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HomeMy WebLinkAboutAGENDA REPORT 2013 1120 CCSA REG ITEM 09B ITEM 9.B. C Js ru //-, a A10/3 ACTION: .�_. , MOORPARK CITY COUNCIL / , , _ !: AGENDA REPORT TO: Honorable City Council FROM: Steven Kueny, City Manager DATE: November 14, 2013 (CC Meeting of 11/20/13) SUBJECT: Public Workshop to Consider Information Regarding a Potential Power Plant Project to be Located near Los Angeles Avenue and 1300 Feet West of Gabbert Road on the Site of Tract Map 5906 BACKGROUND Within the last few weeks, some members of the City Council and staff have been approached by, and individually met with, representatives of the landowner of A-B Properties and Diamond Generating Corporation (DGC). The purpose of the meeting was to inform the City of DGC's intent to propose a 290 Mega Watt natural gas-fired power project within the City of Moorpark. Specifically, the proposed site is the approximate 34-acre site of Final Map 5906 (formerly Map 5147) owned by A-B Properties. This site is currently approved for 17 one acre industrial lots and is subject to a Development Agreement. The site is located northwest of the Southern California Edison (SCE) Substation [at Los Angeles Avenue and Gabbert Road], 1300 feet west of Gabbert Road and south of the future North Hills Parkway. A location map is attached (Attachment 1). DISCUSSION The SCE process for seeking proposals was issued September 17, 2013, and requires submittal of a non-binding Notice of Intent to Offer by December 2, 2013. Submission of an Indicative Offer and Completed Offer are due by December 16, 2013. The Request for Offer Schedule is attached (Attachment 2). City staff has not been able to fully evaluate the proposal but has the following concerns: 1. The proposal is inconsistent with the Development Agreement for the site. Power Generating facilities of this type are prohibited by the land use and zoning restrictions on the site and with a covenant recorded against the subject property. 60 Honorable City Council Re: Public Workshop to Consider Potential Power Plant November 14, 2013 (CC Meeting of 11/20/13) Page 2 Attached is a letter dated November 6, 2013, from City Attorney Kevin G. Ennis to Paul Burns, A-B Properties, addressing this matter (Attachment 3). 2. The eighty (80) foot height of portions of the proposed plant facility, even if the site is somewhat lowered, would be very visible throughout the community. 3. Such a use would be incompatible with the existing and planned residential uses in the immediate vicinity of the site and overlooking the site. It could also potentially adversely affect the planned siting of the Moorpark Studio project. 4. The power plant would create undetermined but anticipated significant impacts to Moorpark's air quality. Most likely, the applicants would have to buy credits for the amount of nitrogen oxide (NOx) produced by the project from the Ventura County Air Pollution Control District. While this may mitigate the impact on paper, the real impact would remain adversely affecting Moorpark for at least the next 40 years. The power plant would also generate sulfur oxide (SOx) and fine particulate (PM10) emissions that would not otherwise occur in such large quantities from the development of light industrial uses on the property. 5. At a prominent entry to the city, Moorpark is already burdened with a relatively large SCE Substation on its 40/ acre site. As identified in SCE's Request for Offers, the projected power needs in the Moorpark Substation area could be met by providing power to other High Voltage Substations located in Goleta, Santa Clarita, Mandalay and Ormand beach areas of Oxnard. While the proposed site may be convenient for DGC and SCE, a more remote location should be considered where air quality, land use, and aesthetic impacts would not affect such a large number of people. The purpose of this agenda item is to allow for the City Council to be informed of the potential proposal, for the City Council to ask staff questions about the proposal and the process, and for the public to be informed and to provide comments and pose questions regarding