Nov. 4, 2004
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On the cover: 1997 file photo
of Eureka, courtesy of U.S. Fish and Wildlife.
story & photos by HANK SIMS
IT
WAS EXPECTED TO BE A ROUTINE BIT OF BUSINESS FOR THE EUREKA CITY
COUNCIL. At the council's meeting on Oct. 5, city staff were
prepared to hire a consultant to help them develop a master plan
for the most valuable piece of vacant land in the city limits
-- the so-called "Balloon Track," a 34-acre plot on
the western edge of Old Town, with frontage on Broadway and Waterfront
Drive. The parcel, an old rail yard owned by Union Pacific, became
the focus of intense controversy five years ago when Wal-Mart
proposed to build a store on it.
The money for the master plan
-- which was intended as a public effort to determine the future
of the property -- was already in place. In November 2003, the
county board that oversees the Headwaters Fund awarded the city
a $45,000 grant to help fund it. The city was prepared to match
that amount with $55,000 from its Redevelopment Agency. The feeling
was that it would be money well spent. Even Eureka resident Aldo
Bongio, a strident critic of government spending who spoke at
the Oct. 5 meeting, said that it "isn't really a big amount."
But suddenly, Councilmember
Jeff Leonard [photo below
left] didn't agree. Despite the
fact that the plan had been standing city policy for almost a
year, re-confirmed by unanimous vote as recently as the previous
meeting on Sept. 21, and despite the hundreds of hours of staff
time spent writing grant applications and interviewing prospective
consulting firms, Leonard had experienced a change of heart.
"With all apologies to
council and staff, I'm not willing to go any farther forward
down this particular road," he said. "A hundred thousand
dollars is actually, in my mind, a lot to pay for a study."
Leonard said that unlike in
other cases when the city had partnered with private interests,
Union Pacific showed no interest in working on the master plan.
"Until I see someone out
in the community who really thinks this study needs to be done
to help them get this piece of property developed, I personally
don't think we should go forward," he said.
With
these concerns in mind, Leonard made a motion to put off hiring
the consultant city staff had picked to lead the work on the
plan. Councilmember Mike Jones quickly seconded Leonard's motion,
and a vote was taken. With Councilmember Virginia Bass-Jackson's
support, the contract with the consultant was delayed, for the
time being.
Debate on whether to kill the
study completely was scheduled for the next meeting on Oct. 19.
In the meantime, Union Pacific had written the city to say that
the company was in negotiations to sell the parcel to a developer,
and the developer had made it known that he didn't want the city
to do a master plan. He would prefer to do the plan on his own.
If the city were to go forward, the letter implied, it could
derail the deal. With the letter in hand, the council voted 4-1,
with only Councilmember Chris Kerrigan dissenting, to send the
Headwaters grant back and abandon the project.
A week after the vote was taken,
Kerrigan was still reeling from the inexplicable reversal of
the council's long-held position on the plan. "It was probably
one of the most shocking incidents I've seen in my time on the
City Council," he said. "It was, in my opinion, really,
really unfortunate."
Deal
in the works
The Balloon Track master plan
had died, but one question remained: Why had Leonard, along with
two of his fellow council members, changed his mind before the
Oct. 5 meeting, before the city had received the letter from
Union Pacific? What had changed?
In an interview last week, Leonard
explained. Sometime in September, he said, he became aware that
the property was close to changing hands. And he became aware
the buyer would be Rob Arkley [photo
below right] , the multimillionaire
owner of Eureka's Security National Servicing Corp. who has,
in recent years, taken a great interest in development in the
city. And Leonard knew that Arkley wanted the Balloon Track master
plan killed.
Reached
at his office Monday, Arkley confirmed this. He spoke of the
duplicity of local government spending $100,000 on a study at
the same time it was asking voters to pass Measure L, a 1 percent
sales tax increase. He reaffirmed his ideological commitment
to private property rights, putting his position in the bluntest
possible terms.
"If you're me, do you really
care what the city thinks?" he said. "I don't want
to have an alternate plan out there because it might not be what
I want."
History
of conflict
City Manager Dave Tyson [photo below left] said
he took the change in stride. City staff members are there to
carry out the will of the council, he said. If the council abandons
one policy in favor of another, the staff switches gears along
with it.
Regardless of council strategy,
Tyson said, it is hard to overstate the importance of the parcel
when considering the future of Eureka.
