PORT GAMBLE — The effort to acquire two miles of Port Gamble Bay shoreline for conservation purposes got a big morale boost in the proposed state budget: $7 million for acquisition.

In an email to supporters, Sandra Staples-Bortner, executive director of the Great Peninsula Conservancy, called the money “a big win” for Port Gamble Bay and the Kitsap Forest & Bay Project.

But wait — the road to land conservation is a long and winding one.

First, the capital budget has to be approved and the $7 million must survive budget negotiations between the governor and Legislature. Then, an appraisal of the property will be done — not an easy task, according to Jon Rose, president of Olympic Property Group, the real estate arm of Pope Resources. All that waterfront is attached to 26 20-acre parcels, a total of 520 acres. To determine its value, the land could be appraised based on its timber value, or its development potential under current zoning, or both. “It will probably be a combination of both,” Rose said.

Based on the appraisal, “we’ll find out how much that money can buy,” Rose said. “The $7 million won’t cover all of the (waterfront acquisition), but it will be making a real dent.”

Finally, who will own it will need to be determined. There is some incentive for Kitsap County to own it: The Legislature added Kitsap to a list of counties exempt from paying timber compensation tax. Timberland owners pay a deferred tax based on when they harvest timber. If someone buys timberland and changes its use from growing and harvesting timber, the new owner must pay a timber compensation tax. King, Pierce, Snohomish, and now Kitsap and Thurston have been exempted as the desire for more publicly-owned open space has grown.

The Kitsap Forest & Bay Project is a consortium of conservation groups, Kitsap County, the Port Gamble S’Klallam Tribe and the Suquamish Tribe, which seeks to buy 7,000 acres of North Kitsap forest land owned by Olympic Property Group, or OPG. The land would be managed as public open space, a nature preserve with trails and non-motorized access to the water.

The effort is being led by Forterra, formerly the Cascade Land Conservancy, and was launched in October. In its agreement with OPG, Forterra has until March 2013 to show that it is making progress in raising money for the acquisitions.

The land is being sold in five segments: 4,000 acres south of the Port Gamble townsite, 2,000 acres in Hansville, 650 acres in the Miller Bay watershed, 520 acres along the Port Gamble Bay shoreline, and 366 acres adjacent to Heritage Park on Miller Bay Road. Some advocates, among them Port Gamble S’Klallam, say preservation of the shoreline is a priority.

Roma Call, environmental coordinator of the Port Gamble S’Klallam Natural Resources Department, said the preservation of the shoreline would contribute to the health of Port Gamble Bay, where the S’Klallam, Suquamish and Skokomish have fishing and shellfish harvesting rights.

While cleanup efforts have improved the bay’s health, challenges remain: Wood waste from the old Port Gamble mill litters the bay floor, and Port Gamble village pumps treated wastewater into the bay. Port Gamble General Manager Shana Smith said the treated wastewater meets state standards, but Call said the outfall is near a shellfish bed. She’s glad that the proposed capital budget includes $2 million so the outfall can be moved upland.

Meanwhile, the best way to remove wood waste and other contaminants from the bay floor is still being discussed by the state and S’Klallam. If it’s removed by dredging, “We want them to use the best techniques so they don’t stir up any of the contaminants,” Call said.

“Spreading sediment around can cause more harm to the shellfish bed.” One possible method: suction dredging, which is kind of like vacuuming the bay floor.

Still, news of the $7 million being included in the proposed capital budget energized proponents of the Kitsap Forest & Bay Project.

“Having the Legislature pass this would be a great shot in the arm,” said Michelle Connor, Forterra executive vice president. “It’s a big step for the project. We’ve been submitting grant applications, but this is our first step forward.”

Connor said the money, if approved, would boost the project’s ability to get funding elsewhere. “Having that commitment from the state makes it more competitive nationally,” she said.

Leda Chahim, director of government affairs for Forterra, noted that the land has been owned for more than 150 years by one company, Pope Resources. Before that, it was indigenous.

“That’s what’s so exciting about this. There are not that many properties in Washington state that have been in this length of ownership. To get it into major conservancy status will be very cool. But we have to get the Legislature over the next hurdle. They’ve got a lot of work to do.”

County Commissioner Rob Gelder, D-1st District, said the proposed capital budget includes $252,000 for soil and groundwater monitoring for the next 23 years at the Hansville landfill, which is closed and now operates as a solid waste transfer station.