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Includes Extended "Amnesia File" Coverage w/ Sound Clips

City Mgm't Wants Council To Spend $2.5+ Million In Capital Projects/Infrastructure Money To Buy Back Part of City Swapped Public Service Yard And, Under Terms of Controversial 2009 Wetlands Swap, Pay To Remove Toxic Land For Developer That Acquired The Rest Of Yard For Industrial Uses

Mgm't also proposes to spend $400,000 to relocate RR station to Willow Springs Park.



UPDATE: Item below passes 8-0 (Schipske absent). No questions or comments from Councilmembers regarding the use of infrastructure funds for the item.

(April 13, 2014, 11:55 a.m.) -- In an item agendized for the April 15 Council meeting (one week after citywide elections), city management will ask the City Council to approve spending over $2.5 million -- from funds that could otherwise be used for capital projects/infrastructure needs citywide -- to buy back a portion of the city's Public Service Yard to become a capped dump for lead contaminated soil on the property that, under the terms of a controversial land swap approved on a 5-4 Council vote in August 2009, gave a Tom Dean-LLC the city's Public Service Yard with a City promise to pay to remediate (clean-up) suspected toxics on the land in exchange surface rights (no oil rights) to part of the Dean-LLC owned Los Cerritos wetlands (arguably undevelopable property.).

The transaction was criticized at the time on several grounds, including exposing LB taxpayers to paying toxic remediation costs for new owner of the industrial zoned developable Public Service Yard property (east side of L.A. river between Anaheim St. to nearly PCH).

Under questioning by now-former Councilwoman Rae Gabelich at the August 4, 2009 Council meeting, then-Public Works Director (now Director of Business and Property Development) Mike Conway acknowledged that the transaction could require LB taxpayers to pay from roughly $2.2 million to $2.8 million in remediation costs for the new owner, with no budgeted source identified at that time to pay for it.

That's basically what has happened...with city management now proposing to use capital project infrastructure money to pay for it.

City management's April 15, 2014 agendizing memo by Mr. Conway asks the Council to approve allocating $3 million it says was "previously reserved" for soil remediation, a total that includes roughly $400,000 to relocate a former railway station on the property to Willow Springs Park.

[Ed. note: LBREPORT.com is unaware of any previous public disclosure of $3 million "reserved" for this purpose in budgets presented by management and the Mayor for Council for approval in FYs 2010, 2011, 2012, 2013 or 2014.]

If the Council approves management's request, it would tap taxpayers' Capital Projects Fund in the Public Works Department to pay the industrial property owner under the terms of the swap from funds that could otherwise pay for capital projects and infrastructure citywide ranging from potholes to larger projects.

Management's request for the $3 million is agendized for Council action on April 15...one week after a citywide election in which some candidates told voters that their records (and Mayor Foster's) had shown fiscal discipline. LBREPORT.com notes that this matter appears to have been the subject of some discussion months earlier in a Council session closed ot the public and the press.

On December 17, 2013 (a low visibility press period), a closed-session Council item appeared indicating a conference with the City's real property negotiator (City Manager Pat West) regarding terms of a property purchase between the City of Long Beach and "San Francisco Yard, LLC" (the entity that now owns the Public Service Yard property.)

City management's memo accompanying its April 15, 2014 publicly agendized Council item states:

[April 15, 2014 agendizing memo text]

RECOMMENDATION:

Authorize remediation and purchase of a portion of the former Public Service Yard, including grant of reciprocal access easements;

Authorize the relocation and limited restoration of the former railroad station building to Willow Springs Park; and

Increase appropriations in the Capital Projects Fund (CP) in the Public Works Department (PW) by $3,000,000. (Districts 1, 7)

DISCUSSION

On August 4, 2009, and as modified on May 18, 2010, the City Council authorized the City Manager to enter and consummate a real estate exchange of a portion of the City's Public Service Yard, for a portion of the Los Cerritos Wetlands. As a condition of the exchange, each party (City of Long Beach and LCW Partners, LLC) agreed to indemnify the other party for existing environmental impacts to soils and groundwater. At that time, the remediation costs for the Cityowned property were estimated at $2,853,300. As part of the exchange, each party was also obligated to reasonably cooperate with the other party to minimize environmental liability.

