SENATOR FEINSTEIN, GOVERNOR DAVIS, INTERIOR SECRETARY NORTON ANNOUNCE AGREEMENT ON ACQUISITION OF 16,500 ACRES OF SAN FRANCISCO BAY SALT PONDS

Negotiations Concluded; Stage Set for Largest Wetlands
Restoration Project on West Coast
December 16, 2002 
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SAN FRANCISCO - Governor Gray Davis, U.S. Senator Dianne Feinstein (D-Calif.), and Interior Secretary Gale Norton announced that negotiations over a landmark public-private partnership to purchase 16,500 acres of salt ponds - and associated salt-making rights - along the San Francisco Bay shore and Napa River were successfully concluded today.

 "This project offers Californians an unprecedented opportunity to improve the physical, biological and chemical health of the San Francisco Bay," Gov. Davis said. "This is the single largest wetlands restoration on the West Coast, and it lies in the heart of a heavily urbanized area. This is a one-of-a-kind project that will benefit the environment and people of California for generations to come."

 The agreement met the principles as announced on May 29, 2002 and sets the stage for the largest wetlands restoration project on the West Coast, on a par with current restoration efforts in the Chesapeake Bay, Everglades, and along the Mississippi River.

 Under the terms of the conveyance agreement, 16,500 acres in the San Francisco Bay and Napa County will be purchased from Cargill for $100 million, with funding coming from the State and Federal Governments and several philanthropic foundations. The agreement is contingent on a vote of the California Wildlife Conservation Board which will consider the issue at its February 11, 2003 public meeting.

 Environmental site assessments of the property, details of Cargill's responsibilities for site cleanup, the agreement regarding the phase-out of salt-making operations, and a full summary of the conveyance document will be finalized and made available to the public in January, well in advance of the Wildlife Conservation Board meeting. (Overviews are provided below.) The conveyance agreement and State and federal appraisals of the property being acquired will be made available following the close of escrow, estimated to be in early March 2003.

 "This historic agreement sets in motion the largest wetlands restoration undertaken in California history," said Senator Feinstein, who worked closely with Federal, State, philanthropic foundations and Cargill officials to reach an agreement. "By forging a public-private partnership, we have developed a project that will benefit generations of Californians to come and may serve as a model for future environmental projects."

 The agreement was reached following more than six months of intensive negotiations with Cargill, the owner of the salt ponds. Cargill has conducted salt-making operations in the Bay since 1978 and is the latest salt making company in a long line stretching back to the Gold Rush days 150 years ago.

 "I am pleased that these important negotiations with Cargill have been successfully concluded," Gov. Davis added. "I appreciate Cargill's agreement to assume the responsibility for environmental cleanup required by the agencies. Cargill's commitments in the agreement will substantially benefit the public."

 The U.S. Fish and Wildlife Service and California Department of Fish and Game will own and manage the properties under agreed-upon principles. Cargill will continue to operate and maintain the ponds after FWS and CDFG acquire title until the ponds meet the transfer conditions specified in the phase out agreement.

 "This historic agreement is an example of a new environmentalism in which government works hand-in-hand with conservation groups, corporations, tribes, private landowners, and others to conserve our land," Interior Secretary Gale A. Norton said. "The restored marshes will improve water quality by filtering storm water runoff, provide a buffer between the bay and urban areas, and benefit hundreds of species of fish and wildlife, including endangered and threatened species such as the California clapper rail, the salt marsh harvest mouse, the California least tern, and the western snowy plover."

 The full funding package includes $100 million for acquisition and $35 million for five years of initial stewardship and restoration planning. Funding for acquisition includes $72 million from the State of California, $8 million from the U.S. Fish and Wildlife Service, and $20 million from a consortium of the Hewlett, Moore, and Packard foundations and the Goldman, and Resources Legacy Funds. The private foundations are also providing $15 million toward the cost of initial stewardship and restoration planning. The remaining $20 million will come from both the Federal and State governments to be provided over a five-year period.

 The parties have jointly developed a proposed initial stewardship plan designed to maintain existing habitat values and prevent a buildup of salt in the ponds while long term restoration planning is underway. This plan, which will require permits from the Regional Water Quality Control Board and other agencies, envisions installing new water control structures and reopening the ponds to San Francisco Bay to allow water to circulate in and out of the ponds.

 During the interim stewardship period, the California Coastal Conservancy's San Francisco Bay program will lead a planning and public information effort to craft a widely supported, scientifically sound long-term restoration plan, estimating the costs of restoration, identifying potential sources of funding, outlining an implementation schedule, preparing environmental documents and obtaining initial federal, state and local permits for restoration.

 Environmental organizations, both local and national, played a constructive role in reaching an agreement.

 "Many parties deserve credit for making this agreement possible," Senator Feinstein said. "By selling this critical environmental property at such a fair price, Cargill is leaving an important legacy that can be enjoyed by generations of Bay Area residents. I am also grateful for the support of the environmental community, and their future involvement in the restoration process will be vital to its success. I would like to recognize the countless hours of work from state and federal officials, who helped negotiate the details of this agreement. And finally, this project would not have been possible without the assistance of the philanthropic foundations. I'd especially like to acknowledge the contributions and commitment of the Hewlett Foundation, the Moore Foundation, the Packard Foundation and the Goldman Fund."

