Hermosa Beach Puts an End To a 30+ Year Drilling Rights Dispute

FACT SHEET

CITY OF HERMOSA BEACH SETTLEMENT WITH E&B NATURAL RESOURCES MANAGEMENT CORP

The City of Hermosa Beach and E&B Natural Resources Management Corp. has resolved several ongoing disputes between them, putting to rest the issue of oil drilling that began with a 1984 vote to allow oil drilling in the city. Following are the specific terms of the settlement announced on March 7, 2017:

• E&B relinquishes all drilling rights in any oil project in Hermosa Beach, including the lease issued by the city in 1992 that gave Macpherson Oil Company (and later E&B, by assignment under the 2012 settlement between Macpherson, E&B, and the City) the right to drill in the city.
• E&B relinquishes all mineral and other rights in any oil project in or under Hermosa Beach, including the private leases and School District lease that E&B acquired from Macpherson.
• E&B relinquishes all other permits and approvals for oil drilling in or under Hermosa Beach, including all road agreements, state approvals and other permits and approvals E&B acquired from Macpherson.
• E&B relinquishes all future claims against the city over the oil project, including claims for interest or any other monetary compensation resulting from the 2012 settlement and the 2015 special election regarding its oil-drilling proposal, the Measure O election.
• In exchange for giving up its oil drilling rights and all current and future claims, E&B will receive $1.5 million from the city’s existing funds.

• Both sides agree not to disparage one another in their comments about the settlement. This is a common provision in settlement agreements.

BACKGROUND

Since 1984, when voters lifted a longstanding ban on oil drilling in Hermosa Beach, the city has lived with the threat of oil drilling. In 2015, Hermosa Beach voters rejected Measure O, a proposal by E&B to drill for oil at the city’s maintenance yard. The vote triggered a requirement that the city pay E&B $17.5 million-plus interest. After the vote, E&B claimed the city owed E&B interest and had violated the 2012 settlement during the Measure O election.

E&B also claimed that if the city ever overturned its ban on oil drilling, E&B would forever have the right to drill for oil in Hermosa Beach under various leases, permits and approvals E&B continued to hold. It based this claim on its assertion that the voters’ rejection of Measure O in 2015 triggered a force majeure clause in the original lease.

Such clauses refer to occurrences, such as an act of government, that are beyond the control of the parties. A force majeure clause can be used to suspend the contract for the period of time during which those occurrences prevent the parties fulfilling their obligations under the contract.

This settlement resolves these issues by providing that E&B relinquishes every lease, permit and approval it holds in Hermosa Beach. The settlement restores the city to the position it was in before Hermosa Beach ever encountered Macpherson or E&B. It also eliminates all future litigation with E&B over its oil-drilling proposal.  

Can Hermosa Beach Permanently Terminate the 35 Year Oil Drilling Lease After A No Vote?

Is The Oil Lease From 1992 Even Valid? 

Why Are 2 Measures Going to Be on the Ballot?  

1)  Yes or No On Drilling & 2) Where The Oil Money Goes? 

E&B Can Put Oil Drilling On The Ballot Several Times Over The Next 35 Years 

Why Did The Hermosa Beach City Council Not Read the Mock Jury Trial Transcript Before The Settlement?

A former City Council member’s opinion

Councilman Kit Bobko has repeatedly told the public that the results of the “mock jury’s” trials conducted by the city’s attorneys, Bird & Marella, were the basis for his decision to agree to a settlement with Macpherson Oil. He told us the mock juries came back with bad news, finding hundreds of millions of damages for Macpherson Oil. Bobko fails to point out that the city’s attorneys specifically told the City Council that this was an exercise to prepare for trial. It was in no way to be used as the cornerstone of a settlement.

Mr. Bobko distorts the truth to make himself look better. He says the city was going bankrupt. This is not true. The City Council only explored conversations with bankruptcy attorneys to assist in the settlement negotiations; we never retained a bankruptcy law firm in a meaningful way except to inform the City Council on the rules and parameters of such an action. The City Council never reviewed the detailed mock jury information because our trial attorneys told us it was not a tool for settlement, merely an exercise for their preparation for the trial. Mr. Bobko said the city was “locked in the embrace of death” by Macpherson. That was in his mind; this was not ever discussed in open or closed session of the City Council. Residents should remember that Bobko’s settlement agreement will cost the city millions even if the citizens approve oil drilling.

Michael Keegan, Hermosa Beach

  

Is The City of Hermosa Beach Hiding Oil Related Expenses?

Howard Longacre Letter to City Council May 20, 2013 (Item 3) 

(Please excuse my typos below)

3)  Request for clarification as to where/how the City is specifically keep track of the accumulating city expenditures which are not being reimbursed by E&B Natural Resources as related to the likely 2014 oil ballot measure.  

When the settlement agreement between the parties was announced in March of 2012, it was indicated that E&B Natural Resources would be paying essentially all of the costs leading to an election for the purposed of determining if the people of Hermosa Beach would lift the City's ban on oil drilling.  

Later it was announced that city staff time utilized for all additional work related to preparation for an election would be reimbursed by E&B at an amount equal to 10% of the cost of the EIR preparation.  And further it was indicated that E&B would cover the costs of obtaining the EIR, and would pay not more than $50,000 of the actual election costs.  

Since then the Council has approved hiring (at the City expense) consultants to do such things as the City's own "Economic Study", and for a "Community Dialog" process (some or much of which "Community Dialogue" will be oil drilling related according to the RFP for that consultant.) 

There appears to be a significant amount of staff time being expended daily on various aspects of oil drilling.  Thus, if the EIR preparation costs amounted to $800,000 in total, that would mean E&B would only be reimbursing the City $80,000 for all of its cots for consultants, meetings, reports, attorney fees, staff time and on and on for the extraneous activities leading to the oil drilling election.  

The people were essentially told by the Council that the oil litigation was over and that their only costs going forward would be one of the following:  

• If the electorate approved oil drilling at an election then the City's obligation to E&B would be $3.5M, plus the City's own costs ongoing attorney and staff time indefinitely, plus essentially the giving over to E&B for their use of a parcel of City Yard land presently worth $11M or more.  In other words an approximate total city burden of $14.5M plus city expenditures of perhaps $500,000 indefinitely.  

• However, if the electorate maintains the ban on oil drilling they'd simply owe E&B $17.5M and that amount could be paid over a period of years, ie. 30 years at "mutually agreed terms". 

