Thanks to Lesley McClurg for her article and podcast of NOVEMBER 21, 2016 shining the light on our fight to keep Vallejo moving forward. Our fight to not slip backwards to the last century’s vision of heavy industry.
Thanks to Michael Krasny for hosting Fresh Air Vallejo on his morning FORUM program on NOVEMBER 23, 2016.
Vallejo must say no to VMT’s private port and Orcem’s cement plant if we are to win the light industry as outlined in the General Plan Update adopted by our City Council earlier in the year. From page 34,
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“South of Downtown. The General Plan seeks to strengthen the existing employment cluster south of Curtola near Lake Dalwigk and in the area adjacent to Downtown Vallejo. New commercial and light industrial uses complement existing businesses and facilitate a transition to fewer heavy industrial uses over time, bringing activities that are more compatible with residences to the north and south. Along the waterfront, existing industrial uses with long-term leases could become commercial/light industry, subject to property changes prior to the expiration of the existing leasehold, which could include a range of uses from research and development facilities and light manufacturing to hotels and tourist attractions, including along a waterfront pathway.”
With all the waterfront acreage VMT is leasing from our city, how much do you think they have to pay?
Currently (2016, June), VMT is paying $0, yes, zero, nada, zip per month to the City of Vallejo. And it’s been that for four years.
Their current lease will allow them to pay as little as $1400/month if the project moves forward!! That’s about the rent for a small apartment in Vallejo?
We started looking into this because this deal is too good to be true!! It’s the kind of sweetheart deal that all of us dream of.
Read on to see how this all came about:
It’s time for Vallejo’s Zombie Lease to finally die
Some things refuse to die, and like zombies, through voodoo or witchcraft, keep coming back to life long after they should. Just like the old lease between General Mills, Inc. (GMI) and the City of Vallejo (COV), which somehow, out of the public view, keeps coming back to life over and over again.
The Old Sperry Mill was last operated by GMI as a flour mill, sitting on property, some of which was owned by them, as well as land Held in Public Trust by the State and COV-owned land.
Most of the historic Mill buildings stand on State land leased through the COV. A ground lease was executed between GMI and the COV acting as Trustee for the public land, on May 1, 1991, backdated to start January 1, 1989, to run for 25 years (until 2014), with an option to renew for another 25 years (to 2039).
GMI ceased operations in 2001 and abandoned the site in 2004. They defaulted on the terms of their lease agreement, which should have terminated their lease according to California Civil Code.
Three years later (February 27, 2007), a Memorandum concerning the GMI Lease was executed between GMI and the COV. This was the first resurrection of our zombie lease. Two months later, the reasons became obvious.
On May 30, 2007, the lease was assigned from General Mills to Cherokee Brooks Street Vallejo, LLC, a Delaware based company, with COV approval. The same exact day and time, Cherokee Brooks filed a Deed for the land GMI had owned. Cherokee purchased GMI’s land and took over its lease with visions of a restaurant, waterfront park and lots of homes.
Another thing happened that May 30th, Cherokee Brooks assigned this deed and the Lease to Bank Midwest N.A. for a loan of $7,150,000, using their land and the lease with the COV as collateral for its huge development project. This could only have happened with the COV’s consent.
If not entirely orthodox, everything seemed all right until the Recession hit. Cherokee Brooks apparently took the money, but defaulted on the loan before any construction or development had been done. Without providing required notice, the land and Lease were sold at a public auction: December 8 and 9, 2010 for $100,000. The high bidder for both of these was California Cherokee Brooks Return, LLC, a Missouri-based LLC. A month earlier—before the auction had actually happened—Bank Midwest had already assigned the Deed to this Cherokee Brooks, indicating that this company had been pre-selected to be the one and only bidder: a material violation of foreclosure laws.
Two different LLCs, incorporated in different states, with different members, and strikingly similar names represented the old and new owners of the property and lease. By law, the foreclosure should have killed the lease too. But this is a zombie lease, and it had already emerged again.
No one seems to know what actually happened to the $7 million.
Nearly two years later, September 28. 2012, the new Cherokee Brooks cashed in and sold its land. COV Staff once again assigned the old GMI Lease, this time to the Vallejo Marine Terminal, LLC (VMT). This time the COV Staff included a “categorical exemption” indicating VMT intended to use the property similarly to how GMI used it, so it would not require CEQA procedures. The exact wording calls for “Operation, repair, maintenance, or minor alteration of existing structures of facilities, not expanding existing use.”
Mind you, VMT was agreeing to operate something similar to the old flour mill, not Cherokee Brooks’ big project.
The COV filed its “Consent” for this. But oddly, the consent was for Cherokee Brooks Street Return Vallejo, LLC, a third “Cherokee Brooks” company, not otherwise involved: a probable mistake that nonetheless calls the lease assignment into question.
At the same time, they issued a First Amendment, which started changing substantial terms. It changed from 25 years to 33 years, with an option to renew for another 33 years, showing the COV’s firm commitment to the extended lease. The Amendment contradicted the “categorical exemption” in the Lease and allowed “Other Alterations” including demolition, removal or replacement of any existing building on the leased land.
