10 Reasons to Vote Yes for Measure A

10 Reasons to Oppose AES Redondo Beach Power Plant Rebuild 

1. Emissions from the new power plant would increase 700%. 
2. 6,850 students go to school within 1.5 miles of it. 
3. AES management has a horrendous track record and has been involved in several law suits and financial crisis issues including Enron.  Read this "AES Corporation: Rewriting the Rules of Management". 
4. AES's largest customer is J.P. Morgan according to the AES company fact sheet on the web site.  A bank as your largest customer?  Sounds a bit like Enron to me.  This Redondo Beach power from this plant is not needed per the CAISO and CEC reports.
5. Power plant lines bring down property values at least 25% in the Redondo Beach & South Hermosa Beach areas and block ocean views.  The power lines may go as well. This has not been studied. 
6. AES hurts the fiscal health of the Redondo King Harbor area surrounding businesses.  New waterfront developments have been put on hold because of the power plant rebuild issue.  Many new restaurants would likely follow the new Shade Hotel being built on King Harbor more money would flow to the City if the power plant was gone.  
7. Opposing it costs nothing & AES only needs the Council and others to do nothing and we all lose.  Doing nothing plays right into their hands. This is not about the future zoning of the site.  We definitely don't want a new power plant.  See map below of what this area could be. 
8. AES pays little in taxes only $385,000 / year in tax revenue to the city. 
9. AES plant borders on South Hermosa Beach and most HB residents will be affected. 
10. The loud steam blasts in the middle of the night are simply ridiculous and this beautiful park rendering (see picture below)  done by the California Coast Commission would be incredible the area. 

In a 3-2 vote, the Redondo Beach City Council decided to continue its discussion on a resolution opposing the repowering of AES Redondo Beach at the July 10 meeting. After a meeting that lasted more than seven hours until 1 am, the Redondo Beach City Council decided to delay its discussion on whether to pass a resolution opposing the repowering of the AES Redondo Beach power plant on Harbor Drive until the July 10. This will allow city staff time to hire an independent consultant to perform an amortization report on the current structure. Councilmen Matt Kilroy and Pat Aust both said they wanted to read such a report before making a final decision.  Is this just a delay tactic?  Read more on Redondo Patch and Easy Reader. 

Redondo Beach City Council 

Matt Kilory, Steve Aspel, Bill Brand, Pat Aust, Steve Diels

Hermosa Beach, Torrance, Manhattan Beach and Palos Verdes should participate as well in support of removing the power plant. NIMBY thinking and waiting is just plain lazy and stupid.  All surrounding City Council members need to work together because this is such a big issue.  Lets set politics aside and be proactive about finding a solution to do the right thing.  This is not just about Redondo Beach and we all stand to benefit with cleaner air and potentially new development that we all can use. The King Harbor area has so much potential. Its a developers "wet dream" and huge private money would follow the opportunity to create something amazing.  

It Redondo Beach City Council's job to find an alternative solution for the power plant land.  However, we all know political people are lazy and always need LOTS of "hand holding" so they feel safe. Why would City Council members be reluctant to oppose the new power plant remodel that produces a minuscule $200,000 in tax revenue per year which is less money than the city makes from its parking garage at the pier. 

Is AES threatening Redondo Beach City Council members with a law suit?  Any initiative by the city residents is not likely to provide AES with any basis to sue the city. Finally, there is an amortization process through which a city, or a citizen's initiative, can allow businesses adequate time to get a return on their investment in a property before a specific use is banned. The proposed citizen initiative would eliminate industrial uses by 2020, which I think is plenty of time (8 years) for AES to get adequate return on their investment in the property, especially considering the majority of the equipment is old and obsolete, and esentially worthless at this point.  

AES is no stranger to crisis and law suits.  In 1992, AES flirted with disaster when its Shady Point generating facility in Oklahoma was discovered to have been discharging polluted water and to have falsified the samples it provided to the Environmental Protection Agency. In the same year, AES was forced to abandon its rebuilding of a power plant at Cedar Bay, Florida following a dispute with state officials and the local community. These events caused AES’s share price to fall by half.  AES has multiple law suits against the company (see AES Law Suits) search results.  