All need to be reminded that the settlement agreement requires an extremely valuable 1.3 acre city parcel, with a present value of $11M or more if properly zoned, to be handed over gratis to E&B, along with $3.5M cash, if the voters approve lifting the ban on oil drilling.  

Further, all need to be reminded that the city and the school district are to be receiving relatively poor share of the hypothetical oil revenue (it should be not less than 50% in total of direct oil and gas sales revenue).  This unfortunate fact indicates that past city councils really did give away the store to Macpherson.  Why they so stupidly did that is past history.  

3-a)  The question here is, how is the city keeping track of its expenses month by month, and where can the public and the Council view and be aware of the ongoing escalating expenses in a manner, ie via a spreadsheet tabulation?  Such tabulation should clearly indicate the ongoing costs being reimbursed by E&B from their deposits fund, along with the ongoing costs being reimbursed by E&B from their deposits fund, along with the ongoing city expenditures not being reimbursed by E&B from their deposits fund.

See Item 4 Brown Act

Have The Rights of City Council Members To Speak On Their Own Been Muzzled By An Agreement?

Letter From Howard Longacre Letter to City Council May 20, 2013 (Item 4)

(Please excuse my typos below)

4)  Request for clarification as to any other ongoing confidential agreements (other than the March 2, 2013 settlement agreement itself) which have also been made by the City's staff and/or the City Council, and/or with any other entity regarding the oil issue.  

The March 2012 settlement agreement between the parties states that the City will take the necessary actions to have an election for the voters to vote Yes or No on lifting the ban on oil drilling in Hermosa Beach.  However, as long as an election does take place and is facilitated by the Council, is there anything that precludes any individual council members from stating to the press or to the public, inside or outside of a public forum, and on the record, of being for or against lifting the ban on oil drilling? 

Has in any manner the rights of any individual council member to speak on their own, or on their constituents behalf, been muzzled via any agreement by the council in closed session or otherwise?  This question has not been answered clearly in my and others' view and such is not specified in the settlement agreement, nor do I recall a debate on the agenda item in any public meeting where the council specifically voted to maintain a position of unanimous support to muzzle themselves.  Something seems to be missing here and apparently has a lot do with the perception the public has of the Council regarding the entire oil matter? (See article:  Did elected officials in Hermosa Beach violate the Brown Act.)

Complicating the issue is that rumors persist that more than one council member has made it very clear to some residents or business operators that they are either supporting or not supporting lifting the ban on oil drilling in Hermosa Beach.

Unfortunately, that all five council member appear to be stonewalling, on the record, the issue of what agreement they perhaps made behind the scenes indicates to many, if not most, that the Council is being disingenuous and playing politically coy, given that the oil drilling issue is far from new in the city.

Further, it is doubtful that even 1 in 20 of the electorate who actually vote on the oil drilling issue will make up their minds one way or the other, basis reading or understanding anything of the nuts and bolts of the EIR's likely mountain of esoteric data, E&B's application, the flood of mailers and propaganda barrages to be likely put out by E&B and others, or the underlying agreements with Macpherson that have been transferred to E&B or others, nor will they perhaps understand or trust the grandiose claims of revenue one way or the other or the safety or lack of safety claims E&B and others are making.  Thus,

4-a)  Are there any agreements written or verbal other than the settlement agreement as related to the question of lifting the ban on oil drilling, the election, confidential, or otherwise, that the public and press are not distinctly and formally aware, and understanding of?  This could include any issues agreed to by the Council members among themselves, such as that they would not individually take announce a public position on oil drilling until "XYZ" occurs, etc.   If there are any other agreements please disclose and clarify as best possible what purpose they are for, why they are needed, and when they are made.

4-b)  Is each and every council member free at this time to speak his own mind regarding lifting the ban on oil drilling, both inside or outside of a public forum, and/or to the press on the record?  Yes or No?  If No, this due to a specific binding agreement made by the full council among themselves, and if so why such agreement required when the settlement agreement is supposedly the full and complete agreement?

See Hiding Oil Money Point 3  

Who Owns Present & Future Oil & Gas Mineral Rights?

Howard Longacre Letter to City Council May 20, 2013

1)  Request for clarification regard the present and future ownership of the oil and gas mineral rights that were own by the City prior to the original agreement(s) with Macpherson.    

1-a)  Who owns / controls the City's original oil and gas mineral rights at the present time? 

1-b)  Who will  own/control the subject mineral rights if oil drilling IS NOT APPROVED by the voters, and for how long?  

1-c)  Who will own/control the subject mineral rights if oil drilling is approved by the voters and for how long? 

2)  Request for clarification regard the Oil Lease expiration data. 

2-a)  How many years remain on that oil lease? 

2-b)  Is the clock presently ticketing on that oil lease or has it been suspended due to the prior oil litigation, and if so is it still suspended and to when? 

2-c)  If oil drilling is NOT APPROVED by the voters what happens to the oil lease, ie. does it expire immediately, will it ever expire, will the clock continue to tick? 

2-d)  If oil drilling is approved by the voters what happens to the oil lease, ie. when does it expire, will it ever expire and if so when? 

Hermosa Beach City Council is Not Taking Responsibility for A Huge Mistake They Made

Barbara Ellman Describes 

15 Ways The HB City Council Is NOT Being Impartial To Oil Drilling

Hermosa Beach City Council is Warned You Are Not Acting Impartial

In case you missed the meeting last night here is a summary of Stacey Armato, Barbara Ellman & Chris Prenter warning the Hermosa Beach City Council & City Attorney Michael Jenkins about the lack of impartiality with oil drilling.  Here are 15 excellent points they bring up that the City has not address and has simply ignored.  Are they acting impartial by not including our due diligence?  

1)  "Oil Drilling" is the proper term not "Oil Production" which makes it sound like you siding with oil.  Lets not "sugar coat" it because it makes it sound like you are siding with oil.

2)  Hermosa Beach web site discussing oil landing page is not properly updated.  It says you are waiting on the project application but also says you are reviewing it?   The project application is not properly displayed on the page.  No current information is posted and no way to notify what has changed.

3)  The illegal settlement agreement is buried in the site.  How about a quick click?  Its important component that needs more attention to detail and FAQs.

4)  City is encouraging the timeliness of the EIR encouraging a quick and efficient process and the project timeline is of critical importance.  Lets encourage the accuracy of the report not the timeliness.  Lets not speed up the process unnecessarily 

5)  As the City Attorney, Michael Jenkins should be going through the settlement agreement that is not properly reflected in the FAQs.