On December 12, 2010, LCW Partners, LLC conveyed the former Public Service Yard property to Alere Property Group, LLC (Alere), which intends to develop the property for industrial uses consistent with zoning. Of the 12.471 acres of former City-owned property conveyed in the exchange, all but 5.31 acres received environmental closure through the local oversight agency at minimal cost. The remediation of the remaining property, in which earthquake fill is located, was anticipated to be addressed through a grading and soil management plan, with environmental closure to be achieved at a reasonable cost.

Upon conduct of the grading and soil management plan, it was discovered that, in 1933, the earthquake fill had been systematically burned, and the lead paint on the debris had spread laterally throughout the property. While of no environmental concern while situated in the soil, grading activities would serve to trigger a requirement that all impacted soil would need to be excavated and transported from the property. The cost for this activity was estimated at $7.2 million.

As required under the exchange, the parties worked together to minimize environmental liability and identified an alternate plan at significantly less cost. Under the alternate scenario, impacted soils would be localized on the northern portion of the 5.31-acre site, leaving the southern portion completely free of earthquake debris. The northern portion would be capped according to an approved Remediation Action Plan, posing no health risk concerns on the surface of the property.

The City would record a covenant against the northern portion, requiring coordination with the oversight agency prior to any invasive activities that could disturb the soil. Upon environmental closure for this site, the City would purchase the northern portion, estimated at 1.864 acres and valued at $1,926,690, which reflects Alere's acquisition cost and temporary holding costs during these protracted discussions. Total cost for environmental activities, to be conducted by Alere, is estimated at $420,000, which includes grading, compacting and capping activities, which is the lowest of three competitive bids. Total cost to remediate and repurchase the property is estimated at $2,346,690. As unknown factors could serve to increase this cost, a 10 percent contingency of $234,700 is recommended for a total remediation and acquisition cost of $2,581,390.

Under the terms of the Exchange Agreement, the City reserved the right to relocate the former railroad station building currently situated on the Alere property for a four-year period that expires in June of this year. Grading activities will be made more difficult if the station building continues to reside on the property. Therefore, staff seeks an additional $150,000 to facilitate the relocation of the station building to Willow Springs Park and $268,610 to rehabilitate and restore the structure to functional use.

This matter was reviewed Deputy City Attorney Rich Anthony on March 20, 2014 and Budget Management Officer Victoria Bell on March 31,2014.

TIMING CONSIDERATIONS

City Council action is requested on April 15. 2014, in order to proceed with the acquisition and remediation of the property.

FISCAL IMPACT

The combined acquisition and remediation cost of $2,581,390 will be paid to Alere as controlled under a Purchase and Sale Agreement through an escrow account. The relocation and restoration of the former railroad station building, at an estimated cost of $418,61 0, will be accomplished as a City capital improvement project. The total cost of the recommended actions is estimated at $3,000,000. Sufficient funding to support this expense was previously reserved for this purpose in the Capital Projects Fund (CP) in the Public Works Department (PW), and an appropriation increase is included in the recommended action.

SUGGESTED ACTION:

Approve recommendation.

Respectfully submitted,
MICHAEL CONWAY
DIRECTOR OF BUSINESS & PROPERTY DEVELOPMENT

LBREPORT.com "Amnesia File" (includes audio clips)

On August 4, 2009, the Council voted 5-4 (Yes: S. Lowenthal, DeLong, O'Donnell, Andrews, Lerch; No: Garcia, Schipske, Reyes Uranga, Gabelich) to approve the Public Service Yard/Los Cerritos Wetlands land swap. The Council vote came after City Auditor Laura Doud was given only brief moments by Mayor Foster at the podium in which she warned the Council that she saw fiscal risks in the transaction.

In public testimony at the time, independent taxpayer advocate Terry Jensen (a former Redevelopment Agency boardmember who opposed a Foster-backed 2008 proposed property parcel tax) called the land swap transaction "one of the most fiscally irresponsible schemes this city has considered," challenged city management's valuations of the respective properties concluded that the proposed exchange would ultimately cost the City over $10 million. [To date, state agencies that city management indicated it hoped (but had no guarantee) would purchase the city-acquired wetlands surface rights haven't done so and there's no publicly disclosed firm date for when that will occur and with what offered price to the city.]

