The Los Angeles City Council has approved a preliminary development agreement for a $47-million co-composting plant, ending a three-month stalemate between the city and the private developer who would build the project.
Terms of the agreement, approved Tuesday upon the recommendation of the council's planning and public works committees, would relieve some of the city's financial risk in the plant by guaranteeing Los Angeles a minimum, fixed return of $12 per ton for the estimated 75,000 tons of co-compost that would be produced and sold by the plant each year, city reports said.
The plant, which would combine garbage and sewage sludge into a material usable for planting and landscaping, originally was proposed for San Pedro, but developers have said they plan to find a site elsewhere in the city. Plans call for the city to pay a garbage-dumping fee to use the privately built plant but to receive a share of sale proceeds to offset the dumping costs.
'Still a Lot of Work'
"We feel better, and I guess they feel better," Frances Reyes-Acosta, a partner with lobbyist Joaquin Acosta in plans to develop the project, said after Tuesday's action. "But there is still a lot of work to be done."
City administrative analyst Drew Sones, who helped direct negotiations that began last August, said the agreement for price guarantees solved a roadblock that ended talks on the project last April. City staff members submitted a report to the City Council last month recommending that negotiations be terminated and the project abandoned.
Without the guarantees, city officials feared that they would lose their return on co-compost sales if the demand for the organic product was less than expected. A city administrative report last year recommended that the city reject the proposal because it could cost the city more than $6.2 million a year to dispose of garbage and sludge at the plant. The city had been paying less than $3 million a year to dispose of the same amount of trash, the 1984 report said.
Reyes-Acosta, however, argued that sales revenues from the plant would be guaranteed by a new state law, passed last year, that requires state agencies like the Department of Transportation to use the co-compost, provided it meets quality standards. The law, written especially for the project, is intended to encourage its use as soil for parkways and noise berms.
"We believe we have guarantees with (the) Senate Bill," she said. "They wanted something more to hang their hats on."
Sones said negotiators also agreed to share in selecting a project site--a step that would be completed after a final contract is approved by the City Council. Negotiators hope to complete work on the contract before the end of the year, he said.