6) Web and FAQs do not say anything about giving the City Yard up which could be valued at $8-10M dollars.

7)  Web and FAQs do not not talk about a 35 year lease of the City Yard.

8)  If the ballot measure passes and there is no significant oil royalties we are obligated to pay $3.5M within 90 days.  How will the City pay for $17.5M if it does not pass?  City says on their web site "they will undoubtedly need to issue municipal debt to pay E&B."  How do we pay for it and you are scaring the residents by not explaining your plan.  What you are implying is that we will need to issue municipal debt and that scares the residents.  This is an overstatement because we have $30M in the bank and a $100M in real estate assets.

9)  Web site talks about gross percentage sales goes to the City and schools without discussing the Tidelands trust?  This is not true and illegal.

10)  We would like to see a much more impartial analysis of on the web site because you sit there and have no opinion on the oil project.

11)  E&B's propaganda machine has been advertising in the paper before a public hearing has been done is ridiculous?

12)  The community of Hermosa Beach does not own the oil.  Its out in the ocean and the resources of the City are not oil.  Our resources are the beach, ocean, parks, people and health and safety.

13)  Steve Layton has a poor environmental track record and no where does the City web site disclose his horrible track record.

14)  Oil drilling is banned in Hermosa Beach and does not say this on the web site.

15)  The planning application is hundreds of pages and hard to read.  Its not easy to read and has not been discussed in public.  You have to hire an attorney to understand it.

Here is the public information sharing slide in the video.

This is Tom Bakaly's slide on the public input process.  Michael Divirgilio is looking into a tracking document to inform folks about the changes they are making to the web site.  There is no way for anyone to know that they are adding any items.  Track document changes, adds and edits.  The web site is the minimum require to stay up to speed.

Jeff Duclos Promised & Failed To Hold A Public Meeting

What Happened to The Information Campaign You Promised Mayor Jeff Duclos?

Hermosa Beach City Council Promised & Failed To Hold One Public Meeting

The Hermosa Beach Oil Settlement Agreement is Not Legal

Why has no one on the City Council read the Macpherson mock jury trial documents or transcript?  The threat of bankruptcy was the basis for was for a $17.5M settlement and extortion vote and no one has read the documents?

Before you read this you should review the contract agreement comments. In a properly negotiated & compromised settlement agreement, "neither party should be happy"with the outcome.  In this settlement agreement Hermosa Beach tax paying residents lost while the lawyers, City Council and oil won regardless of the outcome of the vote.  Here are some very important questions for our proud elected officials: Council Member Patrick (Kit) Bobko, Hermosa Beach City Attorney Michael Jenkins and Michael Divirgilio.

Drilling Down Article 

1)  If there was such a real likelihood that Macpherson Oil would win a court award for HUNDREDS OF MILLIONS OF DOLLARS ($750 million,), then why did Macpherson Oil settle for a mere $30 Million or 4% of his asking price?   Did Macpherson believe that, even if they won the jury trial, they would likely receive substantially less than $30M, or probably even NOTHING (see below)?  

2)  Was the 1995 “STOP OIL” ELECTION FLAWED because the “City Attorney (Jenkins) Impartial Analysis” in the election pamphlet failed to advise/warn voters of the real possibility of a Breach of Contract lawsuit to recover POTENTIAL LOST PROFITS? Were Hermosa Beach voters properly informed about the potential consequences, including tremendous financial liability, of the Proposition E vote in 1995? What law firm was providing City Attorney services to Hermosa Beach during this decade/period of time? Weren’t Bobko and Jenkins both employees of this same law firm - Bobko's current employer RWG Municipal Law Firm (of which he is now a Partner)?

3) Until 2001, Hermosa Beach City Attorney services were being provided by (Bobko’s & Jenkin’s) RWG Municipal Law Firm, represented by RWG Employee Michael Jenkins. From 2001 and onward, Michael Jenkins law firm began providing City attorney services to the City, including providing oversight services on the law firms defending the City from the MacPhersson lawsuit.  After the MacPherson lawsuit was filed, why didn’t RWG admit there had been and omission/error, and advise the City to hold a new election? (The 1995 measure passed by a mere 565 votes). Why didn’t Jenkins (after he/his law firm began providing City Attorney services to Hermosa)? Why didn’t Bobko (after being elected to the City Council)? 

4)  Could damages even be awarded to MacPherson by a jury (under directions provided by the presiding judge) due to failure of Macpherson Oil to make reasonable efforts to “mitigate damages” over the past 15+ years, as required under California law, by insisting on a new vote with a new proper City Attorney Impartial Analysis?  Did Macpherson sue because he could NEVER meet the TERMS & CONDITIONS of the LEASE imposed by the Coastal & State Lands Commission?  Did Hermosa Beach trial lawyers including Michael Jenkins purposely ignore evidence that could have won or minimized damages?  

5) Because of Bobko's associations with RWG Municipal Law Firm and Michael Jenkins, did Councilmen Bobko have a “CONFLICT OF INTEREST” in negotiating and voting on the settlement agreement? Shouldn’t Bobko have RECUSED himself, as required under California law from all such activities.  Has Bobko violated the Brown Act?  

6)  Are these the reasons the Settlement Agreement was negotiated by Bobko in secret, and voted upon behind closed doors without public participation? Was Bobko just protecting the reputation of this law firm, and his friend Jenkins, to the detriment of the City? Why was the settlement agreement not discussed in public BEFORE City Officials signed the contract with a new 3rd party E&B before the scheduled jury trial in April of 2012? Don't neighbors heavily impacted deserve "a say" in that their property and lives could be heavily impacted? - That seems to be normal business practice with Tattoo parlors or new bars, etc

7) Is this the reason that this behind the closed doors settlement includes a requirement that the 1995 "Stop Oil  election be held again"?  By wiping out all City reserve funds if not passed. Are there also other implications with regard to attorney "errors and omissions"insurance and possible reimbursement to the City for its approximately $4M in legal defense costs?

Continue to read a list of more questions that need answers.

Cities That Have Banned Oil & Gas Fracking

Elections & City Council Bans

1)  Longmont, Colorado (Denver / Boulder Suburb) slaps drilling in face, Outspent 30-1 by oil and gas hacks, bans fracking within city limits. Not even close. 60%-40%.

