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Blog: Panel Refutes Legal Fear Mongering Over Power Plant Initiative

Legal panel presents evidence that the Power Plant Phase-Out Initiative is on firm legal ground.

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.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Jane November 11, 2012 at 06:55 PM
Unless these lawyers are going to defend this non-legal-opinion for free, their words are meaningless. This is just a smoke screen and theatre. The City Attorney won't agree, and as a result, the City Council won't side with trying to take the land from AES. When the City Attorney agrees, then you have something. Until then, why bother?
Jim Light November 11, 2012 at 07:03 PM
At least one would be defending the zoning in the initiative. AES postured as though they were going to sue to keep the initiative off the ballot citing some blatant twisting of the City Charter. Then they backed down supposedly to save the city from the cost of the lawsuit. But we all really know they had no leg to stand on. Their twisted interpretation of the City Charter was desparate act to scare the City Council. Fortunately, Webb didn't buy it.
Bill Brand November 12, 2012 at 01:36 PM
Jane, This is not a 'taking.' It does not take land from AES. It rezones the land two years after their current contract expires and at the same time the State bans their use of the ocean to cool it - the end of its useful life. Two of the operating 4 units will be 52 years old, the other two will be 62 years old. This rezoning is in the interest of public health given that a new plant will emit many times the amount of air pollution than the current one does. Hard to believe I know, but even though the new plant will be more efficient, it will run much more often - emitting roughly 500 tons of various pollutants into our community closer to the ground, given that AES has said they will build shorter stacks. Here's a link to Jim's previous blog that gives a good summary of what the initiative does do: http://redondobeach.patch.com/blog_posts/blog-power-plant-phase-out-initiative-in-plain-english And here is a link to the initiative and other reports: http://aesredondomustgo.blog.com/aes-related-reports/ Three power plants on the California coast have permanently retired recently, and this one should be next! Vote Yes on the initiative! This is our opportunity to significantly reduce air pollution in Redondo and leave our waterfront better than we found it while giving AES significant economic use by allowing 15-20 acres for commercial development.
Stu November 12, 2012 at 02:42 PM
How many city councilmen attended the November 8 panel discussion? If any other than Mr Brand, were their concerns about takings, lawsuits, etc, reduced or eliminated?
Jim Light November 12, 2012 at 03:11 PM
Councilmen Brand and Kilroy were there. I think we all learned a lot. Some of the case law was especially revealing. I think most of us went away with the feeling that AES still can sue (anyone can sue over anything), but that the initative is on firm legal ground. I can't speak for Councilman Kirloy. You may want to ask Councilman Kilroy yourself, or perhaps he will comment here. He did commit to writing a letter to the CEC opposing the power plant. We'll see if he follows through.
Josh Obear November 14, 2012 at 07:52 AM
Hello, just a quick question; I was watching the videos of the panel on youtube (thanks again for posting them for those of us who couldn't make it!), and I seem to have missed the citation of the legal case Fangary mentioned: "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." By any chance do you recall what question this response came up during, so I can watch that part again? The entire issue of devaluing the property by mandating a park is one of my biggest concerns with the initiative at this time, and I would love to be able to research the actual court case that serves as precedent on that matter.
Jim Light November 14, 2012 at 03:24 PM
The zoning in the initiative does NOT devalue the property. We are fairly confident that should the residents vote to phase out the power plant, the CEC will not approve their application for a new plant. The power generation capacity versus the need projected for the future does not justify overriding the zoning change. And the fearmongering that AES will just retrofit the current plant to comply with new regs is a joke. AES would not be cost competitive to the new plants coming online next summer. So only two scenarios are viable. One in which the CEC overrides the will of the voters, or one in whcih the CEC denies a permit to AES. If the CEC denies AES permit, the current zoning for the property is industrial and park. Waterfront commercial zoning is worth more than industrial zoning. And the commercial zoning is at the same density allowed in the harbor. So it is generous. If the CEC overrides the zoning voted in by Redondo residents, then AES gets to build their plant. If the CEC sides with residents and denies the permit, the initiative zoning provides AES greater value for their property than the current zoning.
Josh Obear November 14, 2012 at 04:26 PM
I understand that the CEC is extremely unlikely to override the zoning; I am not contesting that. I am, however, still skeptical that allowing commercial development on 30-40% of the land is equivalent or greater than the value of industrial development to AES (I also understand that the zoning is in line with harbor zoning across the street, but it is my understanding that you must compare the new value to the maximum potential value in the status quo). Yes, if we vote them out, the CEC will not bother, but I find it difficult to believe that they will reject their application without the new rezoning, and therefore I am pretty sure that, legally, this is what we must compares values on (not a situation in which we have already made industrial use impossible). Admittedly, I am no expert on waterfront property incomes, so if you provide a little extra information on how exactly that works in terms of higher incomes and value, I am certainly open to changing my views. That being said, I would still love to have the name of that court case, as I think it is still valuable to this discussion. I know that there were 5 or 6 questions from the legal panel posted on Youtube, but I can't find that specific response, and I feel that seeing it would give me a much greater understanding of this topic. Thanks Jim.
Jim Light November 14, 2012 at 04:52 PM
I am swamped today, so I will have to review the question videos tonight. But any industrial development on the site requires a Conditional Use Permit and is subject to an unspecified amount of parkland set aside under current zoning (which is ironic since none of our opponents including AES complained about this in Measure G). Who in the Council would approve an industrial use in that area while we are trying to revitalize the harbor? Would the public let that happen? So it will be very difficult for AES to make a case that some potential industrial uses and parkland would be worth more than the generous commercial zoning we have afforded them under the initiative.
Josh Obear November 14, 2012 at 05:03 PM
Alright, thanks for the explanation :)
Jim Light November 14, 2012 at 06:07 PM
According to the Lincoln Institue of Land Policy, in the Western US, commercial property is valued about 18% higher than industrial property. I am sure there is an additional valuation based on being waterfront commercial. Unlike waterfront commercial, an industrial use near the waterfront is likely of little additional value (ocean related (boat yard, fish processing, etc;) industrial uses excepted).
Fred Reardon November 17, 2012 at 09:48 PM
Hey Jane, unless you are going to pay for all our medical bills related the effects of all this additional toxic power plant plume pollution, you're words are meaningless. You and all your PIMBY ( plant in my back yard) buddies should move to an area where you can live your dream of having fossil fuel based toxic emmissions entering your lungs while you suffer the negative effects of plant which produces power for another area. Why do you PIMBYs have this sense of entitlement to polluting power at Redondo Beach citizen's expense?
Jim Light November 17, 2012 at 10:49 PM
Crackin' me up Fred! Here's some other potentials: DOPE's - Development Over People and Environment PIMP's - Pollution Is My Plan SOOTys -Sold Out Our Town GAWK'ers - Give Asthma Who Kares? BOBA - Bought Out By AES ROAPer - Resident On AES Payroll

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