Half Moon Bay’s bailout bill, SB650 in the state Senate, has more troubles, reports Julia Scott in the County Times. The Senate committee reviewing the bill has objected to its current structure as a grant from the California Infrastructure Bank Fund.  A version that included the I-Bank language passed its first committee vote in the Assembly, but this will send it back to square one in that house as well.

The bill was due to receive a hearing in the Senate committee this week, but committee chairwoman Sen. Fran Pavley, D-Agoura Hills, objected to the source of funding the city proposed for the loan, the California Infrastructure Bank Fund. She asked that the bill be rewritten to exclude the "I-Bank," a low-interest financing authority, from the bill altogether and come up with other, guaranteed sources of funding, said Adam Keigwin, chief of Staff to state Sen. Leland Yee, D-San Francisco. Yee is the bill’s Senate sponsor. ...

"The I-Bank is capped at $2 million for the amount of money they can loan for park acquisition, and these guys are seeking $10 million, so it’s not an appropriate source. They need to find a package of loans and grants that is lawful, appropriate and politically acceptable," Vellinga said.

Senate and Assembly bills with the same language must pass with two-thirds votes.

The SF Weekly says that if Half Moon Bay does issue bonds to pay off Chop Keenan, they might be pioneering a new style of investing.

Into the the promising field of anti-social investment offerings steps the city of Half Moon Bay, a municipality 30 miles south of here. The city’s manager recently told the publication Bond Buyer that it has obtained approval to sell $18 million worth of municipal debt—which we term vampire bonds—designed to pay off an apparently bloodsucking Woodside land speculator who has crippled a small town by simply purchasing land nearby, then going to court. ...

For anti-social investors, such an issue would create a golden opportunity—by allowing them to send money in the direction of a speculator whose machinations have threatened to bleed a small town to death.

We fixed a problem that caused our analysis of Jim Larimer’s column and the attached comments to display improperly or not at all in Internet Explorer.

If you’re using Internet Explorer and you had problems reading the article, you might want to try it again.

I have to admit from a real estate perspective I found the eminent domain lawsuit very interesting.  I read the Federal’s judge’s ruling and found it very direct.  I understand that MWSD a few days ago appealed the decision and I’m curious as to what their reasons were.  Not much has been written about it in the Review and nothing has been mentioned here.

I also know many have wanted for HMB to appeal its loss in Federal Court so now all of us will get to see how the process goes and what it costs. 

Steven Hyman

Comments in italics are by Coastsider

Jim Larimer’s recent column in the Half Moon Bay Review is nearly incomprehensible if you don’t speak the secret language of property rights extremists. In it, he tries to convince us that the city of Half Moon Bay should let Chop Keenan develop Beachwood, rather than pay they settlement they (cynically, yet foolishly) agreed to. He fails to make his case.

He also uses innuendo and falsehoods to try and draw a line between what he calls "no-growthers" (anyone who doesn’t agree with his plans for the Coastside) and environmentally-minded Coastsiders (who are more than half the population).

Let’s take a look at his argument. You can mouse over the highlighted phrases for more detail if you like. I apologize in advance for the length of this deconstruction, but Mr. Larimer’s essay is full of rich material. The indented material includes his entire piece, so nothing was taken out of context.

The U.S. District Court for Northern California ruled in 2007 that the city had taken the Beachwood property by first flooding it and then by declaring it a wetland [The federal judge did not say the wetland determination was a taking]. The value taken from the property owner was established by the court to be the value added to the property if had it been fully developed as originally planned [The valuation was nuts, but it’s no longer at issue].

On March 27, 2008, the city entered into an agreement with the property owner to provide him with a permit to develop the property by June 30 of this year or to buy it at a loss-of-value price of $18 million. If they are unable to pay in full by Aug. 29, the city will owe the property owner $19.9 million plus interest on any remaining unpaid debt until it is paid in full. A bond to raise the cash to pay this debt in full by Aug. 29 will require substantial principal and interest payments to be paid from property taxes for many years to come and will limit the services that would otherwise be funded by our property taxes.

