Alamitos Bay Marina Rebuild Update (May 7, 2009)
Although it may not be evident, we are proceeding with the rebuild of the Alamitos Bay marina. We originally believed we would obtain our final permit, the Coastal Development Permit, by February 2009. However, the schedule has unfortunately been backed up due to a number of issues, mimicking the movie the Perfect Storm. The four issues that have converged to create this perfect storm are the following:
Eelgrass Issue
According to a Federal Eelgrass Policy, adopted in the early 1990s, the removal of eelgrass must be mitigated at a ratio of 1.2 to 1. When we surveyed the dredge area under the entire ABM, we found about 1,400 square feet of eelgrass, which means we need to re-plant about 1,700 feet of eelgrass somewhere else. Because eelgrass is prevalent in Alamitos Bay, there are few areas where we can mitigate. We have communicated with the State Department of Fish and Game, who monitors compliance with the policy, and have determined that the best place to mitigate is the Cerritos Channel adjacent to the Pacific Coast Highway bridge. We have determined that this mitigation will cost about $1.5 million and eliminate ten Basin 6 North slips, which generate about $60,000 in revenue a year – a very costly mitigation.
The real problem, however, is a second part of the Eelgrass Policy. That section requires that “potential eelgrass habitat” must also be mitigated on a 1 for 1 basis. What this means is that if we have soft-bottom areas that are less than 8-feet deep, even if eelgrass is not growing, we must re-create that habitat somewhere else. We have measured those areas under the marina, and calculate that we must re-create about 146,000 square feet of this habitat, roughly three acres, even though eelgrass is not growing there and is prevalent throughout the Bay!
Our consultants have told us that even though this policy has existed nearly two decades, the regulatory agencies have just recently begun strictly enforcing it. This means that we will not be able to get a Coastal Development Permit from the Coastal Commission unless we comply with the policy, or somehow convince the regulatory agencies that this is not feasible or is unneeded.
In a recent meeting with our consultants, expert attorneys and our attorneys, we were advised that if we were to challenge the policy, we would be unwise to do it unless we first did a full environmental impact report (EIR). Fortunately, we have already done a significant amount of work, so we believe that the full EIR should take no more than six additional months, not the year that it normally takes.
Marina Design
When we developed the conceptual design for the marina, we knew there might be some concern, which is normal when there are competing interests for limited water space. In developing the design, we maintained the existing navigation channels, defined by the channel that is unimpeded by structures, docks or vessels used by long-standing operators. This caused concern by the rowing community, as water area currently used in marina operations will contain docks as part of the conceptual dock plan. We have met with rowing community representatives on a number of occasions, and fully understand their concerns and desires. We have also met individually with a number of other stakeholders in Alamitos Bay, and will develop a compromise position that is hopefully accepted by all. It is anticipated that we will hold at least one more public meeting prior to proceeding with the permitting process. The permitting process will entail the following:
Ø Approval of the Environmental Impact Report by the City Planning Commission;
Ø Hearing by City Council if Planning Commission approval is appealed;
Ø Approval by State Coastal Coastal Commission.
Financing Plan
The project is estimated to cost $90 million, which includes $82 million for the final design and construction, and $8 million for the project management and City costs. The State offers a public marina loan program through the State Department of Boating and Waterways (DBW). We have secured $21.5 million of these funds for the ABM rebuild. However, the State has diverted most of the funds used in this program to other State operations (the $21.5 million is secure), and therefore this funding source is not available for projects the magnitude of ABM. As a result, we are evaluating a revenue bond, secured by the slip fee revenue, to bridge the funding gap of $69 million. Unfortunately, the economic environment in the nation, and the world, has made this type of funding more difficult to obtain. We are continuing to work with our Finance Department and bond counsel to determine how to obtain the funds.
Basin 1 Dredging
As we tested to obtain the dredging permit, we needed to take samples of the silt under the docks. The initial tests showed signs of elevated mercury in Basin 1. As a result, after consulting with the Army Corps of Engineers, we conducted a thorough test of the silt in Basin 1, and found highly elevated levels of mercury throughout Basin 1. Since it appears only in Basin 1, we are at a loss as to where it originated. In any event, we may need to dry the material and truck it to an upland landfill, which could cost $100 per square meter, or an additional $2.5-3 million! We are continuing to evaluate alternatives, including using offshore pits and capping the bad material, which will bring the cost down.
We are continuing to work through this perfect storm, and anticipate a Planning Commission date in August or September, a City Council appeal date in October or November, and a Coastal Commission hearing in mid-2010.