2)  Mansfield, Ohio voters adopt Community Charter Amendment That Bans Toxic Injection Wells. Not even close 63%-37% 

3)  Ferguson, Pennsylvania voters approve Clean Air & Water Community Bill of Rights while banning injection wells, fracking & shale gas development.  52%-48%

4)  Not a ban but Carpinteria, California drilling initiative defeated oil drilling in 2010.  Blowout victory 70%-30%.

5)  Wellsburg, West Virginia City Council Banned Fracking

6)  Morgantown, West Virginia banned fracking and forced to zoning by judge ruling 

Read about more State initiatives underway.

I don't think people who have actually lived and own homes in Hermosa Beach, California have any intention of moving backwards to permit a century long ban of drilling in Santa Monica Bay. E&B is simply wasting our value time and City resources which could be better spent elsewhere.

E&B still has the opportunity to pack up their bags and go home to save face. 2014 is a long way away.

Please email any others I may have left off to jeff@drillingmaps.com

Carpinteria Oil Drilling Initiative Defeated

Carpinteria Oil Drilling Initiative Defeated, Measure J (June 2010)

Yes: 944 (29.94%)

No: 2,209 (70.06%)

Measure J (Venoco's Oil Drilling Initiative) from Ted Rhodes on Vimeo.

A Carpinteria Oil Drilling Initiative was on the June 8, 2010 ballot in the City of Carpinteria in Santa Barbara County, where it was defeated. The primary effect of Measure J would have been to approve a slant oil and gas drilling project proposed by Venoco Inc. along Carpinteria’s coastline.  Real estate values were projected to decrease 10-15%.  Please read the Carpenteria Environmental Impact Report (EIR) which reveals some scary facts. 

Posing as a so-called "people's" initiative, Measure J was an attempt by Venoco to bypass local city government review and oversight. As the only donor to the pro side of the ballot measure, Venoco spent well over $600,000 – compared to $80,000 spent by Citizens CAP (Committee Against Paredon Initiative) that was raised from hundreds of individuals – trying to convince the voters of our small town as to the benefits and safety of their proposed massive oil drilling Paredon Project and why Venoco should be allowed to bypass all the local rules and regulations everybody else in Carpinteria needs to follow. Read more details here.

	MEASURE J: Shall the General Plan/Local Coastal Land Use Plan of the City of Carpinteria be amended and a Specific Plan adopted to authorize development of the Paredon Project, a private development project to explore, develop, produce and gather offshore and onshore oil and natural gas resources and transmit them to the Carpinteria Oil and Gas Processing Facility operated by Venoco, Inc.?

Hypocrisy of Councilmen Kit Bobko & Michael Divirgilio

Listen to Hypocrites Bobko & Divirgilio Rant About Transparency

Smart financial move - Beach Reporter Letter From Howard Longacre - October 18, 2012

During the Oct. 9 Hermosa Beach City Council meeting, all concerned had to again endure the self-righteous, condescending, bullying insults and obstruction from Councilmen Michael DiVirgilio and Patrick Bobko regarding a revised banking relationship with the Bank of America.

These two sneaky councilmen owning no property, home, or business in Hermosa Beach, having no historical roots in the South Bay, having both moved and rented units here after briefly renting in Redondo (obviously to use Hermosa Beach for their political self-aggrandizement) have both, more than worn out their welcome.

DiVirgilio and Bobko's badgering questions and ridicule on Oct. 9, nauseously mocked a well-researched revision to the long-neglected banking contract. Hermosa Beach will now see its present $24,000 yearly banking charges completely eliminated. And additionally with new cash credits to be received into Hermosa's account; a net savings to Hermosa's treasury of over $140,000 during the next five years, and without a necessity of expending $75,000 to change banks.

DiVirgilio and Bobko insulted virtually everyone with their pre-planned, disgusting and despicable attacks. They seemingly even elicited an Executive Director of the Hermosa Beach Chamber of Commerce (conveniently a local officer of a banking corporation appropriately rejected from consideration) to complain at the meeting.

DiVirgilio and Bobko's attempt to deceive and manipulate the minds of the public and press with their disingenuous drivel regarding "transparency" and process, was just more illustration of their increasingly offensive and self-serving behavior that wastes and disrupts council meetings costing several thousand dollars per hour.

Much appreciation for this successful new banking contract belongs to Mayor Jeff Duclos, Councilman Peter Tucker, Councilman Howard Fishman, Interim City Manager John Jalili, City Manager Tom Bakaly, the city's finance department staff including the deputy city treasurer, and especially City Treasurer and the financial officials of neighboring cities and agencies who freely gave of their expertise and wisdom.

Howard Longacre 

Bobko and Divirgilio are the same two guys that negotiated (without a public hearing) a deal that is not legal and they have conflicts of interest along with other City officials.  The hypocrisy of Hermosa Beach City Councilmen Kit Bobko and Michael Divirgilio is appalling.  Only 1 only company bid on the deal and they made the city borrow $17.5M with no public forum or RFP. A grand jury needs to investigate what is behind their confidentiality agreement. This video is from the Octorber 9, 2012.  Read more on the top reason this is a bad oil deal for Hermosa Beach.

The City Treasurer was anything but nontransparent taking bids from 19 banks and shared it with the public?   You took a bid on the oil deal from a friend Gary Brutcsh who sourced the deal to you?  Transparency?  Your untrustworthy voting record also speaks for itself.

Request for Open Forum to Discuss Illegal Deal Denied

Its a Legal Issue and Not a Voter Issue

Francesco Galesi, Chairman & Steve Layton, President of E&B Natural Resources

E&B Chairman, Francesco Galesi 

Francesco Galesi is the Owner & Money Behind E&B Natural Resources.  Mr. Galesi was one of the longest-serving directors of WorldCom Inc. He is one of just four board members on the crippled company's audit committee, which signed off on years' worth of cooked books that the company now says misstated $3.9 billion in costs as revenue. Worldcom is the 2nd largest bankruptcy next to Lehman Brothers in U.S. history. Gallesi is responsible for recruiting Scott D. Sullivan, WorldCom's "whiz-kid" chief financial officer, what has become one of America's biggest corporate scandals.  Read this article "The WorldCom debale, Through one Director's Eyes".