In questioning by Councilwoman Rae Gabelich, then-Public Works Director acknowledged that the transaction could require LB taxpayers to pay from roughly $2.2 million to $2.8 million in remediation costs for the new owner, with no budgeted source identified at that time to pay for it.

A few months after the city conveyed the Public Service Yard to a Tom Dean-LLC, the Dean-LLC conveyed the industrially zoned developable Public Service Yard property to a private industrial developer.

City management staffer Mike Conway, who was management's point-person for the land swap negotiations and resulting transaction, has since been named Director of Business and Property Development. In that position, he is the lead visible figure pursuing -- with Mayor and Council majority approved (Schipske dissenting) -- the possibility of allowing a private firm developer/operator to finance, build, operate and maintain for its profit a new Civic Center, that management says won't cost the taxpayers sums beyond what they're paying now (plus an annual CPI escalator.).

LBREPORT.com Archival Coverage (Aug. 2009 and May, 2010)

(Aug. 5, 2009, updated Aug. 6) -- After more than two hours of Council discussion and public testimony, the City Council voted 5-4 (Yes: S. Lowenthal, DeLong, O'Donnell, Andrews, Lerch; No: Garcia, Schipske, Reyes Uranga, Gabelich) on August 4 to exchange the city-owned Public Service Yard for 37.77 acres of privately-owned SE LB open space/presumed wetlands on terms recommended by city management.

At the request of Councilman O'Donnell, the Council included a statement of "intent" -- not legally binding on future Councils -- that the current Council intends that the property be preserved in perpetuity as open space.

Immediately prior to the 5-4 vote approving the deal, the Council voted down 3-6 a substitute-substitute motion seeking a 30 day delay (Yes: Schipske, Reyes Uranga, Gabelich; No: Garcia, Lowenthal, DeLong, O'Donnell, Andrews, Lerch).

Councilman Robert Garcia (in whose 1st dist. the Public Service Yard is located) and Councilwoman Suja Lowenthal said nothing during the more than two hour Council item.

Mayor Bob Foster didn't exercise his veto...which could have stopped the transaction and required six Council votes to override.

During the Council discussion, City Auditor Laura Doud was seated in the Council Chamber. After the motion for a 30 day delay failed, Councilwoman Gabelich asked that Auditor Doud be allowed to speak; Councilman O'Donnell (whose motion to approve the transaction was up for a vote) initially ignored Gabelich's request as did Mayor Foster.

When City Auditor Doud showed no signs of leaving, Mayor Foster addressed her in a less than welcoming tone: "Ms. Doud, do you have a quick comment? I think this has been pretty thoroughly discussed."

City Auditor Doud came the podium, and told the Council in pertinent part:


Webcast screen save: City of LB website

City Auditor Doud: ...The one thing I do have concerns about is the cost of this. At the time we did our cost-benefit analysis, a lot of these costs were unknown at the time. Now they're a lot more transparent to see that the relocation cost and the cost to rent and especially the cost to construct a new Public Service Yard are significant. So those costs do concern me and then just the final concern that I have on the deal is really the State's ability to come forward with the money, it's very uncertain, we don't know, and if they don't come forward then of course we'll be owning it, and if they do come forward and it's less than the value of the Public Service Yard, then obviously the City would be subsidizing this transaction...

"Thank you, Ms. Doud; appreciate it," said the Mayor...and called for the final vote: 5-4 to approve.

To hear this exchange, click here.

Shortly after the vote, LCW provided the following statement to LBReport.com:

"LCW Partners would like to commend the City Council for voting to approve the wetlands exchange tonight. This was not an easy business transaction for all involved and was a long and arduous process. Many hours and money were spent by both sides to reach the agreement tonight. Even with all the discussion that occurred, we think it was a positive outcome for the city. We look forward to the potential exchange of the remaining wetlands owned by LCW Partners at a future date."


Image source: Aug. 4, 2009 LB city management staff report


Image source: Aug. 4, 2009 LB city management staff report

LCW Partners spokesman Mike Murchison added the following comments: "On behalf of LCW Partners, and after watching the exchange and debate, we believe it was a very healthy debate tonight. It opened up some areas of discussion that maybe were not discussed in the past but we can keep moving forward and we think it's the right time to do so."

