Chevron wants SLO to pay $11 million for development

September 22, 2011

By JOSH FRIEDMAN

The San Luis Obispo City Council reviewed and endorsed Tuesday a proposed 322-acre Tank Farm development project designed by the Chevron Corporation, but would not commit to reimburse the developer $11.1 million in costs.

Chevron plans on constructing business parks and manufacturing centers on its property located on the north and south sides of Tank Farm Road between Broad and South Higuera streets. Amenities are to include bike paths, hiking trails and city sanctioned open space

Planners are also considering building baseball fields and luring a hotel to the area in close proximity to the San Luis Obispo County Regional Airport.

Due to San Luis Obispo Municipal Code Subdivision Regulation 16.20.110, adopted in 2006, Chevron actually stands to collect payments from the city when terms are reached. On the grounds that the project is improving neighboring properties, the city intends to “reimburse” the company a prorated amount.

To determine the amount owed to Chevron, the city hired a third party, Goodwin Consulting Group, which calculated the “fair share” Chevron must invest in order to implement the project. Goodwin concluded that the project should cost Chevron $6.1 million, which is $11.1 million short of the company’s projected cost of $17.4 million.

Hence, Goodwin suggested the city “reimburse” Chevron $11.1 million to remain in compliance with its own regulations. The consultant group wrote in its report that the project was only feasible if the city paid Chevron the full amount.

“Without reimbursements, it looks like the project doesn’t work; with reimbursement the project looks to be feasible,” the report says.

Chevron agreed with Goodwin’s findings, and one of its representatives lobbied the council Tuesday night to commit the $11.1 million in its entirety.

“We overspend, and we ask for those fees to come back to us,” said Bill Almas, Chevron project manager. “We’re not asking for anything from the city except to spend money to reimburse us.”

Though the city council did not commit to “reimbursing” Chevron the entire $11.1 million, each council member endorsed the project as a whole and the idea of compensating the company for its effort in improving the community.

Assistant City Manager Michael Codron said the city is exploring the idea of paying Chevron through fee credits from future development plans and inspections in the project area.

Like the council, members of the community expressed overwhelming support for the Chevron project. During public comment, only one San Luis Obispo resident opposed the development plan.

“A deal with Chevron is a deal with the devil,” Will Powers said. “[They are] polluters, human rights violators, murderers of indigenous people… generally terrible stewards of planet earth.”

Vice mayor John Ashbaugh disagreed.

“I see so many benefits from this agreement that I don’t see how we can tell Chevron to take a hike,” Ashbaugh said.

Ashbaugh also warned that choosing to turn down Chevron’s proposal would surely lead to the assumption of the project by the county. The property is currently located in the county and the council intends to have it annexed.

Likewise, Mayor Jan Marx said it is time to move forward on the project.

“This will be like our version of Central Park,” Marx said. “Not that we are New York City, but it is like having a big park in the middle.”

In order to reduce traffic congestion and make the area more accessible, much of the proposed project consists of road expansion. If Chevron’s plan comes to fruition, Tank Farm Road will expand to a four-lane street with a center divider, and Prado Road and Margarita Avenue will each extend to Broad Street.

The energy giant also promises to clear an old and dangerous reservoir, known as “the coliseum,” which is located beside the airport runway along the flight path.

Chevron anticipates construction beginning in two years and taking 25 years to complete. Although Chevron’s project application was accepted by the San Luis Obispo Planning Commission in 2009, the corporation still must negotiate a contract with the city before construction can begin.


50 Comments

  1. slobody says:

    The real problem in slotown seems to be we’ve got elected officials who can’t think their way out of a cardboard box. Where do they leave their brains? Do they check them at the door when they enter city hall, or what? They haven’t met a stupid, expensive project they can resist falling all over. What a bunch. City Hall is a culture of stupidity these days — hasn’t always been that way.

    Like or Dislike: Thumb up 4 Thumb down 1

    • slo_born says:

      key sentence I think you missed:
      “Due to San Luis Obispo Municipal Code Subdivision Regulation 16.20.110, adopted in 2006,”
      Maybe we should just repeal this municipal code or just limit it to properties within the city limits when it was passed, since we only seem to get more legislation and not less.

      and since that code was passed in 2006 your “stupidity these days” comment seems a bit misguided.

      Like or Dislike: Thumb up 1 Thumb down 0

    • r0y says:

      “Likewise, Mayor Jan Marx said it is time to move forward on the project.”

      Maybe it confused and frustrated her. I hear that’s what it takes to get her approval…

      Like or Dislike: Thumb up 0 Thumb down 0

  2. justme says:

    Another Oil co. Avila style moneymaker.
    Clean it up, plant native plants, etc. for FREE then get the hell outa town, Chevron.

    Like or Dislike: Thumb up 5 Thumb down 3

    • slo_born says:

      Avila Style? Is that like when you pay month to month tenants $5,000 + moving costs so you can truck oil sand up a hill and then off to the valley creating more pollution than you’re mitigating?

      this is more like doe eyed local politicians failing to negotiate effectively with another deep pockets developer i.e. copeland/madonna/smith/panides et al.

      Like or Dislike: Thumb up 1 Thumb down 0

  3. obispan says:

    What’s another $11 million? SLO has already spent over $100 million to subsidize the Margarita Area development to be paid in the form of tripled rates for EXISTING users to bring in the water necessary for the development. That $120,000 per house, all in the pockets of the developers in increased profits. Whether it’s screwing Ernie Dalidio to profit the Madonna family or giving away land to the Copelands this town is run for the benefit of a very few.