While a categorical exemption is considered “No Project” under CEQA, the COV was agreeing to a “Project” involving demolition, which requires an Environmental Impact Report. That EIR wasn’t started until 3 years later.
This Amendment also allowed for “abatement of rent” through June 2015 and a “Capital Improvement Offset” against 85% of the base annual rent of $95,520. The offset is for a maximum of $8 million over the term of the lease, meaning most of the rent could be offset for more than 98 years—longer than the lease—and their rent could be as little as $17,193.60 a year (a little more than $1,400 a month). The Amendment also allowed VMT to sublease the property for up to 10 years.
As Trustee for this Public land, the COV is legally required to work for the best possible deal in the Public’s interest, not the best possible deal for the folks leasing the land.
On Sept. 5, 2013, a year after getting the Lease and First Amendment, VMT and the ORCEM cement company jointly applied for a building permit: the first time ORCEM’s name appears publicly. Other documents reveal that VMT already had an agreement for ORCEM to sublease the property.
On June 9, 2014 a Second Amendment was signed as a “minor administrative amendment,” not requiring City Council approval. It allowed VMT to subdivide the land and sublease the subdivided land.
Subdivision hadn’t been allowed by the First Amendment, but a sublease for up to 10 years was allowed without COV approval. The Amendment indicates the subdivision was exempt from the Subdivision Map Act, citing parts of CA Government Code that deals with subdivision for right-of-way, not leases: an infraction that carries criminal and civil penalties.
ORCEM was publicly acknowledged as a sub-Lessee by a Memorandum on March 10, 2015, stating that its sub-lease with VMT was executed May 23, 2013, almost 2 years earlier, and just eight months after the “zombie lease” was assigned and the First Amendment executed.
The Sub-lease is private and its terms haven’t been revealed yet. But we assume that the COV is not getting paid from that transaction: those arrangements are between ORCEM and VMT.
We question whether the sub-lease is legal, because the agreement doesn’t include any consideration for the use of Public Land. We also find it hard to believe that ORCEM really agreed to a lease of just 10 years, the maximum term allowed by the First Amendment without COV approval.
On Sept. 3, 2015, a Draft Environmental Impact Report (DEIR) was released for public comment.
A few days later, a Third Amendment to the lease was executed extending rent abatement for another year. And for the first time, the California Environmental Quality Act was mentioned. Not in the context that CEQA compliance was required before the whole administrative process, but because VMT agreed that the development and operation would “be in accordance with mitigation measures set forth in the Mitigation Monitoring and Reporting Program as adopted by the Vallejo City Council at the time they approve Tenant’s proposed deep water berth, marine terminal, and cement manufacturing project.”
The DEIR was still in public review. No mitigation measures had been identified, nor were any significant environmental impacts that might be mitigated or avoided. Yet they were agreeing to them all in advance.
The COV, for all intents and purposes, gave impermissible approval to a “Project involving demolition” and gave VMT entitlements not commonly seen in ground leases. The three amendments show for all intents and purposes a partnership between the COV and VMT/Orcem.
If that were intentional, it would be governed by a whole slew of other regulations that weren’t followed.
The old zombie GMI lease has long overstayed its welcome and needs to be buried. Its current, thrice amended form cannot withstand scrutiny or be defended. There seem to be many indications of concession, collusion and cover-up. The City of Vallejo needs to come clean now and cancel this lease. It needs to stop abating non-existent rent. Four years of no rent and numerous CEQA violations have not served the Public Trust and are sufficient grounds to cancel the lease, or the COV risks another lawsuit to overturn it. Let this die once and for all. This manner of doing business in Vallejo has to stop.Please share !
Osprey, the “Sea Hawk”
Prior to 2013, Photographers had been taking photos of a very active osprey nest at the Sperry Mills site and had documented the hatching and rearing of numerous chicks up to the time that Vallejo Marine Terminal (VMT) purchased the property.
In 2013-2014, shortly after VMT bought the property (and immediately prior to beginning plant and wildlife surveys that are required by an Environmental Impact Report), an osprey nest in which observers had watched three chicks being reared that season disappeared without a trace from the top of a silo that was also removed from the Sperry Mills site.
Contractors, working on Mare Island, reported that brush and vegetation was cleared from the site as well as the silo with the osprey nest.
Not surprisingly, the biologist contracted to conduct the DEIR wildlife survey, found no evidence of a nest at the Sperry Mills site. In fact the DEIR noted, “it is unlikely that this species (the osprey) would nest in the project area.” (DEIR ES-15)
However, the DEIR does note the presence of an active nest just across the channel at Mare Island. And that ospreys were observed flying overhead, leading to questions about the status and timing of the nest’s removal. It is uncertain if the nest At Sperry Mills was still active at the time that it was removed.
It is unknown if a permit was issued to VMT/Orcem to take the nest by the US Fish and Wildlife Service, as required by law. It could be that VMT was unaware that the Migratory Bird Act––one of the oldest international treaty laws on the books that protect migratory birds––requires following a certain protocol in dealing with osprey, their eggs, nests, chicks, or feathers.