the proposal and process. In addition, SCE, DGC and A-B Properties' representatives have been informed of this meeting and invited to participate. Also attached to this report is a portion of the written material provided to the city by DGC (Attachment 4). For more information about the "Public Utilities Commission of the State of California (CPUC) Decision 13-02-015 Authorizing Long-Term Procurement for Local Capacity Requirements and Southern California Edison (SCE) 2013 Request for Offers (RFO) 61 Honorable City Council Re: Public Workshop to Consider Potential Power Plant November 14, 2013 (CC Meeting of 11/20/13) Page 3 Local Capacity Requirements dated September 12, 2013," you may access the following website: http://on.sce.com/18wAjJc STAFF RECOMMENDATION Direct staff to inform DGC, SCE, CPUC and the California Energy Commission of the City's opposition to the Tract 5906 site for the potential power plant project. SK:db Attachment 1: Location Map Attachment 2: Request for Offer Schedule Attachment 3: Letter dated 11/6/13 from City Attorney Kevin G. Ennis to Paul Burns, A-B Properties Attachment 4: Presentation to the City of Moorpark S:\City Manager\Everyone\ccagenda\Power Plant 2013 1120.doc 62 ' ,'.• . 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',.111;-wi---..--;:ii.--Ir.rai.-1 .k....11,w,,t,,,-.... - i., '7--,-‘4.--:,-7-1,r..• ' 7•'- '-i•t1: ' -• •-••';;-/-'-'-',•,, -11`''''• -- A r.v,■..-•."....•- ''.-•:,----t..1”...Z::: ti,4Z,7,+,t-..; i 7 F,,, , „.r,.,.,,.: ., •„v„,,,, , ..,_ L.!'tl.',It47.r'•[r 4_..414- Itt-4"U;'11r71Y I fq. .7. wi..-93 , _....__, _ -, :v,,,,,a,ov..,uc...,..__. .._ .;:_, -, r,.... . — ,,,,,,,,,.. ,, A,vi,,■11,...,—- Ca., AERIAL PHOTOGRAPH CC ATTACH 63 MENT 1 Attachment 2 Seller's authorized Fuel Manager. If SCE is not the SC, then SCE will not act as the Fuel Manager. C.11. Special Purpose Entity SCE prefers Sellers that are special purpose entities organized for the sole purpose of owning and operating the project and which remain special purpose entities for the Term of the Agreement. Notwithstanding the foregoing, SCE will consider the ownership structure of each Seller on an individual basis, whether the Seller is organized as a special purpose entity or otherwise, and reserves the right in its sole discretion to (i) require any Seller to become a special purpose entity as a condition of executing an Agreement; and (ii) accept an Offer from any Seller who is not organized as a special purpose entity. D. RFO SOLICITATION AND OFFER SUBMITTAL PROCESS D.1. RFO Schedule Timeline Event September 12, 2013 RFO documents issued December 2, 2013 5:00 PM Deadline to submit Non-binding Notice of Intent to Pacific Prevailing Time Offer December 16, 2013 5:00 PM Deadline to submit Indicative Offer and completed Pacific Prevailing Time Offer Submittal Package January 30, 2014 Shortlist notification May 22, 2014 Deadline to complete negotiations of Agreement(s) May 29, 2014 5:00 PM Deadline to submit Final Offer Pacific Prevailing Time June 26, 2014 Last date for notification of successful Offers and to sign Agreements D.2. Non-binding Notice of Intent to Offer Seller should provide the form "Non-binding Notice of Intent to Offer' as shown in Exhibit D.2 by the date and time identified in the applicable RFO Schedule in Section D.1. The Non-Binding Notice of Intent to Offer should be sent via electronic email to contact information in Section D.5 and the Independent Evaluator listed in Section D.6. SCE will not be responsible for information received after the submittal deadline due to unsuccessful electronic transmissions. Southern California Edison RFO for Local Capacity Requirements September 12, 2013 Page 14 of 30 64 Attachment 3 INM RICHARDS WATSON GERSHON ATTORNEYS AT LAW—A PROFESSIONAL CORPORATION 355 South Grand Avenue,40th Floor,Los Angeles,California 90071-3101 Telephone 213.626.8484 Facsimile 213.626.0078 RICHARD RICHARDS November 6, 2013 (1916-1988) GLENN R.WATSON (1917-2010) VIA ELECTRONIC MAIL & U. S. MAIL HARRY L.GERSHON (1922-2007) STEVEN L.DORSEY Mr. Paul Burns WILLIAM L.STRAU5T General Partner MITCHELL E.ABBOTT GREGORY W.STEPAN ICICH ROCHELLE