 "It is good news indeed that the parties have succeeded in resolving their differences regarding the purchase of Cargill Salt Ponds," said Byron D. Sher (D-Stanford), Chair of the Select Committee on Baylands Acquisition. "Public acquisition of these lands, many of which are located in my district in the South Bay, is an important first step to wetlands restoration project of historic proportions that will help reverse past degradations of the bay.  I am pleased that prior to the final approval of the agreement by the California Wildlife Conservation Board, the public will have an opportunity to review and comment on the environmental assessment and Cargill's responsibilities with regard to any hazardous condition and to the phase-out of the salt-making operation."

 For a map of the salt ponds, contact Lori Johnson, Cargill, at 510-790-8157

The agreement summaries can be found at www.resources.ca.gov.

 Agreement Summaries, Cargill Salt Ponds Purchase

 1) CONVEYANCE AGREEMENT

 Cargill will sell 16,500 acres of properties in the South San Francisco Bay and along the Napa River for $100 million to the State and Federal governments for the largest coastal wetland restoration effort in California history. The Conveyance Agreement specifies which properties are being acquired by whom and upon what terms and contains conditions of closing the transaction.

 ·        The State will acquire approximately 6,900 acres of property (a combination of fee title and reserved salt-making rights) in Alameda and Napa Counties.

·        The United States will acquire approximately 9,600 acres of property (a combination of fee title and reserved salt-making rights) in Alameda, San Mateo and Santa Clara Counties.

·        March 6, 2003 is the scheduled date of close of escrow.

·        The $100 million negotiated purchase price is payable in full at closing, as follows:

$72 million - State

$20 million - Participating Foundations

$8 million - United States

·        Cargill is responsible for removing shallow soil contamination from isolated areas of the 20-acre upland portion of the Napa plant site. (For more information, see Section 3.)

·        Cargill is not released from liability for cleanup of hazardous materials required under applicable environmental law after close of escrow.

·        Cargill is responsible for addressing 35 wells in Alameda County to the satisfaction of applicable government authorities.

·        Cargill will provide financial security for the work listed above that will be performed after closing.

·        Cargill will remove certain specified debris and other items from the property, including some structures at the Napa plant site.

·        One of the West Bay ponds will not be conveyed to the Federal Government until lead shot and clay pigeon debris is removed from the property by the third party responsible for cleaning up problems created by an adjacent skeet club.

·        The agreement is subject to approval by the Wildlife Conservation Board (WCB), which will consider the issue at its Feb. 11, 2003 public meeting, and by the director of the California Department of General Services following WCB action.  

2) PHASE OUT AGREEMENT

 The properties have been used for solar salt-making, which involves moving Bay waters through a series of ponds and allowing evaporation to increase salinity levels. It takes time not only to make salt, but also to stop the salt-making process and to transition the ponds to a flow-through water circulation system. The Phase Out Agreement addresses this transition or phase out, which will occur over several years after the State and Federal governments acquire the property.

 ·        The Phase Out Agreement describes Cargill's responsibilities and cooperation with the California Department of Fish and Game (CDFG) and the U.S. Fish and Wildlife Service (FWS) after close of escrow. This 50-page agreement describes the condition of the ponds at transfer; responsibilities for operating and maintaining the ponds; performance standards; schedules for completion, reporting and certification requirements; and the financial security Cargill will provide CDFG and FWS to assure all obligations are met.

·        Cargill will reduce salinity levels in the South Bay ponds such that pond waters could be discharged to the Bay (the Transfer Standard). The San Francisco Bay Regional Water Quality Control Board (RWQCB) will determine the appropriate salinity level through issuance of a discharge permit. In general, Cargill will be responsible for operation and maintenance of the ponds until the Transfer Standard is met.

·        However, if the RWQCB has not acted by March 15, 2004, CDFG and FWS will assume financial responsibility for operation and maintenance of the "low salinity" ponds. Cargill would retain responsibility to meet the Transfer Standard with assurances that the ponds could be managed to prevent a build up of salt. 

·        An independent third party must certify that the Transfer Standard has been met before Cargill's operation and maintenance responsibilities are ended.

·        Because of their geographic location, physical characteristics, and historic and anticipated use by wildlife, Cargill will meet different salinity reduction standards at Alviso High Salinity Ponds A-22 and A-23 in the South Bay. These ponds will be left in a condition that can sustain important wildlife populations.

·        The Napa property is significantly different than the South Bay properties that are being acquired because it is a plant site. It also is operationally and geographically distinct from the South Bay salt-making operations. As a result, performance requirements have been set that are specific to the Napa property. Those requirements call for Cargill to remove salts, brines and salt-harvesting byproducts in the ponds by harvest or other agreed upon methods consistent with the restoration plan and goals to be developed for the site. (For more information, see Section 5.) 