Mr. Galesi purchased he Alma and Equinox assets out of bankruptcy after the Steve Layton's Equinox Oil spill and formed E&B Natural Resources.  In 1969, Mr. Francesco Galesi purchased and transformed surplus military depots in upstate New York and converted them into major Industrial Parks. The conversion of these properties subsequently led Mr. Galesi into the warehousing and distribution business. His visions led to further corporate growth and diversification with the acquisition and development of additional real estate holdings, including residential and commercial sites, the acquisition and restoration of the historic Equinox Resort in Manchester, VT, and ownership in E&B Natural Resource Management Corporation, an oil and gas company.  It has also been reported that Mr. Galesi and his wife recently rented a home in Hermosa Beach to promote their new investment.  

E&B President, Steve Layton

Steve Layton has served as President of E&B since 2000. During his career, Mr. Layton has been actively involved in building and managing several oil and gas companies including two that were acquired by Francesco Galesi in 2000 along with E&B Natural Resources.  In 1983, Mr. Steve Layton co-founded Alma Energy and Equinox Oil with his father and Mike Galesi. He served as President of Alma and Equinox from 1997 to 2000. In November 2000, Francesco Galesi purchased the Alma and Equinox assets out of bankruptcy after a massive Louisiana oil spill and formed E&B Natural Resource Management Corporation. Mr. Layton was retained as President of E&B.  Mr. Layton is a member of the Board of Directors of the Louisiana Independent Oil and Gas Association and the California Independent Producers Association. Mr. Layton has also served as a Director and as Governor of the Houston Region for the Independent Petroleum Association of America and as President of the National Stripper Well Association. Mr. Layton earned a BS and MBA from the University of Tulsa.  Steve Layton reportedly purchased a home on Monterrey Blvd in Hermosa Beach in the Spring of 2012 to promote his oil interests in town.  

Joyce Fahey - Currently a Manhattan Beach resident, brings to bear more than 30 years of conflict resolution experience as a judge, attorney, elected official and, most recently, as Vice President, Governmental Affairs for Blackstone Oil & Gas, Inc. Judge Fahey transitioned to a neutral practice at ARC after her second term as Mayor of Manhattan Beach, CA.  Judge Fahey was appointed to the Los Angeles Superior Court in 1991. After her retirement from the Superior Court in 1997, Judge Fahey continued to preside over cases on an as-needed basis and served on the Retired Judges Mediation Panel.

In her position as Mayor of Manhattan Beach, Judge Fahey was directly involved in resolving a wide variety of issues, from litigation over public works projects, construction and environmental impact matters, to negotiating employment contracts for city employees. Recently appointed as a Trustee for the Manhattan Beach Unified School District, Judge Fahey has worked with school districts to resolve conflicts and has mediated disputes among neighboring cities. Judge Fahey is a recognized expert in cases involving child sexual abuse. She is also highly skilled in child custody and visitation matters. Judge Fahey is fluent in Spanish and Italian.

South Bay Residents Possibly on E&B's Payroll?
Cheryl Cross - PR C.A. Cross & Associates

An Ex-Hermosa Beach Fire Chief retired in 2007
Tiffany Rau - Consultant 

What is an Environmental Impact Report (EIR)?

Hermosa Beach is about to begin the Environmental Impact Report (EIR) process and its important that you know what it is, the timing, costs, players, politics & process.  An EIR is the planning document which describes the environmental impacts associated with a oil drilling project.

17 Environmental Impacts

The EIR will analyze 17 different environmental impacts and will determine which ones are significant. Aesthetics, Agricultural resources, Air Quality, Biological resources, Geology and Soils, Greenhouse Gases, Hazards, Hazardous Materials, Hydrology and Water Quality, Land use and Planning, Mineral Resources, Noise, Population, Real Estate, Public Services, Recreation, Transportation and Traffic, Utilities, Mandatory Findings.  It also describes mitigation measures to reduce the impacts to an appropriate or acceptable level.

Planning Commission & City Council

The information within an EIR allows the decision-makers (the Planning Commission and/or the City Council) to make an informed decision when considering whether or not to approve a project. The report also assists with deciding if approval conditions (entitlements) are necessary. The ultimate decision to approve a project, however, remains with the decision-makers. When the Planning Commmission or City Council approves an EIR, it is simply an acknowledgement that the EIR is true and accurate. It is only a step towards project approval, not a guarantee. The Planning Commmission or City Council may decide to instead decide to approve or deny the project based on overriding considerations. For example, the Planning Commission may find that a proposed project may provide monetary benefits to a community that don't outweigh a problems identified in the EIR, such as unsafe air quality, heavy truck traffic & real estate price decline that will negatively impact property tax revenue.

Public Review

There may also be one or more meetings about the report, either as a separate meeting or as an item in a Planning Commission agenda. Note that approval of the environmental impact report does not mean that the project is approved. Once the report is approved, decision-makers review the project, taking into account the information in the report and other considerations. The public has an opportunity to review and provide comments on a draft of an EIR by contacting, in writing, the planner listed on the EIR. Public input is then included in the EIR, and considered by the decision-makers along with other aspects of the report.

EIR Project Managers

The Hermoa Beach City Council approved a contract with Ed Almanza & Associates, a Laguna Beach firm, to serve as the project manager.  However, there is no public information on this firm available on the internet as of today which is concerning.  The firm will oversee the city’s review of the proposed project at large. The Council also approved a consulting contract with former City Manager Stephen R. Burrell.

Opinion:  "Can Voters Rely on an EIR to Make a Voting Decision?"

It is important for the entire South Bay to understand this will be the 4th time in 80 years that Hermosa Beach has been faced with an oil drilling ballot measure. Hermosa Beach overwhelmingly banned oil drilling in public votes in 1932, 1958 and 1995. An Environmental Impact Report (EIR) will address many aspects of this process, but it will never fully disclose all the damage that oil drilling will bring about in a town 1.3 miles square. Our position as a great area to live will be severely tarnished. These safety and environmental damage resulting from oil drilling will effect generations to come.

An EIR is supposed to be a thorough analysis of: Air quality, Biological resources, Geology and soils, Greenhouse gases, Hazards and hazardous materials, Hydrology and water quality, Land use and planning, Mineral resources, Noise impact, Population and housing, Public services, Recreation, Transportation and traffic, Utilities & any other Mandatory findings of significance like real estate values. Upon the completion of the EIR, a thorough examination of the safety risks will be necessary as it was in the previous MacPhearson oil drilling project. A report like Bircher Report (safety study), which was done in relation to the MacPhearson project, will need to be done.

