The city of Industry's acquisition two weeks ago of a 2,500-acre Boy Scouts campground in the San Gabriel Valley has unleashed a wave of fury from environmentalists, as well as open skepticism from water industry officials.
The city insists that it has acquired the massive parcel to build a reservoir, which it says it needs to meet its future water needs.
Environmentalists and water officials, meanwhile, say building a reservoir on that site would not be feasible. Some environmentalists go so far as to say that the proposed reservoir is merely a ruse the city used to justify buying the land, and that its true intention is to resell the property to Majestic Realty Co. for development.
"My own judgment is that ultimately the reservoir will become infeasible, and Industry will sell the land to a major developer and that developer is Ed Roski," said Jeff Yann, who sits on a conservation authority advisory committee and is a local Sierra Club leader.
Ed Roski Jr.'s Majestic Realty has developed 14 million square feet of commercial property in Industry, meaning the interests of the city of Industry are closely aligned with those of Majestic.
Officials with Industry and Majestic said the environmentalists' conspiracy theory is absolutely false, and that it stems from frustration over failing in their attempts to buy the property themselves.
"(The environmentalists) were not successful in obtaining (the property), so for whatever reason they are skeptical (about the reservoir)," said City Manager Phil Iriarte. "This is going to take years. I fully know that. It's not going to happen quickly."
Nonetheless, the Sierra Club plans to file a lawsuit seeking to reverse the sale, contending that changes in state redevelopment law prohibited Industry from buying the property outside its borders, said Eldon Hughes, a Sierra Club spokesman and former chairman of its Los Angeles chapter.
The environmental group also maintains that the city violated state environmental laws by not conducting a detailed environmental impact report prior to buying the property.
Industry maintains its city attorney reviewed and approved the sale.
The city's redevelopment agency bought the land from the Boy Scouts of America for $16.5 million, beating out a regional conservation agency in a bidding war.
Environmentalists note that Majestic Vice President John Semcken is a member of the Boy Scout Council's board of directors. The Scouts turned down an $18 million offer for the land last month from the Wildlife Corridor Conservation Authority, a joint-powers authority formed in 1994 to buy land and preserve wildlife in the Puente and Chino Hills.
"The Scouts are getting a much poorer deal. The obvious question is why," said conservationist Yann.
Boy Scouts officials said the WCCA's offer just wasn't as solid as the one from the city of Industry.
"WCCA said they had $10 million from the county and $8 million from a private anonymous donor, and we could not verify (the donor)," said Dave Tomblin, vice chairman of the Boy Scouts L.A. Area Council's board of directors and chairman of the negotiating committee. "We needed to bring it to closure."
The property was donated to the Boy Scouts half a century ago, but since then the cost of keeping it up has been too much.
"We needed to make the best use of our assets," Tomblin said. "We can't afford to staff 3,300 acres. The Industry transaction gave us everything we wanted."
The 2,500 acres that Industry bought is part of what was the 3,300-acre Firestone Scout Reservation. The deal will allow the Scouts to build and maintain new campgrounds on the remaining 800 acres they still own, while allowing them to continue to use Industry's portion until any reservoir is developed. The Scouts also would have boating and other recreational rights on any reservoir, Tomblin said.
Semcken, meanwhile, used the word "ludicrous" to describe Yann's theory that Industry's true intention is to sell the land to Majestic.
"That is ludicrous. We do not do residential development. The environmentalists just want this to be open, unused property," he said.
Semcken did acknowledge, however, that he acted as a go-between for the Scouts and Industry, because of Majestic's close relationship with the city. Specifically, he helped Industry draft its "term sheet" after the initial deal had been struck, and then reviewed the purchase and sale agreement after it had been drafted. However, he stressed that he recused himself from any board votes on the matter.
"We do business in the city, and we (Majestic) try to help the city when we can," he said. "It happens to be a case where somebody on our company (me) was on the board of the Scouts and tried to help. (But) we are directors of the Scouts, and in all these cases that was my No. 1 fiduciary responsibility."
Both Iriarte and Tomblin said Yann's speculation has no basis, contending that the way the deal is structured the land must remain open space if it is not developed into a reservoir. State law also would require Industry to offer it to other public agencies first if the city ever tried to sell it, Iriarte said.
Tomblin added the Scouts didn't accept the conservation authority offer because it came too late, and the Scouts had failed twice before in their attempts to sell the land to conservationists, including the authority.
"This was our third transaction in five years," he said.
But conservationists aren't the only ones looking askance at the city of Industry's acquisition.
Local water officials are openly skeptical about the city's plans to build a dam on the former Scout property for a fresh water reservoir that would stretch into an adjoining 2,600-acre ranch that Industry bought in 1975.
Rick Hansen, general manager of the Three Valley Municipal Water District, a water wholesaler that serves the area and is a member of the Metropolitan Water District, said the costs would just be too high.
He noted that the MWD paid about $2 billion to complete its larger Diamond Valley Lake dam and reservoir in Hemet, and even if the Industry reservoir were a quarter of that size, it would cost up to $1 billion.
"I don't understand it, unless you've got firm customers and you've got huge growth planned. Another possibility is if you are going to become a huge water baron and store water," he said. "But it would take eons to recoup your expenses."
Carol Williams, executive officer of the Main San Gabriel Basin Watermaster, which manages pumping out of the San Gabriel Valley's 167-square-mile aquifer, said that Industry could simply use its legal rights to import water, store it in the basin and pump it when needed.
"Industry is a pumper in the main basin, so I am not sure why they would not want to store it here (underground)," she said. "It doesn't make sense they would want to create a surface reservoir."
Industry officials say they have been thinking about building a reservoir since 1975, and now that they have more land, they are going to seriously pursue it.
"Everything right now is preliminary, but now that we have that piece of land, we are going to go as fast as we properly can to make it happen," Iriarte said.
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