September 1999 Issue of Save All of Ballona

September 1999 issue--"Save All of Ballona"

THE BIG NEWS:

--DreamWorks Backs Out; City Hands Out Nearly $500 Million

--Ruth Galanter Now Wants to Save All Land West of Lincoln;

Landowner Could Probably Never Build There Anyway thanks to Bolsa Chica case decision by California Appeals Court

--Explosive Methane Leaks East of Lincoln Blvd. Put Entire Project at Risk

From various news reports:

On August 2^nd, Councilwoman Ruth Galanter announced that she has now realized that there are more wetlands needing to be preserved than she has claimed for the past ten years. While she continues to support the first phase of the project, which is east of Lincoln Blvd, she now says that the proposed second phase, everything west of Lincoln Blvd., should be acquired by the government and preserved.

This is still half of what we want preserved, but it's about twice what Galanter and the developer of Playa Vista previously offered. What probably spurred her decision are three things: the DreamWorks movie studio project has flopped, a victim of grandiose egos, and miniscule wallets; a landmark court decision has probably put most of the property west of Lincoln off-limits to development; and, the admission by the City and developer that Playa Vista has major toxic waste problems on land east of Lincoln could mean that the only safe use of this property is as a refuge for wildlife and wildflowers.

GALANTER'S CHANGE OF HEART?

In a report written by Playa Vista's owners that was leaked by insiders to Save All of Ballona, it is stated, "The entitlements received for Phase I were greater than expected, and therefore the need for an intense level of development in Phase II in order to reach financial objectives is diminished." The report goes on to suggest that the developers, long ago, had begun thinking of giving up the land west of Lincoln Blvd. that Galanter now champions, in what would be a new compromise proposal.

Whether we can trust Galanter, this time, and whether this is a cynical attempt to whitewash her pro-Playa Vista record is a fair question. Galanter said the State should buy the entire Playa Vista site back in 1993, when the City Council was considering the first phase development plans. A few months later, she endorsed the development plans and did nothing to find the money to buy the property, eventually offering tax dollars to help build the project instead of buying it.

THE BOLSA CHICA CASE:

The State Appeals Court decision earlier this year concerning Orange County's Bolsa Chica wetlands, which has been affirmed by the California Supreme Court, makes it clear that Playa Vista's plans to construct houses and commercial facilities in wetlands in the Coastal Zone west of Lincoln Blvd. will not be allowable under the law. This decision, combined with new wetlands studies required due to formerly farmed acres now reverting to their former wetland states, and one of the most environmentally-friendly Coastal Commissions in years, makes it evident that Playa Vista might not have been able to receive permits to proceed with their plans in this area.

As a result of the lawsuit won by Wetlands Action Network in 1998, experts who didn't work for the developer inspected the site looking for more wetlands. The results of the site inspection by wetlands restoration expert Wayne Ferren (U.C. Santa Barbara), wetlands delineation expert Dr. Terry Huffman (who wrote the regulations currently used by the federal government and trains federal & state officials on how to conduct proper and unbiased wetlands delineations) and UCLA environmental engineer and hydrologist Dr. Tom Piechota show much more wetlands at Ballona than claimed by the developer. Ferren's declaration to the 9th Circuit Court of Appeals states there is "an order of magnitude" of wetlands on the property that no one has acknowledged up to this point. Wetlands Action Network attorney Steve Crandall's brief to the Court stated that, after their experts visited and reviewed the site for more than 12 hours, they estimate there to be UP TO 100 ACRES OF ADDITIONAL WETLANDS THAT NEED TO BE PROTECTED ON THE SITE!!!!!!!

If there are more wetlands on the Playa Vista site, then the Bolsa Chica case is vitally important. What the Bolsa Chica decision says, relating to wetlands in the Coastal Zone, is, that, under Section 30233 of the Public Resources Code, "...residential development is not a use permitted in wetlands", even to finance restoration of other wetlands, said Justice Patricia Benke in the 3-0 appellate decision. This is what the Playa Vista owners have proposed to do: pave half the property west of Lincoln Blvd. and use the profits to restore the rest that is west of Lincoln.