The city could act to restore the full value of the property by allowing the improperly installed storm sewer to be fixed and by additionally providing the owner with a building permit. The city would be required to confess its error in ruling that the property is a wetland [There is no evidence that this was ever an option]. No action to admit this error or to re-examine the process that made it has been taken by the city. The most likely outcome now is that the city will purchase this land in accordance with the 2008 agreement.

Mr. Larimer repeats a familiar demand: "Rewrite/reinterpret/ignore the city’s definition of wetland and let the building begin!  We need the tax revenue!". There is no evidence that this is an option at Beachwood, and no evidence that it would satisfy the settlement.

We’ll discuss his tax-roll foolishness in a moment.

The act of purchasing the property acknowledges that it is a wetland unsuitable for almost any development [The property was always a wetland. That’s why they drained it]. It will be a vacant lot, an eyesore [In Mr. Larimer’s eyes, from the highway, at 45mph.] in perpetuity, sandwiched between two housing developments on similar properties. The only winner if this happens will be the no-growth political faction [No such faction exists.] whose political leadership on previous city councils created this disaster by ignoring the reason the property became flooded and then denying a permit to develop it [That’s not an option]. Beachwood is an example of their many victories in controlling growth in our community.

In other words, it’s the city’s fault for not ignoring the law at the request of a powerful developer. Not even Judge Walker went that far.

Is Beachwood an "eyesore"?  I’ve walked the ground at Beachwood, and once you go in about 100 feet, beyond the highway noise, it’s really pretty nice. The open space blends into the hillside—where Mr. Larimer wants to build even more houses and a bypass—in a seamless environment. He’s right that it’s kind of homely from the highway, but it’s a bad idea to plan our communities to be most pleasing when viewed from a moving car.

Is a uniform wall of single-family homes (and their six-foot fences) along Highway 1 is more beautiful than a glimpse our hillsides and natural scrub?

Mr. Larimer keeps referring to some shadowy "no growth faction", imputing multiple strawman motives to them. Who are they? What is his evidence that they exist? He offers us nothing, only their supposed motives and mysterious misdeeds.

Assembly member Jerry Hill’s office says that AB650 has passed out of the Local Government committee.

NOTE: Right now, we’re not planning on sending alerts at this level of detail, but will post updates to the site. If the bill changes, passes either chamber, or meets any roadblocks, we will alert subscribers by email.

Assembly member Jerry Hill’s bill to get Half Moon Bay $10 million for its Beachwood settlement, AB650, is still riddled with uncertainties even as it nears a do-or-die shot at two-thirds votes in both houses of the state legislature. On Friday, Hill restructured AB650 from a grant to a loan by the California Infrastructure and Economic Development Bank.

Julia Scott at the County Times had an conversation with Assemblyman Hill that was similar to the one we had last Friday, in which he hedged on the ultimate structure of funding in the bill. Scott also discovered that the guy that runs the I-Bank had never heard of AB650 as of Monday.

Hill said the California Infrastructure Bank Fund was one possible source of funding and the language of the bill could change again to reflect other possibilities later on.

"There may be several funding sources, there may be other grants and loans," said Hill. "The purpose is to try to get something that will work and that will keep the bill moving." ...

"What you describe is completely unique to me. There are a lot of requirements that must be met by each municipality to qualify to borrow and what they can borrow for," said [I-Bank Executive Director Stanton] Hazelroth. ...

Hill maintains that Beachwood will still be turned into a park under the loan scenario, although the new bill language does not contain the word "park."

UPDATE: I-Bank loans can be up to $10 million and for thirty years, at 2/3 of the rate for A-rated municipal bonds. Details after the jump.

AB 650, the bill designed to help the city of Half Moon Bay pay its Beachwood settlement, has been rewritten to be a loan from the California Infrastructure and Economic Development Bank (aka I-Bank) instead of a grant from park bond funds. The bill now also includes a requirement that the city obtain an independent appraisal of the Beachwood property.

The bill’s sponsor, Assemblyman Jerry Hill, told Coastsider that the structure of the bailout was still "fluid" and that it could ultimately include a cash component as part of the $10 million, and that the term or interest rate of the loan had not been determined.  He said that the bill was restructured as part of the process of getting it out of the Assembly Local Government committee.  However, he declined to characterize the current version of the bill as a placeholder.

