City Council to Draft MOU Regarding AES Property

Editor's note: This article was originally published at 5:39 p.m. May 7, 2013.

Despite concerns from Redondo Beach employee groups, the Redondo Beach City Council unanimously agreed to draft a memorandum of understanding between AES Southland and the city that outlines the company and city's commitments throughout the process of collaborating to find a new use for the property on North Harbor Drive.

As part of the motion, the council also directed staff to draft a contract to hire a land-use economist to provide an independent assessment of "financial benchmarks by which to guide discussions and planning for alternative land uses" and an independent analysis of AES' economic target.

The current AES Redondo Beach plant must be retrofitted, retired, rebuilt or obtain special exemptions to continue operating beyond 2020 due to a new ban on once-through cooling, where ocean water is pumped into the plant to cool the superheated steam used to spin the turbines and generate electricity. Parent company AES Southland has indicated that it wishes to rebuild the plant and has submitted an application to do so with the CEC.

AES officials say the new plant will run more efficiently, have a smaller footprint and provide flexibility for the grid when energy from renewable resources isn't available.

During Tuesday night's council meeting, representatives of multiple employee groups—including the Police Officers Association, the Firefighters Association and the Teamsters—reminded the council that the employee groups had made multiple concessions years ago when the economy went south. Several speakers commented that it seemed like the city was spending money on issues while putting off its obligations to employees.

Mayor Mike Gin disputed that idea, noting that he hoped the revitalization efforts for the Redondo Beach waterfront—including those that may eventually occur on the AES Redondo Beach property—would help increase city revenues.

Also on Tuesday night, the city council voted 4-1 with Councilman Steve Diels dissenting to discuss a potential moratorium in 60 days and give direction to staff at that point.

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Read below for the live blog of the portion of the meeting discussing AES Redondo Beach. Entries are in chronological order; please excuse any typos!

7:52 p.m.: Time for the AES discussion. It's been moved up to accommodate the crowd of people who attended.

"Council asked me a couple of weeks ago to come up with some recommendations," says Mayor Mike Gin.

"I think this is going to be one of the most important efforts that we will be undertaking in terms of a major land-use process," he says. This is an opportunity to "really work collaboratively with a private property owner to look for ways to help eliminate future industrial uses on that piece of prime coastal property."

He explains that this is not city land; it's owned by AES Southland.

"What we are doing here in the city of Redondo Beach is frankly unique not only to our community but to them as a corporation," he says.

Here are the issues:

1. There have not been good or effective collaboration with the property owner in the past, and AES has not engaged in meaningful discussions. Gin wants to establish and formalize a memorandum of understanding between the city and AES. The MOU should have specific items about moving forward and searching for alternatives.

Gin says he's spoken with AES Southland President Eric Pendergraft, and they agree that this should be formalized.

"AES and Eric have indicated that there is an economic target," he says.

He also says that an economic target needs to be identified.

2. He recommends that the city council authorize selecting a land-use economist to be the city's advocate. This person would conduct an independent assessment and find financial benchmarks for the city to compare to AES'.

"We understand that AES is a business just like any other business," he says.

3. Gin supports, in concept, the formation of a citizen's committee, but until the MOU is signed and an economic target is established, the committee should be deferred. The benchmarks will set the tone for the discussions of the committee. He thinks it should be a focused committee.

The committee would come up with alternative land uses and zoning to provide economic incentive for AES, he says.

He has laid out a framework on how the committee could be structured.

4. He is recommending a moratorium on the site. "The needs assessment should be done, and if a moratorium is enforcing our option for the needs assessment to be done … I think it's important to do," he says. Nevertheless, there are issues with moratoriums. He's offering some prerequisites:

• There is a MOU.
• The city has created the citizen's committee with specific timelines, guidelines and goals.

These can be used to justify the moratorium.

"Until those things are done, I think it may be premature to do (a moratorium)," he says.

8 p.m.: Councilman Bill Brand thanks Gin for his work.

"It seems like a really important step; I'm not sure if we should be making these decisions tonight," says Brand. He agrees with the citizen's committee idea; however, he doesn't think the city should wait.

"You don't have to make any commitment to AES," he says, adding that it takes awhile to get a committee organized.

He agrees with the idea of hiring an outside expert.

Re: the MOU. Brand's not sure if that will work. "I honestly don't see ... what the city itself has to offer other than we're willing to work with AES," he says. The city isn't going to stand down on opposing the application; AES isn't going to drop the application.

Brand mentions the staff report from 2004 with steps for phasing out the power plant.

"If you just ask AES what they want, they're going to want a power plant, the empire state building and 3,000 condos," he says.

The moratorium creates a conflict for a needs analysis from the California Energy Commission, Brand says. The city can always institute one.

City Attorney Mike Webb explains the legalities behind a moratorium.

"I am generally in agreement with this," Brand says, but he disagrees with meeting AES' target, he wants to start the task force process now, and he wants a moratorium now.

