High-Power Sale

The For Sale signs haven’t gone up yet, but at the Department of Water and Power the calls come almost daily. Hotels, golf courses, studios, parking lots--the list of proposals for surplus DWP land keeps getting longer.

In coming weeks, the agency will hire a real estate company to handle its planned sell-off of surplus land holdings in the Los Angeles area. Some of the bounty may be used to pay off the agency’s $4-billion debt for construction of plants that don’t produce power at current market rates.

The land sale coincides nicely with a super-heated market for commercial and industrial land in L.A., particularly in urban areas where vacant lots are scarce, DWP officials say.

Developers “are even saying they will buy our [non-surplus] land and buy another place to move us to,” said the agency’s Eric Tharp.

The agency plans to raise $6 million annually over the next four years from land sales to balance budgets. But a single lucrative sale could well exceed that, said Frank Salas, executive assistant to the general manager.

Although the agency has held land sales in the past, “the typical way we used to sell property was to put up a for-sale sign . . . and the highest bidder would get it,” Salas said. “But now we need to be a lot more sophisticated about it.”

In the next few weeks, DWP officials will select a real estate company for a two-year contract under which they will analyze real-estate holdings and help peddle the agency’s land. Officials may consider shutting down some yards now in use, or even swapping properties, to squeeze the last of the cash from its holdings, Salas said.

DWP owns more than 400 properties in the Los Angeles area, including 139 in the San Fernando Valley. About 60 have been identified as surplus, and others may be freed up as the agency lays off workers to save costs, Salas said.

The agency’s large holdings in the deserts and mountains of the Owens Valley probably won’t be sold because they protect the watershed for the city’s water supply, Salas said. But other far-flung holdings, such as a railroad in Nevada, might also be put on the block.

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Because many of the local properties are large and zoned for industrial use, they represent a rare opportunity in built-out areas of the city, said Rocky Delgadillo, L.A.’s deputy mayor for economic development.

Old maintenance yards could become homes for new and expanding companies, bringing jobs and income to the region, he said.

“DWP can increase its revenues, and at the same time the city can increase the impact on its local economy,” he said.

But the agency also owns property prized for other public uses. These range from a Metrolink station in Northridge to soccer fields in the East San Fernando Valley. Other properties, treasured by conservationists, are largely protected by legal restrictions.

Still, the sale leaves open the possibility for conflict over private and public needs. Despite the agency’s hunger for dollars, “part of our mission is being sensitive to community concerns,” Salas said. “There will be a concerted effort to do that here.”

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Perhaps the most politically charged property is the mothballed Chatsworth Reservoir, a de facto nature preserve coveted by sports leagues and eyed by developers who have proposed building housing and golf courses on the site.

Though no longer filled with water, the vast concrete-edged reservoir in the northwest San Fernando Valley is covered with grass, shrubs and seasonal ponds. Over the years it has become the focus of a long-frustrated preservation campaign, spearheaded by City Councilman Hal Bernson, who represents the northwest Valley.

Bernson, a former businessman who said he’s usually “not the greatest environmentalist,” has nonetheless worked to make preservation of the reservoir his legacy after two decades on the council.

The reservoir is a stopping place for migrating flocks of Canada geese. Yellow-eyed burrowing owls stalk through the grass on stork-like legs. Visitors to the reservoir have been surprised by the sight of sleeping bobcats draped across the branches of massive oaks.

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But if nature is evicted, he agency has estimated the land value of the reservoir could be as much $50 million. “I think before we give away 50 million bucks, we better really understand what we are doing,” said Rick Caruso, president of the DWP board of directors.

Caruso said he recently called off negotiations with the Santa Monica Mountains Conservancy, which seeks to lease the reservoir and preserve it in its natural state.

Before continuing, Caruso said, he wants to know more about possible uses of the property from the real estate study and about public attitudes toward it.

Bernson thinks Caruso is stalling. The City Council voted earlier this year to direct the agency to draw up a 10-year lease agreement with the conservancy. But while the council can override the DWP board votes after the fact, it can’t force Caruso or the board to act on a matter beforehand.

“I’ve fought for this [preservation of the reservoir] since I came to the council,” said Bernson, who is 67 and plans to seek just one more term. “I’d like to see it taken care of before I’m gone.”

Environmentalists, too, are aggravated that years of effort to save the reservoir have been grounded inches from the goal.

“I am so angry that this is happening,” said Rosemarie White, of the Canada Goose Project, “so angry that so many people have tried and given of themselves for this and it has stalled.”

Development of the reservoir may be difficult. The land is zoned for open space and is designated a wildlife refuge in community plans. Santa Monica Mountains Conservancy division chief Rorie Skei said it’s also in the conservancy district, meaning the conservancy may be able to call upon its right of first refusal for land sales.

But land-use designations, said Caruso, can change. Sports groups who have petitioned to use the land for ball fields represent a community interest with some political weight.

The 1,300-acre reservoir is so big, that “there’s something in it for everyone,” Caruso said. “A substantial amount could be for open space. A nice amount could be for a more formal park . . . and probably there is some property that could be developed and provide income to the department.”

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Among the other large parcels on the list are a nine-acre swatch of prime waterfront land in Seal Beach, a Malibu plateau, a reservoir off Mulholland Drive in Woodland Hills and a broad stretch in the upper reaches of Big Tujunga Wash.

Seventy percent of the Seal Beach property is zoned for a park, and the rest could be used for a hotel development with stores, said Seal Beach City Manager Keith Till. The agency has received from a Florida developer a glossy packet that contains plans for a hotel on the site, Salas said.

The Malibu property above Corral Canyon Road was once earmarked for a nuclear power plant. It is in the conservancy district and will almost certainly remain open space, Salas said. And much of Big Tujunga Wash may be off-limits to development because of steep slopes, DWP officials said.

Little stands in the way of the sale of the majority of the agency’s smaller surplus properties--urban lots and yards full of pipes or trucks, parcels that duplicate operations nearby or stand empty behind chain-link fences, officials said.

“One of our big challenges is funding large properties for industrial users,” Delgadillo said. “DWP properties in industrial areas are significant. For example, those in Pacoima. There is a 3% industrial vacancy rate in Pacoima.”

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DWP’s Major Surplus Properties

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Site Acres Current Status 1. Chatsworth Reservoir 1318.0 Empty reservoir 2. Tujunga Galleries 129.7 Partly leased 3. Malibu Nuclear Power Plant Site 97.9 Undeveloped 4. Lakeside Debris Basin 68.8 Power line right-of-way 5. Pendleton Landfill 14.8 Vacant 6. Rose Hills Dump Site 11.4 Filled debris landfill 7. Seal Beach Generating Station 8.0 Demolished facility 8. Gerard Reservoir 5.9 Out-of-service reservoir 9. Lomita Pumping Station 5.6 Site wells to be abandoned 10. Northridge Metrolink Station 5.5 Metrolink regional station 11. North Hollywood Wells 5.2 Partly leased 12. Harbor Generating Station Site .8 Former storage area 13. Van Nuys Telecommunicating Shop .7 Unoccupied buildings 14. Records Center .3 Unoccupied building

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Source: Department of Water and Power