A San Diego ‘Chinatown’ With Los Angeles as Victim

The plot should be familiar. Competing with an established metropolis to the north, an upstart Southern California city desperately seeks water in order to grow. A new water source is found--a faraway river in a fertile farming valley. Sensing that money can be made, speculators buy up water and land rights. Soon, a city grows mighty, fortunes are made and an unsuspecting valley withers. This is the so-called “Chinatown” account of how early Los Angeles reputedly grew at the expense of the Owens Valley.

Today, an eerie re-enactment of this saga--this time, at the expense of the Imperial Valley and most of Southern California--is occurring. The new “Chinatown” involves San Diego, the Texas billionaire Bass brothers and the San Diego County Water Authority’s proposed lease, for 75-125 years, of up to 500,000 acre-feet of “conserved” water from the Imperial Irrigation District.

But there is one crucial plot difference. The cost to San Diego of building its own aqueduct, as Los Angeles once did, is prohibitively expensive. As a result, the deal’s supporters are trying to commandeer as much as 40% of the Metropolitan Water District’s 1.2-million-acre-foot Colorado Aqueduct, which brings water to 16 million Southern Californians, to convey leased water to San Diego. If this “wheeling” scheme succeeds, metropolitan Los Angeles faces the bleak prospect of less water at higher prices.

“Chinatown,” San Diego-style is a drama in three parts. Act I involves the Imperial Valley, Sid and Lee Bass, and greed and secrecy. Over the past three years, Western Farms, a Bass subsidiary, has purchased or acquired options on up to 40,000 acres of valley farmland. The real prize is water rights, not land, and the enormous profit potential created by water markets. By getting water cheaply and selling it to San Diego dearly, the Basses hope to make $3 billion to $4 billion.

The key to the brothers’ success is their influence over the Imperial Irrigation District (IID), which holds the water rights in trust. Bass functionaries have engaged in extensive, secret negotiations with the board. A former Bass consultant is the IID general manager. Investigating the relationship between the Bass interests and the local water board, a grand jury found that the brothers exercised “undue influence” over the San Diego water-transfer deal and that the selection of the general manager was “seriously flawed.”

Water savings approaching 500,000 acre-feet, an amount sufficient for the needs of 2.5 million urban customers, will be difficult to achieve and costly to the valley. The plan’s success depends on a controversial and largely untested conservation method. Hefty water conservation will encourage land-fallowing, driving up the valley’s already high unemployment rate. The Salton Sea, a major bird stopover on the Pacific Coast flyway, could shrink by as much as one-third, with a dramatic increase in salinity and selenium levels. Valley selenium concentrations already exceed federal standards.

Recognizing such dangers, a broad-based coalition of valley residents and businesses is fighting back. The group seeks a transfer cap of 200,000 acre-feet and a contract length not to exceed 40 years. Anxious about a too-hasty decision process, the coalition wants a deal finalized only after all public hearings, environmental impact reports and conservation programs have been completed and approved. To date, the IID board has ignored these concerns.

Act II involves the board of the San Diego County Water Authority (SDCWA) and its drive for water independence from the L.A.-based MWD. San Diego is 90% dependent upon the Met for its water. Claiming that the MWD is an unreliable water source, and fearing L.A.’s weighted-vote influence over MWD board representation and its preferential water rights, the San Diego authority has turned to the Imperial Irrigation District for water.

Yet, the SDCWA board is becoming deeply divided over the proposed IID water transfer. Leaders of the city of San Diego’s water-board delegation are a major force behind the deal. By contrast, board members from price-sensitive north-county agricultural districts worry about the deal’s cost and its effects on water quality, as well as the failure to explore alternatives. Of growing concern is the short 60- to 90-day public-review period for a contract locking in four to six generations of San Diegans.

San Diego’s water-intensive high-tech companies, keys to the region’s future, seem unaware that a contract of this duration could become highly uncompetitive if cheaper water is found or low-cost desalination comes on line. A showdown on the SDCWA board looms, and leaders of the San Diego city delegation, the board’s 800-pound gorilla, have threatened to use their weighted vote to get their way, precisely what they accuse Los Angeles of doing on the MWD board. Yet, Los Angeles has never demanded its preferential water rights, even during the recent drought.

Act III involves the MWD, the Colorado Aqueduct and metropolitan Los Angeles. The SDCWA/IID deal only makes economic sense if leased water can be wheeled through the Colorado Aqueduct at a nominal charge. Otherwise, a new $2-billion-to-$3-billion aqueduct has to be built, doubling or even tripling the price of water to San Diego. The Met, which serves 26 other member agencies besides San Diego, its largest customer, is doing everything possible to keep the aqueduct full to ensure long-term water reliability to all its customers.

By contrast, Bass lobbyists appear to be trying to artificially “dry up” the Colorado Aqueduct to assist wheeling efforts. Bass tentacles extend to Sacramento, Washington and even to lower-basin states such as Arizona in an apparently concerted effort to reduce MWD’s supply of Colorado River water and create unused aqueduct capacity. An unexpected ally has been found in Assemblyman Richard Katz (D-Sylmar), who has co-sponsored legislation to facilitate aqueduct wheeling. By so doing, the term-limited Katz, an unsuccessful 1993 L.A. mayoral candidate, apparently has decided not to run again for the city’s top post. It would be hard to run for mayor on a platform of selling Los Angeles down the river.

The one individual who has a real opportunity to serve as the region’s water peacemaker is San Diego Mayor Susan Golding, fresh from GOP-convention-generated national publicity and viewed as a rising star. Golding has studiously avoided endorsing the proposed deal. Yet, the mayor’s leverage over the city’s influential SDCWA board delegation--they are her appointees--virtually guarantees that she will bear responsibility for any agreement signed.

As proposed, the SDCWA/IID water deal threatens harm to metropolitan Los Angeles, the Imperial Valley and even San Diego itself. Given that 16 million Southern Californians and a $500-billion economy are affected, the lightning-speed negotiations, aimed for completion by year’s end, need to be drastically slowed down to ensure adequate public scrutiny and participation, due diligence and needed compromise. Otherwise, the region risks another “Chinatown.”