AES is a $9 billion public company (NYSE: AES) planning to make a $500M+ investment on a power plant that might be worth an estimated $135M (comps based on AES Huntington Beach valuation performed in 2011). AES is looking to repower the plant in 2018. They are currently using the plant only 5% of the time right now, and with an investment of $630 million for a new plant, the amount of energy needed to pay back the investment will mean lots of particulate matter in the atmosphere in Redondo, Hermosa, and surrounding communities. While the footprint will be smaller (12 acres vs the current 50 acres, 4 stacks instead of 5), any chance for revitalizing the waterfront will be lost for 50+ years as no one will want to invest in the area. Here are some points and a link to FAQs Tear Down Redondo Beach Power Plant Blog:

California Coastal Commission's study for AES power plant area

Poll: Predict The Redondo Beach Measure A Voting Results

Public OpinionPoll Results

For more details on the Redondo Beach Measure A see NoPowerPlant.com.  If you live in Redondo Beach vote on March 5th.  

Capped Oil Wells Beneath Homes & Ocean Can Blowout

Capped Oil Wells That Could Blowout in Redondo Beach & Hermosa Beach

Capped oil wells are a real danger in the South Bay.  Pat Aust the Redondo Beach City Councilman and former firefighter knows first hand of the dangers.  Hermosa Beach has a handful of capped wells and some are out in the Ocean as you can see.  However, Redondo Beach has hundreds of them underneath homes and Manhattan Beach has plugged oil wells at Mira Costa High School.  Here is an explanation to help you understand the potential threat to our community if slant hydraulic pressurized oil drilling is permitted underground.

Oil drilling blowout preventers (BOPs) can be used on the drilling site itself on the surface to mitigate risk.  However, blowout preventers CANNOT be used on capped wells or adjacent wells underground & in the Ocean.   If an adjacent capped oil well were to blow on the ocean seabed it would cause a massive oil spill and mess on up and down the coast.  The ocena seabed well could be capped but would required significant emergency effort (like the BP Spill in the Gulf) and would change the integrity of life in the South Bay as we know it.  If an adjacent capped oil were to blow underground beneath homes.  Lives and homes could be lost because an explosion is highly likely.  Residents in Hermosa Beach and Redondo Beach who own homes over a capped underground well would never know about the problem until it is too late.  Do we really want to trust the that the integrity of the well was capped properly 30 or 40 years ago?

Crude oil is a flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights that are found in geologic formations beneath the Earth's surface. Because hydrocarbons and gas are lighter than rock or water, they often migrate upward through adjacent rock layers until either reaching the surface or becoming trapped within porous rocks (known as reservoirs) by impermeable rocks above. However, the process is influenced by underground water flows, causing oil to migrate hundreds of kilometres horizontally or even short distances downward before becoming trapped in a reservoir. When hydrocarbons are concentrated in a trap, an oil field forms, from which the liquid can be extracted by drilling and pumping at high pressure. The down hole pressures experienced at the rock structures change depending upon the depth and the characteristic of the source rock.  The deeper the well the more risky the operation.  E&B is proposing deep wells.

Blowouts happen all the time and are daily occurrence in the oil industry.  Don't convince yourself it can't happen here because Steve Layton knows too well from his Blowout in Louisiana which bankrupted Equinox Oil.

Here is another conclusion that supports this argument from the Coastal Commission.

19 Fatalities, 60 Injuries & $230M in Property Damage Per Year from Pipeline Accidents

Fatalities, Injuries & Property Damage Per Year from Pipeline Accidents 

Who wants an oil and gas pipeline near their home? Not me and hopefully our neighbors don't either.

Pipelines average 19 fatalities and 60 injuries every year in the US.  Pipelines incidents in the US produce on average $230,000,000 worth of property damage.  A pipeline does not belong in Hermosa Beach, Redondo Beach or Torrance going to Exxon Mobile Refinery.  See these oil and gas pipeline incident statistics here.  

Oil Pipeline through Redondo Beach to Torrance Exxon?