Another important finding of the Appeals Court in the Bolsa Chica case finally protects the Ballona bluff slopes from any development. Under Coastal Act section 30240, properties designated by the Coastal Commission as "ESHAs (Environmentally Sensitive Habitat Areas), whether they are pristine and growing or fouled and threatened, receive uniform treatment and protection." The court disagreed with the lower court judge's approval of the destruction of an upland eucalyptus grove at Bolsa Chica, home to hawks and other raptors. The court said the grove, though deteriorating, was an ESHA that could be destroyed only to promote other "habitat values," not development.

Koll Company, owner of Bolsa Chica, wanted to "move" the ESHA - i.e., cut down trees where raptors were roosting and put up poles for the raptors to roost on. Here is what the Court said, "Such a system of isolation and transfer based on economic convenience would of course be completely contrary to the goals of the Coastal Act which is to protect ALL coastal zone resources and provide heightened protection to ESHAs."

The Ballona bluff developer wanted to fill in a canyon, and grade and cut a major road up the bluff slopes. This is now illegal because the slopes were designated an ESHA by the Coastal Commission in the 1980's.

Given developers' predilection for "moving" habitats in order to fit their proposed development schemes, this finding of the Court is likely to be attacked by supporters of the building industry in the state legislature.

The state's Supreme court was not asked to overturn the ruling, but fielded and rejected several requests to withdraw it as a precedent for other cases.

By Rex Frankel

On July 1^st, the super billionaires at DreamWorks said "Hasta la Playa Vista". They're out of here! Blaming the high cost of construction and lack of financing, they won't help in the destruction of the Ballona Wetlands. Gone, is much of the over $100 million tax dollar giveaway, which included $35 million in tax breaks to DreamWorks, and the $40 million from Caltrans and $30 million from the MTA that goes directly to build roads, bridges and freeway offramps for the Playa Vista developer.

I suspect that what we hear on the surface is not what's really going on. DreamWorks has been hearing heavily from the public to stay away from Ballona; head-man Steve Spielberg was on the front cover of New Times L.A. in June with the headline "DreamJerks"; their films and TV shows and music releases have not made them the tops in the business, as their backers originally claimed. In fact, company insiders claim, according to the L.A. Times, that DreamWorks lost $200 million in 1998. Maybe that's bad "karma", and maybe Spielberg's movie "Poltergeist" was truly prophetic; the proposed studio site is on top of a massive 100-acre toxic chemical leak from Howard Hughes' old aircraft factory, and DreamWorks couldn't get an exemption from the State water board from being on the hook for the cleanup. Meanwhile, the movie industry is slowly leaving L.A. for cheaper studio sites in Canada, for example; this means that DreamWorks can rent vacant studio space here cheaper than building new space.

I'm sure there are other good reasons why DreamWorks backed out on their $13 million investment, but I bet they'll never publicly say it's because the public doesn't want them to be partners with eco-destruction. Over the last four years they have refused to acknowledge that people don't like Playa Vista, even sugar-coated with Steven Spielberg's "visions". An admission like that might prove that movie and entertainment "sparkle" can't cover up for a bad product.

The people won this time.

The $35 million tax and fee break given to DreamWorks is definitely gone, because it was given specifically to DreamWorks. That giveaway was to be a rebate back to DreamWorks of a portion of business-license taxes, utility user taxes and developer fees paid to the City in exchange for the creation of new jobs. According to the July 3rd Daily Breeze, David Herbst, chief project propagandist, said "Even if we were to build it ourselves, we would like to partner with the City. We will go back to the City when we have the right mix. When we have a tenant...like DreamWorks...we would want to make our case to the City."

The incentives for the rest of the Playa Vista project offered by the City still remain. Those include a change in the business license classification for multi-media companies and a reduction in the sewer service hookup fees. Now, if PV can't get another multi-media company to move in, then that giveaway may be gone, too.

Mike Keeley, who was Mayor Riordan's Deputy Mayor in 1995 when the DreamWorks bailout was unveiled, was interviewed by Warren Olney on KCRW's "Which way L.A." on December 11 , 1995. He said that "as one of the Mayor's negotiators on this", that the State will pay $40 million for road widenings and improvements, the City $5 million and the developer would only pay $5 million for all of the traffic mitigations that the developer had previously agreed to entirely pay. His contention was that without the government money, the entire Playa Vista project is economically unviable.