Its too complicated for the voters to rely on an EIR alone.  Its too complicated and does not address safety to the residents.  An EIR is meant to simply figure out how a project could get approved. Don't be surprised to see this EIR analyzed and separated by parts to make the environmental impacts appear smaller and insignificant to residents. It’s very important that the City Council get a report similar to the Bircher Report to fully understand the risks these kind of project present.

Hermosa Beach has been down this road before and completed an Environmental Impact Report for Macpherson Oil in the 1990's at this exact location. The City Council elected at that time showed great care and diligence in their decision making. They commissioned the Bircher Report and reviewed the EIR and concluded that it was unsafe and the air quality impact would have been too harmful on residents. Three City Council members Sam Edgerton, Julie Oakes and John Bowler unanimously agreed that to not proceed with oil drilling after reviewing all the findings. They felt that the safety risks were too great to allow the oil drilling project to proceed.

We need the EIR to be interpreted by professionals who will take into account the same safety issues our 1990 City Council had to. Our current council chooses not to heed this previous unanimous vote of their predecessors. It is unknown if they even read the prior EIR and related safety reports before agreeing to this settlement arrangement. The current city council viewed the outcome of a jury trail too risky and unlike our 1998 city council they put the citizens at risk, or in this case obviated the due diligence of a complicated project into a political vote where safety arguments and facts might get lost in the rhetoric..

Former City Manager Steve Burrell Unretires to Manage Oil EIR

Steve Burrell's Retirement Party Two Months Ago April 5, 2012

At the May 22, 2012 City Council Meeting, City Officials are set to approve a Professional Services Agreements with Ed Almanza & Associates and Stephen R. Burrell for consulting services to augment staff in processing land use entitlements and an Environmental Impact Report in connection with an oil drilling project.

Here is a letter to the City Council regarding this consulting agreement from long time resident Barbara Guild who beat oil drilling in 1957.  Barbara Guild has also done an extensive review on the agreement signed by Hermosa Beach and suggest that you read her oil agreement comments here.

Barbara Guild's Letter to City Council of Hermosa Beach

Dear Mayor Duclos, Councilman Fishman, Councilman Tucker, Councilman DiVirgilio, Councilman Bobko,

STOP and THINK before you go forward tonight and inappropriately approve not one, but two of the following items:  “Agreements for Consulting Services to Augment Staff in processing Land Use Entitlements and an Environmental Impact Report in Connection with an Oil Drilling Project.” DO NOT VOTE FOR THESE TWO AGREEMENTS!!! 

I have lived in Hermosa Beach for 64 years, and I am very interested in maintaining the flavor as well as the environment of our city. I actively defeated the Shell Oil Co. in their proposal to drill for oil in our tidelands in 1957. And I spoke to the Council, March13th, following the signing of the current agreement with E & B, where I stated that we are now starting with a clean slate and must realize this fact. 

The people of Hermosa Beach should be allowed to know which firms are bidding for the opportunity of preparing the necessary Environmental Impact Report. It should not be given to the first group that comes along. Allow those of us who are most interested in protecting our environment to come up with suggestions of who to engage. We have many environmental issues that need addressing, and a two-man group from Orange County, with no office on record, only a P. O. Box, should not be signed up without further consideration and public input.

The Settlement Agreement you signed, March 2, 2012, limits, to $50,000, the amount of money E & B will provide to reimburse the City for only these THREE items from (Paragraph 4.4 a):

1) The EIR,

2) The CEQA 

3) The Election to rescind the Oil Drilling Ban.

Former City Manager, Steve Burrell could earn $168,000 for each fiscal year (plus expenses), and the preliminary estimate for Almanza & Associates is $138,000. This would leave nothing to pay for the election, if it’s ever called.   Do you really think that E & B is going to pay for the contracts you might sign tonight? Please seriously consider your vote!

Yours sincerely, Barbara Guild

P.S. Here is Paragraph 4.4 of the March 2, 2012 Agreement the City made with E & B:

4.4 a. E & B’s Obligations Following Closing a. Reimburse City for the cost of preparation of an environmental impact report or supplemental environmental impact report (EIR) pursuant to the California Environmental Quality Act (CEQA) based on a Project description provided by E & B, should such an EIR be prepared and the cost of conducting a special election NOT TO EXCEED $50,000 as provided in Paragraph 4.6 (a). (Emphasis added). We are concerned why the city staff would need "assistance with processing the development application and other necessary entitlements" since this is a technical and straightforward procedure that shouldn't require a specialist consultant to accomplish. Unfortunately, Mr. Burrell placed a political cloud over his head by choosing to retire when he did. Had he stayed on longer, this contract would not be necessary. Although the city is not paying for his services, it has the appearance of double-dipping. Those opposing oil development will make hay of this which may very well distract from the serious issues of determining the safety of this project and proposed financial return to the city.

We would like to hear some details on why these people were chosen and what their qualifications and expectations are.  This comes from City Officials like Michael Divirgilio who is sounding the horn on more public transparency which I think is good.  Some questions I have for these individuals:

1) What are the details of this consulting agreement?

2)  How much are they getting paid and by Hermosa Beach?

3)  What is their history with the project, E&B, oil or lawsuit?

4)  What is their professional experience managing processes like this?

5)  Do Steve Burrell or Ed Almanza have any conflicts of interest?

6)  How will this facilitate the promise from City Council about making the EIR process public?

7)  Are any city residents involved in the EIR process?

8) Why are the we, the citizens, paying for this? Why isn't this cost being underwritten by the oil company? Or are we concerned that if they pay for it we won't get legitimate answers?

Please add your comments here. 

How Can Hermosa Beach Pay For The $17.5M Settlement?

Hermosa Beach Self Storage Worth Approx. $7M ($180K Annual Tax Revenue)

City Yard in Hermosa Beach Worth Approx. $15M ($0 Tax Revenue).  Are we just giving E&B a $15M property? Here is why it might be more expensive to vote yes.  $3.5M loan repayment + $15M Property for voting Yes = $18.5M vs 17.5M for Voting No.  

Noble Park in Hermosa Beach Worth Approx. $20M ($0 Tax Revenue)

Hermosa Beach Breezeway Lot Worth Approx. $1.5M+  ($12K Tax Revenue)

Old Prospect Ave School Building Lot Worth Approx. $800K (No Tax Revenue)

Public Parking Facility Worth Approx. $20M ($360K Annual Revenue)

The biggest question that voters need to understand when going to the polls is how is Hermosa Beach going to pay for the $17.5M upon a "No" vote.  There has been some speculation that the vote might not happen until 2013 or 2014 which doesn't surprise me.  In the contract, it states that E&B can ask the city to put the measure on the ballot at any time and the city has 6 months to do it.  When do you think it will be in the best interest of E&B to put the measure on the ballot?  