8:07 p.m.: Councilman Matt Kilroy asks Webb about some of the finer points of a moratorium. If a public hearing is held, the moratorium can initially be established for a longer period than a moratorium established without a public hearing, Webb says.

Kilroy loves the idea of an MOU. "I think it would be fantastic if we follow through with that and AES follows through with that," he says.

He's in favor of moving forward with the committee now—"whether you're talking 38 acres or 50 acres, we need to start having that discussion," he says.

He wants a school board representative and possibly a representative from the Beach Cities Health District.

"I think it would be awesome if AES comes to the table," Kilroy says.

8:15 p.m.: Councilman Steve Aspel's turn. He says it's "a given" that the city has to work with AES.

"No. 1, they have to be able to have an MOU ... to figure out what this property is worth," says Aspel. He's concerned about the cost of a land-use economist.

Webb says the money to pay for this economist would probably come out of the budget they've allocated for the intervener budget.

Aspel doesn't think a committee is necessary right now, especially with the elections coming up. "I think sometimes the same people who wanted us to slow it down for CenterCal want us to speed it up for this," Aspel says.

(Some guy in the audience who is sitting behind me keeps commenting rather loudly on everything discussed.)

"I think it can way until the new council comes in," says Aspel. He says the employee unions should get involved, too. "This is going to cost a fortune. It's not as if we can just snap our fingers and make this power plant go away."

AYSO and the Little Leagues would be "valuable" to have, too—but then you'd get too many people. "This is different than a growth-management task force," he says.

Aspel doesn't see "anything positive" coming out of a moratorium until the city finds out the cost. "Nothing needs to be done today on a moratorium; they're not going to build anything there next week," says Aspel. He's certain there will be a needs analysis without a moratorium, but that's his opinion.

Aspel says that changing the zoning has been on the table, but people who are now members of Building a Better Redondo and/or NoPowerPlant.com opposed it. He says the city must work with AES.

"Until we can pay our employees and just pay for what we have, we can't just go spending money," Aspel says. His words are met with applause.

8:16 p.m.: Diels moves that the city council authorizes the mayor and city manager to put together an MOU and hire a land-use economist.

Kilroy seconds the motion. Councilman Pat Aust says he wants to amend the motion to give the land-use economist specific instructions.

8:22 p.m.: "The train has left the station on the permitting process, and if we don't find an economic alternative to a power plant, AES is very good at getting power plants permitted," says Diels. He doesn't want a moratorium because he's suspicious that a needs analysis would turn out bad for the city.

Brand says he'll support most of it, but he wants the committee started. Any zoning change will have to be voted on by the residents, he says, so he doesn't see "any reason to wait whatsoever."

The new council can always change who's been appointed to the committee. "We'll have to wait two months, then, if we don't do it now," he says. He offers a friendly amendment to get started on the committee.

The committee will drive the results of the vote, he says. "If you bring something forward that doesn't have citizen support and advocacy from people who have been doing this for some time ... the whole thing will go down the tubes."

He says the city should be "fully engaged" and "spending some money" on the issue. He notes that the committee could look at the 38 acres AES has said will not be part of the power plant.

8:30 p.m.: Diels declines to accept the friendly amendment—he doesn't think that the group should be formed without a goal. He would accept the amendment if it included something along the lines of "will be formed when these conditions are met," one of them being AES agrees to the MOU.

"Well, if we wait for an MOU, it's going to be a long time ... and we've lost precious time," says Brand.

Aust agrees with the MOU idea—it's a "good idea," he says. He says OK with the economist if a scope of work is established. He doesn't want the committee because he thinks that AES won't do anything until it has a permit to repower, which will take 18 months. "Once we get an MOU, we have an idea of what they want, we have an economist's idea of what it's going to cost to put it into play," then the group will have an idea, he says. "It's not like we're going to miss the bus by not deciding it this week, next month or four months from now."

Aspel says he's going to pile on a little bit—why would someone go on a committee if they might be fired by the next council member when he or she is elected? The people shouldn't be booted off by the next elected person.

"I think we need new blood in this thing, and not the usual suspects," says Aspel. One group "will not be satisfied without total annihilation." "There's got to be room for moderation and people have to be able to sit in a meeting and bend a little bit."

He'll support the motion as long as the friendly amendment isn't added. It was already declined.

8:38 p.m.: Just like people spend money on accountants and/or software to pay their taxes, the city will have to spend money to get the proper information for this issue. "You go and get help for those things that you're not trained to do," says Kilroy. "We need advice on the economic value that AES is looking at, whether it's to come up with a zoning alternative or whether it's to come up with mitigation measures."

Gin notes that many members of the audience are part of employee organizations. He thanks them for the services they provide. "Frankly, we wouldn't have a city (without you)," he says. "You guys and you gals are key. I can't express my appreciation enough for what you've gone through, especially the past few years."

