WaMu will forge ahead on Ahmanson despite massive litigation

By Michael Collins

Ventura County Reporter – December 26, 2002

DON'T BANK ON ITLast Thursday the Ventura County Board of Supervisors reasserted the 1992 board’s 4-1 vote, signing off on the Ahmanson Ranch’s supplemental environmental impact report (SEIR) and approval of the Phase A Master Tract Plan. Predictably, the reaction was fast and furious.

“As you are no doubt aware, the [Los Angeles] City Council has already voted unanimously to instruct the city attorney to file suit over this project,” Los Angeles Deputy City Attorney Keith Pritsker told the Reporter. “The city attorney’s office will vigorously litigate for the protection of the quality of life of the residents of the San Fernando Valley”

“The Los Angeles Regional Water Quality Board has substantial concerns regarding the use of groundwater at the Ahmanson Ranch project,” a water board official added. “Additional water well tests are in order to determine whether the development will or will not pose a threat to human health or the environment.”

The lone vote against the 3,050-home development, to be situated on 2,783 acres of pristine ranchland, came from Supervisor Steve Bennett.

Now that the curtain has finally dropped on the decade-long Act One of the Ahmanson Ranch saga, The Reporter interviewed Tim McGarry, Washington Mutual’s vice president of corporate public relations, for his insights on the controversial development. The questions and answers were exchanged electronically—the bracketed material in the replies is the product of Reporter editing, and the parenthetical entries are McGarry’s.

Michael Collins: The Reporter and other publications have noted that there are entities prepared to sue Washington Mutual over this issue. Also, the state regional water quality control board showed up at the hearings and expressed its concerns with the SEIR. The Department of Fish and Game, U.S. Fish and Wildlife and the U.S. Army Corps of Engineers also submitted letters into evidence expressing reservations about the SEIR. Is Washington Mutual ready to spend what could be another decade overcoming the possible lawsuits and what may be a contentious permitting process?

Tim McGarry: Practically, we expect things to move much more quickly and the history of the project supports this view, hi 1993, a similarly formidable line-up of entities sued under CEQA [California Environmental Quality Act] to void Ventura County’s development agreement with Ahmanson and overturn certification of the original EBR for the project Petitioners’ claims were denied in Superior Court in 1994. This decision was sustained at the appellate level the following year. Our attorneys are optimistic that a new round of suits could be resolved even more expeditiously We expect to break ground in 2004.

I think you may be overstating agency concerns relative to the SEIR. We intend to work cooperatively with the agencies you mentioned to ensure that any concerns are resolved to their satisfaction and we expect the process will be constructive, not contentious. Bear in mind, too, that much of the work on remaining entitlements has already been completed and has simply been on hold while we completed the CEQA process. We believe this will help us to complete pending entitlements within a reasonable amount of time.

MC: Folks have commented on what they perceive as a somewhat nasty and personalized tone of Washington Mutual advertisements and a press release issued (the day before the Board vote). Regarding your “We’ll call you” ad in the [Ventura County] Star, do you feel the tone of that ad was justified and, if so, why? And in a Dec. 19 press release on the plan, it refers to “hype and hysteria.” What exactly is the “hype” and what exactly is the “hysteria?”

TM: Come on, Michael. Rob Reiner has traded relentlessly on his celebrity and that of his pals to bring attention to his views and advance his anti-Ahmanson agenda. I think he’s big enough to handle a little chiding on this score. As to tone, we’ve gotten a lot of favorable comment on the humor in the ad, including an editorial in the Ventura County Star Saturday morning. I’m told even [Rally to Save Ahmanson Ranch’s] Chad Griffin found the ad funny.

The “hype and hysteria” phrase in the press release refers to all the emotionalism and fearmongering relative to perchlorate and contamination (combined with a dearth of fact-based analysis) that infested the hearings. [Former Environmental Protection Agency Secretary] Carol Browner’s presentation was typical—basically a stump speech, long on references to thyroid deficiency and fetal development issues but short on facts directly pertinent to the matter at hand— what should or should not be done with the well on MRCA [Mountains Recreation and Conservation Authority] land.

