The Skunk’s Big Plans

An Interview with Robert Pinoli:

When Mendocino Railways announced in October that it had bought the remaining land on the Fort Bragg millsite and along the banks of the Pudding Creek estuary for about $1.2 million via an unchallenged eminent domain claim against Georgia-Pacific in October, it was a jolt to what had been a long, quiet discussion.

For nearly all of the previous 20 years, Georgia-Pacific had held onto the land, at first as an active participant in planning the future of the site. Then, after a complicated lawsuit involving G-P, the city, and G-P’s predecessor company, Boise-Cascade, now OfficeMax, that partly involved responsibility for environmental cleanup of the site, G-P largely fell silent. Planning went on  — years of community meetings that set priorities and general areas for a mix of developments on the site  — but the actual zoning of the land remains what it was 19 years ago: Industrial. Since June 2020, the City of Fort Bragg held its own talks with G-P to try to work out a public acquisition.

All that time, or at least since 2004 when it bought the Skunk out of bankruptcy, Pinoli said, Mendocino Railways has been working on G-P to sell it the millsite. The ultimate purchase of the south end of the site, via an eminent domain claim that G-P did not challenge, came as a surprise to many, but Pinoli said it was the result of years of negotiation, and that Mendocino Railway resorted to eminent domain simply as a way to hurry completion of the deal. Taking that route relies on the Skunk Train’s status as a freight railroad, a status that is being challenged by the City of Fort Bragg in Superior Court. 

But the outcome of that case, both city and railroad officials agree, won’t affect who owns the property  — the purchase of 271 acres on the south side of the millsite and approximately 70 acres along the banks of Pudding Creek, is a done deal. The outcome of the city’s case, however, could affect how development and environmental remediation of the site proceeds. 

Jurisdiction 

Pinoli was emphatic that any millsite development that is not directly related to railroad operations  — although that could include workforce housing  — would be subject to state and local land use laws.

“Anything that’s railroad related,” he said, “a depot, railroad tracks, a repair facility, a maintenance facility, that’s specific to the railroad, doesn’t go through the standard process. Anything else? Absolutely (state and local rules apply). Now, when I say it doesn’t go through the standard process, it doesn’t mean we’re exempt from following the code. But we don’t get the building permit. The bulk of what’s happening out here  — a hotel, housing, visitor serving commercial, all of that, is subject to all the rules and regulations anyone is subject to.”

So, if there was a Skunk Train Hotel, would that be a railroad operation?

“No. If it were flagged the Skunk Train Hotel or California Western Lodge or whatever, no. That is an absolute absurd use of power. Now if it was housing, workforce housing specific, like you go to a national park and there are cabins or houses or a housing complex and it’s specifically for workers, that’s a different story.”

Pinoli made clear that Mendocino Railway’s prime goal is railroad-focused.

“Now keep in mind,” he said about the 2019 plan combining retail, hotels and housing on the west side of Main Street, “we didn’t want this. This plan is what the community decided through the process. We didn’t come in and say we want houses and a hotel. This is what the community process decided. Now that there is a property owner intent on seeing something happening, now the conversations will be far better focused.” 

Ownership

The Skunk Train is operated by the Mendocino Railway Company, of which Pinoli  — an Anderson Valley native who first started working at the Skunk at age 15  — is President and CEO. Mendocino Railway is in turn owned by the Sierra Railroad Company, which bought the Skunk Train out of bankruptcy in 2004 and also operates the Sierra Northern Railroad, a line with both freight and excursion operations on the Central Valley. Mike Hart is CEO of Sierra Railroad Company. Chris Hart, his brother, is Vice President of Sierra Railroad in charge of business development.

Mike Hart is also CEO of Sierra Energy a waste-to-energy company that has received grants from the Department of Defense and California Energy Commission, as well as millions in private investment funds, to develop its FastOx gasification technology. It currently operates a prototype gasification plant at Hunter-Liggett Army base in Monterey County. 

Gasification

Pinoli said the two companies are separate, but he also made clear that he views gasification as having a potential role in the millsite’s future.

Whether on the millsite or not, Pinoli talked about energy, waste disposal and possibly desalination as part of a much larger role for the railroad in the region’s economy.