Keeley's exact quote is "the key reality is this, Warren, if the project itself had to bear those costs, the project would have to recoup those costs from the tenants, from the people buying the units, etc. etc. We were persuaded that that would make this project infeasible, that if that $40 million has to be charged back to the tenants--the DreamWorks, and the buyers of the condos--that essentially the units would not be built because they would be priced over the market in today's marketplace."

The Toxic Time Bomb Under Playa Vista

--And Another Sweetheart Deal for Robert Maguire

By Rex Frankel

Until recently, developers have always said that any piece of land can be built upon: even wetlands or landslides. Recent events, however, show that one may be able to put a building anywhere; but to live or work in it is another story.

The issue "blew up" in the faces of the administrators of the L.A. Unified School District this summer, as they tried to build a $200 million high school on top of an oil field west of downtown L.A. Nearing completion, workers began smelling foul, potentially explosive gases coming from the soil. The project is now shut down, and investigators for the State are wondering how our school system could spend so much money without investigating the safety of the land beforehand. If the workers are getting sick while building the place, it surely isn't a good place for several thousand schoolchildren.

Politicians never seem to learn their lessons. For in the last month, our City Council has handed out almost $500 million in tax-exempt bond financing to jump-start the moribund Playa Vista development. And surprise: spewing out of the Jell-O-like swampy ground in the first phase of Playa Vista is highly explosive methane gas and highly poisonous sulfurous gas. Residents in the area have complained of smelling obnoxious gases for over ten years, but the landowner and the Southern California Gas Company, which stores natural gas in caverns far underneath the Ballona wetlands, say nothing is leaking. Until now.

One reason why DreamWorks probably got cold feet at Playa Vista is that the L.A. Regional Water Quality Control Board has refused to exempt them from being liable for toxic chemicals that were dumped on the far eastern end of the land over the last 50 years by the Howard Hughes aircraft and helicopter companies. Toxic soil and gasoline and cancer-causing industrial solvents foul around 100 acres of the 1000-acre Playa Vista site. While Playa Vista has tried to clean up the problem, it has actually gotten worse in the last ten years. According to the water board's Cleanup and Abatement order #98-125 issued to Playa Vista on December 22, 1998, cancer-causing chemicals such as trichloroethylene and toluene have seeped down into the Silverado aquifer, which is a source of drinking water for cities in the area.

Last month, the Vice President of Playa Vista, David Herbst, admitted that the project "has a methane problem" before the City Council's housing committee. This is an issue that scares these developers to death, because no investor is going to want to put their money into land loaded with toxics. It was rather fun to watch the City Council hearing on the $500 million giveaway on August 13th, when City Councilman Nate Holden asked Playa Vista�s spokesman Peter Kelly about the methane leaks. His partner, Lisa Specht, was in the front row furiously waving her arms and loudly whispering "NO! NO! NO! Don't answer the question!"

I understand why: in a report authored by the City's Building and Safety department dated January 19, 1999, soil experts found 84% levels of methane in the soil east of Lincoln Blvd., next to land on which Playa Vista wants to build a new elementary school and affordable housing. No tests were done on the land between Lincoln and the Gas Company's storage field because that area was under water at the time of the study, February 1998. Because the report states that "methane gas can be highly migratory", all development in the Playa Vista project will have to deal with the risk of "high concentrations of gas", if that is possible. So the taxpayers have again acquired highly toxic, probably unbuildable land to locate schoolchildren upon, and are giving tax-exempt status to investors who want to build the rest of this mega-project.

The revelation of the explosive gas underneath the property has forced Playa Vista to undo a full year's worth of site preparation work, which they began in the summer of 1998, in order to install methane ventilation systems in the soil under each proposed building.

Such systems are so new that they have no track record of success in areas with extremely high levels of natural gas in the soil. What is probable is that the only safe use of the Playa Vista land is as open space.

Why Playa Vista's Corporate Welfare Really Stinks:

The massive giveaway of taxpayer dollars to the owners of Playa Vista by corrupt politicians is not a one-time occurrence. The co-owner of Playa Vista also owns several of the tallest high rises in downtown Los Angeles, and he has a potent bargaining chip to offer sheltered downtown bureaucrats. And they have rewarded him greatly.

