L.A. Takes Steps to Meet DWP Terms for Fryman Deal

The Los Angeles City Council acted Friday to meet conditions set by the Department of Water and Power on the utility’s cooperation in a $10-million plan to buy Fryman Canyon in Studio City to prevent houses from being constructed there.

The council tentatively agreed to pay the DWP more for its participation and to allow the utility to distance itself from the deal, which some council members said indicated that the deal provides an improper profit to the canyon’s owner.

The Water and Power Commission on Thursday demanded a restructuring of its role in the agreement by the city, state park officials and private interests to buy the 63-acre canyon from developer Fred Sahadi for parkland.

One of the DWP’s key demands was that it be fully reimbursed by the city for the properties it is contributing to the purchase. Under the agreement, the utility would transfer four of its surplus properties in the Santa Monica Mountains to Sahadi as partial payment for Fryman Canyon, located just north of Mulholland Drive and west of Laurel Canyon Boulevard. The four parcels were most recently valued by the DWP at $1.725 million.

Sahadi also would be paid $6.7 million by the Santa Monica Mountains Conservancy, the state agency that would maintain and operate Fryman Canyon as a park. The remainder of the $10.1-million deal would come from city funds and private sources.

Previously, the Fryman deal was set up so that the utility would have been paid by the conservancy only $61,150 for the four properties.

Under the deal tentatively approved Friday by the council, the city will pay the DWP $1.725 million for the four parcels and another $2.7 million for a fifth parcel that would be transferred to the conservancy as part of the deal.

But the method of payment was left unresolved, with DWP officials and Councilman Michael Woo saying that the intent is for the city to reimburse the DWP with as-yet unspecified “in-kind services”--not in cash. A DWP executive later said payment might involve transferring city property to the utility.

The DWP board also insisted that the City Council--not the DWP board, as previously planned-- declare the purchase of Fryman Canyon in the public interest and approve the transfer of the DWP properties to Sahadi.

The council agreed to do so.

Councilman Zev Yaroslavsky speculated later that DWP was distancing itself from the Fryman Canyon purchase because of lingering questions about whether the $10-million price might involve an illegal gift of public funds to Sahadi. The most recent state-approved appraisal of the canyon set its value at $8.75 million.

But DWP executive Mike Moore rejected Yaroslavsky’s interpretation. “We’re not in the parks business, we are in the water and power business,” Moore said. That being the case, it is not appropriate for DWP to determine if the public interest necessitates the purchase of Fryman Canyon for a park, he said. “That’s a council decision.”