Blog: Panel Refutes Legal Fear Mongering Over Power Plant Initiative

Thursday night (Nov. 8), BBR and NoPowerPlant.com sponsored a panel question-and-answer session regarding the legality of the residents’ Power Plant Phase-Out Initiative. A team of three land-use and environmental law attorneys responded to the public’s questions regarding different legal issues raised by AES, AES’ paid residents and other power plant proponents.  

The attorneys included Frank Angel, the long term attorney for Building A Better Redondo; Zein Obagi, an attorney with his own law firm with a background in land use law; and Hany Fangary, a Hermosa Beach attorney specializing in environmental law with an engineering background. All three donated their time to respond to the concerns and issues brought up by the residents.

The initiative is not a “taking”

AES and power plant propopents have stated the Power Plant Phase-Out Initiative is a "taking" or "eminent domain" or impacts AES' "right" to build a new power plant.

"Eminent domain" is where the government actually takes a private entity's property. The initiative does not affect the ownership of AES' property. Like all other zoning, it merely defines what AES is allowed to do with their property.

The bottom line on whether the initiative is a "taking"—all three attorneys provided substantiation that the zoning written into the initiative is not a “taking” and stands on firm legal grounds. All three expressed the opinion that if AES did bring a lawsuit to challenge the zoning during or after the election, it would most likely be thrown out for a variety of reasons. One of those reasons is that since the zoning does not affect AES until 2018, when AES’ current contract expires, or 2020, when the initiative requires any power generation to end, AES has no basis to sue until that time.

Bolstering that argument is the fact that the initiative has allowed ample time for AES to complete its current contract and make the return on investment that they could reasonably have expected when they purchased the plant from Southern California Edison in 1998. A key consideration in this is the age of the plant when they bought it and expiration date of the current contract. Another element, the initiative uses a state deadline for the application of new environmental constraints that would drive major modifications and investment in the plant.

The attorneys provided even more basis that the initative is not a “taking” and is legal. Obagi cited case law that affirms the right of a city to rezone a property in the best interest of the surrounding community. Angel cited a case where a city rezoned an oil company’s property due to its impact on the surrounding community. The oil company sued maintaining the zoning change took away their property rights. The court found the rezoning was legal on the basis that the company had no “right” to a land use that exposed the surrounding community to hazardous emissions. Fangary referred to another case where new zoning decreased the value of the property by 75 percent. The judge found that the new zoning provided residual value for the property and therefore was not a "taking.”

All three attorneys agreed the initiative zoning provides AES ample residual value for the property and that even the public recreational space requirement would not be considered a “taking,” nor would Redondo be required to buy the property.  

We maintain that, if the initiative is successful and the CEC denies AES' application to build a new power plant, the initiative zoning actually gives AES MORE value for their current property. Certainly waterfront commercial zoning is worth more than the  current industrial/parkland zoning. 

The Initiative is not "spot zoning"

Some power plant proponents have tried to argue the initiative is "spot zoning", which could be a grounds for lawsuit.  "Spot zoning" is zoning that benefits or discriminates against a single property unfairly.  The initiative zoning cannot be spot zoning because the density and uses allowed under the new zoning are based on the harbor area zoning right across the street.  The initiative zoning actually better integrates the uses allowed with those of the surrounding community.   

AES is responsible for tear down and clean up

Another issue brought up by the audience is the responsibility for the tear down and remediation of the plant. According to the panel, AES is responsible for the costs to tear down the plant although they can pass on that responsibility to any new buyer (which would lower the selling the price). AES and SCE are responsible for remediating the contaminated soil. Again, they may pass that on to a new buyer and reduce the selling price because of those costs, but should that buyer renege on that agreement, the responsibility for the cleanup is AES’ and SCE’s. There are Federal, State and local laws that would enable legal action if AES tried to abandon the plant in place. 

Current zoning demonstrates AES has no “right” to rebuild

Many people don’t realize that the current zoning for the AES site provides a strong basis for the initiative zoning. Currently, power generation uses at the site require a Conditional Use Permit that gives wide latitude to the city to approve or disapprove a new facility or major modifications. Here are some key clauses from the current zoning:

(a)        Purpose. The purpose of this section is to ensure that new public utility facilities andadditions to existing facilities are compatible with surrounding properties and consistent with the public health, safety, and welfare of the City.

(3)        The proposed use shall have no adverse effect upon any abutting property, the neighborhood, or the City, and the proposed use shall protect the public health, safety, convenience, interest, and general welfare.

(4)        The applicant may be required, as a condition of approval, to dedicate land forstreet or park purposes where indicated on the General Plan and to restrict areas perpetually as open space for common use by appropriate covenants.

(1)        A Conditional Use Permit shall be required for the construction, reconstruction, erection, alteration or placement of any improvement or the making of any other physical change in or to any public utility facility…

AES did not challenge these requirements when they were added to to the property. State permitting requirements combined with the current zoning for the AES site provide a strong case that AES has no “right” to build a new power plant.

Comparing the Initiative to the Hermosa Beach Mapherson Lawsuit

Certain power plant proponents, even a couple members of our City Council, compare the potential for lawsuit to Hermosa Beach's Macpherson lawsuit. Fangary demonstrated that the initiative is a totally different situation than the Macpherson lawsuit. In the Macpherson lawsuit, the City broke a contract it had signed with the oil company. In this case, AES has no contract with the city. The initiative does not break any contract between the City and AES. Furthermore, the initiative allows AES to complete its power production contract with JP Morgan. The initiative does not expose the City to the risk of a Macpherson-type lawsuit.

Thanks to Frank, Zein and Hany for donating their time to respond to issues raised by AES and power plant proponents and the concerns and questions raised by the audience. For those who missed the event, NoPowerPlant.com will post a video of the discussions.

Watch video of the attorneys' answers to questions from the public at http://www.facebook.com/nopowerplant

Go to http://aesredondomustgo.blog.com/power-plant-faqs/ for more information.