Worries about the extent of methane beneath 1,087-acre Playa Vista are causing city officials to order more studies and delay millions of dollars in tax subsidies for what would be the city’s largest development.
Last week, Councilman Mike Feuer’s Budget and Finance Committee declined to issue $135 million in tax-exempt Mello-Roos bonds for building some of the streets, sewers and other public improvements needed for the project near Playa del Rey. Instead, the committee ordered more studies, which could delay a vote by four months or more.
The city’s Housing Committee, chaired by Councilman Nick Pacheco, has also postponed voting on approximately $33 million in tax-exempt bonds to help build the Fountain Park Apartments at Playa Vista.
Both moves disappointed the developers, who have paid more than $890,000 to lobbyists trying to secure city support and subsidies since 1993. Records also show the developer lost $11 million in 1999, owes nearly $81 million to lenders and has nearly $12 million in other liabilities.
The city’s new concerns over Playa Vista began to emerge in late April, when the Los Angeles Department of Building and Safety released a study on methane gas on one portion of the property. Victor Jones, president of Houston-based Exploration Technologies, Inc. (ETI), found large methane seeps at Playa Vista and a potentially active earthquake fault under Lincoln Boulevard, which serves as a conduit for gas migration from deep underground to the surface. In contrast, the developer’s 1993 Environmental Impact Report had dismissed the risks of methane leaking to the surface as insignificant.
“We are concerned that our actions don’t put human beings in danger, or future city councils at risk,” said Feuer, before his committee delayed consideration of the bonds on May 14. ETI’s Jones appeared before the committee June 7 and proposed a methane study of the entire 1,087 acres.
“We need to do the studies now,” he said. “Once the construction starts, the ability to map the methane decreases. In my opinion, unless you stop construction on this project you run into the same problems as Belmont did.”
Jones also said an investigation is needed to determine whether the Southern California Gas Company’s storage field at Playa del Rey was a source of the methane seeps at Playa Vista. Jones said he asked the gas company to provide gas samples from each of its wells (the company stores natural gas in oil reservoirs) but was rebuffed. Gas company consultant John Thompson denied that a request had been made, but assured Feuer that the company would cooperate.
Jones also told the committee that his April 17 report was incomplete. “My firm had only four days to prepare the report on this site,” he said. “We were rushed due to the city’s intent to issue Mello-Roos bonds. I am very concerned about the safety of this site. We need adequate time to conduct more extensive studies.” In particular, Jones wants more time to study a “hypothetical probable fault” he thinks he found below Lincoln Boulevard; Playa’s consultant told the committee that no such fault exists.
Playa Capital’s senior vice president, David Nelson, said the environmental concerns have been blown out of proportion. “Our experts think that there currently exists enough critical data on these issues to allow Playa Vista to move forward safely.”
Two other Playa consultants assured Feuer’s committee that all was well with the project. Michael Young testified that “the contamination at the site is pretty much nothing. [It] poses no risk to the worker.” John Sepich explained that adequate mitigation for methane existed. “We were the engineers for a large office building in Century City built over 22 oil wells. What we’re proposing for mitigation at Playa Vista is far greater than anything else in the city.”
Asked Feuer: “You and your team disagree that further study is necessary because your mitigation is adequate?”
“That is correct,” John Sepich responded. Feuer then asked Victor Jones, “Is there anything in the presentation by Playa Capital that makes you change your opinions about your report and recommendations?”
“No, “ Jones replied.
Feuer appointed Jones as an outside consultant to the city’s new interagency task force on Playa Vista: “We will not analyze Playa Capital’s data alone,” Feuer explained. “That information is relevant, but it cannot be the sole base-line data. We have to go outside the project proponent.” Jones will assist the new task force comprised of various city agencies in determining the scope of studies at Playa Vista. The task force will hold a public meeting within three weeks to discuss possible studies, and will have at least four months to complete its report.