BROWNE A-B Properties QUINN M.BARROW CAROL W.LYNCH 505 East Thousand Oaks Boulevard GREGORY M.KUNERT THOMAS C CE N Thousand Oaks, California 91360 STEVEN H.KAUFMANN KEVIN G.ENNIS ROBIN 0.HARRIS MICHAEL ESTRADA Re: Proposed Development of the Amaranto Energy Center in the City of LAURENCE S.WIENER SB..TILO N KIM Moorpark SASKIA T.ASAMURA KAYSER 0.SUME PETER M.THORSON JAMES L.MARKMAN Dear Mr. Burns: CRAIG A.STEELE T.PETER PIERCE TERENCE R.BOGA LISA BOND Our firm serves as the City Attorney for the City of Moorpark(the"City"), and I am IANET E.COLESON ROXANNE M.DIAZ the appointed City Attorney. I am informed that Diamond Generation Corporation JIM G.GRAYSON WILLIAM ROPY.A.CLARKS ("DGC") has presented preliminary plans to the City to seek approval of a natural CU RLEY 111 MICHAEL F.YOSHIBA REGINA N.DANNER gas-fired power plant, referred to as the Amaranto Energy Center, on property owned PAULA GUTIERREZ BAEZA BRUCE W.GALLOWAY by your firm(the"Property"). I write to express the City's concern that you are DIANA K.CHUANG NORPATRMAN ICK A.K.DUPO BOBKO NT facilitating DGC's proposed development of this power plant on the Property in direct DAVID M.SNOW LOLLY A.ENRIQUEZ conflict with the 2/15/13 Development Agreement(the"Agreement"). ). KIRSTEN R.BOWMAN GINETTA L.GIOVINCO TRISHA ORTIZ CANDICE K.LEE Development on the Property, which encompasses approximately 34.53 acres north of JENNIFER PETRUSIS STEVEN AMY..FLO ER the Union Pacific Railroad right-of-way and west of Gabbert Road, is governed by DEBORAH). HAKMAN , D.CRAIG FOX the City's zoning regulations and the Agreement. As explained more fully below, MARICELA E.MARROQU(N GENA M.STINNETT development of non-renewable power generation facilities, including natural gas-fired TOUSSAINT S.BAILEY SERITA R.YOUNG power plants, is prohibited by the zoning restrictions on the Property and would SHIRT KLIMA SEAN BA.GIB HORNS constitute a breach of the Agreement. For the following reasons, the City requests JULIE A.HAMILL ANDREW J.BRADY that A-B Properties cease its efforts to proceed with DGC's proposed Amaranto AARON C.O'DELL BYRON MILLER Energy Center. AMANDA L STEIN SPENCER B.KALLICK PATRICK D.SKAHAN STEPHEN D.LEE First, Paragraph 4.1 of the Agreement provides that the permitted and conditionally OF COUNSEL MARK L.LAMKEN permitted uses of the Property are limited to those allowed by the Project Approvals SAYRE WEAVER TERESA HO-URANO and the Agreement. Paragraph 1.4 provides that the Project Approvals include SAN FRANCISCO OFFICE General Plan Amendment No. 97-2 and Zone Change No. 97-6. The latter, adopted TELEPHONE 415.421.8484 ORANGE COUNTY OFFICE by the City Council in 1998 as Ordinance No. 249, amended the zoning of the TELEPHONE 714.990.0901 TEMECU LA OFFICE Property from Agricultural Exclusive (AE) to Limited Industrial (M-2). Paragraph 2 TELEPHONE 951.695.2373 of the recorded Covenant, which you executed on behalf of A-B Properties, expressly 65 RICHARDS I WATSON I GERSHON ATTORNEYS AT LAW-A PROFESSIONAL CORPORATION Mr. Paul Burns November 6, 2013 Page 2 states that the developable portion of the Property is subject to the permitted uses in the M-2 zone. Moorpark Municipal Code Section 17.20.060 lists the permitted uses in the M-2 zone. It specifically permits"energy production from renewable resources," subject to a conditional use permit. The Code defines "energy production from renewable resources" as "any facility or installation such as a windmill, hydroelectric unit or solar collecting or concentrating array, which is designed and intended to produce energy from natural forces such as wind, water, sunlight or geothermal heat, or from biomass, for off-site use." Energy produced from natural gas does not fall within this definition. Energy production from non-renewable sources and other types of energy generation facilities are not permitted uses under the Zoning Code. Therefore, the proposed natural gas-fired power plant is not a permitted use on the Property. See Building Industrial Legal Defense Fund v. Superior Court, 72 Cal.App.4th 1410, 1416 (1999) (uses not identified in a zoning code are non-permitted uses within the zone). Second, Paragraph 