City staff opened the item with nearly half hour presentation by Public Works Director Mike Conway. Mr. Conway's presentation compared valuations of the properties and recited indemnities that he said LCW, Partners, LLC would provide to the city, and vice versa.

Public testimony

Almost every speaker opposed or declined to support management's proposed transaction. Most urged a thirty day delay; some opposed the deal outright. Among the speakers:

  • Los Cerritos Wetlands Land Trust Executive Director Elizabeth Lambe. Audio, click here.

    Webcast screen save: City of LB website
    Ms. Lambe questioned the City's valuations and reiterated concern about lack of legal assurances that the property would in the future be used as open space. Ms. Lambe said the issues aren't small and are at the heart of the ability to protect the wetlands and must be addressed before a vote is taken. She noted that the state of CA is prohibited from paying more than fair market value although the city is not...and if the city takes a big financial hit in the transaction, future Councils may be tempted to sell off the wetlands or use them for purposes other than protected habitats. Ms. Lambe urged the Council not to vote on the transaction until these questions are answered.

  • Former RDA boardmember Terry Jensen. Audio, click here.

    Mr. Jensen opened his remarks by noting that he's now a Third district resident...and likened city staff's presentation to fiction. He called the proposal "one of the most fiscally irresponsible schemes this city has considered," challenged city management's valuations and concluded that the proposed exchange would ultimately cost the City over $10 million. Noting that this comes at a time when City Hall is proposing to lay off police and firefighters, Mr. Jensen said voters can show whether they disagree with what the City is doing "as they did with Measure I" (on which he also challenged City Hall's numbers). Mr. Jensen ended his testimony by stating that if the Council approves the deal, the public can only resort to the ballot box.

  • Mary Parsell, 1st VP/Conservation Chair of the El Dorado Audubon Society, and said "there are just too many questions"...and asked if the agreement regarding mineral rights would mirror the agreement now in effect between the Los Cerritos Wetlands Authority and Signal Hill Petroleum on the 66 acres of Phase I property (formerly owned by Bryant on either side of the San Gabriel River).

  • Belmont Shore Residents Association President Mike Ruehle. Audio, click here. Mr. Ruehle said an agreement to indemnify the city made by an LLC means little, arguing that small LLCs can just walk away leaving the city (as surface landowner) effectively holding the bag. Mr. Ruehle noted that Mayor Foster and Councilman DeLong had accepted campaign contributions from sources linked to Tom Dean and related business entities. Ruehle charged that the proposed land exchange is testament to the power of those contributions...and called it a gift of public assets.

  • LB environmentalist Ann Dennison. Audio, click here. Ms. Dennison said "there is no one more interested in acquiring those wetlands than I am" but urged a vote against the proposal or a 30 day postponment, saying the City isn't getting a fair appraisal and the state conservancy can't acquire the wetlands for less than fair market value.

  • SE LB community activist Tarin Olson (critic of a developer's current plan for the Seaport Marina site at PCH/2nd St.). Audio, click here.

    Webcast screen save: City of LB website
    Ms. Olson read a letter from a law firm raising CEQA and gift of public resources issues (first reported Mon. Aug,. 4 by LBReport.com).

  • Retired LB Deputy City Attorney Jim McCabe. Audio, click here.

    Webcast screen save: City of LB website
    Mr. McCabe questioned city staff's valuation and delivered cautionary testimony about city reliance on the LCW, Partners LLC. LLC's are special purpose companies, Mr. McCabe said...and the Council is deceiving itself by relying on an indemnity from a company that might not be around for the long term.

  • Appraiser David Robertson. Audio, click here. Mr. Robertson's apparisal (done for Tom Marchese) was cited among other appraisals by city management. Mr. Robertson advised the Council to get a proper, independent appraisal.

  • Sierra Club LB-area president Rudy Vietmeier. Audio, click here. Mr. Vietmeier defended city staff's valuation (comparing it to the Louisiana Purchase which some considered too costly at the time) but acknowledged that lack of legal protection ensuring the property's use as open space was a problem and urged a 30 day delay.

  • Wetlands advocate/LCWLT boardmember and University Park Estates homeowner Tom Marchese. Audio, click here.

