This picture above precisely why homes are so much cheaper in Huntington Beach, CA. A $1,000,000 home in Hermosa Beach would likely be 25% less if it were based in Huntington Beach. Most speculate its because of the widespread drilling amongst the homes. Do you want our in Hermosa Beach to drop by 25%?
The 1.3 acre City Yard lot was worth an estimated $57,000 back in 1958 according to old news articles. At this time oil was trading at $2 per barrel. This was when the last Shell oil drilling vote was being contested by long timer Hermosa resident and hero Barbara Guild. What is this City Yard lot worth now?
Most speculate it might be worth as much as $10M for commercial zoning and possibly as high as $15M if it was rezoned for residential? That is 175X the value. Oil is now $100 per barrel only 20X more. So you have to ask yourself the question which is more valuable today? Real estate or oil? Are we just giving E&B Oil a $15M piece of property for nothing? Its not factored into the proposed cost of voting for Yes oil drilling.
There are 7,000 parcels in Hermosa Beach. Every 1% decrease or increase in home prices in Hermosa represents a $57M increase or decrease in aggregate wealth. A 15% drop would flush $1B of wealth and and huge property tax base down the drain. The is assuming median home prices are $820,000. This oil drilling deal gambles with $5.7 billion in aggregate real estate wealth based on 7,000 parcels. This is a zero sum game if you if you factor in the amount of property taxes that will be lost as a result with a 15% drop in real estate values. You could also make the argument that real estate in Hermosa has been suppressed because of the ongoing oil and bankruptcy issue. Pay of the $17.5M and real estate may rise by $1 billion in the area and increase the property tax base.
The City "might" make $1M in estimated revenue if they are lucky for a 4% increase on a budget of $25M annual budget? .20 cents per barrel for the schools is going to amount to nothing. Plus they can't spend the money because of the Tidal Lands act which restricts usage of the funds generated from oil.
Property values have risen up 2X since the deal was struck with Macpherson in the 1990's. Median home prices were around $400,000. Property values are up a 100X+ since the 1950's when the last oil crises was upon us with Shell.