"It's a fairly significant
piece of property for our community," he said. "It's
largely a gateway for the Old Town/downtown area, and for our
harbor."
Currently home to nothing more
than weeds, rusted railroad cars and toxic waste, the Balloon
Track was once a vital part of the city's infrastructure. It
was the main yard for the Northwestern Pacific, the rail line
that linked Humboldt County with the San Francisco Bay Area.
Petroleum companies used the site to cache their automobile and
diesel fuel until it could be sold to customers. But with the
slow, steady demise of the railroad, along with serious problems
with groundwater contamination, the property became less and
less useful over the years. Eventually, it was almost completely
abandoned.
The
parcel sprang back into the forefront of public consciousness
when Union Pacific proposed to sell it to agents representing
Wal-Mart. In meetings with members of the City Council at the
time, the company made it known that it wished to put one of
its mega-stores on the site. According to Tyson, the majority
of council members were tepid.
Instead of going through normal
channels, where the company was looking at a potential defeat
on the City Council level, Wal-Mart and its proponents decided
to put the issue directly to the city's voters. They sponsored
a ballot initiative -- Measure J -- that would have given the
retailer the right to build on the site through a rezoning. A
bitter campaign ensued, with the company backing an expensive,
heavy-handed campaign to promote the initiative. Some residents,
concerned about the company's negative effect of the local economy
and claiming that Wal-Mart would be a poor use of a prime piece
of real estate, formed an opposition group. When the issue came
to a head at a special election in August 1999, Wal-Mart was
defeated by a wide margin, 61 to 39 percent.
As Tyson noted, lifelong friendships
were severed over the issue. The public was bitterly divided,
each side suspicious of the other's motives. It was at that point,
Tyson said, that the city decided it should be more forward-looking
when it came to future development on the site.
"The master plan has been
on our list of things to do probably since the Wal-Mart issue,
the Measure J issue, back in the late `90s," he said. "Since
that time, it's been the feeling of the city and many people
in the city, residents here, that we ought to look at master-planning
that site. In that process, we would look at what types of uses
would the community want to see on that site. Would we want manufacturing,
would we want more service/commercial -- retail. Do we want light
industrial? Do we want parks? What do we want?"
The master plan was supposed
to find the answers. City government holds what Tyson called
the "trump card" over future development on the Balloon
Track, as it does on all property in its jurisdiction, through
its ability to zone properties for different types of development.
The Balloon Track is currently zoned for "public" use,
meaning that only public facilities such as schools and other
types of government buildings can be placed there.
The
master plan -- which would have functioned as a miniature version
of the city's General Plan -- would have studied physical impediments
to development, such as water and soil toxicity and protected
wetlands, as well as impacts on the area's traffic. But it also
would have listed what specific types of development the community
wanted to see on the site. The zoning will have to be changed
from its current "public" status if any new, private
development is to occur at the site -- the master plan would
have recommended what to change it to, after an extensive public
outreach effort gathered enough community input on the recommendation.
The way Tyson understood it,
that would have protected the community, but it would have protected
the developer, too. If the public were to endorse a vision for
the site, it would make it difficult for that same public to
oppose a project that conformed to the recommendations.
"That's largely why we
were thinking it was a good idea," he said. "We were
looking at it as a defense mechanism, so we wouldn't have to
go through this public process that was very divisive. Had there
been this process in place, then we probably wouldn't have had
the type of Wal-Mart fight in the community."
Waste
of money?
Last week, Leonard recounted
how he had come to change his mind about the wisdom of continuing
with the Balloon Track master plan. A few months ago, when the
county's various political factions were embroiled in the fight
over the county's general plan update, a controversial article
appeared in the Times-Standard. It told of a new study
by the Workforce Investment Board that called the idea that young
people were leaving the county in mass numbers -- a central tenet
of those who sought to accelerate development -- a "myth."
By Leonard's account, the article
had so upset Arkley and his colleagues that they called a meeting
of some of the county's movers and shakers at Security National's
headquarters on Fifth Street. Leonard was among the invitees.
"We ended up just talking
about jobs and economic development -- the whole nine yards,"
he recalled. "During that meeting, I think, Rob said, `Well
I'm going to be buying the Balloon Track soon. We've almost finished
the deal,' or something along those lines. I think that's the
first time I actually heard it from him, that in fact he was
going to buy it.
"At
some other point, the comment [from Arkley] came out, `What's
the city doing with this Balloon Track master plan? It's a private
piece of property! It's going to get privately developed. What
are you guys doing spending a bunch of money on it? It's wasted
money.' And then that launched into, `Here's what the Headwaters
Fund ought to do...'