I think Hermosa Beach should be financially prepared for another recession and have the cash in the bank or a bond measure approved to pay for $17.5M NOW!  Current macroeconomic headlines could easily affect our ability to finance a bond offering or sell real estate in the coming years:  1)  inflated bond market, 2) massive U.S. government debt and 3) European Union debt restructuring recession.  Its been over 4 years since the 2008 financial crisis and you never know when the next downward cycle will hit our economy.  

The City of Hermosa Beach has plenty of liquid and semi-liquid assets that it can use to cover the costs.  There is no need to do a parcel tax or an assessment on residents.  There is no need to believe the oil propaganda and rumors about the going bankrupt over the oil settlement.  We can afford to pay it and it won't affect our budgets or our valuable schools.  The City owns a lot of valuable property and the last time I checked we are not in the "property management" business.  The City has a number of assets that do not generate any tax revenue for the city and should be considered for sale.  

The City of Hermosa Beach likely owns over $100+ million in real estate assets and has over $25+ million in working capital in the bank available to pay for the settlement.  The City also has the ability to get a $10M "Judgement Bond" from the State of California at 3% and service loan which will cost the city $300,000 per year which is nothing out of the budget.  Why not also float another bond for $7.5M as well since boring money is so cheap these days.  So there are lots of ways we can solve the problem of paying for the settlement if we have to.   

The Storage facility was purchased by the City years ago for around $4M.  Its likely worth about $7M today if you put 14 multifamily units on the lot and zone if for residential purposes.   It generates $180K per year for a property the city paid $4M.  Is rent revenue worth the annual yield for tax payers?  The City is not in the property management business and thus we should sell it.  See lease agreement. 

The City Public Works Yard on 6th Street has 8-10 employees and unfortunately they would have to relocate if oil drilling came into town.  The city could outsource the public works functions to a private company which would save money on employee salaries and pensions, etc.  This lot is likely worth $10M  zoned as commercial and might be close to $15M as residential.  17-20 multifamily units could likely fit onto this lot if a developer buy it.  Also, has the city has not factored into the E&B Oil drilling deal that the we are practically giving E&B oil a $15M property.  So in reality, it might be cheaper to pay the $17.5M and vote NO vs paying $3M+ giving a $15M property to E&B for voting Yes. 

The City owns 13 parks some of them are more useful than others.  I am not proposing to go around the City to sell parks but if you compare a price per square foot and the lack of tax revenue to the city.  Noble Park is probably the most valuable asset we have that could be sold.  The Beach House next door to this large lot pays Hermosa Beach $800,000 per year in bed tax revenue.  I know there are a lot of people that use the park to walk their dogs but that is a debate for a separate discussion.  However, most people would not let their kids play in the grass because of the amount of dog waste.  You might be able to classify this as one of the most valuable dog walking park in the U.S.  It might be worth $25M depending on the zoning. 

The Fat Face Fenner's breezeway is likely worth $1.5M.  Currently the city leases the above air space for $1K per month for the right to have a restaurant above the walkway space.  $12K per year is not a lot that is worth $1.5.   I don't know many people who currently use the walkway and don't know how much value it has to lower pier any longer.   A full scale Fat Face Fenner's restaurant might make sense here if constructed from the ground up. 

The Old Prospect School is next to the Fort Lots of Fun park might be worth $800K.  It has been a storage facility for old city lights for years and does not serve as a tax generator for the City. 

The City of Hermosa Beach has parking garage which it shares revenue with LA County on a 50/50 split.  What is a property like this worth that generates $300,000 per year?  Could it be worth $20M and is it worth it to sell half of our stake for $10M?  Again we are not in the property management business and it might be in our best interest to divest this property.  See LA County agreement & annual parking structure revenue / expense financial statement. 

As you can see, we have lots of choices of assets that the City can sell.  Its up to the citizens to come up with a plan to sell one or a few smaller parcels because we know our officials wont take the initiative.  Just look at what Redondo Beach City Council is doing to their residents if you need any proof.  Real estate has recovered from the 2008 lows and it looks like another good time to sell some assets.  I hope this makes everyone more comfortable about voting "NO". 

This is work in progress and we would like your feedback on our theoretical pricing.  If you have commercial real estate experience please contact us or comment below.  Please check back frequently for changes.  I apologize for any errors.  

Settlement Agreement Comments

Below is a draft of our settlement agreement comments we are compiling from residents.  We welcome your comments so please email us with your comment structured similar to below.  If you want to read the full 45 page agreement you can download it on the HermosaBCH.org or at Google Docs.

Recitals, Page 1, A
Macpherson also obtained all of the necessary Permits to Construct for the Oil Project from the South Coast Air Quality Management District In November 1995 the residents of the City passed City Measure E an initiative measure that banned oil drilling in the City. 
Comment- South Coast Air Quality Permit ran out or cancelled March 30, 2000. 

Recitals, Page 1, A
In early 1998 and notwithstanding the passage of Measure E the California Coastal Commission authorized issuance of Coastal Development Permit No 29E86 to Macpherson far the Oil Project subject to conditions
Comment - Coastal Developmental Permit No. 29E86 never issued. 

Recitals, Page 2, D
Substantial revenue stream to be generated for City and the Hermosa Beach School District as a result of the payment to City and School District of royalties in association with the production of oil and gas reserves by E&B
Comment - How can School benefit from tidelands trust?

Definitions, Page 3, 2.10
School Lease means the lease between Macpherson and the Hermosa Beach School District
Comment - No lease on School property found. Where is this?

The Closing, Page 4, 3.2
Confidentiality Agreement previously signed on behalf of each of the Parties on February 17 2012
Comment -  Where is a copy of this?

Macpherson's Obligations At Closing: Page 5, 4.1 

1031 exchange as provided in Article X hereof all of Macpherson the School Lease and any other leases releases set forth in paragraph VI
Comments - Like-kind exchange, what's Macpherson doing here?  What other leases are involved in this agreement?

E&B's Obligations At Closing: Page 5, 4.3a 
Said assignment reserves to Macpherson from E B and its successors and assigns an overriding royalty of 1.5% of one hundred 100% of gross hydrocarbon production but otherwise
Comment - Macpherson keeps part of this going here.

