Group to Buy Landfill Site--If It Can Be Cleaned Up
An investment group has agreed to pay $47 million to buy a 157-acre site for a huge commercial complex in Carson near the San Diego and Harbor freeway interchange, provided the land is not too polluted to develop.
The buyer, Carson Realty Projects Inc., has tentatively proposed to build a “super regional” shopping and entertainment center on the property, formerly the Cal Compact landfill.
But the purchase is subject to a number of conditions, among them that the cost of cleaning up hazardous materials buried on the property shall not exceed $25 million.
For years, development plans for the property have been dogged by concern about buried pollutants and most recently by bankruptcy proceedings involving the owner of the land, Orange County businessman Robert A. Ferrante.
But on Thursday a representative of Carson Realty Projects met with Carson Mayor Vera Roble DeWitt and other city officials and told them about his group’s plans to have the dump site tested for contaminants, cleaned up and developed.
Carson officials, who have been trying to get the property developed for years, welcome the effort. Their enthusiasm, however, is tempered by memories of the many failed plans for the property, which have included mobile home parks, high-rise hotel and office complexes, automobile dealerships, and football stadiums--first for the Rams, then for the Raiders.
“Their proposal is very ambitious, but it’s too early to tell what will happen,” DeWitt said. “I’m cautiously optimistic.”
Developing dump sites is nothing new in Carson. According to city redevelopment manager Adolfo Reyes, half a dozen facilities in Carson sit on landfills, including the South Bay Six Drive-In Theaters, a mobile home complex and a truck repair facility owned by car dealer Don Kott.
None, however, approaches the development potential of the Cal Compact dump site. The property has attracted grandiose schemes ever since it was closed as a landfill in 1968, after 10 years in operation.
The site is among the largest vacant tracts with possibilities for intensive development in the Los Angeles area. Its location at the confluence of two major freeways makes businessmen swoon.
Mindful of the property’s potential to generate tax revenues, Carson city officials are also eager for development of the tract, which has a network of paved roads but is devoid of buildings.
“The sales tax dollars are certainly attractive to our community,” DeWitt said, pointing out that sales levies account for nearly half of Carson’s $28 million in annual tax revenues.
As the prospective developers and Carson officials acknowledge, however, serious hurdles have to be cleared. The most immediate is the problem of hazardous wastes.
Besides normal municipal waste, the Cal Compact dump contains paint sludge, solvents, tank bottom residue and oil-drilling mud, according to Allen Hirsch of the state Health Services Department.
The site also contains large amounts of methane, a foul-smelling gas produced by the decomposition of organic matter.
State health officials are preparing to oversee a detailed study of at least a year’s duration to determine the types and extent of hazardous wastes in the landfill.
The estimated $1.5-million study is being funded by Carson Realty Projects as part of its purchase deal. The cost may be shared with BKK Corp., successor to Cal Compact Inc., which ran the dump until the mid-1960s.
Health officials said the state will not allow development on the dump site until the study is completed and pollution-control work is performed, a process that could take several years. The first step, which is the study, is expected to get under way this summer.
“I think we’re pretty close to getting a starting date,” said Alice Gimeno, the health services official who is overseeing the Cal Compact study. “It’s very possible we could start next month.”
Finances present another hurdle. The purchase of the Cal Compact site was approved in U.S. Bankruptcy Court last November as part of a reorganization plan to satisfy creditors of World Industrial Center Ltd., a limited partnership controlled by Ferrante.
Carson Realty Projects, a corporation formed to buy and develop the dump site, is controlled by Southern California/Arizona Glaziers, Architectural, Metal and Glass Workers Pension Fund and by California Properties Fund, a real estate investment trust.
Although the purchase agreement breathes new life into efforts to clean up and develop the property, it will not take effect unless certain conditions are met within four years, according to Brian Lysaght, an attorney for Ferrante.
Among the stipulations: Cleanup costs cannot exceed $25 million, the buyer must get clear title to the property, approval of access roads to the land must be granted, and the buyer must be assured at least 3.5 million square feet of space.
Even if all conditions are met, developers would face the challenges of luring businesses to a dump site and dealing with soil settling, methane accumulation and other landfill problems.
As Carson City Atty. Glenn R. Watson pointed out, there are too many potential pitfalls to consider development a sure bet. Watson said: “I will believe it when I see it.”
Peter Sardagna, project manager for Carson Realty Projects, declined to be interviewed for this story. But a public relations consultant for the investors said they are considering construction of a large complex combining retail stores with a theme park, such as the Mall of America being built in Minneapolis, Minn.
The publicist, Sherry Twamley, acknowledged that numerous questions must be answered before plans can be pursued in earnest. A key issue under study, she said, is how to create a legal framework that shields businesses from liability if pollutants under the site cause problems in the future.
“If a business like May Company comes in and then a carcinogenic gas is found that wasn’t detected before, May Company would be liable,” Twamley said.
Pointing out that businesses would not consider locating on a landfill until such legal risks are removed, Twamley said attorneys hired by the investors are studying the possibility of vertical property division, selling space above the land, in order to limit liability.
“That, more than anything, is the basis of whether this whole thing is going to happen,” Twamley said.