The Long Beach City Council Tuesday approved a contentious motion by a 5-4 vote (Gabelich, Garcia, Schipske and Reyes Uranga dissenting) allowing city management to move forward with a land swap of 37.7 acres of private wetlands property for 13.4 acres of City property currently being used as a public service yard.
LCW Partners principal Tom Dean, who owns the private property and has been working with city officials to negotiate the swap, told the lbpost.com on Tuesday, “[LCW partner Jeff Berger] and I have always thought it would be a good piece of real estate to somehow deliver to Long Beach so they could control it, and frankly I live here with my family and we would be honored to be the team that finally got it to the City.”
At the start of more than two and a half hours of public comment and Council discussion on the item, and in a change from normal procedure, Councilmember DeLong asked that the public comment period on the agenda item go first. More than a dozen members of the public came to the podium to speak, with all but one speaking out either against the land swap or asking for a delay in the Council vote on the action under consideration.
Following public comment, Councilmember DeLong said in his opening statement to the item, “one of the reasons we want to acquire the property is to maintain some control instead of a private owner.”
DeLong said he had heard many comments against the current proposal but he had not heard any other options.
“The options are do we want to take the deal or there is no deal, there is no other option,” said DeLong.
During Council discussion on the motion, Councilmember Andrews said, “We have heard individuals saying slow down–what would be the downfall of another 30 days.”
DeLong said that his understanding was that “the landowners perspective is they are done… It will either finalize tonight or it won’t at all.”
Councilmember Schipske added, “I think that this was a good idea at one time that went bad somewhere along the way… it has been cloaked in a false sense of urgency…the city’s role is not to bail out any developer.”
She said that she believes that the city does not currently have the money to remediate the wetland property and “we going down a road that we are going to regret.”
Councilmember Gabelich showed a cost estimate indicating that the total cost to the city of the land swap and relocating the city public service yard would be between $10 million and $18 million, depending on what the wetland property eventually sold to the Los Cerritos Wetland Authority. She also reiterated that the city does not have this money. Gabelich made a substitute motion to deny the partnership and encourage LCW to negotiate with the LCWA directly. Following further discussion, she removed her motion.
Councilmember O’Donnell offered his support for the deal, adding that “there are risks inherent to any real estate deal but I think this will be a good deal in the long run.” He moved to add language to the agreement that stated the city’s intent was to preserve the LCW property as wetlands in perpetuity. Upon questioning by Council members, the City Attorney clarified that the additional language added by O’Donnell was non-binding.
Council member Reyes Uranga said, “I don’t know what the rush is.” She pointed out two previous land deals with Tom Dean where the City Council was told that the deal faced a timing urgency, and later the deals did not materialize as originally proposed to the Council. “Things are not always what they seem,” she warned. Councilmember Reyes Uranga then moved to hold over the vote for 30 days.
“Whether or not a developer makes a profit today on this deal is not my concern. I don’t care, [as long as] it benefits the community,” said Councilmember Lerch.
The motion by Reyes Uranga for a 30-day delay was voted down by a vote of 6-3, with Schipske, Gabelich and Reyes Uranga in the minority.
The original item with Councilmember O’Donnell’s added language was approved by a final vote of 5-4. Councilmembers Schipske, Gabelich, Garcia and Reyes Uranga voted against the motion.
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In early February, the Council voted to allow city management to conclude an agreement to swap just under 34 acres of LCW Partners property for just over 12 acres of city owned property on the Westside now home to a city service yard. The city plan called for the 34 acres to be transferred to the Los Cerritos Wetland Authority for restoration and maintenance as wetlands.
After the meeting and following the release of public document (first reported by the District Weekly) which called into question the behind-the-scenes negotiations between the City and LCW, the City Attorney determined that the Council was not provided with all the facts required to make its Feb. 10 decision, prompting a return to the Council this week.
Critics of the land swap have raised questions about the nature of the negotiations, how the city and private parcels were appraised, where the city service yard would relocate to, why LCW would retain the mineral rights to the private property in the deal, and who would be responsible for the clean-up of the private property which is now dotted with oil wells and may have been the site of various material dumping in the past.
The proposed land trade has received hopeful feedback from the public, but as time has passed many questions have arisen that have yet to be answered. For starters, no one is quite sure how much the wetlands property is worth (a recent Press-Telegram article tagged the value of the originally proposed 33.7 acres between $9 million and $36 million, while City Auditor Laura Doud estimated similar land five times that size at $14.25 million), and critics of the plan say that the City is giving away too much. In the terms of the deal, the City would not control rights to oil drawn from the area, while at the same time it is not apparent how much of the land can possibly be restored as wetlands. Conversely, it is not clear how much can possibly be developed.
Tuesday’s revised motion increased the amount of city property in the proposed swap to 13.4 acres and also added four acres of LCW property (near but not adjacent to the original 34 acre parcel) to the pot.
The new motion also stated that the public service yard would relocate to the northernmost 4 acres of the current yard property and remain on the site rent free for a period of six months with terms for the city to lease the property for up to five years following the swap and the rent-free period.
The new motion also said that if the 34 acres of wetlands is sold to the LCWA at an appraised value of less than $7.9 million, LCW Partners would reimburse the City the difference up to $500,000.
Under the approved motion, LCW Partners would indemnify the City for all environmental impacts related to oil and gas production on the 34 acres parcel up to and following the closing of the deal. The City would do the same for the service yard property.
Tuesday’s motion reiterated that the full fiscal impact to the city over the land swap will remain unknown until the wetlands are sold to the Los Cerritos Wertland Authority. However, the approved motion makes it clear that this will only happen once the LCWA receives money from the state to do so. The Authority currently does not have the funds to purchase the wetland property.
The city estimates that proceeds from the sale to the LCWA could range from $1.5 million, if the property is ultimately determined to be fully wetlands, to $9.5 million if the property is determined to be commercially developable.
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