Businesses and commercial property owners in the heart of Malibu are in the muck of a sewage problem.

A regional water board wants to ban Malibu’s septic tanks in the Civic Center area. But that would mean costly assessments to build a sewer system and treatment plant. What’s more, septic systems and upgrades that have cost shopping center owners millions of dollars – some just completed – would soon be obsolete.

“We are trying not to panic about this, but it’s very difficult, especially given the economic situation,” said Rebekah Evans, chief executive of the Malibu Chamber of Commerce.

At issue is Malibu’s reliance on septic tanks – some many decades old. City officials had until recently resisted installing a sewer system in part because of residents’ concerns that it would spur development.

But many of the aging septic tanks are leaking, sending untreated wastewater into the ocean and raising the occasional foul smell.

The water board and environmental groups contend this is the major reason why some of Malibu’s most famous beaches, including Surfrider Beach, frequently receive “F” grades from Heal the Bay and other beach-monitoring groups.

“This is already having a negative impact on the economy,” said Tom Ford, executive director of Santa Monica Baykeeper, a local environmental group. “How many people now stay away from Malibu beaches because they know that if they swim in them, they will get sick?”

Malibu officials dispute that septic tanks are the prime cause of beach pollution. The city’s position is that much of the offshore pollution is the result of runoff from Calabasas, Agoura Hills and other communities and facilities farther up the Malibu Creek watershed.

Beyond the fact that residents have resisted a sanitary sewer system for fear it would unleash development, city officials have been daunted by the cost of a sewer system – $40 million to $50 million.

Nonetheless, earlier this year, Malibu moved to prepare the way for a sewer system, allocating $2.6 million for the design and engineering of a sewage treatment plant. Initially, the system would cover the central city area, which extends nearly two miles from Pepperdine University on the west to the Malibu Pier on the east.

But the city is not moving fast enough for the Los Angeles Regional Water Quality Control Board, which at its Oct. 1 meeting is scheduled to consider a ban on septic tanks in Malibu’s Civic Center area. If approved, new septic tanks would be banned immediately, while all existing septic tanks would have to be capped or otherwise taken out of use within five years.

“This is a long-awaited solution to a chronic water-quality problem in Malibu,” said Tracy Egoscue, executive officer for the water board. “The board does want a long-term centralized system in the center of Malibu. Having clean water will be really good for business in the long run, especially when these businesses are so close to an economically vital beach.

“It will be good for tourism to have clean water that people can swim in, it will be good for the people who work there and for the people who live there,” she continued.

The deadline for comments on the proposed septic tank ban is Sept. 8.

Aggressive action

As if to ratchet up the concern, the water board has recently taken a more aggressive stance against septic tank owners.

In April, the board sent out notices of violation to 38 owners of septic tanks in the Civic Center area, including commercial shopping center owners, individual building owners and city-owned facilities. The violations ranged from failing to submit the proper permits to missing filing deadlines. It ordered the septic tank owners to file all the proper reports and applications by July 24 or be fined $1,000 a day.

“Some of these violations were quite minor, like being a day late with a filing deadline,” said Mark Olson, a chamber board member who works at Southern California Edison. “The water board is strictly enforcing the current rules to the point where it’s causing difficulty for businesses that are trying to do the right thing.”

Among the businesses receiving the violation notices were: the Malibu Beach Inn, the Casa Malibu Inn, HRL Laboratories LLC and Jack-in-the-Box and KFC outlets. Notices were also sent to the owners of the Malibu Country Mart, Cross Creek Plaza and Malibu Colony Plaza shopping centers.

So far, according to water board officials, no fines have been issued.

Most of the businesses contacted for this story declined to comment on the notices, citing the fear of being fined or otherwise singled out by water board regulators.

Michael Koss, principal of Koss Financial Group, which owns the Malibu Country Plaza, was the only owner willing to address the notice issue. He wants to upgrade his wastewater system, but doesn’t want to spend any money on septic systems that could soon be banned.

“We’ve been unable to significantly alter or modify our septic system because the city is moving towards a centralized system,” he said.

Septic tank ban

The threat of the septic tank ban in five years has many alarmed.

City Manager Jim Thorsen said Malibu is opposed to the ban because the time frame is too short.

“This is not a simple project,” Thorsen said. “We are moving as quickly as we can, given all the issues involved.”

Among the challenges: finding a suitable site for a sewage treatment plant and getting enough funding until an assessment district can be established.

Under state law, two-thirds of the property owners must agree to establish an assessment district, and it’s not at all clear that many people will agree.

Business interests are wary about how the costs would be divvied up.

Chamber member Olson said the main issue is how large the assessment district would be. “How wide will the net be cast and what will the cost be per parcel? That’s of most pressing concern to our members.”

What’s more, a few landowners who recently spent millions of dollars to upgrade their septic systems to meet the latest standards now have another concern: the prospect of having to shut off those septic systems if and when the septic ban goes into full effect in five years.

“We are aware of this situation,” said Egoscue of the water board. “When granting the permits for the upgraded or new septic systems, the board made it very clear that they were not happy and they would rather be granting permits for a centralized sewage treatment system.”

Property owners’ opinions on the issue are mixed.

One of the affected landowners, Koss of the Malibu Country Mart, said he had no problem with shutting off his septic system.

“I’m completely in favor of a centralized treatment system and it is our hope that the city will move forward with this in an expeditious manner,” he said.

The owner of nearby Cross Creek Plaza, Retail Holdings Group, refused to comment. Principal Michael Shabani did acknowledge that Retail Holdings and the previous landowner, business executive and former L.A. mayoral candidate Steve Soboroff, had spent $4 million to upgrade the plaza’s septic system.

The owners of Malibu’s newest shopping center won’t be too affected by any septic ban because they built an on-site sanitary sewer collection system that can be connected to a city sewer system. However, the system cost $4 million, representing an investment of $130 per square foot.

“We’ve built the most advanced onsite sewage treatment plant in the state, if not the entire country,” said Richard Weintraub, president of Weintraub Financial Services Inc., which owns the recently redeveloped Malibu Lumber Yard Mall.

Yet Weintraub said he’s concerned about how much the city will assess his property to build its sewage treatment system.

“The city is going to have to prove to me that it will actually improve the water quality,” he said.