Hermosa Beach Pipeline to Exxon Torrance Through Redondo Beach

I guess Stop Oil Hermosa Beach just enlisted the help of 200,000 more people from Redondo Beach and Torrance who could feel the impacts of the proposed oil project.

Of course this was one of the last document posted on the Hermosa Beach E&B website.  Why would safety, noise or toxic air quality concern anyone from an oil company because they say everything is sooooooo safe?  E&B has minimized the safety impacts of this project and we plan to expose every last detail of facts they leave out.  Of course all the documents are posted as PDF and not searchable.  Its only 1000 pages to read.  However, feel free to start reading the noise impact study here.

E&B seems quite proud of their aesthetic renderings for the proposed drilling site.  However, there is no way to draw the winds or the toxic air we are going to be breathing.  I don't think anyone really cares how it looks when toxic air could be blown downwind to thousands. 

Redondo Beach Considers Oil Drilling To Protect Reserves

Former Tritton Oil Drilling Site (Dirt Lot) Harbor Dr & Portofino Way in Redondo Beach

Former Oil Drilling Site 190th and Prospect in Redondo Beach

The Redondo Beach City Council took a the first step toward exploring oil drilling within city limits to boost city revenues on Tuesday. Read the RB Patch Article.

In a referral to staff, Councilman Steve Diels, who represents District No. 4 in North Redondo Beach, asked City Manager Bill Workman if city staff could examine whether Redondo Beach could tap into the "hundreds of millions of dollars" sitting beneath the city.

Additionally, Diels asked if city staff could look into the effects of possible oil drilling in Hermosa Beach on Redondo's reserves. Both cities sit on top of the Torrance Oil Field.

The councilman noted that money from potential projects could be used for various capital projects, and even implied that revenues from oil drilling could be used to pay for a park at the AES Powerplant site on Harbor Drive.

Bill Brand, who represents District No. 2. "In general, though, I don't support that kind of industrial activity going on in our town."

If the city does eventually decide to allow oil drilling, it would not be the first time oil wells were dug in Redondo Beach. According to the Redondo Beach Historical Society, wells dotted the city during the 1920s.

Lets not forget Tritton Oil & Gas Corporation abandoned the site in 1990 at 101 Portofino Way, Redondo Beach 90277.

Related Articles: 
Pat Aust recalls oil fire in Redondo Beach.
Tritton Oil & Gas Corporation oil well abandonment in 1990 
Hermosa pursuing legal action against Oil Operator Roy Stinnett in 1991 (LA Times)
Map of regional oil wells in the South Bay.
Is the AES Redondo Beach Powerplant Related to Hermosa Beach Oil Drilling

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.  

More Questions That Need Answers

Continued from Questions That Need Answers:

Below is an ongoing list of questions I am compiling from Hb residents on this issue.  Email me if you would like to add something.

8)  Many former City officials including former councilmen Sam Edgerton questioned in 2008 whether the city’s lawyers have ignored a line of attack that he believes could turn the legal tide back in Hermosa’s favor. Why was this never done and why are many of these officials furious of the current settlement? Why are current City Officials telling residents they will not take a position for or against oil drilling in the current settlement? Are they working for HB residents or their own interest? Read Easy Reader Article from 2008

9)  Do the deal leads Jenkins, Bobko & Divirgilo have any ‘skin in the game’? Do they have property value to protect or do they just simply rent temporarily in Hermopsa?  They have demonstrated that they are interested in higher levels of public service (above the City). Do they anticipate receiving future financial support from the Oil Companies to assist them in achieving their political ambitions? Kit Bobko, ran for Congress in 2011 to fill Jane Harman’s seat in a special election and finished in 7th place with 3.6% of the vote.  Michael Divirgilio was a Congressional Staffer for Rep. Jane Harman.  

10)  Why is Hermosa Beach spending money on a PR Firm,  Fiona Hutton & Associates  and how much is the city spending on this new endeavor? Don't we have elected officials on the City Council who do PR as a profession? Why aren't all Council members speaking for themselves, rather than just "going with the flow"? Why did the CIty hire a PR agency? What is their exact role? What is the cost of the PR agency? 

