Yak Timber was established in July of 2018 to harvest 21 million board feet of Yak Tat Kwaan Inc. Timber lands that remained left over from a 1979 Timber partnership with Koncor Forest Products. YAK Timber has since harvested over 15 million board feet of timber and has exported this timber to China, according to its website.

A timber company run by Yakutat’s village corporation is dissolving. Yak Timber was created four years ago to harvest 21 million board feet of land owned by Yak-Tat Kwaan, Inc. The logging subsidiary has since harvested about three quarters of that — some 15 million board feet — and shipped it to China, according to its website.

As CoastAlaska’s Angela Denning reports, Yak Timber is shutting down after pushback from shareholders on a proposal to log an important island just outside of town.

Yak Timber’s logging has been controversial in Yakutat–a village of about 600 people in the Gulf of Alaska. As a subsidiary company, it’s supposed to extract value from corporation land holdings to fund dividends for shareholders. But Yakutat’s tribal and municipal governments — plus a significant number of shareholders — have spoken out against past clear-cuts that they feared would damage salmon habitat and endanger their way of life.

More recently, Yak Timber has faced backlash over a proposal to log corporation land nearby Khantaak (pronounced CAN-tak) Island.

“Khantaak is considered a barrier island for our community,” said Marry Knutsen, cultural heritage director for Yakutat’s tribe. “It literally sits right in front of town, and blocks all of the harsh storms that come off the Gulf of Alaska. And so it prevents us from having high speed winds. And it protects from tsunamis.”

Yak Timber planned to log the island by thinning rather than clear-cutting — picking specific trees and leaving most of the forest intact.

Khantaak Island is located near Yakutat. (Photo by Amanda Bremner)

In a letter to shareholders, parent company Yak-Tat Kwaan, Inc. says the decision to log the island was made in the community’s best interest. The corporation says it had hoped to use the revenue from the timber harvest to fund new business ventures and help community members build homes.

“Ultimately, the Board felt there were more benefits to the Shareholders if the Corporation went forward with the tree thinning, subject to strict guidelines such as a 300’ buffer zone from the coast and daily oversight,” Yak-Tat Kwaan’s board told shareholders in a letter dated Oct. 4.

But that was still too much for many. Knutsen says besides the island being important geographically, it’s culturally significant.

“Before we had the process of burying people in one specific location, we would also cremate them, which would then make the trees culturally modified trees, right,” Knutsen said. “So we haven’t been able to do enough exploration over there as the tribe to be able to say where all of those specific locations could be.”

Fisheries biologist for Yakutat’s tribe, Hava Roelof, says the streams on Khantaak need to be studied before any logging takes place there. State biologists haven’t recorded ocean-going fish in the streams, so Roelof has been hiking around the island studying them herself.

“None of the streams that are over there are cataloged by the state currently, so they don’t have anadromous protections,” she said. “It’s all ideal coho habitat, it just screams coho habitat. So that’s my goal right now is just kind of mapping the whole stream network out there and making sure that if coho are utilizing the streams that they’re documented in that they’ll be protected.”

Yak-Tat Kwaan cites opposition to the Khantaak logging operation as its reason for shutting down. With debts coming due and no viable source of revenue, the corporation’s board says it was left with no choice but to dissolve Yak Timber and sell its assets.

“Yak Timber had significant debts that required revenue and cash flow to service, which could only effectively be generated through timber harvesting,” the board’s letter says.

Yak Timber and Yak-Tat Kwaan, Inc. did not respond to requests for comment.

But some shareholders say they’re not to blame for Yak Timber shutting its doors.

Jason Jensen is a shareholder descendant who worked for a company that Yak Timber contracted to load its timber onto ships.

“If you read the fine print, that’s what it sounds like is it’s our fault that we didn’t let them go do this,” said Jensen. “Pretty much all the shareholders here have the same mindset that it sounds like they’re trying to pass the blame on the shareholders for them not being a successful business venture.”

He says shareholders weren’t privy to the corporation’s finances and there’s been a problem with transparency. Meanwhile, he says the timber company set itself up for failure by taking out loans, acquiring equipment, and getting into more debt without communicating with shareholders.

“It just seemed like every step of the way, there was a roadblock, there was something — canceled meetings, canceled elections and nonstop stuff in the road, the blockade, or to block the shareholders from getting the information that they wanted,” Jensen said. “And so, at some point in time, that number came out that there was like $14 million in loans, and the collateral was land that the shareholders never agreed to give up.”

Yak-Tat Kwaan says the company plans to sell all of Yak Timber’s equipment and assets at an auction in Seattle in the coming months.    

Yak-Tat Kwaan letter to shareholders Page 1, Page 2, Page 3, Page 4