Sierra Energy’s FastOx gasification method is one of a number of such technologies that has drawn large-scale private and government backing in recent years. The process heats non-recyclable waste to thousands of degrees to produce reusable byproducts and fuels. The company’s website states “Sierra Energy’s FastOx gasification eliminates the need for landfills. Household trash, hazardous waste, tires, medical waste, construction and demolition materials can be converted into energy safely, responsibly, and without burning.”

A small but growing number of gasification plants have been built in the U.S. and Nova Scotia over the past few years. The U.K. brought its first municipal gasification plant online in 2019. Sierra Energy’s plant at the Hunter-Liggett base near Monterey was installed in 2017. Pinoli did not rule out a role for that type of technology at the millsite, or at least in Fort Bragg.

“The layperson would call it burning, but it’s a completely different process, that creates syngas. You can put just about anything into the gasifier and not be emitting harmful particulate matter into the environment because of the temperatures used, and create a number of beneficial byproducts.”

“And,” he continued, “it would give us the ability to control our own trash. There is nothing worse than a community that touts to be environmental champions of the world, but exports all their garbage to some other place. It’s kind of hypocritical really.

“If you have this machine that has the capability of doing something so that you don’t put trucks on roads, so that you don’t ship your garbage for someone else to deal with, well then you actually are a responsible community.” 

‘Coal Train’

Pinoli batted away talk that the remaining Koch brother, whose company still owns Georgia-Pacific, or other outside investment groups have been associated with the millsite purchase:

“There has been some discussion that the Koch Brothers are investors or shareholders or are in control of Mendocino Railway...But the Koch Brothers have no association with us whatsoever.

There have been rumors about an Oak Investment or Brookfield  — those entities have nothing to do with Mendocino Railway, Sierra Energy, Sierra Railroad Company, any of the associated companies.”

The same goes, Pinoli said, for any association with the ‘Coal Train’, a proposal that came to light in September to ship coal by rail from the northern Rockies to Eureka. Proponents of the plan acted to delay the “railbanking” of the tracks between Willits and Eureka, a key step in creating the Great Redwood Trail, which is the latest plan for the future of the line that was abandoned in the 1980s.

Mendocino Railways also filed an objection to the abandonment procedure, but Pinoli said that had nothing to do with shipping coal through northwest California, an idea he said he firmly opposes:

“Coal. No. Absolutely not. I don’t even know who this group is. As the President and CEO of Mendocino Railway, I have not spoken with anybody who has associated themselves with ‘The Coal Train.’ In fact, one of the very first calls I made when this whole coal thing exploded was to Congressman Huffman and we spoke about strategies. Because we do not support coal. We are not associated with coal. No...We’re not touching it.”

The railroad’s objection had more to do with expanding the railroad’s overall role in the region’s economy, he said.

“We also have to think differently about the future of rail transport, particularly in rural areas. We almost have to go back to the way it was in the early 1900s when boxcars would come into the coast.

“There was something called a railroad express agency, a post office on wheels if you will. A boxcar didn’t have one commodity in it. It wasn’t just full of oranges or lumber. That’s what we’ve gone to, because it’s more efficient. Or, is it more convenient for the big railroads? You’ve got somebody who wants to bring something to the coast. They don’t need an entire boxcar...So we have to go back to this kind of cooperative idea.” 

Remediation

Before any millsite development occurs, the state Department of Toxic Substances Control has to OK what is likely the final stage of cleanup there, including the mill ponds just west of Redwood Avenue that are known to contain dioxins and other chemicals left over from more than a century of mill operations. DTSC is expected to hold public hearings in Fort Bragg next year to finalize the last cleanup phase, known as Operating Unit E. Pinoli said he expects to come to an agreement on remediation “that everyone can live with”, and that can also be limited in cost to about $3.5 million. Mendocino Railways has also inherited Georgia-Pacific’s responsibility for monitoring groundwater quality on the site at a cost Pinoli estimated at about $150,000 a year.

As far as what’s next on the site, Pinoli said, “The first thing is that the remediation work needs to happen. Oftentimes that is the unappreciated work, but it’s the most important work. People just want to see something happen, but in order for that something to happen, you’ve got to take care of what’s underneath the ground. In order to do any development outside of railroad tracks, remediation, where it’s needed, must happen.”