    Webcast screen save: City of LB website
    Mr. Marchese criticized the proposed transaction and disputed management's valuations, charging that city officials persisted in misstating material facts including the property's current zoning...which Mr. Marchese said hadn't been approved by the Coastal Commission.

  • Community advocate Kerrie Aley. Audio, click here.

    Webcast screen save: City of LB website

  • Belmont Shore neighborhood advocate and environmentalist Melinda Cotton. Audio, click here.

    Webcast screen save: City of LB website

  • Andrew Leitch, representing LCW, Partners LLC. Audio, click here.

    Webcast screen save: City of LB website
    Mr. Leitch urged Council approval of the transaction...and read a letter into the record that stated in part, "...[I]f the city is unable or unwilling to approve the LCW exchange this evening, LCW will elect not to expend further time, effort or expense in pursuing the land exchange and instead will concentrate on pursuing other alternative courses of action regarding the LCW property."

  • Council statements following public testimony

    Councilman Gary DeLong made a motion to approve management's proposed transaction, saying [paraphrase] that he knew of no better proposal to acquire the wetlands. He said former Councilman Doug Drummond regretted not getting the wetlands into public hands...and said acquiring the wetlands would give the city more control over their future development. He said the Council's options were either to take the deal or have no deal. Audio, click here..

    Councilman Dee Andrews asked city management what effect a thirty day delay would have, Councilman DeLong answered instead, telling Andrews that if the Council didn't approve the proposal, the landowner had indicated it wouldn't pursue a wetlands exchange further. "Thank you," Councilman Andrews replied...and didn't speak further. Audio, click here.

    Councilwoman Gerrie Schipske said the exchange was a good idea that has gone bad; said the original deal was "cloaked in a false sense of urgency" in February 2009...and yet "here we are in August...and we now hear the owner will walk away" if the Council doesn't approve the deal. Councilwoman Schipske said the City's role isn't to "bail out a developer" and while wetlands are priceless, "remediation is not." Audio, click here.

    Councilwoman Rae Gabelich displayed an itemized listing of costs to the City of LB in the transacton. The costs to the City approached $20 million ("just from what we've identified here") and the potential proceeds from the sale of the wetlands is $1.5 million to $9.5 million. "That doesn't seem like a very good deal to me," Councilwoman Gabelich said.

    Councilwoman Gabelich also noted that an item in management's report indicates the City will be required to reimburse the refuse fund (with money or more land)...and she asked how much that would cost. Mr. Conway responded that this could cost $2.4 million more. Audio, click here..

    Councilwoman Gabelich then made a substitute motion to have LCW Partners to negotiate directly for sale of its wetlands to the state conservancy...so the City wouldn't bear these costs.

    Councilman Patrick O'Donnell responded by indicating that he believes management's proposed exchange would be a good deal for the city in the long run. He made a substitute-substitute motion (countering Gabelich) that was basically DeLong's motion to approve...but with legally non-binding "intent" language on future open space use of the property that doesn't bind future Councils. Audio, click here.

    Management's proposal doesn't include a deed restriction or other language legally binding future Councils regarding open-space use of the property...and Councilman O'Donnell's "intent" verbiage is likewise not binding on future Councils, simply reciting that it's the current Council's intent that the property be preserved in perpetuity as open space.

    Realizing O'Donnell's motion was basically DeLong's management-supportive motion with non-binding "intent" language attached, Councilwoman Gabelich withdrew her motion to let Councilwoman Reyes Uranga to make her own substitute motion seeking a 30 day postponement.

    These were the two motions ultimately voted on: first, the Uranga motion seeking a 30 day postponement [failed 3-6] and then O'Donnell's motion (basically DeLong's motion to approve management's proposal with non-binding "intent" language attached] which passed 5-4.

    Prior to the votes, Councilwoman Tonia Reyes Uranga criticized the record of another Dean-related LLC, noting what it said it would do when it sought Council approval for a WLB crane storage facility...and comparing it with what she said had been done since the firm received Council approval. Reyes Uranga urged a 30 day postponement. Audio, click here.

