Point: Setting the DWP settlement record straight

I attended the recent Seal Beach City Council Meeting and heard eight speakers criticize the City Council on the recent settlement agreement with Bay City Partners.  So much misinformation was presented I feel compelled to set the record straight.

  1. The city of Seal Beach sued Bay City Partners first.

Bay City Partners only countersued to defend its property rights when the city offered $48,000 for land appraised at $5,000,000.

  1. The so-called “secret” settlement agreement was done on orders of the court that required settlement discussions.Private mediation was overseen by a retired federal judge who urged both parties to find common ground and settle.  Settlement conferences are conducted in private according to the Brown Act; that is how litigation is resolved in our legal system. The City Council acted within the law.

  1. The driveway to the beach and sewer easement have always been part of the Specific Plan; the San Gabriel River Bike Trail was not.The city does not have a prescriptive easement (the right for public use or ownership) on any Bay City Partners land.

For 50 years the city used the driveway and sewer easement under a revocable license agreement with Los Angeles Department of Water and Power, which expired when Bay City Partners purchased the property. Bay City Partners recorded a notice of “Permissive Public Use” and posted the property with signs per the California Government Code within the five years required for property to be protected from prescriptive rights.  Prescriptive rights apply only to private property so the 5 years did not begin until Bay City Partners acquired it.  The city never had any rights to the oil lines.

4.The residential project will have to go through the same public hearing approval process as any other project.  It is not a done deal until Coastal Commission approval is received.

  1. Staff has an obligation “to secure consideration” for any project. Consideration is not approval.

  1. The School District will receive about $500,000 in school impact fees from this project.

  1. The 9.46-acre Los Angeles Department of Water and Power Specific Plan Map calls for 70% public open space, which is 6.62 acres. Bay City Partners is providing 6.5 acres south of Central Way and another .3 acres within the residential area.This equals 6.8 acres. Bay City Partners ownership is larger than the Specific Plan Map area.

8.The open space being provided to the city is worth far more than $2 million. The Quimby fees, affordable housing requirements and other waivers were fairly included as part of the negotiated settlement agreement.

  1. The 7,000 square feet of city land at the corner of First Street and Marina Drive, is not being used and is non-functional.This land was taken by condemnation from Los Angeles Department of Water and Power in 1977 for $20,000 and is now being returned.

  1. If the Quimby Act applied here, less than one acre would be required.The amount of land provided by Bay City Partners is far in excess.

  1. If the city approves the residential project it only gets the open space land if Bay City Partners gets a Coastal Permit.It is in the city’s best interest to support Bay City Partners’ effort to get the Coastal Permit.

  1. The law requires the city to pay fair market value in taking land.The City Council successfully negotiated down from fair market value and allowed Bay City Partners to take a tax deduction for the difference between the appraised value of the open space the consideration paid is common place in open space acquisition agreements such as those done with the Trust for Public Land, an open space advocacy organization

  1. Bay City Partners property is clearly not on tidelands and fee title to Ocean Ave lies with Bay City Partners, not the city.

  1. The property was remediated for any and all contamination by and received clearance from the Orange County Health Department.

  1. The city will not be paying for the streets in the project.

  1. The City Planning Department in 2009 confirmed in writing to BCP on September 23, 2009 that “South of Central Way” in The DWP Specific Plan means the “Southerly Right of Way line of Central Way”.

This agreement is a significant win for the city.  It is likely the city would have been ordered to pay Bay City Partners $5 million for the driveway way to the beach and sewer area plus another $1.5 million in legal fees for both Bay City Partners and the city.  It would have only received about a half acre of the 6.5 acres obtained with the settlement agreement.  At $100 per square foot, the cost to acquire the remaining land would have been $26 million.  The city would also have lost the $2 million grant from the State for the Rivers End project.  This adds up to a $32.5 million potential liability.  A $2 million certainty is a bargain compared to the risk.

The city can zone land for public open space but under our system of government it has to pay for it; it just can’t take it.  The speakers Monday night seem to have forgotten this is not public land but is privately owned.

The city had the opportunity to purchase all of the Bay City Partners land from 1999 to 2003 from Los Angeles Department of Water and Power and the city rejected the department’s offer and the property was sold to Bay City Partners.  The city easily could have sold the development area to a private developer and kept the open space area at no cost.

All the facts in this piece are backed up by a factual document such as a deed or agreement.  Anyone desiring verification is encouraged to contact Bay City Partners and the documentation can be reviewed.  Can those that spoke at the council meeting provide documentation to their assertions?

Edward Selich is the Bay City Partners’ project manager