State Lands Commission Executive Officer
100 Howe Ave, Suite 100 South
Sacramento CA 95825-8202
Chief Counsel, State Lands Commission
100 Howe Ave, Suite 100 South
Sacramento CA 95825-8202
Re: State Lands Commission Lease No. PRC 7348.9 dated 9/27/89, First Amendment dated 5/5/92, Second Amendment dated 6/27/00 with City of Palo Alto, Lessee
This is a formal complaint against the City of Palo Alto (“City”), the Lessee under the above Lease and its two amendments, (a) for violating the clear terms of the First and Second Amendments in several respects as stated below and (b) for ongoing current actions of the City contrary to and completely ignoring the claim of the State of California (“State”) to title to the Bayfront formerly submerged lands within the City limits. As Citizens of the City and of the State we the undersigned ask the State Lands Commission (“SLC”) (a) to enforce in full against the City the above referenced Lease and its two Amendments and (b) to assert against the City the State’s claims of ownership to Bayfront formerly submerged lands immediately adjacent to these leased parcels, all as described in detail below.
The undersigned have enclosed their brief resumes with this letter so that you may see that we are all long term citizens of the City with substantial involvement in and knowledge of its civic affairs.
We are bringing this matter to the SLC because the SLC ”serves the people of California by providing stewardship of the lands, waterways, and resources entrusted to its care”, all as stated in the Mission Statement of the SLC on its website.
We have exhausted all hope of having the City correct these matters complained of below, having had conferences on this exact matter with the City Attorney’s Office in January 2009, letter and oral presentation at a Council meeting in that same month and a letter and oral presentation at a Council meeting in April 2010. We have also made this presentation at a scoping meeting held by the City and ARI, the technical consultant hired by the City to prepare a report on the building of an industrial size anaerobic digestor facility on nine acres of land that the State claims ownership to and which SLC has clearly intended to require the City to provide to the public as a park, all as promised to SLC in this Lease and two Amendments. We state our case in each instance; the City says nothing in reply and continues on its illegal course of action as though we had not spoken.
THE LEASE AND ITS TWO AMENDMENTS
Attached as Exhibit A are the Lease and its two Amendments. The undersigned obtained these from SLC through the assistance of SLC employee Nanci Smith on 1/13/09. See her email transmittal at Exhibit A1 in response to our telephone request and letter dated 1/12/09, also at Exhibit A1. These documents show full execution and dates.
Note that the legal descriptions and the attached maps on the two amendments show a total land area divided into four quadrants labeled Phase I, Phase IIA, Phase IIB and Phase IIC. Note further that the legal description and map on the original Lease, which covered only Parcel I, shows only three subparcels. Parcel I is the same in all three maps but the remaining land is described in the map attached to the original Lease as parcels II and III. Obviously, when drawing up the First Amendment in May 1992, it was agreed that the land in the original Parcels II and III would be divided differently, into three rather than two parcels, and that the three parcels would be labeled IIA, IIB and IIC. The total land area remained exactly the same, but the internal parcel lines and labels changed.
The First Amendment added Parcel IIA to the original Lease and the Second Amendment added Parcel IIB to the original Lease, leaving only Parcel IIC, which was and is still being used by the City as an active operating Landfill (the City operates its own Landfill as part of its City operated Refuse Collection) to be added to the Lease when the City Landfill operation ceases, which is now planned for late 2011 or early 2012.
On all three maps the unnamed facility that is shown on the lower left hand corner of each map is the City’s Water Treatment Plant, which will be discussed more below. Parcel IIC, which as of this writing has not yet been added to the Lease although its addition is clearly contemplated at the closing of the City’s Landfill, extends to the property line of the City Water Treatment Plant.
CITY ACTIONS CONFIRMING THE EXISTENCE OF THE LEASE AND ITS TWO AMENDMENTS
The City’s Baylands Master Plan, which was adopted by the City Council on 10/6/08 is part of the City’s Comprehensive Plan (the name that the City gives to what most others call their General Plan) and as such is an ordinance of the City. This Baylands Master Plan was made up of a series of City actions since the 1960s which had never been collected in one document, and the City action on 10/6/08 was the completion of a project that pulled together and integrated into one document what became the Restated Baylands Master Plan.
