BKK’s Elsmere Profit Could Be $125 Million : Landfill: The city gave a preliminary OK to a plan allowing the purchase of the site from BKK and joint operation with the county.

Los Angeles city officials were told Tuesday that BKK Inc., a private waste management firm, could earn a $125-million profit by playing middleman in the proposed conversion of Elsmere Canyon into a public landfill.

Some city officials said they believed the figure is far too high and indicated it would be challenged before a final agreement is struck. “It is an issue that election defeats are made of,” Councilman Zev Yaroslavsky said.

BKK’s profit level arose as an issue during City Council discussion of a proposal for the city to enter into a partnership--called a joint powers agreement--with the Board of Supervisors to purchase the Santa Clarita Valley site from BKK and operate it as a landfill.

The council, on a 10-3 vote, gave its preliminary approval to the agreement, which will come back for final consideration next Tuesday.

The measure does not deal with such issues as BKK’s profits. However, during the debate Tuesday, Ron Deaton, the city’s top negotiator with the county, disclosed that BKK is seeking a total price of $195 million. Of that, $70 million would cover BKK’s costs of buying the land and establishing the landfill. The other $125 million would be profit.

“It was the first I’d ever heard that the profit was going to be that immense,” said Barbara Fine, head of the city’s Solid Waste Citizens Advisory Committee, a group of council-appointed private citizens involved in the garbage issue.

Yaroslavsky, whose questions elicited the testimony about profits, agreed that the size of BKK’s earnings from the project are “little-known.” But when it becomes known, it will be politically dangerous, he said, because any councilman who supports paying such amounts is likely to face voters’ wrath.

The terms of the deal with BKK are being negotiated by the county. The city, however, will have a voice because it must ratify any agreement.

Asked about the price later, Deaton defended the $195-million figure, arguing that the landfill would be worth that and more on the open market when operational. In fact, agreeing to pay Elsmere a $125-million profit could be viewed as placing a “cap” on the firm’s profits, he said.

Under the plan, BKK would buy the approximately 2,000-acre Elsmere Canyon site, obtain all environmental clearances needed to develop the property as a landfill, build the infrastructure needed to make the canyon an operable dump, and then sell the site to the city-county joint powers agency.

Users of the landfill, including the city’s own Bureau of Sanitation, would then pay a tipping fee to the joint powers agency to cover the cost of buying and maintaining the dump.

The partnership plan has been hailed by many as a welcome sign of a new era of city-county cooperation on the pressing garbage disposal issue.

Councilman Marvin Braude, who heads the council’s environmental committee, called Elsmere “probably the best location in all of Southern California for us to have a landfill.” It has a capacity of 190 million tons of trash.

Westside lawmakers such as Braude are pleased with the proposed pact because it would end the longstanding efforts of county solid waste officials to develop three West Side canyons--Rustic, Sullivan and Mission--as dumps.

Mary Edwards, a leader of the North Valley Coalition, a group opposed to expanding and placing landfills in the San Fernando Valley, was among numerous environmentalists to testify against the joint powers pact.

Edwards complained that the agreement puts the city on the record as supporting county plans to develop landfills in Towsley, upper Sunshine and Blind canyons, all located in the Santa Susana Mountains.

On a separate 13-0 vote Tuesday, the council adopted a motion by Councilman Ernani Bernardi to delete language from the agreement that gave the city the option to continue using the city-owned Lopez Canyon in Lake View Terrace as a dump even after Elsmere became the city’s principal landfill, possibly as early as 1995.

The city is currently seeking to expand the Lopez Canyon Landfill.