Public auction set for AES site Feb. 22; still time to resolve
by Garth Meyer
At 11 a.m. Feb. 22 by the fountain at 400 Civic Center Plaza in Pomona, Fidelity National Title Company is scheduled to conduct a public auction for the AES power plant site in Redondo Beach.
The announcement came 90 days after a foreclosure notice was sent to Leo Pustilnikov and 11 investors who bought the site from the AES Corporation in 2020.
The owners are $36 million behind in payments.
Pustilnikov said the matter is a result of the way two State of California power-plant extensions played out since the purchase – which were not anticipated in the original sale agreement.
“The extensions were a one-year plus a two-year. AES is saying it’s not a three-year, which in effect, it is,” said Pustilnikov.
AES contends the matter is simpler.
“For us, the foreclosure relates to the buyer’s failure to meet his payment obligations under the sale agreement, nothing more,” said an AES spokesperson.
The public sale would award the 54-acre waterfront site to the highest bidder.
“(A public auction like this) often gets rescheduled and in this case it probably will be,” said Pustilnikov.
Is there enough time before Feb. 22 to resolve this?
“I think so, yeah,” he said.
The AES Company, based in Virginia, asserts that the announcement of a date for public auction continues the foreclosure process begun last October to “complete the sale of the Redondo Beach site,” which includes its power generation capability.
“AES is exercising its rights under the transaction agreements, and our filing is consistent with the goal of having the obligations under the sales contract met,” said the AES spokesperson. “While this process moves forward, AES continues to have a valid lease with the current owner of the site and can operate the Redondo Beach generating units until December 31, 2023.”
California pays AES to keep the plant operational.
When Pustilnikov’s group bought the site, it was under a one-year extension with the state.
He described the foreclosure dispute last fall as “literally a negotiation of a true-up over accounting.”
Pustilnikov, head of SLH Investments (Beverly Hills), and partner Ely Dromy of Dromy International Investment Corporation (Los Angeles), are the lead investors among 11 limited liability companies, and an individual investor. All have been served by the foreclosure notice. ER