Posted on 03/13/2006 9:33:59 AM PST by NormsRevenge
Negotiations have been going on for nine months between Long Beach City Hall and the company that wants to build a controversial liquefied natural gas facility.
But "negotiations" is an overstatement.
Nothing has happened in the three months since the company, Sound Energy Solutions, made a specific proposal. SES offered $16.3 million up front and $12.6 in annual fees and taxes, plus $3 million in pipeline revenue in exchange for building the facility at the Port of Long Beach. The city offered no counterproposal, then last week abruptly threatened to end the talks for lack of progress, just four weeks before the city elections.
Maybe the timing is just a coincidence, though the company doesn't think so. One of the candidates for mayor, Frank Colonna, has made the LNG proposal one of his campaign issues, and putting the LNG negotiations on the council agenda will give him a chance to make a little hay Tuesday night.
That's small advantage, since three other mayoral candidates, Bob Foster, Doug Drummond and John Stolpe, also oppose the LNG project. In any case, Colonna denies he had anything to do with City Hall's latest demand.
City Manager Jerry Miller says the timing of the city's demand has less to do with politics than with SES' advertising campaign promoting the benefits of an LNG terminal. If persuasive, he said, the campaign could lessen the city's leverage in negotiations.
The company's proposal includes $10 million for a community foundation to be managed by a city-appointed trustees; $4.3 million in capital costs for security; $2 million at the time of permit signing; $5 million in wharf fees; $5 million in property taxes; $2.3 in yearly security costs; $280,000 in utility taxes; a $1 million a year discount for natural gas users; rates based on a regional index; plus pipeline fees of about $3 million. The terminal would increase supplies of natural gas, which could bring down rates by about 7 percent.
City Hall says this is much too little, but declines to say what might be acceptable. A letter of intent with exclusive right to negotiate extends to June 6, then continues without exclusivity. So there is no great rush.
We'll see how the politicians play things out. Their opposition has been based on safety, not revenue, which makes it a bit awkward to make a big issue out of pumping up fees. But that won't stop the politicking.
I'd say unbelievable, but I've seen just about everything in California. I remember when Long Beach used to be a conservative town; now it more resembles a Hollywood set version of the People's Republic of Santa Monica.
Yet there are still-operating oil rigs in shopping center parking lots and neighborhoods allover LB.
LNG/ENERGY PING!!!
When the Navy moved out LB has been on a downhill slide.
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