11) Why did you settle at $17.5 million & $3 million? What was the magic number and why?

12) Did you have a plan in place to pay the $17.5 million or 3 million? At what price did you have a plan in place to pay the settlement?

13) With the 6th street Yard being used for oil drilling it would be lost to the city for use.  What would the city do without this lot for city use?

14)  What is the City Yard lot worth? Could we sell it to help cover the 17.5 million?

15) What is it going to cost for extra emergency services personnel, equipment, and training? - Who is paying for it? Do we have to raise salaries for specific certifications of emergency services?

16) The tower is going to be over 135 feet tall. It is going to be in the line offsite of many residents. This devalues homes. Can the city be sued for the devaluation of their home?
The oil wells will cause issues with:

• The beautiful views from homes
• Air Quality (So much for the No Smoking signs along the strand) 
• Noise pollution 

17) The 2008 Chatsworth train crash happened when the conductor was texting while managing the train. 25 people were killed, 135 were injured with 46 being critical! My friends mother was in this accident. She was seriously injured. There is a cap on the amount of payout for the lawsuit at $200 million. She cannot even get her medical bills paid. With that said you are saying we would have had to pay $750 million no matter what while a train wreck that killed 25 people and injured 135 others cannot get more than 200 million!

18) What happens if there is an oil leak in the bay?  Is the City of Hermosa Beach on the hook for anything? How would this devalue not only Hermosa Beach homes but all of the homes in the bay?  Could there be a civil suit?

19) There is talk of "revenue share" from the oil wells.  Can we not pay the money and have the money go towards the $3 million first then take the revenue sharing?  What are the projections of the revenue sharing?  This should have been done long before any settlement happened! The biggest question is what can the money legally be able to be used for! There have been many statements that the money cannot actually go towards the school systems. This is something your lawyers should have advised you of before any settlement happened. The lawsuit has been going on long enough someone should have known and or have an answer.

20) Who is auditing the revenue coming in from the oil?  Do we now have to pay people to manage this and at what cost?

21) What happens if there is a disaster and or someone is killed?  Is the contract null and void immediately?

22) How safe is this type of oil drilling in case of an earthquake or tsunami? At what size of earthquake or tsunami do we run into an additional disaster?

23) The homes they drill under do they get revenue from the drilling and who has mineral rights? What happens if their foundation and or other issues appear in years to come from the earth under them moving?

24) Is the oil company using funds to get the votes to drill in Hermosa? If so did you know they would put money into the City of Hermosa to promote oil drilling?  What businesses in the city stand to benefit from oil drilling?

25) Kit Bobko and Michael Divirgilio are not home owners in Hermosa Beach. You do not directly pay taxes for the homes in Hermosa Beach. If you owned a home nest to 6th street before the settlement how would you feel? Would you sell your home? Why haven't you bought a home in Hermosa Beach?

26) If we vote no to the oil drilling your letter states: "$17.5 million equates to a liability of $2,500 per parcel." Are you going to bill the citizens this amount if the drilling is not approved? What if I moved into the area after the lawsuit and was not notified about the lawsuit? Do I still have to pay? The bigger question is as renters are YOU personally going to pay $2500 towards the liability you have committed to the citizens of Hermosa Beach?

27) What are the solutions to pay $17.5 million? How much money do we have in the bank? What assets does Hermosa Beach own? Can we get a bond from the state of California? What research have you done to figure out how to pay back any amount let alone the $17.5 million?

28) Now that you have settled the lawsuit what side are you on? I feel that you have drawn a line in the sand and now you should state whether you are for drilling or against drilling. This is only fair to the citizens of the city. What are the pro's and con's from each of your perspectives?

29) How late can drilling take place? Is it 24/7/365? How noisy is it? I can hear the Redondo Power Plant at 4am release steam that practically shakes my windows. Will we have any noise at all and if so how loud and at what times?

Email me if you would like to add or change something to this list. 

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)

Hermosa Beach Slant Oil Drilling Maps

These maps are speculative drawings based in information we have gathered from the Macpherson proposals.  E&B oil has not submitted their drilling proposal yet.  