Page 80 of that Baylands Master Plan (See Exhibit B attached) states that the State claims title to the formerly submerged lands on the City’s San Francisco Bay waterfront and the City disputes those claims. It then goes on to declare that the City and the State have entered into a 49 year lease ending in 2038 for the disputed property, that the City is allowed to construct such improvements on the Leased land as “contained in the Byxbee Park Master Plan (this portion of the baylands is sometimes referred to by the City as Byxbee Park) and that there would be no compensation paid to the State ”as long as the lands do not change from a public recreational use”.
The City has approved the Lease and its two Amendments by formal Council action and execution of the documents attached at Exhibit A. We do not understand that the City contests in any way the existence and legality of the Lease and its two Amendments, but, without giving any reason for doing so, the City has since 1992 been ignoring the terms of the First Amendment and since 2000 been ignoring the terms of the Second Amendment. In continuing City actions over the past several years the City has been taking actions fully inconsistent with the anticipated addition of Parcel IIC to the Lease when the City Landfill is closed, now planned for either 2011 or 2012.
The City does not dispute the Lease and its Amendments; it simply ignores them as though they did not exist. The undersigned have raised with the City at Council meetings and in writing and in meetings with the City Attorney’s Office over the past two years the City’s obligations under the Lease and its Amendments. There is never a response and there is never a change of the City’s illegal actions.
CITY’S ACTIONS IN VIOLATION OF THE FIRST AMENDMENT TO THE LEASE
Turning first to the terms set out in the First Amendment, we see in the third Whereas a statement that the City plans for the conversion of the Baylands Sanitary Landfill ” into a pastoral passive park”, in the fifth Whereas a statement that the City is adding Phase IIA to the Lease ”for the further development of the Lessee’s parklands”, then there is the actual addition of Parcel IIA to the Lease and in Section 1C the seven itemized “work and activities authorized in and on Parcel IIA” after which is stated seven items that the City can do, all of which are consistent only with closing the landfill and moving toward opening the land as a “”pastoral passive park”.
Now looking at the provisions of the original Lease, the terms of which apply under the First Amendment, we see on the first page Section 1“Lease Type: General Permit – Public Use, Recreational “, then “Land Use or Purpose: Public Park”, then at the top of the second page under ”Consideration” a statement that the “public use and benefit” will suffice as consideration to the State, then a section on “Authorized Improvements” which are consistent only with closing the landfill and opening it as a park, then in Section 4 General Provisions Paragraph 2(a)(3) a repeat of the declaration that the promised public use is sufficient consideration to the State and in paragraph 4 a statement that “ Lessee shall use the Lease premises … only for the purposes stated …Lessee shall commence use of the premises within ninety(90) days of the beginning date of this lease. Thereafter Lessee’s discontinuance of such use for a period of ninety (90) days shall be conclusively be presumed to be an abandonment.” Then in paragraph 11 entitled Default and Remedies we see “ The occurrence of any one … of the following events shall constitute a default or breach of this Lease by Lessee: (1) Lessee’s failure … of … consideration as required under this Lease.”
With these stated obligations of the City in mind, we now turn to what the City has done since the execution of the First Amendment in 1992: The City closed the landfill in 1992 and put a chain link fence around parcel IIA, thus preventing any public access or use and the land has set that way for almost nineteen years – a closed Landfill of 22.5 acres fenced, denying the public any access or use.
In contrast, Phase I, which came under the original 1989 Lease and consists of 35 acres closed as a Landfill in 1989 and was open to the public in 1991, after an expenditure of $1.6 million in funds from waste disposal fees which had been collected by the City from its landfill operation. The Phase I park won several awards for design. See pages 84 and 85 from The Baylands Master Plan attached as Exhibit C. In seems clear to the undersigned that SLC expected the City to do with Phase IIA what it had done with Phase I, but the City did not do so and has continued to not-do-so for 19 years. See the Section below entitled WHY DID THE CITY NOT OPEN PARCELS IIA AND IIB TO THE PUBLIC? for a further explanation of what the City was doing with the fenced parcels that it had promised the State that it would open as a public park.
