DWP Pipe, Tank Project at Lake Hollywood OKd : Water: Controversial construction plan is approved. Critics blast price paid for open space and contend animal habitats will be damaged.

After five years of difficult negotiations, the Los Angeles Department of Water and Power has received approval to launch its biggest construction project in a decade--a $160-million complex of underground water storage tanks and pipelines at Lake Hollywood that will dramatically alter the natural landscape and cause substantial street disruptions on the Westside for up to three years.

The costly project, aimed at complying with state rules on the safety of water in open reservoirs, has been reluctantly endorsed by homeowners in the Lake Hollywood area after years of mediation because they believe it will stave off a proposed housing development in the hills.

The plan is strenuously opposed by conservationists, who complain that the agency paid an exhorbitant price for the land, and who contend that the project will ruin animal habitats and unique riparian woodlands in the eastern Santa Monica Mountains.

It is also opposed by homeowners in the faraway Cheviot Hills area, whose streets will bear the brunt of extensive pipeline construction.

The DWP will bury two to four storage tanks with a total capacity of 60 million gallons next to the popular lake, and lay eight miles of pipeline from Westwood to Hancock Park.

Officials at a state parkland agency have expressed outrage that the Department of Water and Power has been authorized by its board of commissioners to pay a real estate investment group more than double the appraised value for 166 acres of open space surrounding the spot where the tanks will be buried.

In an appraisal commissioned last year by the Santa Monica Mountains Conservancy and the DWP, the land owned by Lake Hollywood Ltd. and managed by the Jefferson Development Co. was appraised at $3.1 million. A subsequent appraisal by the DWP on its own declared the land to be worth $4.6 million. The firm has been trying for years to obtain city approval to build up to 64 million-dollar homes in a gated community on that property.

DWP commissioners on Tuesday authorized the agency to pay $8.25 million for just 106 acres of the property. The agency is in negotiations with a second party to pay $1.25 million for the remaining 60 acres.

“They’ve gone off and negotiated something on their own and it’s absolutely outrageous to me,” said John Diaz, land acquisition chief of the Santa Monica Mountains Conservancy. “That’s an offensive price.”

The purchase of the land is critical to the completion of the vision that the federal government, the DWP and surrounding homeowners have for the Hollywood Reservoir.

In 1988, the federal Environmental Protection Agency declared that all municipal water districts nationwide must begin to clean up water in open reservoirs by the mid-1990s. In Los Angeles, the DWP initially decided to cover its open reservoirs, but public opposition led to mediation and the consideration of alternatives, such as filtering the water at large plants next to the reservoirs.

A mediation panel composed of DWP officials and representatives of homeowners in the gorgeous, mountainous Lake Hollywood area brainstormed the idea to bypass the Hollywood Reservoir entirely and store most of the water necessary to serve its area in underground tanks.

Water will flow into the tanks at a constant rate from a filtration plant and ground-water pumps to the north, and their valves will regulate the flow of water to customers from Hollywood to Central Los Angeles. Effectively, the 1 billion gallons of water in Lake Hollywood itself will be taken out of commission, to be used primarily as emergency backup.

To sink the tanks in the ground in a 10-acre flat parcel of land that the DWP already owns next to Lake Hollywood, the DWP will need to excavate at least 800,000 cubic yards of dirt--a considerable amount.

Bob Yoshimura, assistant director of water-engineering design at the DWP, said the department determined it would cost $25 million to truck that dirt out of the Lake Hollywood basin over the course of the project. Instead, he said, it has decided to spend $5 million to spread the dirt around the surrounding canyons and hillsides in a way that “will look like it was placed there by Mother Nature” instead of bulldozers.

“We know we’re paying more than the appraised price, but we still feel it’s a good deal because it saves us the cost of hauling the dirt away,” said Yoshimura. He estimated the savings at $13 million.

The notion of re-landscaping nature, however, has conservationists up in arms. In addition, critics fear that the open space will be returned to private hands after the DWP project is done.

“It’s going to beggar our children and the people of Los Angeles for the rest of history not to have those hills as natural, public open space,” said Alan Kishbaugh, a longtime leader of the Federation of Hillside and Canyon Assns. “You won’t have any more canyons. You’ll have perfected building sites.”

Westside residents have also expressed opposition to the project, because the DWP plans to supplement its new tanks in peak summer months with water piped over from Upper Stone Canyon Reservoir in Bel-Air. That water is not subject to federal surface water treatment rules because it is surrounded by broad cement culverts instead of trees and earthen banks.

The department will spend at least $50 million to tear up eight miles of streets from Westwood to its water distribution center near Hancock Park--traversing, at one stretch, the Los Angeles County Club. Cheviot Hills residents have complained the loudest, and successfully encouraged their councilman, Michael Feuer, to set strict conditions on the DWP project.

Despite the disruptions and cost, representatives of homeowners in the Lake Hollywood area generally approve of the plan.

“We have to accept some compromises to keep the reservoir in a natural condition,” said Chris Hesse, a Lake Hollywood Estates resident who has invested thousands of hours of study of the project in his role as a member of a mediation panel. “Nobody really wants the tanks, and nobody wants to put dirt in the hills, but we realize it’s necessary to improve water quality. This is the best plan we’ve come up with in four years.”

Taking a longer view, some longtime activists in the Hillside Federation fear that the DWP could ultimately sell most of its acreage back to a home developer in five years anyway because the land will already appear degraded. Barbara Fine, an adviser at the federation, says that even if the carefully re-contoured canyons are well planted, it could take decades for vegetation to appear natural.

“If the deeds are not restricted to require that the land stay open, it becomes a prime area for the DWP to sell in the future,” she said.

Indeed, Yoshimura at the DWP confirmed that the agency has “no fixed plan” to sell or donate its unneeded open space ultimately to the Santa Monica Mountains Conservancy for use as state parkland, as once seriously contemplated.