"I know that the idea of maybe spending some money on an effort like this" may seem odd, he says. He calls money spent here an investment. "If we can create an economic engine on some of that unused land or that entire site that AES currently has a power plant on, you'll have huge amounts of increased tourism, new hotels that may be providing additional transit occupancy tax, additional sales tax."

These projects could bring more revenues for the city, so it can get back to a sustainable economy in the city. He sees this "as an investment in our community's future, in all of our futures."

Brand thanks Gin for reminding everyone of that. Brand really wants a committee, and he hopes that Aspel will support a committee after the election. Brand believes that any idea that's decided

"I just think that was a brilliant statement that you just made that there will have to be collaboration with the community, and I couldn't agree more," says Diels. (Make a note. Diels agrees with Brand.) He just thinks that right now is not the right time for the committee.

8:39 p.m.: Public comment! John Armstrong, a city building inspector, is at the podium. "Quite frankly, as a citizen of this country, I've become so incensed I can't see straight," he says. He notes that everyone relies on a capitalist system.

Secondly, he was under the impression that as a citizen, he voted on Measure A. "We've got a whiny group of people that want to continue it on," he says. He says the planning commission does

He doesn't want them to make the "Half of our consultants are either idiots or they tell us what we want to hear," he says. He thinks the consultant could lead the city into a lawsuit. "We had a whole election, it was supposed to be solved." He suggests that the people who don't want a power plant should stop using electricity.

8:42 p.m.: Scot Martin, president of the Police Officer's Association, says the bargaining groups have been told that there is no money. The groups took concessions several years ago to keep people.

"Our management group is in a negotiation process that is not progressing at all," he says. He's unhappy that the city is spending $200,000 on the intervener process and possibly up to $1 million when city employees are still taking concessions.

8:48 p.m.: Brad representing the Firefighters Association hopes that the city puts as much effort into establishing MOUs with the city groups as they do with AES. It's been nine months without an MOU with the Fire Department, he says.

He says he's hearing a lot about customer service, but it's not happening internally. Employees are feeling unappreciated.

Carlos (can't spell the last name) with the Teamsters is now at the podium. "This AES issue is obviously important ... but at the same time, there is other important issues," he says. He's afraid these important issues will keep the city from investing in its workers—he calls it a "procrastination issue."

He asks the council to be considerate of its employees, many of whom live in the city. They don't know the impact of the vote. "We want to make sure that these folks ... aren't on the backburner," he says. "You need to invest in them as well."

8:51 p.m.: Deborah with RBCA asks the council to be mindful about what they spend "because we are super-mindful of what we spend at home."

Walt Howells in District 2 says he wasn't going to speak tonight, but now he is. He agrees and disagrees with everyone, which is nothing unusual.

"We have a timeline, and the timeline seems to be slipping, slipping, slipping," he says. "I think this is what we all a lame-duck council ... so what I would suggest is the council reconsider the moratorium for the property so nothing happens until (the new council comes in) and some more thought can be put into how we spend our money and how we can go forward."

The moratorium gives the city time to come up with some plans for the property without a plant.

8:54 p.m.: Eric Pendergraft is at the podium. He's not prepared to respond to the detail, but he can talk in general.

"We want the existing plant demolished," he says. "Everyone across Redondo ... most of us want it demolished."

AES has the most experience with pursuing the smaller facility, which is a package deal with the demolition of the old plant. "We're willing to consider other alternatives for the site, but we need to do a few things in preparation for the site," he says.

They need to confirm that this won't put the CEC process at risk; they need to get their own advisor; they need to get corporate approval for the target economic value, the willingness to share it publicly and the level of detail that they're willing to share, and the

He thinks it will take AES about 3 months to get through the process. AES "fully agrees and supports and embrace public engagement and the need to get community input for whatever is done on the site." He's not certain that the community task force is the best vehicle for getting that public input. "We're open to the idea, but glad you're deferring it because at this point we can't fully support that process."

8:57 p.m.: George Ikeda of District 1 says the economic value of the property is based on the land use and zoning requirements. Right now, the economic value is not there; the voters need to change the zoning. "I don't know where you people are coming from," he says. "I think you need to think about it again and make sure you're not wasting your time and the public's money."

Next is an employee of the city of Redondo. I didn't catch his name. He says he agreed with the concessions, but now he's been hit with inflation and the housing bubbles—"What about us? We treated you guys, we take care of you guys ... what about our needs?"

Sean Guthrie of King Harbor Marina offers his support for the current motion. He says he sympathizes with all the workers, and he suggests the city look to the community to meet its needs.

8:59 p.m.: The motion passes unanimously.

Webb asks them to vote on the moratorium because it's clear that a resolution on it wouldn't pass in two weeks.

Aspel moves to hold off on the moratorium until an MOU is signed. Kilroy offers a substitute motion to bring the moratorium back to discuss it in 60 days. The council will then give direction.

Diels, who seconded the original motion, doesn't agree. Aust seconds Kilroy's substitute motion.

With Diels dissenting, the council passes the motion.