(06-26) 04:00 PDT Boonville, Mendocino County -- There it was, utterly fearless, stolidly returning stares from a Douglas fir branch. The living emblem of the Timber Wars -- a northern spotted owl.

Not that this kind of encounter is necessarily rare for ornithologists, said Katie Fehring, a researcher for PRBO Conservation Science and a spotted owl maven. The endangered birds, she said, are renowned among scientists for their bland indifference to human beings.

What does seem unusual is that the owl -- long associated with primeval, cathedral-like stands of conifers -- is in this particular place: the North Coast's "working forest," a vast tract of relatively young redwoods and hardwoods that stretches from northern Sonoma County to southern Humboldt County.

These forests are on the cusp of change, with the likely future either rural development or continued timber production.

But if it stays in timber, the old ways won't suffice, said Paul Brateris, the chief operating officer for Harwood Products, the region's last major mill, in the little town of Branscomb.

Art Harwood, the president of the company, has been trying to get timber industry representatives, environmentalists and local citizens to forge a new approach to logging and milling, Brateris said -- one that emphasizes stewardship as much as lumber production.

Sustainable forestry is the only real option for the North Coast if it is to retain its essential character, he said.

"As it is now we can't get the logs we need locally," he said. "We have to barge them down from Washington and Canada, and that's expensive. If we're going to keep our heads above water, we need local product."

For decades, this land has been logged by companies such as Louisiana Pacific, Georgia Pacific and Sierra Pacific. But in recent years, the timber companies have begun divesting themselves of their holdings because there isn't sufficient timber left for profitable operations. And some conservationists say opportunities now exist to buy the land before developers pounce on it.

And though these forests have been stripped of mature trees, the presence of Fehring's spotted owl is reason for hope, conservationists say.

"If they can find what they need -- abundant rodents and a fairly dense canopy -- they can do OK," Fehring said.

Conservationists, of course, would like to see the owls and other species -- marbled murrelets, coho salmon, steelhead trout -- do more than OK.

To thrive, these sensitive critters need large expanses of mature forests, their preferred habitat. And the North Coast's logged-over woodlands can't reach maturity if they're chopped up into subdivisions.

"A lot of these lands already have moved into pension funds, real estate investment trusts and other investment group holdings," said Chris Kelly, the West Coast director of the Conservation Fund, which spent $10 million to buy 24,000 acres of timberland along Mendocino County's Garcia River and its tributaries.

The fund's holdings now constitute about one-third of the Garcia's watershed. The transaction was supported by grants and loans, including a $4 million loan from the California Coastal Conservancy. Kelly said the Conservation Fund has negotiated for an additional 16,000 acres from the Hawthorne Timber Co., a spin-off of Georgia Pacific.

"(The landowners) will sell to conservancies, but they also have a fiduciary responsibility to obtain fair market price," Kelly said. "We have to compete in the marketplace like everyone else.

"If we can keep marching north, we will. This entire region is at stake."

The Conservation Fund doesn't plan to manage its newly acquired lands as an inviolate reserve, Kelly said. Rather, they will remain working, sustainable forests. That means selective logging rather than clear-cutting. Particular care will be taken to restore riverine habitats to benefit salmon and steelhead runs.

The fish once thrived in the Garcia and its tributaries, but were decimated by sedimentation from gravel extraction and logging. Kelly said the runs are starting to return.

"There simply isn't the funding available to turn these lands into public parks," Kelly said. "One way or the other, they'll have to generate revenue. But some ways of generating revenue are preferable to others."

About one-third of the fund's holdings will be permanent reserve with no commercial cutting. On the rest of the land, logging will help thin heavy stands of young, skinny trees that otherwise crowd each other.

Scott Kelly -- a forester who consults with the Conservation Fund and is not related to Chris Kelly -- said these practices can help speed replacement of old-growth forests.

It all remains to be seen whether such a free market approach to forest conservation will actually work in the global free market.

Domestic prices for Douglas fir -- common along the Garcia -- are low at $450 to $500 for every thousand board feet. Redwood prices are better, about $950 a thousand board feet. However, redwood plantations are now expanding in New Zealand and it is unclear if the price will remain stable.

Meanwhile, logging costs -- dependent on the price of diesel fuel -- are climbing rapidly.

"They went up about 5 percent in the last year alone," said Scott Kelly.

Small landowners also play a role in these changing forests.

One is Fred Euphrat, a consulting forester from Healdsburg who owns 416 acres of woodland west of the town. The land has been in Euphrat's family since 1960 when his father bought it for recreation.

Euphrat now wants to manage it as a working forest that accommodates both timber production and wildlife. He owns an additional 320 acres of logged-over land near the North Coast town of Elk that he is rehabilitating, and he plans further timberland acquisitions.

Ultimately, Euphrat said, his Healdsburg property should yield $50,000, not including the salary he pays himself. For every tree cut, another is protected from logging or a new one planted.

"We're saving our larger trees as heritage trees, and others as wildlife trees because they have good nesting or denning value," he said on a recent tour of his land with his stepdaughter, Elise Euphrat. As Euphrat talked, Elise and a crew of forestry technicians marked trees for the pending harvest.

"This isn't a charity," Euphrat said. "We believe California timberlands are an excellent investment. But we aren't just managing for economic productivity. We're also managing for wildlife and watershed values, timber stand regeneration and fire control. For all that, we need multiple tools -- timber harvesting, government grants, conservation easements and good information."