Note also that the pages attached in Exhibit C do not show the same Parcels IIA, IIB and IIC as the maps attached to the First and Second Amendments to the Lease. For some reason and without any permission from SLC to do so, the City around 1992 began using its own map for the balance of the Landfill and completely ignored, without any explanation for doing so, the controlling maps attached to the Lease and its two amendments. Thus, the reference above that Parcel IIA is 22.5 acres is taken from the City’s unauthorized map for the area, and that unauthorized parcel was what the City actually closed and fenced under the First Amendment, not the parcel as described in the official REAL map attached to the First Amendment, which would have been larger by about 10 or 11 acres.
CITY’S ACTIONS IN VIOLATION OF THE SECOND AMENDMENT TO THE LEASE
The City’s violations under the Second Amendment parallel almost exactly those stated above for the First Amendment. Using the City’s unauthorized maps, as shown in Exhibit C and explained above, the area of Phase IIB is 23.2 acres and the area was closed as a Landfill in 2000. At that time the City promised to use the land as a public park, but, in fact, the City fenced the area and excluded the public. It has been so for almost 11 years.
In adopting its own unauthorized maps for Parcels IIA and IIB the City trimmed off about 11 acres each from parcels IIA and IIB and added the resulting 22 acres to Parcel IIC, which it thereby increased to 51.2 acres total. There is no paper trail available to the undersigned of why or by whom this was done, and the City will have to answer to SLC for it. We are not able to do more than offer our experienced opinion that the City Department of Public Works around 1992 changed the maps and made all of these unauthorized decisions and other parts of the City administration simply deferred to Public Works as the department in charge of refuse, the landfill and the baylands that had not yet been turned into a park. The City Planning Department did the Restated Baylands Master Plan, and the undersigned do not believe that they had any idea that Public Works had substituted its own maps for the ones attached to the SLC leases. The City Attorney’s Office could possibly have caught this unauthorized map switching, but the undersigned believe that they simply trusted Public Works. A big mistake. One result of the advantage to Public Works of using their own maps, thereby enlarging Parcel IIC to 51.2 acres will be discussed below in the next section, where we will explain further what the City was really doing with this land.
WHY DID THE CITY NOT OPEN PARCELS IIA AND IIB TO THE PUBLIC?
There are probably many reasons, but we will focus on two, and we continue to believe that the manipulations came entirely from Public Works. Other parts of the City administration can be held responsible for lack of supervision, but the intentional manipulations we believe came from Public Works. We go into this detail only to help provide a logical motive of the conduct that has so badly mis-managed this matter. Many at the City now will claim no knowledge of it, and they are probably telling the truth, but the mess is there for all to see.
One reason that Public Works wanted a larger Parcel IIC is they wanted to put the City Compost operation on land that is actually on Parcel IIB based on the maps attached to the First and Second Amendment to the Lease, but which the Public Works maps put on Parcel IIC --- that is, THEIR Parcel IIC which is about 22 acres larger than the REAL Parcel IIC under the First and Second Amendments. Attached is page 85 of the Baylands Master Plan, which shows the parcels labeled as Public Works wanted, rather than according to the lease maps and it shows where the compost operation is located. Compare that map to the REAL map attached to the Second Amendment and you will see that the REAL map would exclude by the express terms of the lease any activity on the REAL Parcel IIB other than park use. Why Public Works considered it so important to put the Compost operation in that exact spot we do not know, but there must have been some reason to make them go so far as to substitute an unauthorized map for the real one.
The second reason is (a) to increase revenue flowing into the City from the Refuse operation and (b) to avoid the expenditure of City funds to improve the closed parcels before they could be opened as parks. All of the acts we will relate took place under the prior City Manager or even Managers prior to that.