No one disputes that perchlorate is a dangerous toxin, and everyone agrees that, when detected, it has to be dealt with. However, the specific dangers posed by well No. 1 and how to mitigate or avoid them were the critical issues facing the board. To their credit, all the supervisors (including Steve Bennett) kept their focus on the facts and on these issues and their resolution. They refused to let themselves be distracted by “cartoons” and other red herrings served up by the testifiers from Rally [to Save Ahmanson Ranch], whose real objective was clearly delay.

I’ll confess to a certain curiosity as to the identity of the “folks” who perceive our tone as “nasty and personalized.” Surely it wasn’t Calabasas Mayor Janice Lee, who said to KABC-TV last week (so I’m told—I haven’t seen the clip yet) that “Washington Mutual will now be known as ‘the bank that kills.”‘ I have to believe it wasn’t Mary Weisbrock of (Save Open Space), who has few peers when it comes to the art of ad hominem attack. I’ll never forget the sound bite she dropped on [Ventura development expert] Bill Fulton after he was quoted making a favorable comment on Ahmanson. If memory serves, she told the Los Angeles Times that “[Fulton] must have sand between his ears, if he thinks it’s a good project. What are they paying him?” And it simply couldn’t be Joe Behar of the West Valley Community Coalition, whom I have never met but who nevertheless once opined in a Star op-ed that everything I say “is motivated purely by greed.”

You know, the phrase “hype and hysteria” is beginning to sound a little tame. Maybe next time I should try harder, if I expect to keep up with the opposition.

MC: It has been speculated that Washington Mutual fought hard for the SEIR to raise the prospective price for the ranch property in case you negotiate a deal to sell the land as open space. Is that true? Also, have you unequivocally ruled out possibly negotiating with the state or some other entity, a deal that would result in the land being saved as open space and/or parkland?

TM: We worked hard for SEIR certification and approval of the map of the project’s first phase because we want to see the Ahmanson Ranch community built. Our plans remain unchanged, and the ranch is not for sale. Remember, we have already made a substantial contribution to parkland expansion—project approval caused nearly 10,000 acres of open space to be transferred to public ownership, including 7,300 acres donated by Ahmanson.

We frankly don’t see state or conservancy purchase of the remaining Ahmanson Ranch for fair market value as a very realistic possibility at this point. Ahmanson is, after all, an approved project and has been since 1992. The Times recently quoted a senior official of the California Resources Agency to the effect that an Ahmanson acquisition could impose a financial burden that would hamper efforts to bring other properties with more significant conservation values into public ownership. This is something those who are concerned about the big picture for conservation in the state should ponder.

MC: Washington Mutual is a financial institution. Some have asked what you are doing in the land development business. Are you engaged in these kind of activities elsewhere and, if so, where? Are you home developers? If you know, how do your shareholders feel about this?

TM: Financial institutions in California—Home Savings under Howard Ahmanson and American Savings under Mark Taper, for example—have a long and storied history in real estate development. Washing¬ton Mutual, however, had no involvement in real estate development until it acquired H.F. Ahmanson & Company and its Home Savings and Ahmanson Land Co. subsidiaries in 1998. Ahmanson Ranch is the final item in what was once a large development portfolio. Although Washington Mutual has no current plans to continue in real estate development beyond Ahmanson, management believes that the interests of the company’s shareholders are best served by seeing the project through to completion in an orderly manner. We have reason to believe our shareholders are generally supportive of this objective.

MC: [Ventura County Supervisor Frank] Schillo directed that well No. 1 be destroyed. Since you won’t have access to that water for the foreseeable future, where do you plan to find it hi these days of tight water supplies?

TM: This topic was covered extensively in the hearings. Non-potable water demands will be met primarily by the Tapia Water Reclamation Facility and by Ahmanson’s on-site reclamation facility If needed, an additional source will be non-potable groundwater supplied by the Las Virgenes Municipal Water District.

MC: [Ventura County Supervisor Judy] Mikels noted that if there was a way to clean the groundwater of contaminants, you should be able to do so and then be able to use it. Before she said that, you said in your letter to us [see page 4] that you would “treat the water and remove perchlorate.” How exactly and technically would you do that and do you have any idea of how much it would cost?

