Setting the stage for the next chapter of one of the biggest development battles in Redondo Beach history, officials announced ambitious plans Monday to purchase the oceanfront AES power plant site, which has generated electricity and contentious debate in the beach town for decades.
Standing in a parking lot overlooking the hulking, gas-fired power plant on North Harbor Drive, Redondo Beach Mayor Bill Brand, Los Angeles County Supervisor Janice Hahn and South Bay Assemblyman Al Muratsuchi outlined their road map to acquire as much of the 51-acre property as possible for open space in a public-private partnership.
‘A historic day'
Brand, who began his political career fighting a plan to build up to 3,000 condos on the site in the early 2000s and tried to rid the the beach of the under-utilized power plant with a ballot measure, said it was a “historic day.”
“A Central Park-type venue is essential for a vibrant, prosperous, healthy community that values the environment and personal health along with the financial success required for us to flourish,” Brand said, noting Redondo Beach’s designation as a “park poor” community.
Two weeks ago, the city submitted a letter of intent to AES, which put the property up for sale nearly two years ago and closed a second round of bidding Nov. 9.
But it’s merely a nonbinding proposal at this point and a “monumental effort” lies ahead, Brand acknowledged. A formal offer would need to be approved by the City Council and any zoning changes must go before voters. The land is currently zoned for park space and public utility.
“Unfortunately, the public is not the only suitor interested in this choice piece of property, and it will not be all park,” Brand told the crowd, which included members of the South Bay Parkland Conservancy. “There is a competitive bidding process going on right now and we have only made a proposal on how we plan to get there. Everything gets very complicated after that, but your government agencies have decided to take a leadership role instead of waiting and watching to see what happens.”
The idea is to preserve parkland and restore wetlands on the open space component. The rest would be reimagined by a private developer. That could mean a hotel, restaurants, shops or other mixed-use development.
Brand said he can’t say whether that could include housing. But officials don’t seem to be fond of that idea, which has faced pushback.
So far, bids for the AES site have ranged from $50 million to $250 million, officials said.
The land has been home to a power plant since 1907. Virginia-based AES Corp. purchased the current facility from Southern California Edison in 1998 and signed an agreement with the city soon after to downsize it.
Because the plant uses ocean water to cool its steam turbines, under new state regulations, it must be decommissioned by 2020.
AES submitted an application for a smaller facility in 2012, prompting Redondo Beach to formally intervene.
In March 2013, voters rejected Measure A, an initiative co-authored by Brand and slow-growth activist Jim Light, which would have retired the plant and allowed commercial use and open space.
Then AES unveiled its own ballot initiative, Measure B, which would have rezoned the site for mixed-use, allowing 600 residential units, 85,000 square feet of commercial space, a 250-room hotel and 10 acres of open space. It was defeated by another close vote in March 2015.
Later that year, AES announced it would put its application for a smaller plant on hold and market the property for nonindustrial use as part of a settlement agreement with the city.
Potential $40 million
Muratsuchi told the crowd that Redondo Beach could potentially use $40 million from a state parks bond on the June ballot for the acquisition. He and Sen. Ben Allen helped ensure the bill includes language tailored for Redondo Beach.
The rest of the bid would be financed by additional grants, the private developer and the creation of a special financing district.
Hahn said she will ask the county to explore creating the Enhanced Infrastructure Financing District, a redevelopment tool that is a successor to defunct community redevelopment agencies.
“This piece of land is full of potential, but I also know that Redondo Beach residents have been worried about increasing density and traffic and worry that any redevelopment of the AES site must take those considerations into account,” Hahn said.
The special district would not mean new taxes for residents, according to Larry Kosmont, the financial consultant working on the proposal for the city.
Once the City Council and Board of Supervisors approve the formation of the district, the boundaries of which would take in the AES site, property taxes collected on it would be diverted from the county and instead be used for the acquisition. The funds also could pay for improvements to the open space, such as wetlands restoration or recreational facilities.
“All it really does is redirect the taxes that would normally come from a project to the district so the district could implement an infrastructure financing plan,” Kosmont said.
The buyer likely will be the special district. Kosmont believes a deal could be put together within the next six months.
AES Southland Vice President Eric Pendergraft declined to say how many bids have come in for the site, but he said the energy company is open to considering one from Redondo Beach.
But there are many questions to be explored, he said, such as what hurdles exist, what the likelihood of success is, what strings would be attached to the funding and how much they would limit the ultimate development of the property.
“There are a lot of details to still be ironed out, but to the extent some public financing can be obtained to help provide funding for an open space component that otherwise bidders and developers would assign no value to, that could potentially be beneficial to the project,” Pendergraft said.
He said the application for a smaller power plant remains on hold “until we run into a fatal flaw or a dead end, and then we’ll reconsider.”
Another public-private partnership on the Redondo Beach waterfront, CenterCal’s $400 million pier makeover, has soured into a bitter legal battle since voters rejected the project with a slow-growth initiative earlier this year.
CenterCal has a claim against the city and state and federal lawsuits seeking $15 million in damages.