Cities Pursue Elaborate Swap to Save LA Base
Remember the frightening things your mother used to tell you in the name of safety when you were a child? If you went running around with scissors in your hand, you could put out an eye. Or if you went back into the swimming pool too quickly after eating, you could double up with cramps and drown.
The same scare tactics may work on cities. Try this: If you do not bring your housing element into compliance, you could lose your military base!
True, the idea is far-fetched, but it is the possible denouement to the convoluted story of the Los Angeles Air Force Base and efforts to keep it in Southern California.
Not everyone has heard of the Los Angeles Air Force Base, which has few pilots, no airplanes and no runways. The base, in fact, is little more than a large office complex that sits on the borders of Hawthorne and El Segundo in southern Los Angeles County. Known also as Systems Acquisition Management Support (SAMS), the base is the procurement arm of the service, employing 4,000 military and another 3,500 civilian personnel.
The local community is understandably eager to keep the base, which is a hub of the regional economy. But locals are jittery about the future of the base. According to Hawthorne City Councilman Gary Parsons, Pentagon officials view the base as too costly to run, and concern is also growing over the seismic safety of the dozen-plus buildings of the existing base. While nobody knows when the next round of base closures are to be announced, local officials see an urgent need to move quickly.
The Air Force came up with a genuinely entrepreneurial idea — a land swap — to pay for the facility. (The Defense Authorization Act of 2001 provided the land-swap mechanism.) It works like this: A developer or team of developers agrees to build an entirely new building for the Air Force, in exchange for military land. By demolishing the current 860,000-square-foot complex in favor of a new 560,000-square-foot facility that is more economical to operate, the developers are saving the military up to $115 million in construction costs, and another $3 million a year in operating costs. With those savings, the theory goes, the Pentagon will have no further need to move the base.
After soliciting proposals, the Air Force chose a team of developers consisting of Catellus Development Corporation of San Francisco, Morgan Stanley Real Estate Fund and Kearny Real Estate Company, a real estate fund affiliated with Morgan Stanley. The developers plan to build 750 housing units on the site of the existing base after the base is demolished, and another 280 units on a separate military-owned site. So far, it sounds like a good deal for the Air Force and a rich deal for the developers.
At this point, though, our story starts to get a little squirrelly. The cities of Hawthorne and El Segundo support the deal, but both had difficulties with the proposed development. Hawthorne is an aging middle-class and lower-middle-class residential community. El Segundo, on the other hand, is a well-manicured atoll of office buildings with a limited amount of housing. El Segundo originally wanted retail development on the base site, but Hawthorne residents, worried about traffic, opposed that idea. El Segundo did not want housing, which could conflict with surrounding industrial development. Hawthorne, which borders the property on three sides with residential neighborhoods, volunteered to annex the property and place it in a redevelopment project area. New, for-sale housing would be a boon for Hawthorne, where 70% of housing is rental.
So the plan now is to demolish the base, build the new housing in Hawthorne and construct the new base in El Segundo. Still being worked out, the financial deal has the developer "crediting" Hawthorne for three land parcels. Hawthorne, together with Los Angeles County, will issue up to $25 million in bonds to help pay the cost of building a new base. Property taxes and tax increment from the new houses will service the bond debt, meaning that Hawthorne redevelopment monies would pay for a project in El Segundo! The developer will lease the new base to the Air Force to close part of the $10 million financial gap.
But the cities may now be endangering the very project they are trying to protect by over-reaching. In an effort to protect the unusual deal, the cities asked their local Assemblyman to propose a statute (AB 658, Nakano) that would shorten the period during which people could file lawsuits over the proposed annexation from 60 days to 30 days.
A Senate Local Government Committee analysis looks askance at the bill, noting that Hawthorne does not have a valid housing element, and without one cannot be said to have a valid general plan. The lack of a valid general plan, in turn, makes the city vulnerable to redevelopment lawsuits because state law requires a finding of consistency between the general plan and the redevelopment plan; without a valid general plan, no consistency finding is possible.
Litigation is a concern because some local homeowners oppose the density of the project, which at about 19 units an acre could be called "low-medium" in this area. If lawsuits derail the base project, the Pentagon could just possibly elect to send the whole kit and caboodle somewhere else, to disastrous effect on the local economy. In July, lawmakers amended the bill, saying the shortened time to sue cannot take effect until the state certifies Hawthorne's housing element. The Senate Local Government Committee passed the amended bill with no votes to spare. As of late August, the bill still needed Senate approval and Assembly concurrence.
While that amendment improves AB 658 somewhat, the bill remains highly questionable as a tactic to protect the base insofar as the bill itself could become a lightning-rod for lawsuits, rather than the means to deflect them. In short, the bill sounds self-defeating. The moral is clear: If you go running to Sacramento with an ill-conceived bill, you could lose your most prized employer. At least, that's what your mother would say.