Senate Bill Creating Wetlands District Clears 1st Hurdle

Legislation that could ease the development and restoration of the Bolsa Chica wetlands cleared its first hurdle Wednesday, but not before a hoped-for agreement between the developer and the City of Huntington Beach crumbled in a power struggle over the area’s future.

Sen. Marian Bergeson (R-Newport Beach) had hoped to secure agreement on the best way to govern Signal Landmark Co.’s proposed development of the wetlands, where the Irvine-based company intends to build a marina, a waterfront housing development and a regional park.

Although Bergeson’s bill won the unanimous approval of the Senate Local Government Committee, which she chairs, it did so over the vociferous objection of Huntington Beach and opposition from the Sierra Club and a subsidiary of Shell Oil Co., which owns the mineral rights to the wetlands. The bill still must pass two more committees before it can go to the Senate floor.

At issue is how much power Signal Landmark should have in a special district the bill would create--a jurisdiction within a city to implement development plans that have already won tentative approval from the California Coastal Commission and the Orange County Board of Supervisors.

The project would include as many as 5,700 homes on 500 acres and a 1,300-slip marina. The community would have a 130-acre regional park and 915 acres of wetlands to be maintained as wildlife habitats.

Before construction can begin, Signal contends, the company needs a way to pay for the massive investment it will make to build the roads, sewer and water facilities, marina, parks and wetlands restoration connected with the project.

The cost of those items is expected to exceed $233 million. Signal wants to ensure that it will be able to recoup its portion of that investment by being able to build the project without the risk of its being scuttled by Huntington Beach or other political interests.

The special district, a public body with a board of directors that would be controlled by Signal, would be the most efficient way to finance and implement the early stages of the project, the company believes. Once the homes are built and residents begin moving into the area, control of the district would shift to the homeowners and, probably, the city.

“When you’ve got all your money at stake, it helps when you have a public agency that is receptive to your needs,” said attorney Russell Behrens, who represents Signal.

The bill, for example, would allow the special district to levy fees to finance the construction and operation of water and sewer systems. If that power were in the hands of the city, a hostile city council or lawsuit might result in a ruling blocking construction of the pipelines, thus stalling the project, Signal argues.

Governmental Powers

“This is unique,” Bergeson said in support of her bill. “Where there are so many competing interests, if annexation (to Huntington Beach) were to occur immediately, it would be extremely difficult to ever have implementation of the plan.”

But Huntington Beach officials, who said they support the project, warned that the bill would essentially give governmental powers to a private company because the board of directors of the special district would be elected by the district’s landowners, of which Signal is the largest. No one now lives in the area.

In addition to the power to finance and build water and sewer systems, the district would build, maintain and operate a small craft harbor, facilities for land reclamation, drainage, flood control, parks, open space, levees, channels and docks.

Like other government bodies, the district would have the power to sell bonds, which would be repaid by assessments on the people who move into the development, and the power to condemn land through eminent domain. Signal also proposed allowing the district to levy a hotel room tax, although Bergeson agreed to remove that provision after Huntington Beach objected.

“We just don’t believe that giving this kind of very municipal power to a single landowner-developer makes sense,” said Jerry M. Patterson, the former U.S. representative who is now a Sacramento lobbyist for the City of Huntington Beach. “This is much further than one ought to go.”

‘Special Interest District’

Mayor Jack Kelly said amendments allowing the district to sell bonds and levy water and sewer charges ensure that the city will be “unalterably against” the bill.

Kelly said the bill would create “a landowner-controlled special interest district with a broad governmental authority for the sole purpose of protecting the financial investment of a special interest.”

Although the bill implies that the community and its governing district will eventually be annexed to the city, Kelly said Huntington Beach wants to take over the area now. The Bolsa Chica wetlands are in an unincorporated area surrounded by Huntington Beach.

But the committee, voting 6 to 0, sided with Signal. Sen. Newton Russell (R-Glendale) said he could understand why the developer would be reluctant to submit itself to the political process in Huntington Beach, which in the past has been controlled by slow-growth factions hostile to the project.

“I don’t blame him at all,” Russell said. “I would be concerned that if I annexed to the city then that would be the end of my project.”

The next stop for Bergeson’s bill is the Senate Natural Resources committee, where objections from environmentalists concerned about the restoration and preservation of the wetlands will be heard. Shell Oil, whose representative said Wednesday that the company fears what the creation of the district might mean for its mineral rights, also will testify at that hearing.