$100 million salt-pond deal sealed with Cargill
Jane Kay, Chronicle Environment Writer
Tuesday, December 17, 2002
2002 San Francisco Chronicle.

Federal and state officials completed a historic, $100 million deal with agribusiness giant Cargill Inc. on Monday to buy 16,500 acres of salt ponds and other property around San Francisco Bay.

The agreement puts into public hands the biggest intact chunk of privately owned bay shoreline, and it represents an unprecedented opportunity to restore natural tidal marshes for fish and wildlife habitat in the bay.

Nationwide, experts say the sheer size of the restoration effort is comparable in scope to restoration programs on Chesapeake Bay, in the Florida Everglades and along the Mississippi River.

"This is the single-largest wetlands restoration on the West Coast, and it lies in the heart of a heavily urbanized area," Gov. Gray Davis said in announcing the deal's completion Monday. "This . . . will benefit the environment and people of California for generations to come."

Interior Secretary Gale Norton issued a statement saying, "The restored marshes will improve water quality by filtering storm water runoff, provide a buffer between the bay and urban areas and benefit hundreds of species of fish and wildlife."

The wetlands are habitat for the California clapper rail, the western snowy plover, the California least tern and the salt marsh harvest mouse.

The colorful salt ponds -- patches of shimmering chartreuse and orange-red visible to travelers flying into the Bay Area -- lie along the shores of Alameda, Santa Clara and San Mateo counties. Cargill also is selling 1,400 acres of ponds in Napa County on the Napa River.

The agreement is contingent on a Feb. 11 vote by the California Wildlife Conservation Board, which is expected to approve it, and approval by the state Department of General Services.

Many of the controversial issues were resolved during the past six months of negotiations between Cargill and government officials, according to people involved in the talks.

They included assurances that Cargill would provide financial security to clean up toxic waste at the sites, deal with the highly saline water that can harm bay life and handle other hazardous conditions.

Also, public interest groups wanted to see the environmental assessments, appraisals and other pertinent documents before the government went ahead with the purchase.

Sen. Byron Sher, D-Palo Alto, who chaired a Senate select committee examining public concerns about the deal, said he was pleased with the outcome.

"My view from the beginning was if the state and federal agencies think this is a good deal, they ought to release as much information so the public also thinks it's a good deal," Sher said. "I was concerned that the agreement was made public before the Wildlife Conservation Board voted."

Cargill's responsibilities under the agreement and an environmental assessment will be made public in January, well before the conservation board's vote, said Sher.

Cargill has agreed to take responsibility for dealing with toxic waste, brine and other contamination, state officials said. Under a permit issued by the San Francisco Bay Regional Water Quality Control Board, Cargill will operate the ponds and remove harmful materials so that a full-scale restoration can proceed, Sher said.

"We'll take the brine into our plants and harvest it into salt," said Lori Johnson, a spokeswoman for Cargill. Some of the activity could take 10 years, she said.

"It's unusual for the seller to continue to manage the property after the sale at its own expense," Johnson said. "It's as important for us as it is for our partners that this work go very well."

Cargill intends to keep operating on 11,000 acres, 8,000 of which are owned by the U.S. Fish and Wildlife Service and 3,000 that it owns.

Although Fish and Wildlife has said it will not disclose the appraisals until after the sale, Cargill maintains that it is selling the land and salt- making rights below the appraised market value of $243 million. But many environmentalists say much of the land isn't developable and not worth the $100 million.

The funding package includes $100 million for acquisition and $35 million for the first five years of pond management and early restoration.

For purchase, the federal government has appropriated $8 million, and the Packard, Hewlett and Goldman foundations have pledged $20 million. The state will make up the other $72 million, which will come from Proposition 50, a $3. 4 billion clean-water bond measure that passed in November. For management, the foundations will contribute $15 million, and the state will make up the rest.

In January, the agencies will release documents showing the extent of pollution at the ponds. Regulators say that while more than half of the 16,500 acres are ready for restoration, 3,300 acres require lowering the salinity, and 4,200 acres are polluted with mercury from old mercury mines in Santa Clara County. On nearly 60 percent of the mercury ponds, Cargill is merely selling the salt rights because the government already owns the land.

E-mail Jane Kay at [email protected].

2002 San Francisco Chronicle.
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