According to Assemblyman Hill’s office, the bill was restructured because parks supporters were unhappy with a bill that would short-circuit the established process for awarding parks bond money.

The California Infrastructure and Economic Development Bank was created in 1994 "to promote economic revitalization, enable future development, and encourage a healthy climate for jobs in California". It generally makes loans to local governments to finance the construction of infrastructure.

While Half Moon Bay would still be responsible to the state for the $10 million if it were a loan, the city it would no longer have to issue a bond in an uncertain market to pay off the cost of its $18 million settlement.  The city has said that issuing a bond would cost the city about $1.5 million/year.

CORRECTION: In an earlier version of this article, the net revenue for 2008 was shown as positive, rather than negative, due to an editing error.

The opponents of Sharp Park’s golf course constructed a pair of arguments that lead inevitably to their desired conclusion, that this is the right time to restore the original wetlands habitat in order to save the nearby endangered species. The first premise is economic:

"Sharp Park’s deficit is substantial. Sharp Park has lost between $30,000 and $300,000 a year for the past four fiscal years from the golf fund alone. San Francisco’s other golf courses suffer for it, because they must subsidize Sharp Park’s losses, robbing other courses of needed maintenance. But that isn’t all it costs San Francisco to operate Sharp Park: Sharp Park also draws down the capital fund, the open space fund, and the natural areas program fund."

But what if the claim about all the money being lost is false? Does that make a difference to the validity of Plater and SF Supervisor Mirkarimi’s argument against the golf course?

According to the San Francisco Controller’s 2009 report for the last 4 years showing the net result after subtracting Sharp Park’s expenses and overhead from revenue:

The Controller also states that revenues from earned interest, citywide membership fees and non-specific concessions are not allocated to individual courses but to the overall golf fund. For the years shown above the cumulative revenue to that fund was $1,467,755

If we were to allocate just 11% of that number (based on percentage of total golf revenue) to Sharp Park’s results we would increase its cumulative by $161,453 to a new total of $836,731

San Francisco’s Sharp Park golf course operation does not have a financial viability problem. Rather, it has a financial management problem that a small fee increase would help.

Plater’s other premise, that the golf course is bad for the environment and the endangered species may or may not be true, but we can see that he does not want to find out. Supervisor Mirkarimi’s legislative end-run around the Environmental Impact Review process so he can place the golf course in the care of GGNRA doesn’t portend a fair hearing for the existence of the golf course once out of San Francisco and Pacifica’s control.

Why not? In answer let us note that Brent Plater is a prominent volunteer at GGNRA and retains substantial connections there. No need to wonder why he sees Mirkarimi’s legislation as the golden opportunity it is.

Ken King
Half Moon Bay

Groundwater is so scarce in parts of the Midcoast that in a dry year, water levels can fall far enough to endanger the water supply, even if no further wells are dug, according to the County Times’s report on the county’s groundwater report.

"I think a safe and sustainable water supply is crucial to a community’s public health," said Steve Monowitz, long range planning services manager for the county. "And if an individual homeowner drills a well that impacts the community, that’s something the county needs to review when it considers new development proposals."

"What I took away from the report is that all the basins are at risk of problems in dry or very dry years, not just the granite areas. I wouldn’t limit the possibility of banning wells to the granite rock areas," Monowitz added.

The county report has been in the works for at least six years and in some cases, is more notable for the information it doesn’t provide than what it does.

The purpose of the study was to gauge how much groundwater could safely be extracted over the long term without exceeding the amount replenished by rainfall each year, as well as to determine environmental impacts.

But this could not be achieved because of lack of well data and accurate stream-flow measurements. Of the 1,097 wells in the county’s database, only half gave crucial details like their location and how much water they can produce.

Two or more consecutive dry years can cause the water table to drop all the way down to sea level and even below sea level, raising the risk of saltwater intrusion in the groundwater aquifer. The Midcoast is in its second consecutive dry year right now, but officials can’t say what the effects have been. The county is not monitoring any wells on a long-term basis.