The reminders are everywhere in the 2.2 square miles that comprise Signal Hill.
Grasshopper-like oil pumps bob up and down all over town three in the parking lot of Curley’s Cafe, as well as at the end of the newest subdivision overlooking Long Beach harbor and behind the commercial strip along Cherry Avenue.
Still, it’s a far cry from Signal Hill’s heyday as an oil town. In 1945, 20,000 wells dotted the landscape. Period photos show a forest of derricks towering above homes, which led to the city being nicknamed Porcupine Hill. There were also seven refineries as recently as the early 1970s.
Today, only one derrick remains, and it’s inactive. (There is actually another derrick, a miniature replica on the monument in front of City Hall, commemorating the first strike in 1921.) There are no refineries, and about 600 pumps are still scattered around town, not all of them active and many of them hidden in metal boxes and screened by fences.
“This used to be the oil capital of the world,” said Bob Randle, executive director of the Signal Hill Chamber of Commerce and a resident since 1938. “Now it’s a town with oil.”
The city and its economy are at a crossroads, as civic and business leaders prepare to further reduce the amount of land devoted to oil and turn it into housing and retail projects.
“The oil field itself is shrinking in size, so more parcels are coming up for development,” said City Manager Ken Farsing. “With it phasing out, it gives Signal Hill a second chance at development.”
The transformation of former oil fields into alternate uses has been widespread across Los Angeles and Orange counties, in places like Fullerton, Huntington Beach and Brea. And it’s an economic imperative for cities that once depended on oil revenue.
Signal Hill’s local government gets very little property tax revenue only $300,000 a year and revenues from the city’s small tax on each barrel of oil pumped there have diminished along with production. That makes the city “highly dependent on other revenue sources,” Farsing said. Signal Hill’s main source of revenues is its sales tax, which accounts for $8 million of its $10 million annual general fund budget.
“We have to be more creative in attracting development and looking for revenues,” Farsing said.
Specifically, the city is looking to bolster its economy through two channels retail and housing.
On the drawing board:
? The 188-home Bixby Ridge subdivision the largest in the city’s history. The developer, Le Plastrier Cos. of Irvine, plans to break ground this summer.
? Retail development totaling 65,000 square feet in the Town Center shopping area, including a grocery store (the city’s first), a pharmacy and restaurant. The city is negotiating with developer Comstock Crosser & Associates.
? A moderate-income housing project consisting of 52 single-family homes, currently under construction behind a wall along Pacific Coast Highway, at the foot of the hill along the city’s southern border.
? Two public parks atop the hill.
To support the anticipated development, two new reservoirs are being built to supply additional water. City officials are projecting Signal Hill’s population to grow by about 3,000 in the coming decade, to around 12,000.
To accommodate the projected increase, even more land is about to be made available for development. The last refinery in the city is being dismantled, raising the question of how to reuse the eight acres belonging to Kim Oil. The “west field” area on the city’s northwestern edge encompasses 70 acres of weeds and old warehouses and could be redeveloped with new housing or retail projects.
Elsewhere, city officials hope to extend both its “auto row” of car dealerships and its Town Center retail area. There also are plans to eventually upgrade the Pacific Coast Highway corridor, which is currently a deteriorated strip of fast-food outlets, motels, liquor stores and auto repair shops.
And on the hilltop, the city’s plan calls for 525 new single-family homes.
“The pattern the council has established is quality residential growth and commercial (retail projects) to support it,” Farsing said.
Randle said he has no problem with the transformation, “as long as it changes in a slow, orderly manner.”
“I think you have to deal with (the oil industry), realize it’s there, it’s a business. You shouldn’t try to put them out of business,” Randle said. “I only want to see them stay as long as it’s a viable business.”
Development of upscale housing is actually consistent with the original vision for Signal Hill that of a “Beverly Hills South” with great ocean views. The city still has a handful of craftsman-style homes built before the discovery of oil, some of them summer retreats for wealthy Pasadenans.
But the oil strike of 1921 changed everything. Pitchmen lured people into investing in oil lots. Gushers would drench entire neighborhoods with oil.
About a billion barrels have been pumped out of Signal Hill since the original strike there 77 years ago, and close to a billion recoverable barrels remain underground. But the frenzy of the early years has ebbed considerably as the price of local crude dropped.
The Barto family of Huntington Beach owns about 90 percent of the remaining oil fields and pumps in Signal Hill. Most of the 1.2 million barrels produced annually go into roofing tar and asphalt.
Oil contamination has not been a major obstacle to redevelopment so far, Farsing said. The city has spent millions to cleanse the soil of petroleum hydrocarbons and some volatile organic compounds that came from refining.
The existing oil operations are much quieter, smaller and cleaner than those of years gone by, when fires were not uncommon. And unlike redevelopment efforts in many other areas, Signal Hill’s plans to build homes and retail stores on its former oilfields do not seem to be drawing any significant opposition.
“It’s not open space anyone is thrilled about,” said Deborah Rich, director of economic development and housing.
The city started preparing for the drop-off in local oil production in the late 1970s, when crude prices fell and Shell Oil, Texaco and Atlantic Richfield Co. cut back production and started selling off their Signal Hill land.
A redevelopment agency was formed in 1974 to help ease the transition from oil to retail, small-scale office and warehouse operations.
“The city needed to position itself to get more breadth and diversity to the economic base,” Rich said. It acquired property for what has become a row of car dealerships along Spring Street and the Town Center area.
The city also worked with the neighboring city of Long Beach to keep Office Depot’s business services division, which employs 1,100 people in the two cities.
The redevelopment agency has also assisted in housing projects, including Kaufman & Broad Home Corp.’s California Crown project. That development consists of 92 upscale Mediterranean-style homes built six years ago on a former oil field, and 24 apartments for the physically disabled completed last year.