Eleven floors of one of the tallest, swankiest buildings in downtown Los Angeles, owned by Playa Vista's co-owner Robert Maguire, are occupied by 1000 employees of the L.A. Unified School District. Since 1995, the school district employees have occupied 1/3rd of the tower at 355 Grand Avenue which had been vacated by IBM Corporation, at a cost to taxpayers totaling nearly $40 million. The school district leased the tower from Maguire after another school building had been declared unsafe following the disastrous 1994 Northridge earthquake. The chief administrative officer for the school district, David Koch, says that the building located at 1400 S. San Pedro St. was "extremely vulnerable" to a moderate earthquake and needed up to $29 million in repairs to make it safe. The problem is that according to a 1994 internal district memo released by the State Legislature's Joint Legislative Audit Committee, there was no "imminent danger or imminent need" to move the employees out of the district's business services building. The Federal Emergency Management Agency has found that the building could be repaired to current safety standards for about $1 million.

The L.A. School District has been under fire recently for wasting nearly $200 million to build a new high school on top of toxic land that spews explosive and poisonous gases. The Belmont Learning Center project just west of downtown L.A. is now on hold, and half-built, because no one can say it is safe to put schoolchildren on a site contaminated with methane and hydrogen sulfide gas. The prior owner of this toxic land somehow worked out a sweetheart deal giving the school district the full legal liability for cleaning up the toxic problems.

The local connection is that in the midst of Playa Vista lies a four-acre site that was given to the school district on the same day the lease for the IBM tower space was signed: February 6th, 1995. The land is the proposed site of a new elementary school. It is unclear if the school district knew what it was getting into at Playa Vista; for spewing out of the ground at this site also is highly explosive methane gas and highly poisonous sulfurous gas.

Was the L.A. School District deal a sweetheart deal to the politically connected Robert Maguire? Maguire had hovered near bankruptcy in the mid-1990s economic recession as tenants deserted his prestigious, expensive and heavily mortgaged high rises for cheaper rents. Maguire eventually lost control of the Playa Vista property in 1997 to the bank from which he had borrowed nearly $200 million to finance his dream of a mega-city on the Ballona Wetlands. Maguire does still own a small share of the project, and since the DreamWorks studio deal collapsed, he has been put in charge of developing that portion of the project.

So when the school district handed the financially troubled Maguire a $38.7 million deal for space in his IBM tower, it was a big favor, especially in light of the fact that 37 other buildings owned by others were also considered by the district. And Maguire got to unload onto the taxpayers a piece of toxic land at Playa Vista. As with the other gifts of tax dollars that Maguire and Playa Vista are receiving, the question is what did the taxpayers get in exchange? A good deal--for whom?

(More on this story is in the L.A. Times dated March 14, 1999, on page B-1)

A LETTER TO THE EDITOR

Dear Friends and Members of Save All of Ballona:

Save All of Ballona's June 1999 newsletter highlights the issue of Playa Vista "buying supporters" for their development of the Ballona Wetlands. As part of this, the newsletter indicates that Playa Vista's 1998 "Annual Report to the Community" indicates the developer is financially supportive of the Santa Monica BayKeeper. Save All of Ballona's reporting was accurate; However, Playa Vista's representations were not.

The company's portrayal of their support for Santa Monica BayKeeper is misguided and erroneous because BayKeeper refuses to accept financial support from Playa Vista. Indeed, thousands of dollars have been turned away because of the inappropriateness of accepting funds tied to the potential destruction of one of the last stands of wetland habitat in Los Angeles County.

When contacted about their Annual Report, Playa Vista stated that apparently a staff member purchased two tickets to a BayKeeper fundraiser using a corporate check. The total amount was $250. Unfortunately, BayKeeper was not aware of this incident at the time, and procedures have now been put in place to avoid this situation in the future. BayKeeper has also demanded from Playa Vista a retraction of the suggestion that the company has supported the environmental efforts of Santa Monica BayKeeper. The company has agreed.

Steve Fleischli, Santa Monica BayKeeper

© Copyright 2006 Rex Frankel. Last update: 8/3/2006; 10:04:57 PM.