"At that point, I certainly
knew -- OK, he's looking at buying it. He's not going to want
to participate with this stage of the process. He has said on
many occasions, `I don't use redevelopment money, I don't use
economic development money.' OK -- he doesn't have to. So, again,
it just seemed to me like, `How come we're taking Headwaters
money and redevelopment money to put together a study that the
person who has the property isn't going to use? It doesn't do
us any good.'
Leonard said that he always
felt that the primary purpose of the master plan would be to
get developers interested in the site. If the community could
put forward uses of the property that it would find acceptable,
potential developers would have some assurance that they could
build at the site without inspiring a Wal-Mart-style battle in
the community. But if Arkley was close to closing escrow on the
property, Leonard said, perhaps the city could find better uses
for its money than pre-determining what Arkley could build.
"I'm not going to say that
that master plan wouldn't have helped in that decision -- it
might have helped," he said. "Would it have been $100,000
worth of help? No. I don't think so. I don't know if it's worth
$100,000, given the way the situation has developed in the meantime."
The
next 'big fight'?
Minus the master plan, the Balloon
Track project will go forward like any other. Assuming Arkley's
deal with Union Pacific goes through, he will put forth a proposal
to the city's Planning Commission and then to the City Council.
(Because the property lies near the bay, it will also have to
be approved by the California Coastal Commission.) At every point
the public will have the opportunity to offer comment and critique,
as Leonard takes pains to emphasize. At the city level, council
members will give their thumbs-up or thumbs-down to the project.
What
won't happen is a preemptive community dialogue aimed at reaching
consensus before it goes before the decision-makers. Mayor Peter
La Vallee -- who, like everyone on the council, said that he
is eager to see the property developed -- sees the "potential
for another public explosion," along the lines of the Wal-Mart
debate, which made national headlines for its rancor and bitterness.
"Rob has been interested
in that property, and I think that's wonderful," he said.
"But the issue is, are we going to have a public, forward-thinking
debate on this, or are we going to have a big fight like last
time?"
If such a fight were to break
out, Arkley would certainly have the advantage going in. In recent
years, he has demonstrated a willingness to go to the mat for
his ideas. He spent over half a million dollars this election
season in an effort to unseat North Dakota Senator Tom Daschle,
the leader of the Congress's Democratic minority. He and his
family have given over $100,000 to the Republican National Committee
and George Bush's campaign. Locally, he put his weight behind
DA Paul Gallegos and started his own newspaper, the Eureka
Reporter, because he disapproved of the Times-Standard's
coverage. (On Monday, he disclaimed any knowledge of the mysterious
"Eureka Coalition for Jobs," which flooded the airwaves
and local mailboxes with anti-Kerrigan ads over the weekend.)
He is not an ordinary developer.
For his part, Arkley declined
to specify what sort of plans he had for the site, except to
say that it would be something that would benefit the area's
economic development and would assist in the effort to provide
local opportunities for the area's high-school graduates. He
said that these were the same motivations that prompted him,
in 2000, to offer to donate up to $3 million to the city in order
to finance a public buyout of the property. (The city turned
down the offer, citing the unknown costs of toxic clean-up at
the site.)
In the event that anyone has
any plans to bring the Balloon Track master plan back, Arkley
wished to disabuse them of that folly.
"I'm not willing to sit
at the table with anybody until I decide what to do with the
land," he said. "If they think that taxpayer money
is well spent doing that, they should think again."
SEE ALSO:
MAY 27, 1999: COVER STORY: Does Wal-Mart have a
plan B?
JULY 1, 1999: IN THE NEWS: Wal-Mart debate heats
up
SEPT. 2, 1999: IN THE NEWS: Wal-Mart no longer
interested
OCT. 28, 1999: IN THE NEWS: Balloon tract may be
park
JULY 27, 2000: IN THE NEWS: Council reverses reversal
MAY 17, 2001: IN THE NEWS: Balloon tract to be
cleaned
OCT.
1, 2001: COVER STORY: Finding beauty in the blight: A fresh look
at the Balloon Track Tract
MAY 29, 2003: COVER STORY: Going nowhere: Has the
Northwestern Pacific Railroad reached the end of the line?
NOV. 27, 2003: IN THE NEWS: Doling it out: Six
names for $300,000 in Headwaters money
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