A good neighbor and responsible steward of the ecosystem would act in accordance with well-established laws to protect the ecology of the osprey. So far, VMT has not demonstrated that kind of stewardship.
California Department of Fish and Wildlife appreciates our help to protect the osprey nesting at the Old Sperry Mill site. If a disturbance of the nest of any kind is observed please call CalTIP hotline: 888-334-2258 (888-334-CalTIP) or text: TIP411 any time, day or night to report an osprey nest disturbance at 800 Derr Ave.
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Napa County is at the forefront of a herculean effort to restore the Napa River, including the historic tidal marshes into a geomorphically stable, living estuarine system. Levees have been breached, old salt ponds are transitioning to tidal marshes and the restored tidal prism has greatly reduced the flood threat in the Napa Valley.
But all that good work stops at the Napa County line. On the other side of the county line, a shadow government has been working in secret to bring back polluting, heavy industry by dredging the lower Napa River to accommodate huge transpacific freighters.
Heavy industries along lower Napa river will not only sabotage Napa County’s efforts to restore the Napa River Estuary but potentially damage the vineyards in the Carneros Appellation.
Air and water doesn’t pay attention to arbitrary distinctions like county lines. Heavy Industries on the lower Napa River doesn’t affect only Vallejo. The cement plant and port are just the beginning. If the U.S. Army Corps dredges for large transpacific freighters, more heavy industry spewing toxins into our common air and waters will be inevitable.
To read more:
Vallejo development threatens Napa
One of the issues that Environmental Justice communities really focused on are the localized emissions. These are the things that are triggering asthma, that are triggering asthma mortality, that are happening at epidemic rates in Environmental Justice communities. Those issues are a dimension of greenhouse gas emissions, but they are not necessarily being talked about by the environmental community. That has got to change.
To read more:
RACE & ENVIRONMENTAL JUSTICE: A CONVERSATION WITH ACTIVIST VERNICE MILLER-TRAVIS
A report compiled by the University of Stuttgart and commissioned by the Irish firm, Ecocem, which finds that cement causes massive environmental damage has prompted a furious backlash from the Cement Manufacturers of Ireland.
The highly contentious report, which has not been made available to the wider public, finds that the manufacture of cement caused €2.1bn of environmental and health costs in the decade up to 2012. The impact on human health amounted to €450m over that period.
“Although a large range of pollutants is emitted in cement manufacture, the main pollutants contributing to the negative impacts are carbon dioxide, nitrogen oxides, sulphur dioxides and particulate matter.
“The impacts on human health include chronic respiratory disease, reduced lung functions or lung cancer, heart disease, and even damage to the brain, nerves, liver, or kidneys, all leading to reduced life expectancy in those affected,” claimed the report.
To read more:
Cement industry slams eco report
Cement manufacture causes environmental impacts at all stages of the process.
All cement, whether slag cement or Portland cement, starts off as solid chunks of material which are then ground into a fine powder.
Slag cement is called “green” for one reason only: the solid base material is a recycled industrial waste product of the steel smelting process. As such, slag cement is not fired in ultra high temperature kilns, which is the process for Portland cement modules. The high temperature kilns are a key producer of greenhouse gases on a global scale hence the claim that slag cement is “green.”
But to say that slag cement is less polluting than Portland cement does not make it “green.” First, slag is full of heavy metals and chemicals from the steel smelting process. Second, the dust from storing and grinding cement is known to harm and even kill people, animals and plants. Third, the plan to ship slag and clinker halfway across the world requires dirty diesel-powered ships, both wasteful and polluting.
TOXINS — Slag cement contain toxins from the steel smelting process such as hexavalent chromium, the toxin that poisoned Hinckley, CA. Of further concern for Vallejo residents, the slag that would be shipped to Vallejo would not go through any screening process, so it could contain any number of harmful heavy metals and chemicals, potentially even radioactive waste. Orcem plans to ship from China, which is notoriously lax in its industrial processes, and Japan, which has been found guilty of improperly disposing of Fukushima radioactive waste. Who is to say what would arrive in Vallejo?
HARMFUL DUST — The dust from storing slag and Portland clinker, and from the cement grinding process is harmful to humans, animal and plant life.
DIESEL POLLUTION — Shipping slag and Portland clinker halfway around the world to grind it here is not green. The diesel fuel used for ocean-going vessels coming in and trucks going out is dirty…
It should be noted that Orcem plans to mill Portland cement in addition to slag cement – a fact which they try to evade by saying they would only do so based on “market conditions.” Given that Stockton has a slag cement plant farther along in the process, chances are the local cement market is competitive. So, for all their claims to be interested in “green” cement, Orcem also wants to produce the dirty Portland cement it is supposed to replace. chances are the local cement market will be highly competitive. For all their claims to only manufacture “green” cement, Orcem can also produce standard Portland cement. Orcem’s cement is a wolf in green clothing. It’s not green.Please share !