Judge OKs
Durango water rights sale
Bankrupt paper company's assets to be sold at auction in December
By GORDON JACKSON, The Times-Union
A federal judge will
allow the sale of water rights issued to Durango-Georgia Paper Co. when
the bankrupt company's assets are sold at an auction in December.
U.S.
Bankruptcy Court Judge Lamar Davis Jr. ruled in favor of the trustee
managing the paper company's assets on Friday, despite objections from
the state Environmental Protection Division.
The judge did include a
disclaimer, however, that the sale of water rights was subject to
approval by the state agency.
Ward Stone, an attorney representing the
court trustee selling the bankrupt paper mill, said the intent of the
motion was to increase the number of bidders for the property.
"Whoever
acquires the mill will know they will have enough water to operate the
plant," Stone said. "Private developers could have their own system. It
keeps options open until the auction."
Proceeds from the sale will be
used to repay creditors still owed money from when the mill, Camden
County's largest employer for 61 years, closed in November 2002. More
than 900 employees, many still owed money, lost their jobs.
Stone said
he didn't anticipate anyone would bid on the water rights without
wanting at least some of the property on the 750-acre site. He also said
there was a possibility the high bidder, if it's a private developer,
may not want any water rights and would choose to hook up to the public
water system in St. Marys.
However, some environmentalists said they are
concerned about the precedent that may be set -- allowing a precious
public resource in a growing state to be auctioned off to private
interests.
Chris DeScherer, senior attorney with the Southern
Environmental Law Center, said he is concerned the water rights may
attract a bidder with no interest in the property.
"I don't know if
anyone would bid on this, but it's a concern," DeScherer said.
State EPD
officials at the hearing argued it's against state law to sell water
rights, and that anyone buying the rights would still have to have
approval by the state before a permit is approved.
The Georgia Attorney
General's Office declined comment Monday. But in the motion filed in
federal court, the office argued the existing permit is for the
expressed purpose of "pulp and paper manufacture."
"This permit
essentially has no value unless a purchaser intends to continue to
operate a paper mill on the site to which the permit attaches," the
motion said. "In that event, and in only that event, may the purchaser
apply for a transfer and subsequent renewal of the existing permit."
David Kyler, director for the Center for a Sustainable Coast, said the
ruling "completely goes against the notion and intent" of the state's
authority to issue permits to pump water.
"It's misleading to auction
water rights," Kyler said. "It implies you'd have a toe in the door [to
get a permit] when you don't have one."
Kyler described the potential
privatization of water rights as a "very dangerous" step.
"Any transfer
of water withdrawal permits circumvents the authority of the state," he
said. "This is not in the interest of Georgia's public."
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