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Thursday, August 6, 2009

My vote on the wetlands: the facts.

I voted against the proposed swap of land that is not fully documented wetlands for prime industrial property owned by the City of Long Beach for a number of reasons based upon my research and the in put of many residents who were concerned that the taxpayers of this City were not being protected in this real estate deal.

Here's why:

  • It may have been a good idea, but it went terribly bad.
  • The entire deal was cloaked in a false alarm of urgency. City Council was told by city staff that negotiated the deal that if it was not done in December, it would be "fatal." Of course, it wasn't.
  • The truth is that this deal didn't hatch out of thin air. The developer specifically established a Limited Liability Corporation to purchase the property which he then immediately began offering to some of the City electeds and staff about two years ago.
  • Although usually wetlands are purchased and restored by environmental and the state conservancy, E-mails between the developer and City staff indicate that the developer doesn't particularly like or trust the state conservancy or the State Coastal Commission so instead it was decided to have the City of Long Beach obtain his property which would then require the City to clean it up and restore it in order to sell it to another party.
  • The developer refused to allow the City to complete a delineation of the property to determine what really is there.
  • An independent appraisal was never obtained on the value of either the wetlands area or the City's Public Service Yard for which it was swapped. These were done in-house or old ones were used. (A deal this significant and we couldn't even hire an independent appraiser?)
  • The value of the LLC's property holdings near Second and PCH really amount to little on the surface. The real value is in the oil and minerals beneath the land which the developer refused to sell to the City and is now marketing them to another company.
  • Wetlands may be "priceless" but the costs of cleaning them up is not; it is very costly. Where will the City get the money to clean it up?
  • The Public Service Yard which is being given to the developer for his wetlands, is contaminated and will require $2.8 million to clean up. Where will the City get the money to clean it up?
  • The City will be required to vacate the Public Service Yard and to relocate to the Oil and Gas Property on Spring at a cost estimated by the City Manager at $5 million.
  • Until the relocation, the City will pay the developer rent to stay on the property. With what money?
  • The apparent proposed use of the Public Service Yard is for a trucking yard which currently is not allowed under the City's moratorium. But that can be lifted at any time and polluting trucks can be brought into the neighborhood.
Other disturbing facts surround this land deal:
  • The voters were asked to give over their hard earned money with a parcel tax last year. (Which I opposed.) They were told that it would be used to fix their streets, sidewalks and other things (that the City should have been fixing). But Measure I also included a small reference to the fact that the funds could be used to restore the wetlands? Hardly infrastructure repair?? Voters saw through the proposal which is why City property had to be found to swap for the wetlands property because the City did not have that source of cash.
  • The City received a valid offer to purchase the Public Service Yard at a price higher than the value of the current swap agreement. Magically, that developer withdrew his offer on the PSY and was offered City Hall East (at a price much lower than its value) and an agreement that the City would close its Main Library and relocate it there and pay rent. That freed the PSY to be swapped, instead of being purchased. Also magically, escrow has never closed on City Hall East and it has been recently discovered that the Main Library doesn't have to be closed after all and could be repaired at a fraction of the cost that was being used to force its closure.
  • E-mails exchanged between the owner of the wetlands property and the City negotiator indicate that the owner was told by City staff that he had " 5 or 6 in pocket" concerning the deal even before the vote was taken publicly. Other e-mails referred to those not in pocket as "loud talkers."
  • The economy worsened from December 2008 until this month and the value of both the wetlands land and the oil underneath have plummeted while prime industrial land has not.
  • The City Council declared a fiscal emergency a few weeks ago because it does not have one spare dollar to spend on anything not related to the core services of public safety.
  • Despite City Auditor Laura Doud telling the Council that the deal was flawed and that there are too many unknown risks, it ignored her. (I will blog more on the rude treatment Auditor Doud received at the Council meeting.)
Also consider this:
  • The City Attorney confirmed before the vote on the deal that language requested by a councilman expressing the "intent" of the City Council that the land be open and preserved, had absolutely no binding effect. And why would it? The City has refused to place a restrictive covenant on the land before its purchase because the developer doesn't want the value diminished (wetlands is worth much less than land that can be commercially developed). So the language is meaningless and does nothing to assure that the land won't be developed by some future city council that is cash strapped because it has sold off its assets or made other unwise real estate transactions when it could not afford to do so.
  • Why the urgency on the transaction? The owner said the deal would be off if the City didn't approve. And there is this little matter of another development at 2nd and PCH that needs PCH to be widened by acquiring land, part of the same land in question. Without the street widening traffic cannot be mitigated. So many people had an interest in getting this done now.
  • Well, then, the deal should have been called off, especially until the City hired its own real estate broker and retained an independent appraiser and environmental specialist who would have made damn sure that we didn't buy anything without complete and full disclosure of just what we were getting ourselves into.

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