3) ENVIRONMENTAL SITE ASSESSMENTS 

A primary goal of FWS and CDFG has been to determine whether there are any recognized environmental conditions that should be addressed before or as a condition of acquiring the property. The agencies, with the assistance of consultants, employed a multi-step process to obtain data on which to base their decisions. 

·        FWS and CDFG reviewed the Phase I Environmental Site Assessment (ESA) of the property prepared on behalf of Cargill by the environmental consulting firm of Erler and Kalinowski, Inc. The ESA was prepared according to American Society of Testing and Materials (ASTM) standards for such assessments. These ASTM standards are a generally accepted business practice and are recognized by environmental laws as being the appropriate standard for reviewing property before acquisition.

·        FWS used the ESA to conduct its own federally required Level I survey, then followed up with a Level II site assessment that included 18 sediment samples and more than 100 biota (snail and fish) samples in the South Bay ponds.

·        CDFG conducted Level II sampling and analysis at the Napa plant site and the Baumberg (East Bay) concentrator ponds to investigate recognized environmental conditions identified in the ESA. More than 100 soil, sediment and groundwater samples were collected and analyzed. Most of the sample locations were at the Napa plant site. Sampling locations were selected to represent overall site conditions or targeted locations with evidence of possible contamination, such as soil staining or low points in the surface topography. 

Key Findings 

An analysis of the data from the Level I and II assessments identified two issues associated with salt-making operations that require remediation. Both are located at the Napa plant site. 

·        Lead, believed to have been from lead-based paint, was found in the soils immediately surrounding two residences at the Napa plant site. Materials, such as petroleum hydrocarbons, were found in a concrete-lined sump and in the soils around the exterior of maintenance buildings at Napa. Cargill is responsible for cleaning the sump and removing this shallow soil contamination from these isolated areas on the upland portion of the Napa plant site.

·        FWS' Level I survey identified the presence of mercury in the South Bay. This mercury is the legacy of historic mining operations located in the Guadalupe River watershed above San Jose. The entire south end of San Francisco Bay has been impacted by this mercury release over the last 150 years, and consequently levels of mercury in the South Bay are higher than average levels throughout the Bay.

·        The presence of mercury was further evaluated by FWS in its Level II survey. As anticipated, the Level II Site Assessment shows the sediments in the ponds closest to the Guadalupe River/Alviso Slough contain levels of mercury that are similar to the adjacent slough channels but are higher than average levels in other parts of the Bay. The highest levels of mercury were found in ponds already owned by FWS. Given the currently available information about the presence and possible impacts of mercury in those ponds, it is reasonable to address the situation through management options during restoration.

·        No evidence of contamination was detected in the samples collected at the Baumberg ponds. These ponds, having been used for recreational hunting, were sampled to determine the presence or absence of lead contamination. No lead pellets or significant lead residues were found.

·        The ponds at the Napa plant site, used principally as crystallizers or for storage of hyper-saline brines or wash water were sampled. Analysis of soil/sediment samples from these ponds revealed no evidence of contamination requiring remediation to comply with applicable laws.  

4) INITIAL STEWARDSHIP   

FWS and DFG, with technical assistance from Cargill, have developed a proposed initial stewardship plan for the properties to be acquired. The plan is designed to maintain existing habitat values and prevent a build up of salt in the ponds in a cost-effective manner while long-term restoration planning is underway. It envisions reopening the ponds to San Francisco Bay to allow Bay water to circulate in and out of the ponds to achieve these objectives. 

·        FWS and CDFG will need to construct some additional water control structures in order to manage the acquired properties during the initial stewardship period.  Installation of those structures will require permits from the U.S. Army Corps of Engineers, the San Francisco Bay Conservation and Development Commission and the RWQCB.   

5) LONG-TERM RESTORATION PLANNING 

South Bay

The goals of the long-term restoration planning are to restore and enhance wetland habitats for migratory birds and threatened and endangered species, provide for flood management, and provide public access and recreation opportunities in the South San Francisco Bay. 

·        The California Coastal Conservancy's San Francisco Bay Program will lead a collaborative planning effort with FWS and CDFG. Initial funding for the planning effort will be provided by the Coastal Conservancy and the Hewlett, Packard and Moore Foundations.

·        In order to ensure the development of a scientifically sound, widely supported restoration, flood management, and public access plan, the project team will actively engage trustee and regulatory agencies, local governments, nongovernmental organizations, the scientific community, and the public in the restoration planning process. There will be frequent opportunities for organizations, agencies, and individuals to be involved in the planning process, which is expected to take approximately five years. 

·        The Web site for the South Bay Salt Pond Restoration Project will be www.southbayrestoration.org and will be active by the end of 2002. Meeting notices, project updates, and other resources will be available on the Web site.  

Napa Plant Site

In cooperation with the California Coastal Conservancy and private foundations, CDFG will initiate the restoration planning process for the Napa plant site following close of escrow. The plan will be coordinated with the ongoing Napa Marsh Restoration Project process and will focus on the restoration of tidal and managed wetland habitat. 

Ponds surrounding the Napa plant site will be restored to tidal circulation or maintained as hyper-saline ponds for migratory birds and threatened or endangered species as determined through the long-term restoration. 

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