Map of the proposed Hermosa Beach slant oil drilling site will reach out into the ocean.  What is slant oil drilling?  The drilling will also go underground into Redondo Beach likely.  The California Coastal Commission has full authority of this drilling and has thus tidelands restrictions on where money from oil can be spent.  The oil site will also be less than 100 feet from homes when Colorado requires a 350 foot setback and California recommend 300 feet.

Do we really know what is underground nor want to disturb the environment with oil drilling pipes possibly poking through the ocean floor?  Do want want to risk the dangers of the ocean floor and our beaches sinking (subsiding)?

The proposed drilling site effects more than 50% of residents of Hermosa Beach.  Noise, air pollution, explosions or dangerous gases are all a potential consequence.  Not to mention the drilling site will be within a few hundred yards of your kids playing in the park.  If you run on the greenbelt in Manhattan Beach or Hermosa Beach there could be an oil pipeline to under it to Chevron Refinery in Torrance and/or a natural gas pipeline AES Power Plant in Redondo Beach.

Lets not forget about the fault line that runs across the Santa Monica Bay and the South Bay.  We have had several earthquakes offshore in Hermosa Beach and Santa Moncia bay in the past few years. 

 27 oil wells and 3 water injection wells for Fracking and Natural Gas

Horrible Air Quality

I am told by oil experts in the business that the odor from gases and drilling will be "awful" around the site.  There is no way to contain the odor or poisonous gases that come up our of the ground.  This map depicts 3 different wind scenarios we get in the area.  An onshore, offshore and no wind where the smell and gases get trapped in the valley.

Emissions generated during the drilling/development phase include vehicle emissions; diesel emissions from large construction equipment and generators, storage/dispensing of fuels, and, if installed at this stage, flare stacks; small amounts of carbon monoxide, nitrogen oxides, and particulates from blasting activities; and dust from many sources, such as disturbing and moving soils (clearing, grading, excavating, trenching, backfilling, dumping, and truck and equipment traffic), mixing concrete, and drilling. During windless conditions (especially in areas of thermal inversion), project-related odors may be detectable at more than a mile from the source.  Excess increases in dust could decrease forage palatability for wildlife and livestock and increase the potential for dust pneumonia.  See source.

250 Yard Heavy Impact Zone from Noise, Odor, Dangerous Gases and Explosions.   There are two parks, hundreds of homes and a jogging trail in the vicinity which I think is disgraceful.   There are probably 10+ kids under the age of 10 years old that live in the red boxed area.  Its just sad that no one thought through the ramifications.  

Projected Ripple Affect of Real Estate Losses

This is a Scenario of What Could Happen

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Redondo AES Power Plant Rebuild is Related

E&B Oil drilling is related to AES plans to rebuild Redondo's Power Plant.  E&B will be required to build a pipeline underneath the Hermosa Beach greenbelt down to Redondo Beach for trucks to transport and/or service the low grade oil.  Do you want big oil trucks driving into the community or a PowerPlant that could use the oil to run operations?  Who knows AES might have plans to process the oil on site.  We don't know but the timing of the the AES Redondo Power Plant remodel could be related!

The oil pipeline and the power plant are separate but do share the same nuisance factors. The oil will be piped down the greenbelt to a SCE tunnel (tube) that houses other piplines and utility type uses including fiber optics that land on our beach. Some is above ground (wires) with otherstuff below ground. The power plant AES used to run on oil and had several pipelines installed over the years. SCE controls this access under utility agreements.

We need to fight this one and see the big picture of what is going on.  Big business energy is attacking a community and its our job to protect our livelihood.  Join the fight on Facebook to Tear Down Redondo's Power Plant.  Also, read the the blog similar to ours AES Power Plant Must Go. 

$1B+ Destruction of Real Estate Wealth

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.  

E&B Oil Production in California

Hermosa Beach is the logical next step for E&B's oil drilling operation based on this California map of oil underground.  Wilmington & Huntington Beach should be investigated heavily. 

This Map was obtained on the E&B Natural Resources web site here. 

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