Funding Plans Collapse : City Searching for Way to Buy Slough

Eager to purchase the environmentally sensitive Famosa Slough from a developer, San Diego officials are still scratching their heads, wondering where and how they are going to obtain the remaining $2 million needed to close the deal.

The City Council and Terry Sheldon, who owns the 20-acre slough and wants to build condominiums around it, entered a $4.6-million agreement in May for the city to buy the wetland and preserve it. According to the agreement, the council is to spend $2.6 million to acquire the waterway near Ocean Beach, and the other $2 million is to come from state sources.

The city has until Nov. 11 to come up with the money to complete the purchase. At first, city officials and Councilman Ron Roberts, whose district includes Famosa Slough, hoped that Assemblywoman Lucy Killea (D-San Diego) would be able to obtain the necessary state money.

However, Gov. George Deukmejian threw a monkey wrench into those plans earlier this month by vetoing $1 million earmarked for purchase of the waterway. That money was to have come from the environmental license plate fund, said Kathy Krause, an aide to Killea.

“The money is available in the state budget . . . but the governor vetoed it because the request didn’t go through the normal process and state officials didn’t have time to review it,” Krause said.

Because state officials will not have an opportunity to review the request before the Nov. 11 deadline, city officials have been left scrambling.

An additional $500,000 for the land purchase was supposed to come from the state Coastal Conservancy, but the availability of that money also is now in question, according to a Roberts aide who requested anonymity.

“It’s back in the hands of the city. . . . The $2 million was really the city’s problem. We were simply trying to help them out. We can certainly try again,” Killea said. “It seems to me that they have two ways they can go. They can wait and get the money from the state, or they can renegotiate the agreement with the developer. Either way, they’ll probably have to postpone the November deadline.”

Neither Killea nor Roberts’ assistant would say that the agreement between the city and Sheldon is dead. The councilman’s aide said the city has nothing definite lined up to acquire the money, but he added that both Roberts and Sheldon are “still actively seeking alternative sources of funding.” Those include private environmental groups, he said.

Roberts’ assistant said discussions are being held, but he declined to elaborate because they are still preliminary. “Let’s just say that Ron has been to Sacramento and has talked to several sources and is working to get the necessary funding,” said the aide.

Roberts’ office declined to comment on the possibility that a new deadline may be negotiated, and Richard Flannery, who does public relations for Sheldon, declined all comment. Sheldon could not be reached Wednesday for comment.

At least one private group, the San Diego chapter of Ducks Unlimited, has already committed itself to raising the estimated $280,000 needed to restore and maintain the slough for five years after it is purchased.