Old DOE Test Site at Center of Standoff

Stalled negotiations over the future of a sophisticated government testing facility in the rugged Santa Susana Mountains are proving that the road to post-Cold War privatization can be as rocky as the road to peace.

The negotiations center on the 90-acre Energy Technology Engineering Center that over the past 30 years has tested everything from pumps for a new generation of nuclear reactors to earthquake safety devices.

The Department of Energy decided last year to close the facility, and set up talks on its future between a citizens group of business leaders and the Rocketdyne Division of Rockwell International, which operates the site for the government. Similar talks have taken place across the nation as the government tries to privatize former military bases and other defense facilities.

But the negotiations here have became so contentious--including so-far unproven allegations of the theft of millions of dollars worth of government equipment--that the government sent a high-level team from Washington last week to try to break the impasse.

“It’s unfortunate that both sides seem to be rather intransigent in their positions,” Robert Le Chevalier, site manager for the Energy Department, said before the meeting.

Afterward, Le Chevalier said that there had been no breakthroughs, but that he had detected flexibility in the two sides that he hoped could eventually lead to a breakthrough.

The sticking point is over who will run the facility after the government withdraws. The citizens group, known as a Community Reuse Organization, says it cannot carry out its mandate to find private commercial uses for the testing facilities without gaining control of the land, either through purchase or a long-term lease.

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But Rocketdyne has so far contended that it must be in control of the site, which is within the boundaries of Rocketdyne’s 2,700-acre Santa Susana Field Laboratory, which tested the rockets that blazed America’s path into space.

Energy Department officials said they are unaware of any privatization negotiations anywhere else as difficult as these. A principal reason is that in almost every other case, the government owns the land involved. In this case, Rocketdyne owns the land, but the government owns the buildings--greatly complicating any plans for the future use of the site.

The citizens group charges that unless the government takes action, millions of dollars worth of taxpayer-funded testing facilities will wind up in the hands of Rocketdyne.

“We aren’t being treated civilly or fairly,” said Chuck Bloomfield, a member of the board of directors of the organization.

“We’re up against a $12-billion company with tremendous power. They have basically drawn a line in the sand.”

Membes of the citizens group also have harsh words for the government, accusing the Energy Department of betraying them by not standing up to Rocketdyne. On Oct. 31, 1995, the department sent a letter to Rocketdyne, informing the company of its intent to buy the land, according to the citizens group. Just three months later, James Hirahara, the department’s associate manager for site management in Oakland, sent a letter to the citizens group saying the government had decided “it is not in DOE’s best interest” to purchase or lease the site.

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Government officials admit Rocketdyne has threatened to sue the government.

“I believe when Vice President Al Gore talked about downsizing, this was the type of project that fits that definition,” said Bonny Capobianco, executive director of the Valley Industry and Commerce Assn. and a leading member of the board of the citizens organization.

“Now we’re finding the Department of Energy reluctant to move forward [to wrest the land from Rocketdyne] for fear of litigation. It’s hypocritical.”

The department denies that it backed down from Rocketdyne. Hirahara said the department never said it would buy the land. It was merely reserving the right to do so.

“As we got farther into the discussions, it didn’t seem like the way to go,” he said.

Citizens group officials say that if the negotiations break down, they fear the government will simply abandon the facilities to Rocketdyne. “The outrage is, they are contemplating walking away from $50 million to $60 million in assets,” said Alan Insul, a real estate attorney and board member of the citizens organization.

The facilities include 250,000 square feet of test buildings, some several stories tall.

Despite the difficulties, Rocketdyne officials said they hoped negotiations would proceed and professed respect for the citizens group.

“We’ve had good relations in the past,” said Mark Gabler, director and program manager of the government test site. “I respect their expertise. Once we work out our approach, this issue will be put aside.”

The site is 90 acres at the edge of the 2,700-acre Santa Susana Field Laboratory, where in 1947 Rocketdyne began testing the massive rockets that would later carry astronauts to the moon.

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The testing facilities opened in 1966, mainly to test components to be used in nuclear power plants, such as pumps, steam generators and valves. At an adjacent site, advanced reactor concepts were tested, and some defense work was performed.

With the phaseout of the nuclear program in the late ‘70s, the test site began working on solar projects and energy conservation.

The current work at the site, which includes seismic testing of isolators designed to help bridges survive earthquakes and huge pumps for Japanese sodium reactors, will continue into 1997.

The Community Reuse Organization was established in 1994, when a Rocketdyne official approached Capobianco and asked her to head up the citizens group. She agreed and filled out the board of directors with a cross-section of business people.

Talks began amicably, but as negotiations proceeded, it became clear that both sides envisioned far different roles for each other.

The citizens group members decided they needed control over the site in order to market it effectively to commercial contractors interested in using the facilities to safely test their products.

Members of the group predict that they could bring in 2,000 jobs if they were allowed a free hand.

“This is an important resource for Rocketdyne,” Gabler said. “We intend to continue to operate it.”

An additional problem, he said, is that the test site is dependent on the larger Rocketdyne property. “There are common roads, a common fire department,” Gabler said.

Rocketdyne officials say they regard the citizens group as a partner, but its members are more jaundiced. “They want us to act as their P.R. arm,” said member Bloomfield.

Complicating the negotiations are press reports that Rockwell International, Rocketdyne’s parent company, is selling Rocketdyne. Gabler refused to confirm the rumors. “Any discussion is purely speculation,” he said.

The theft issue arose after a recent citizens group tour of the testing facility. Members noticed that the chemistry lab and engineering building had been cleaned out.

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“You walk into the building and all the desks, the chemistry equipment, had disappeared,” said Bloomfield. “We know that stuff is gone. It has to be determined whose fault it is.”

Gabler said nothing has been taken.

He said that after the government announced its plans to pull out of the test site, Rocketdyne reduced its work force there from 160 to 80. Desks were moved and old chemicals disposed of, but nothing was misappropriated.

“What we did was effective management of the site,” he said.

But Hirahara, of the Energy Department, said equipment is missing.

“Whether there is pilferage, or a corporate decision to misdirect property, I can’t say,” he said.

These concerns led David Pines, the Energy Department’s contracting officer, to send a letter to Rocketdyne on April 17 ordering the company “not to dispose of the Department of Energy property, material, real or personal.”

Hirahara said that action was taken “because of appearances of some things happening to undermine privatization.”

He doesn’t know what’s missing yet, or whether there has been any intentional misappropriation of property.

“What we’re trying to do is evaluate what’s missing. We’re looking at whether we have a write-off or something we want to look into further.”