    Councilwoman Gabelich then engaged in follow-up questioning that produced a number of additional revelations. These included potential City costs of $2.2-$2.8 million to clean up the Public Service Yard if LCW or a new owner wanted to use the site for activities that might disturb the soil or build new buildings. Mr. Conway noted that LCW had originally proposed to use the facility for very heavy truck storage and use that he said "minimized city [remediation] exposure." Whether that use is allowed when a current Council-directed moratorium expires [expected before the end of the year] and a CUP process is put into effect [by a separate Council action] remains to be seen, Mr. Conway said.

    "Have resources been identified to pay for [possible remediation] costs exceeding $2.2 million," [for potential new uses] Gabelich asked? "No, they have not," Public Works Director Conway said. "I think that says a lot right there," Councilwoman Gabelich said.

    Under further questioning by Gabelich, Deputy City Attorney Richard Anthony said that if LCW Partners, LLC were at some point dissolved and tried to make distributions to its members that exceed its liabilities, the City could sue the members to seek repayment, which would require the City to take legal action.

    To hear this entire exchange, Audio, click here.

    Vice Mayor Val Lerch began by asking management if the Public Service Yard would move regardless of what the Council did. Public Works Director Conway responded that this has been management's "long term intent" [without mentioning that it's ultimately a Council decision]. Lerch then asked about selling the Public Service Yard and declared on his own that this would be "one-time" money that wouldn't prevent layoffs or solve the City's long-term debt problem regardless of whether it's sold or not.

    After declining to engage in a colloquy with Councilwoman Gabelich on the issue (Mayor Foster is heard off-mike quieting Gabelich), Lerch changed the subject and said it was his intention that the City be protected from paying relocation costs of the Public Service Yard. He said cost has now been "taken out of the equation" because RDA will loan $500,000 in funds (now proposed to pay LCW rent instead of temporarily relocate the facility) and RDA would be reimbursed if the wetlands sell for at least $7.9 million. [Unmentioned: there's no state money to buy/reimburse LB for the wetlands now or in the immediate future.]

    Vice Mayor Lerch then said that looking in the "long range," he believes acquiring/protecting the wetlands is a long term [benefit] for the City. The following are his exact words, transcribed from on-demand audio, below:

    We have over and over again bought land through Redevelopment and through this City where we've held onto the land for a period of time and then developers come along and said, 'I've got a great plan for your community that will enhance your community' and we sold that land for a dollar, two hundred dollars, on what we paid for it.

    Prime example is in Rae's district at the Trader Jo's. Developer came in and said 'you got this land, I got something that'll work for the city,' and we gave the land to 'em. We're doing the same thing at Artesia and Atlantic Ave. Bought all of that land and the restaurant people are going to come in and build restaurants on it and we're going to give them the land because it's going to be good for the community.

    I see this as the same thing. At three years, four years down the road from now, if we've got a developer who's going to give us a good plan with wetlands, I don't have any problem with giving it to them for a dollar, because it's going to benefit the community. And whether or not some developer ends up today making a profit is not my concern.

    My concern here is to make sure that long range this City is protected, wetlands and so on and so forth.

    So if we end up giving it to 'em for a dollar because wetlands are more important ten years from now, it's what's been done hundreds of times in this city, so I don't see what's the big deal.

    For Audio, click here.

    LBReport.com plans much more on multiple aspects of this major story.

    Background

    On Feb. 10, 2009, a City Council majority (Schipske and Gabelich dissenting, 1st dist vacant) voted to authorize city management to finalize to conclusion -- without further Council or public review -- an agreement to swap 33.77 acres of LCW-owned land (indicated below) for approximately 12.1 acres of the city owned Public Service Yard.

    Immediately prior to that vote, a Council majority voted down (3-5) a motion by Councilmembers Gabelich and Schipske, backed Reyes Uranga to have the private entity pay $500,000 in taxpayer costs to relocate city agencies from the city owned property and to disclose to the Council and the public the terms of the final contract before approving it.

    The Feb. 10 Council-majority approved transaction was halted by the City Attorney's office after a Public Records Act request by University Park Estates homeowner and wetlands advocate Tom Marchese uncovered City Hall emails (released by the City Attorney's office and first reported by TheDistrictWeekly.com's Dave Wielenga) disclosing how senior city management had negotiated the proposed transaction.

    The City Attorney's office subsequently indicated that Councilmembers had not been informed of certain "material facts" prior to voting on Feb. 10 to approve the transaction.