2 of the recorded Covenant provides that"[p]rimary uses, except agricultural crops, shall be conducted within completely enclosed buildings and metal faced buildings shall not be allowed as principal buildings." Upon reviewing the examples of modern natural-gas fired power plants provided in DGC's proposal, we noticed that they are primarily constructed of metallic materials. In fact, DGC's Sentinel Energy Project appears to be constructed almost entirely out of metal. Assuming the proposed facility on the Property would be constructed in a similar manner, the facility would violate the terms of the Covenant executed in favor of the City. Third, even if a natural gas-fired power plant were a permitted use on the Property, the proposed Amaranto Energy Center would not be consistent with the development standards required within the M-2 zone. The purpose of the M-2 zone is to provide suitable areas for the development of industrial activities that include light manufacturing, processing, and fabrication. It is intended to safeguard adjoining industrial sites, nearby non-industrial properties, and the surrounding community from intensive industrial uses or development. To effectuate this purpose, Moorpark Municipal Code Section 17.36.050(A)(3)(a) provides that "[t]he following shall be maintained at levels which are appropriate for 66 RICHARDS I WATSON I GERSHON ATTORNEYS AT LAW-A PROFESSIONAL CORPORATION Mr. Paul Burns November 6, 2013 Page 3 the zone and geographic area and are not objectionable at the point of measurement when the use is in normal operation: i. Smoke, odors, vapors, gases, acids, fumes, dust, dirt, fly ash or other forms of air pollution; ii. Noise, vibration, pulsations or similar phenomena; iii. Glare or heat; iv. Radioactivity or electrical disturbance. The point of measurement for these factors shall be at the lot or ownership line surrounding the use." Given the probable size and magnitude of a 290 megawatt natural gas-fired power plant, we have significant questions and concerns as to whether the proposed facility would violate these standards. Finally,the Agreement was intended to permit development of 17 individual buildings on the Property, not a single, large industrial project. This intent was made clear in the Mitigated Negative Declaration(MND) applicable to the Agreement. The MND reviewed the environmental impact of subdividing the Property into 17 industrial lots "for the future development of 17 industrial buildings" (italics added). The MND estimated that the 17 buildings would have footprints ranging from 17,424 square feet to 21,257 square feet. Relying on the MND and the Agreement, the City Council approved a new Tentative Tract Map for the Property less than six months ago, which proposed re-subdividing the Property into 17 individual lots ranging in size from .82 acres to 1.53 acres. This plan of development contemplated in the Agreement and Tentative Tract Map was made in recognition that the site is located near a rural residential neighborhood and other non-industrial properties. Given the surrounding land uses, the City believed that appropriate development on the Property would be limited to relatively small scale, light industrial uses. Development of one large natural gas-fired power plant encompassing all or nearly all of the Property contradicts the clear intent of the Agreement. Development of the proposed Amaranto Energy Center on the Property is inconsistent with your agreement with the City and not permitted. 67 RICHARDS I WATSON I GERSHON ATTORNEYS AT LAW-A PROFESSIONAL CORPORATION Mr. Paul Burns November 6, 2013 Page 4 Violations of the Agreement can be remedied by injunctive relief and specific performance. Additionally, in certain situations the City has the right to withhold the issuance of building permits for the Property until a violation is cured. The City urges you to discontinue your efforts in support of the power plant and proceed to develop the Property consistent with the Agreement and Covenant. I look forward to hearing from you on this matter. Very truly yours, Kevin G. 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