Majority Oppose Calpine

3/17/04 Majority Oppose Calpine
(This letter was sent to Eureka’s mayor and City Council Wednesday via e-mail.)

By David Elsebusch

You heard lots of testimony last night. The majority opposed the Calpine project and some supported a “study” and a “process.” None said they researched the project and have sufficient knowledge to conclude that it is a good one.

Support for a “process” is universal. Part of the process is what you experienced last night – public comment.

Mr. (Ken) Abreu of Calpine has testified that the project will be aborted if it lacks community support. Well Calpine doesn’t have “community support” and as more of the populace becomes informed about the project and the adverse effects of an LNG facility on Humboldt Bay, there is no doubt that should the matter be put on the November ballot for voter approval, the “process” would end right there and voters would tell Calpine to “get out of Dodge.”

Calpine has spent years schmoozing with private interests and meeting with elected officials and bureaucrats in private, and now it is desperate to have the city locked into an agreement to sell the airport property to Calpine before the public is adequately informed about the pros and cons of the project, going so far as to buying full page ads in the Times-Standard making five false assertions.

1. Calpine states, “Nothing in the agreement makes the city sell this property to Calpine.” The truth behind that falsehood is that the exclusive right to negotiate does require the city to sell the property to Calpine after certain conditions are met.

2. Calpine states, “Calpine will be prohibited from applying for any local, state or federal permits until after the City Council’s approval of an “option agreement.” The truth behind that falsehood is that the contract that Calpine desperately wants the City Council to approve specifically permits Calpine to engage in “pre-filing” activities which is the precursor to permit applications.

3. Calpine states, “There can be no independent report until there is a proposal from Calpine. There can be no proposal until after there is a site. There can be no site until the City Council approves the pending site agreement. The agreement is ready to be approved now.” The truth behind that falsehood is that although Calpine desperately wants the city to sign the agreement now, Calpine has simply unilaterally decided that it will not present a proposal until the city agrees to sell the property to it. It is clear that Calpine is free to present a proposal before the city agrees to sell the property. That’s the way business is conducted – a proposal is made and if it is acceptable, a written agreement is executed.

4. Calpine states, “Without approval of the site agreement, there can be no proposal from Calpine.” The truth behind that falsehood is that Calpine does not admit that it made up this rule, which is contrary to the best interests of the city and the county.

5. Calpine states, “The pending agreement gives Calpine the right to physically evaluate the site. Without that right, there can be no proposal. Without a proposal, there can be no “independent report.” The truth behind that string of lies is that, while the proposed agreement to sell the property to Calpine gives Calpine the right to physically evaluate the site, it is not necessary to agree to sell the property before providing Calpine a right to inspect the site and an independent report can be generated without executing an agreement to sell the property.
Please don’t get the cart before the horse and approve the “exclusive right to negotiate” and lock the city into that agreement, at least before there is a truly independent study and additional public comment.

Many of us believe that, based on information we have acquired, the project is absolutely wrong for Humboldt Bay, but concede that information could be provided to more of the populace. Rejection of Calpine’s request for the ERTN would permit the “process” to continue in a rational and reasonable manner and avoid possible litigation.

(Tuesday) night, I furnished you with copies of the (federal) General Services Administration’s letter of March 10 addressed to Mr. Tyson. I trust you agree that it represents proof that the ERTN is seriously flawed and the basic concept – the sale of the site – has not been sufficiently researched and addressed.

The position of the GSA that it – not the city – is entitled to the proceeds of the sale of the (airport) property at fair-market value looks like a deal-buster to me.

(David Elsebusch is a McKinleyville resident. Following is the letter from the GSA that he said was addressed to Eureka City Manager David Tyson on March 10.)

Re: QuitClaim Deed Dated Dec. 9, 1947

Dear Mr. Tyson,

This pertains to the proposed abrogation of the airport restrictions contained in the QuitClaim Deed dated Dec. 9, 1947 between the United States of America and the City of Eureka. As you know, the General Services Administration is the successor agency to the War Assets Administration and, therefore, the authority to abrogate the use restrictions rests with GSA.

We understand that you are contemplating a sale and/or lease to Calpine Corp. for a portion of the property that was conveyed for airport purposes in the deed referenced in the paragraph above.

The MOA between the city of Eureka and Calpine Corp. includes a provision whereby Calpine Corp. would be contacting GSA to obtain a release of these deed restrictions.

It is GSA’s position that any abrogation request must be submitted by the city of Eureka, the grantor under 1947 deed, and include the concurrence of the Federal Aviation Administration, the successor agency to Civil Aeronautics Administration.

After receipt of the abrogation request and the required FAA concurrence, our office would then obtain an independent appraisal of subject property to determine the fair-market value for the payment to the United States of America. Upon receipt of such payment, we would then prepare a release. …

Clark Van Epps
Director, Property Disposal Division (9PR)
General Services Administration ...