    Like or Dislike: Thumb up 12 Thumb down 0

  4. SLOChildrenAtPlay says:

    Since 2012 is an election year, I wonder if Mayor Marx and the City Council will shelve this project now that it’s “dirty” little secret has been revealed?

    It will be pretty hard for Marx to get re-elected, or the city be able to get the meaure Y sales tax extended – after the city pays $11 million to help a major oil company clean-up and develop polluted land that it voluntarily acquired in the Unocal merger. Especially when it will result in a profit for Chevron.

    Like or Dislike: Thumb up 10 Thumb down 0

  5. R.Hodin says:

    “This will be like our version of Central Park,” Marx said. “Not that we are New York City, but it is like having a big park in the middle.” – Mayor Jan Marx

    Perfect. Just down the block from the county’s new homeless center on Prado Rd.

    Like or Dislike: Thumb up 19 Thumb down 0

    • R.Hodin says:

      I’d much prefer some common sense in the middle.

      Like or Dislike: Thumb up 11 Thumb down 0

    • SLOChildrenAtPlay says:

      This project is looking less like Central Park, and more like Love Canal. It’s good to know that Jan Marx realizes that this isn’t New York, but sad that she apparently doesn’t have a clue where the “middle” of San Luis Oispo really is.

      Apparently this project is just another expensive and grandiose pipe dream brought to you by Jan Marx, and the SLO CIty Council. What next? Replace SLO Transit’s bus system with a cross town high-speed rail line?

      Wasn’t SLO facing a $3 million budget “shortfall” just a few months ago? Or does the city council only mention that when SLO needs to raise parking and water rates?

      Like or Dislike: Thumb up 12 Thumb down 1

  6. oto says:

    Ever since Tognazzini the Park ranger (?) claimed to have seen the world’s largest rat in Paso Robles, (the non-law-enforcement-side-of-the-gene-pool-Tognazzini family has a plumbing business,) I’ve been more skeptical about “sidebars” to the CCC news articles. I can’t even get articles online from the 1980’s much less articles from the 1920’s. So, my question to SLOChildren at Play is, when did this Web site appear, and how come this stuff is not available at the source, at the Telegram Tribune? Is it possible to walk into their office and get a paper copy of the article you mention? I wouldn’t know any other way to document the authenticity of the article. Any advice from fellow bloggers?

    Like or Dislike: Thumb up 3 Thumb down 1

    • R.Hodin says:

      It should be possible to see a paper copy of the linked “Vault” article at the Trib’s offices. It’s dated 2010, plus they “should” have a copy of the original from the 20s, if not a scan on microfilm. In fact, the SLO Library may have microfilm copys.

      I do have a copy of the Nov. 19, 2006 article referenced in the “Vault” article.

      Like or Dislike: Thumb up 2 Thumb down 0

      • Kettel says:

        Someone has posted a bunch of Slo history pictures on YouTube including some on the tank farm.

        http://www.youtube.com/watch?v=_IhAX77Gpzc

        Like or Dislike: Thumb up 3 Thumb down 0

        • Kettel says:

          Also NOAA has this write up about the weather related to the tank farm fire including whirlwinds and a tornado.
          “About, 10:30 a. m. on the 8th, a tornado traveling from the reservoirs picked up Mr. Martin’s house, raised it, 300 feet, in the funnel. It was carried shout 100 feet northwest and dropped, completely demolished. A small range of hills about 500 feet in height lies northwest of the Martin house and may have been the cause of this tornado apparently traveling against, the northwest wind. It is probable that an eddy formed in the lee of these hills.”
          PDF http://docs.lib.noaa.gov/rescue/mwr/054/mwr-054-04-0161.pdf

          Fun fact,
          “We have a road called “Tank Farm Road”. In the twenties Union Oil Co. had 10 acre concrete dishes to store oil before it was loaded on ships at Avila Beach. They were just off the end of the runway at the airport. The story says that a small plane from the airport failed on takeoff and landed in one of them! They were required to put some kind of cover. on them. So they placed vertical 8 x 8’s in concentric circles. Then they put 6 x 12’s and 8 x 12’s in circles on top of them with steel pins at the end that went into the top of the 8 x 8’s. Then they put 1 x 10’s across the circles and covered the whole thing with asphalt roofing paper. Much later, probably in the sixties, they were abandoned. A man bought the wood and setup a system to recover the wood for sale. Yes, we bought a lot of it.” from http://www.charlies-web.com/additions/original%2010.html Thanks Charles.

          Like or Dislike: Thumb up 4 Thumb down 0

        • oto says:

          Wow! This is COOL! Thanks for the links, Kettel, and the great stories from the old T-T. I love coming to this site and not only reading the articles but getting useful information and references from the bloggers. They are like the “stringers” of the old newspaper business, in a way.

          “Stringers” were writers who didn’t work full time for the newspapers, but got hired to write articles when regular staff was not available to cover the story, or when a newspaper couldn’t afford to hire additional staff on a regular basis. They were paid by the column inch, so a string was used to measure how many inches of space the column took up when it was set in print. Hence, the term “stringer.” Thanks for the info. from your fellow blogger:)

          Like or Dislike: Thumb up 2 Thumb down 0

      • oto says:

        Thanks for the useful information, R. Hodin. The cite to a 2010 article helps me identify the article to know what to ask for and the information about the microfilm is a definite resource for future use. I haven’t checked to see how much they have gotten on microfilm yet, but I haven’t asked for many years. Keep up the great blogging!

        Like or Dislike: Thumb up 0 Thumb down 0

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