Point (b) above on not spending public funds to improve the land as parks is easy to see. We saw above that it took $1.6 million in the early 1990s to improve the 35 acres of Parcel I before it could be opened as a park. Prices had risen and there were parcels of 22.5 and 23.2 acres, even by the City’s unauthorized maps, to be improved before they could be open to the public. Public Works came up with the statement that the last three parcels, that is Parcels IIA, IIB and IIC, all had to be opened as park at the same time because “that is what had been planned”. It was a completely untrue statement, but no one had the documentation at that time to speak against it if Public Works said it was so. It was not until official restatement of the Baylands Master Plan in 10/08 that citizens could read all relevant documents for themselves and see that Public Works was just making it up.
As to the matter of increasing the City’s revenues, the issue came up at the 1/22/07 Council meeting (See the City Manager’s Report and the minutes of that meeting, both attached as Exhibit D) at which it was decided that the City could charge the City’s refuse customers for rent on the CLOSED portions of the landfill –--- this was deciding in 1/07 that the City would charge rent for Landfill areas closed and out of use since 1992 and 2000 –--- and they did so and continue to do so. Such an action is clearly treating the closed areas as still a part of the landfill, even though the SLC leases required that they be opened as park!! If the City could keep their actual use in limbo, in suspension, it could argue, as it did, that it could continue to charge the Refuse customers rent for them.
The City will have to speak to what rent was charged but the undersigned believe that it is and continues to be about $60,000 an acre per year. For the 45.7 acres that amounts to $2,742,000 a year starting in, we believe, 2005 and continuing on in the future. On a City budget of approximately $120 million a year, this is a significant inducement to cheat, and that is what they did.
CONTINUING CONDUCT BY THE CITY IGNORING COMPLETELY THE STATE’S CLAIM TO OWNERSHIP OF PARCEL IIC
The City has been pursuing for the past two years a study to locate an industrial size anaerobic digester operation (“AD”) capable of handling about 60,000 tons of material per year on nine or ten acres of Parcel IIC immediately next to the City’s Water Treatment Plant. Such a use is clearly not a “passive pastoral park” as all negotiations between the City and SLC and their resulting documents have assumed, and, will, in fact, detract greatly from the public’s use and enjoyment of the park that the City is required to provide. See Exhibit E for 2010 newspaper articles re the City’s actions.
Such a facility is not needed or necessary for the City or the area because the City has agreements in place with its hauler GreenWaste to handle food scraps and with the Sunnyvale SMaRT Station to handle yard trimmings. Furthermore, a similar regional facility with sufficient capacity for the City’s organics is underway on Route 237 in San Jose about ten miles away from the proposed site of the AD that is being studied.
This contemplated industrial intrusion into the Baylands is contrary to the goals and recommendations of all previous City Councils, Commissions and Baylands Committees since 1965 for completion of a park on this site, which goals and recommendations are all consistent with the City’s existing agreements with SLC. The City’s current course of conduct reverts the City back 50 years to an unenlightened era when at least 44 garbage dumps ringed the Bay. It violates a long established promise to the citizens and the public, supported by the SLC, that this land will be a pastoral open space park.
REQUEST FOR RELIEF
Based on the above facts, which we stand ready to support as called on by SLC except as to those matters which are stated as opinion, the undersigned ask that SLC immediately inquire into this matter to the point of its own satisfaction, then take promptly full remedial action to require the City to comply with the First and Second Amendment to the Lease, based on the true maps attached to those leases and not the unauthorized maps that the City has been using, including requiring the City to promptly fund the improvements for Parcels IIA and IIB in the same manner that it handled Parcel I improvements. We take no position on whether the SLC should require cash rent from the City for the 19 years that it has been out of compliance of its lease obligations for parcel IIA and the 11 years it has been out of compliance for parcel IIB, but we note that that is a possible claim that the SLC can make. In addition, we ask the SLC to make clear to the City that the State claims title to Parcel IIC and will not approve any use of that land by the City other than as a park, all as in line with the Lease currently in effect.
Date: February 8, 2011 at Palo Alto CA