    City Attorney Bob Shannon directed that Councilmembers first discuss the matter in closed sessions...culminating with an "up-or-down" Council vote (re-vote) on the deal...which occurred on Aug.4.


    (May 14, 2010) -- LB city management has opened escrow, and anticipates closing by the end of May, on a swap of part of the city owned Public Service Yard (developable industrial property) in exchange surface rights to part of the SE LB open space/presumed wetlands (owned by a Tom Dean-related LLC) by the end of May, an item agendized by management for the May 18 City Council meeting discloses.

    The agendizing memo, signed by Public Works Director Mike Conway with initialed approval by City Manager Pat West, cites Council approval of the transaction on August 4, 2009 [in a 5-4 Council vote: Yes: S. Lowenthal, DeLong, O'Donnell, Andrews Lerch; No: Garcia, Schipske, Reyes Uranga, Gabelich]...although the transaction now differs somewhat from what the Council voted to approve last year.

    Among the changes: reducing slightly the amount of land to be swapped on both sides...which management says will allow the "majority" of the city's Public Service Bureau to remain at the Public Service Yard (in the 1st Council district), eliminating city costs to leaseback the property and reducing "significantly" [amount not specified] funding needed to co-locate the remainder.


    LBReport.com photo: Public Service Yard between PCH and Anaheim just east of L.A. river

    City management's memo discloses that in an April 20 closed Council session, Councilmembers [presumably by voted action, details not publicly disclosed] directed city staff to use alternative parcels to circumvent issues [raised by opponents of the transaction] to carving out a new four acre parcel (north of 2nd St., east of PCH) without obtaining a Coastal Development Permit (a management-proposed action that also encountered Coastal Commission staff opposition).

    "Staff was directed to proceed with the inclusion of these [alternative] parcels in the real estate exchange," city management's memo says...but then learned that the alternative parcels aren't legal parcels...with no legal parcels north of 2nd Street viable for exchange.


    City management thus proposes for Council approval on May 18:

    ...[I]n order to maintain an approximate 3:1 ratio in the exchange, staff now proposes to reduce the amount of land at the Public Service Yard to be exchanged for the 33.77 acres of wetlands south of 2nd Street. Staff proposes to remove approximately 2.7 acres from the northerly portion of the Public Service Yard from the exchange...


    LBReport.com photo: Northern portion of Public Service Yard between PCH and Anaheim just east of L.A. river

    This will reduce the City-owned land in the exchange to approximately 11 acres. The majority of the Public Service Bureau will remain on site, on City-owned property, with the remainder to be co-located at the Gas & Oil property. This will serve to eliminate the need to leaseback the property beyond the 6-month free rent period. The Gas & Oil Department will continue to provide the funding needed to co-locate the remaining portion of Public Service Bureau; however, as the co-location needs will be minimized, the funding need will be significantly reduced.

    The memo states: "The parties are currently in escrow and anticipate closing escrow by the end of May 2010."

    Regarding timing considerations, management's memo states: "City Council authorization is requested on May 18, 2010, in order to proceed with the exchange in a timely manner."

    Regarding Fiscal Impact, city management's memo says: "The recommended modification will void the anticipated $209,088 per year in lease costs for the Public Service Yard. In addition, the cost related to relocation and colocation of the Public Service Bureau will be greatly reduced. Actual savings will not be known until final plans are developed. There is no impact on local jobs by this action."

    Not mentioned among Public Works Director Conway's list of fiscal impacts: LB city taxpayers would (according to previous management representations) remain financially liable for toxics and/or clean-up at the Public Service Yard after the private party acquires its portion of the developable industrial site. City management has indicated in previous Council colloquy that the City plans to have a covenant and/or agreement in place with the private party land owner to minimize such potential cost exposures...but the covenant and/or cost-exposure/future development agreements (if any) are not disclosed in managament's May 18 memo...

    Editor's note: On May 18, 2010, a motion was made by Councilmember O'Donnell, seconded by Councilmember DeLong, to approve recommendation of the management sought change, with the stipulation that within three months a request be made to the State for a delineation study. The motion carried 6-2 (Yes: Lowenthal, DeLong, O'Donnell, Andrews, Reyes Uranga, Lerch); No: Schipske and Gabelich; Absent: Garcia.)


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