E&B's Obligations At Closing: Page 6, 4.3c 

constitutes the E&B Loan of $17,500,000

Comment - Note this loan and how it's to be repaid by the city.

E&B's Obligations At Closing: Page 6, 4.4b 
Upon issuance of the drilling permit or in the event the City cannot issue the drilling permit as the sole result of action or inaction undertaken by and under the control of E&B (including without limitation) the failure of the California Coast Commission to issue a coast development permit. immediately

thereafter forgive $14,000,000 of the E&B Loan

Comment - Failure to meet conditions and most of loan is forgiven?  Where does the fact we are giving E&B a $15M property factor into the cost?  Total costs is more like $18.5M and more cheaper to vote no. 

City's Obligations Following Closing: Page 7, 4.6a 

Place on the ballot at a special municipal election in a manner that comports with all applicable law within six 6 months of a request to do so by E&B
Comment - Within 6 months call election!!!! "....notwithstanding inconsistent change in City's Municipal Code." ????

City's Obligations Following Closing: Page 7, 4.6b 

Vacate and make the City maintenance yard available for the construction of the Project as when and in the manner and subject to the conditions provided for in the Lease and repay Three Million Five Hundred Thousand Dollars of the E&B Loan through a deduction of royalties equal to 1.5% of gross proceeds. 
Comment - Vacate and make the City maintenance yard available? And where in the world is the city going to put it. Steve Burrell could never find another location for it, here or in Redondo Beach. Let's get real. this is an important issue.  This property is worth $15M and we are paying them $3M on top?  Total deal looks like $18.5M to vote yes.  

City's Obligations Following Closing: Page 8, 4.6d 

Grant as reasonably required by E&B all necessary rights of way 
easements franchises and other rights as necessary for subsurface pipelines < and other facilities and appurtenances in order for E&B to drill for produce market transport and sell all oil and gas produced from the subject lease 
Comment - Whoa Ho! Check out this demand. Dig up the streets or the greenbelt? And where will it terminate in Redondo Beach or AES?

City's Obligations Following Closing: Page 9, 5.4 

The parties recognize that Macpherson is materially changing its legal position and rights and property holdings in reliance upon the final and binding effect of this Agreement and any rescission of this Agreement would be a wholly inadequate remedy for Macpherson because rescission cannot possibly return to Macpherson the legal position and rights it held prior to the consummation of this Agreement
Comment - We need an attorney to explain this paragraph. It's legalese is convoluted.

Mutual Releases: Page 9, 6.1 

Effective upon the successful completion of the Closing in accordance with the conditions described in paragraph 3
Comment - What are these conditions in 3.3 

Mutual Releases: Page 10, 6.1 

the City hereby fully and finally waives releases and  permanently discharges Macpherson and its respective partners officers employees agents representatives and attorneys the Releases from any claims arising under the Lease any continuation extension amendment restatement or replacement of the Lease
Comment - Whoa Ho! What's this? What about compensation due the city for the past  Environmental reports, attorneys fees due the city, etc?

Mutual Releases: Page 10, 6.4 

Except as may be provided in this Agreement each of the Parties waives any and all claims for the recovery of any costs expenses or fees including attorney fees associated with the matters and claims released in this Agreement
Comment - Attorneys fees from earlier court cases? Have they been paid?

Defense of Litigation:  Page 11, VII
In the event that one or more lawsuits are filed challenging this Agreement and/or the actions implementing or contemplated by this Agreement the Parties to the extent named as parties defendant in the lawsuit will cooperate in good faith in the defense of the litigation and shall initially bear their respective attorneys fees and costs With the exception of a lawsuit challenging the approval of this Agreement itself should the Ballot Measure described in paragraph 46a pass E&B shall indemnify the City for all attorneys fees and costs incurred by City in the defense of litigation encompassed by this paragraph and also for any attorney fees and costs awarded to a plaintiff against City if any in such litigation
Comment - Does this mean the city can collect attorney fees if sued for this agreement?

Representations & Warranties:  Page 11, 8.1c
They acknowledge that the Stinnett Well has been plugged and abandoned and agree that Csity inability to convey the Stinnett Well to E B shall not constitute a breach of this Agreement or the Lease. 
Comment - Dave Lucero, what was the result of your looking into this well on the City's Yard?

Representations &Warranties:  Page 12, 8.2c

The force majeure provisions in paragraph 30 of the Lease apply and have applied during the pendency of the Action and the CUP remains valid. 

Comment - CUP is for a "Conditional" Use Permit. The  Use Permit itself was never issued, or was it? Wasn't the Fire Code in doubt?  In the CUP it states, "All CUP required studies and reports must be submitted to the City and approved before permit issuance."

Representations &Warranties By All Parties  Page 12, 8.3a
The Parties have received all corporate and other approvals necessary to enter into this Agreement on their behalf and that the persons signing this Agreement on their behalf are fully authorized to commit and bind the Parties to each and all of the commitments terms and conditions hereof and to release the claims described herein and that all documents and instruments relating thereto are or upon execution and delivery will be valid and binding obligations enforceable
Comment - Not so! The California Coastal Commission issued "approval with a long list of conditions" but never issued a "Permit" for Macpherson to drill in Hermosa Beach. So how does this affect this Settlement Agreement? Is Macpherson claiming to have abided by all the requirements of 15 b. of Lease No. 2 (it has with the City), i.e. "The Lessee shall also apply for and obtain all necessary permits from the City of Hermosa Beach...The Lessee shall also be responsible, at its sole expense, for alI necessary permits and approvals to be obtained from the California Coastal Commission...."
Representations &Warranties By All Parties  Page 12, 8.3d
The Parties have prior to the execution of this Agreement obtained the advice of independent legal counsel of their own selection regarding the substance of this Agreement and the claims released herein
Comment - Was the advice "independent"?
Representations &Warranties By All Parties  Page 13, 9.2
This Agreement and the Confidentiality Agreement discussed in Paragraphs 32 and 3 are an integrated contract and sets forth the entire agreement between the Parties hereto with respect to the subject matter contained herein 

Comment - If the Confidentiality Agreement is part of this, please, let's have a look at it.

Representations &Warranties By All Parties  Page 13, 9.5
This Agreement shall be binding upon and inure to the benefit of each of the Parties and their respective representatives partners officers employees agents heirs devisees successors and assigns
Comment - How about to the benefit of the people of Hermosa Beach?

(stay tuned more to come)