Jun. 06, 2002

Salt pond deal draws scrutiny

Mercury News

Concerned about the fine print in a historic $100 million sale of industrial salt ponds in the South Bay to the public for a wildlife refuge, state lawmakers in a surprise move Wednesday formed a committee to scrutinize the deal.

``I'm enthusiastic about this deal happening,'' said state Sen. Byron Sher, D-San Jose, who will head the panel. ``And I don't want to second-guess its main essentials, but there are a lot of things we still want to look at.''

No state lawmaker has opposed the deal since it was made public last week by Gov. Gray Davis and U.S. Sen. Dianne Feinstein.

Under the terms, Cargill, a Minneapolis agribusiness giant, agreed to sell 16,500 acres of salt ponds along the bay front, including 15,100 acres from Hayward to Redwood City, to the state and federal government. The project, the largest wetlands restoration deal in California history, would have government biologists gradually convert most of the property back to marshlands for fish, ducks and other animals.

But the Legislature's decision to hold public hearings suddenly turns a hotter spotlight on the deal. Issues expected to be investigated include whether there are toxic clean-up liabilities on the property, how the lands were appraised, and if levee changes could flood low-lying Alviso or Mountain View.

The six-member oversight panel was set up by the Senate Rules Committee on Wednesday with the blessing of Senate President Pro Tem John Burton, D-San Francisco.

Its chairman, Sher, is a veteran legislator considered the dean of environmentally minded lawmakers in Sacramento. Sher also is a law professor at Stanford University.

In 1998, Sher led a similar oversight panel when the state was considering buying the ancient redwoods of Headwaters Forest in Humboldt County from Texas financier Charles Hurwitz.

During that contentious debate, Sher took a plan negotiated by the Pete Wilson and Bill Clinton administrations and demanded tougher language, legal guarantees and more protections for streams and wildlife. At times, he gave the Davis administration fits, however, as Hurwitz threatened repeatedly to walk away from the table.

``I welcome their involvement,'' said Florence LaRiviere, a Palo Alto resident who heads the Citizens Committee to Complete the Refuge, an environmental organization.

``If the deal is structured in a way that's to the advantage of the public and the bay's resources, this won't harm it at all,'' she said.

LaRiviere, who has worked to block development on bay wetlands for 40 years, said she supports the Cargill sale but wants to see more scrutiny of the appraisal that set its value at $243 million. She and some other environmentalists fear that the price -- which allows Cargill to take a $143 million tax write-off -- will set a high price for future wetlands purchases around the bay.

Lori Johnson, a Cargill spokeswoman, could not be reached Wednesday.

Cargill, Feinstein and Davis announced that they hope to sign a legally binding purchase agreement by Sept. 15, and then have the property change hands by Dec. 15.

Another key question is whether the purchase or restoration is linked to a controversial plan by San Francisco International Airport to build new runways a mile into the bay.

No airport money is committed to the $100 million Cargill purchase. Funding would come mostly from the state, with some federal and private foundation sources.

But the airport, along with state and federal officials, has said that if new runways ever are approved, it might contribute up to $200 million to help pay for the salt ponds' conversion to tidal marshes to offset filling of the bay from runway construction.

``The state will be making the lion's share of the contributions to this project,'' said state Sen. Jackie Speier, D-San Mateo, who will sit on the new oversight panel.

``It's a pittance from the federal government. Who is going to pick up the tab to restore it, which will cost $250 million? Is this all about building another runway from SFO into the bay?''

Other lawmakers on the panel are Burton and state Senators Bruce McPherson, R-Santa Cruz; Liz Figueroa, D-Fremont; and John Vasconcellos, D-San Jose.

The panel cannot kill the deal outright, but it could make recommendations that, if not followed, might block state funding.

``We're going to make it better,'' Figueroa said. ``This is in my district. I want it to occur. We're not going to blow it up. But we want to make sure there is a contract we can be proud of.''