Paperwork holds up city’s Poseidon decision

AES must sign agreement before council will vote on desalination plant; firm agrees to property taxes.The historic Poseidon vote has been delayed -- again.

Attorneys for the city and the Connecticut company spent weeks wrangling over the proposed desalination facility’s contract to get it ready in time for Monday’s special meeting, but by the time it reached the floor, landlord AES still hadn’t signed the document, which is known as the Owner Participation Agreement.

That deal spells out all the benefits of the proposed desalination plant to city coffers, including tax revenues and a grant program Poseidon planned to develop for city services. The deal is moot without the signature of AES, and city officials are fearful that the contract wouldn’t be enforceable unless the utility giant gave the project a green light.

AES owns and operates a coastal power plant near the intersection of Newland Avenue and Pacific Coast Highway, and it would lease a lot behind the facility to Poseidon for the construction of a $250-million desalination plant.

Using a series of intake and outfall pipelines that run into the ocean, AES plans to provide Poseidon with the salt water it needs to create 50 million gallons of drinking water per day and then deliver the unusable brine back into the ocean.

Poseidon Vice President Billy Owens said he anticipates that AES will sign the agreement, but will need a little more time -- the deal wasn’t completed until Jan. 3 and was just recently submitted to AES.

“It’s a large company, and the deal still needs to go through the attorneys and all the right channels,” he said.

That signature needs to come before March 5, the deadline for the conditional-use permit approvals. State law requires that the permit be considered no more than six months after the council certifies the project’s environmental report, or the applicant can sue the city for delays.

To avoid passing the deadline, Councilman Keith Bohr proposed the city take up the Poseidon vote on a special Feb. 27 meeting. If the document is not yet signed by AES, the project will not likely be approved.

“There is a limited window of opportunity we have to work with,” Mayor Dave Sullivan said.

Details of the agreement were released Thursday, after weeks of anticipation and delay. As expected, the document promised the city several economic incentives if it approved the desalination facility. Those incentives include:

* A commitment to pay property taxes on the site for the next 30 years, valued at approximately $1.8 million annually. If the property is handed over to a public utility agency, that group must pay a fee in lieu of taxes for the site.

* The creation of a $2-million grant program allocated by the city to pay for projects to improve the quality of life in Huntington Beach.

* An agreement to make $1.9 million in improvements around the proposed facility and along the pipeline route.

QUESTION

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