Sep. 18, 2002

Salt pond deal delayed

Mercury News

State and federal officials extended this week's deadline for signing an agreement to buy 16,500 acres of bayfront salt ponds, saying they are still hammering out complex issues in the historic $100 million deal.

The shifting schedule comes amid criticism that more details of the purchase should be made public and that toxic studies of the ponds are behind schedule. But government and company officials said the negotiators are working to satisfy the concerns of state and federal legislators who want to ensure that the public is not left with a huge cleanup bill, among other things.

``It's not surprising to me that it's taking a little longer to iron out the details,'' said David Lewis, executive director of the environmental group Save the Bay. ``I have no reason to believe they won't reach an agreement soon. Everybody has a lot to gain from this deal. The proof that that is true is that the parties have all come so far.''

Under the proposed agreement announced in the spring by Gov. Gray Davis and U.S. Sen. Dianne Feinstein, D-California, Cargill Salt would sell its salt ponds to the state and federal government. Most would be added to the Don Edwards San Francisco Bay National Wildlife Refuge, increasing the amount of tidal wetlands in the bay by 40 percent.

In a letter to Feinstein, Robert Hight, director of the California Department of Fish and Game, said negotiators for the state and federal governments and Cargill expect to take an additional two to three weeks to complete the deal. Hight and other officials said the delay should not affect the Dec. 16 deadline for closing escrow on the property.

``Although delayed, we believe agreement is likely,'' he said. The parties have been collecting information about the condition of the ponds, making sure data has been analyzed and responding to legislative inquiries, Hight added.

Those inquiries came primarily from Sen. Byron Sher, D-San Jose, a leading critic of a policy of secrecy regarding the government's appraisal of the land. Sher complained in a letter to Senate President Pro Tem John Burton that the Legislature was excluded from the negotiations and has no way of knowing whether its concerns are being addressed.

Those concerns include questions about who would be liable if hazardous materials are found, and whether the state could withhold payment to Cargill if the company fails to meet its obligations. There are concerns that mercury from old mines, or other heavy metals or pesticides, could be concentrated in the sediments, leaving a potential cleanup headache.

In a letter to Burton last week, Feinstein said she had been assured that the state would not be liable for any toxic contamination, and that Cargill's payments could be withheld.

She also said she had been assured that the property underwent two separate appraisals. Details of those appraisals cannot be made public as a matter of federal policy, she said.

On Tuesday, Sher said he was satisfied.

``The basic question is, is it a fair price? Before they can make the final agreement and authorize the release of state money, they've got to affirm it's a fair deal,'' he said. ``These agencies have made it clear to me they are quite comfortable that $100 million is a fair price.''

Sher said he was under the impression that many of the issues he has raised are being discussed. According to Sher and other officials, Monday's deadline was ambitious for signing the purchase documents.

``Obviously this is a big deal,'' he said. ``There are a lot of things that have to be tied down in this agreement.''