TM: This matter was the subject of extended discussion during the final EKRC [Environ¬mental Report Review Committee] hearing on Oct. 30, which I believe you attended. I’m sure the county can provide you with a transcript, if you’re interested. At that hearing, Ahmanson agreed to Mitigation Measure WR-4, which required the developer to implement a water quality testing program to evaluate the presence of perchlorate, using sampling methodology consistent with EPA guidelines.

In the event testing confirmed perchlorate to be present, Ahmanson would be required to provide for the establishment of a perchlorate treatment facility on the ranch using an ion exchange or other suitable system in order to treat the irrigation water to the more stringent of currently established state or federal drinking water standards.

Finally, WR-4 provided that if monitoring indicated that contaminants from off-site sources were being drawn into the wellhead, the well would have to be abandoned per Ventura County public works standards.

Michael, that’s about as “exact and technical” as I can be on a Sunday evening. Please feel free to consult the SEIR and hearing transcripts for further details. My notes from Oct. 30 indicate that there was a discussion of a number of municipalities in Southern California, including La Puente, that have perchlorate in their drinking water sources and successfully use ion exchange systems to treat the water to remove the perchlorate. My notes indicate that Bruce Smith, the ERRC chair¬man, characterized the effectiveness of these methods as “well known and not controversial.” You may wish to contact him for further information on this matter.

I’m afraid that I have no way to reach our engineering consultants this weekend to ascertain what costs estimates were generated for compliance with WR-4, so I will be unable to provide that information to you.

As you are aware, WR-4 is no longer operative. Instead, the Board of Supervisors at their Dec. 19 meeting imposed the condition that the well be destroyed and that no ground-water from this source be used.

MC: The Reporter received a letter today from a homeowners association close to the project. The board member of that association informed us that the group has voted to withdraw $118,000 from its soon-to-be-closed Washington Mutual account over what they call a “disastrous” ranch project because of pollution concerns. Are you concerned that attempting to build the ranch could turn into a public relations disaster for Washington Mutual?

TM: Judging from the New York Times story this morning, perhaps it’s Rob Reiner who should worry more about PR disasters.

As for Washington Mutual, the controversy has not significantly affected our business to date, and we have reason to believe our vulnerability is very limited. We will continue to use a variety of communications means to address customer and public concerns as events warrant.

MC: Observers claim that this project is somehow a personal mission of yours. How would you respond to that observation?

TM: First of all, this is not about me. Your “observers” are hilariously wide of the mark if they think I exert some sort of influence at Washington Mutual to keep the company involved in the Ahmanson project— I’m simply not that important. I’m just one of several press officers at our Los Angeles regional office, far from the seat of corporate decision making. The Ahmanson Ranch just happens to be one of my assignments (and that’s what it is—an assignment, not a “mission”). My responsibilities are limited to media relations. Major decisions about the bank’s involvement in the project are made elsewhere by people far more qualified to make them than I am.

Moreover, I don’t have a personal stake in the outcome. I don’t plan to ever live at Ahmanson Ranch, for instance. I work down¬town, still live in the same mid-Wilshire neighborhood where I was born and raised and wouldn’t have it any other way I love L. A. The suburbs aren’t for me—even one as nice as Ahmanson is sure to be.

To be sure, I honestly believe in the project. I hope it comes to pass (and I believe it will). Here, let me step outside the spokesman role and speak strictly for myself. From the perspective of what strikes me as best for the region as a whole, I’m critical of the tendency of affluent coastal communities to try to push all development inland or out into the desert. I don’t think that’s socially equitable, and I’m sure it will make our environmental and infrastructure problems worse. I see Ahmanson Ranch (along with Playa Vista) as a major test case of the region’s ability to resist that tendency, which I view as elitist. I also think the open space dedication associated with Ahmanson was brought about by a model of the public and private sectors working together to generate something of considerable public value. I think we lose that model if the project fails to happen.

Those are my opinions, for what they’re worth. But frankly, there are things that stir my soul a lot more. I try to work hard, do a good job and be conscientious, but I don’t see myself as on a mission as far as the Ahmanson Ranch is concerned.