Redondo Beach and LA County propose buying power plant site
by David Mendez
Elected officials from the Redondo Beach City Council, the Los Angeles County Board of Supervisors and the California Assembly gathered Monday morning at the site of the AES power plant on Harbor Drive to announce a joint effort to purchase the century-old power plant.
The officials disclosed that the City of Redondo Beach and the County of Los Angeles have submitted a proposal to AES, the 18 year owner of the Redondo Generating Station, to purchase its 50 acre parcel and restore the saltwater wetland that the power plant sits upon.
“I feel very optimistic. It’s been a long, hard road to where we’re standing now, there’s a long road ahead, and it’s worth celebrating,” Redondo Beach Mayor Bill Brand said from the U.S. Bank parking lot overlooking the AES site. “Behind us is a rich history of nature, human wonders and achievement.”
The City Council approved a motion to submit the proposal in a unanimous vote during a closed session on Nov. 7, two days before a Nov. 9 deadline imposed by AES.
Details of the proposal are confidential, according to Brand. Real estate consultant Larry Kosmont said the city is still attempting to determine the costs to remediate the land. Valuations for the property have fluctuated between $50 million and $250 million, depending on factors such as the level of environmental remediation needed to make the land usable.
According to AES Vice President Eric Pendergraft, the proposal doesn’t include a dollar figure, but is an “expression of interest and a structure for a potential transaction.” That structure indicates the City acting as a third party alongside AES and a potential developer.
The City’s chief interest, Pendergraft said, is to buy the property and create a supporting agreement with a developer for a ground lease in a public-private partnership.
“We’re certainly not going to do a fire sale,” Pendergraft said. “If the City is willing to sign [an agreement] at a level consistent with what the property is worth, we’d consider entering into a transaction straight with the City.”
Assemblyman Al Muratsuchi announced that the proposal seeks funds that would be created by passage of SB 5 during next year’s June 26 election.
SB 5 is a statewide open space bond measure that would finance up to $4 billion in projects. A section supported by Muratsuchi and State Senator Ben Allen has language specifically supporting Redondo Beach, authorizing up to $60 million toward repurposing fossil fuel power plant sites.
The section also endorses restoration of “Native American, natural, cultural and historic resources within the state,” as well as enhancing science centers and improving community, civic or athletic venues.
The site fits those qualifications. The Old Salt Lake, as it was known, was named California State Historical Landmark 373, and was once used by the Chowigna Native American tribe. The California Coastal Commission believes there is underlying seawater at the site, which AES disputes. Pendergraft said that an agreement between AES, the City and the Coastal Commission is in the works, and may be announced by February.
Supervisor Janice Hahn stated that she would ask the County of Los Angeles to explore the creation of an Enhanced Infrastructure Financing District that would bring county resources to the project. EFIDs are financed through taxes generated from property tax increases within the district, and can be formed without voter approval.
The City and County, Kosmont said, will attempt to find as many sources as possible to get the funds for buying the land and “can’t rely on any one source.”
In his estimation, the City may obtain a letter of intent from AES within three to six months. The project as a whole, however, could take 10 years.
“We’re on the front end of this one,” Kosmont said. “Structural, physical change doesn’t come quickly.” ER