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County supervisors grant extension to West Park developer

POSTED March 8, 2011 10:51 p.m.

By a split, 3-2 vote, the Stanislaus County Board of Supervisors approved continuing work on a new, smaller version of the oft-maligned West Park inland port development.

Supervisors Vito Chiesa, Bill O’Brien and board Chairman Dick Montieth voted in favor of granting Developer Gerry Kamilos a 15-month extension to complete numerous studies on the project, now a 2,800 acre industrial park, solar farm, and inland port planned for the site of the former Crows Landing Naval Air Station. They said it was the fastest way to the 17,000 jobs now promised by West Park developers.

“You’re only asking for 15 months,” Monteith said. “For all the money and all you have invested and the uncertainties of the state, 15 months is nothing.”

All emphasized that Tuesday’s yes vote was not a final vote on the project. If Kamilos does not return with finalized, detailed, reasonable projections – including an environmental impact report, a feasibility study and a financial plan – in 15 months, both O’Brien and Chiesa said they would vote the project down.

“I’m not sold on the project; I’m not against the project,” Chiesa said. “I’m willing to give this extension for 15 months. I’ll go on the record now: I will not extend it again.”

Supervisors Jim DeMartini and Terry Withrow both opposed the development, stating Kamilos had continuously failed to meet milestones, answer questions or engage with the community. Both supported putting the project back out to bid, and seeking out a new partner to redevelop the Crows Landing Naval Air Station.

“We owe Mr. Kamilos nothing more,” DeMartini said. “We should not give him a 15-month extension. He has not lived up to his promises. His project is questionable.

“I’m sure we could find a real developer out there to come up with a project to submit.”

 

West Park long in development

The West Park development has been in the works since Stanislaus County acquired rights to the Crows Landing Naval Air Station in October 2004, following the base’s closure. In March 2006 the Board of Supervisors approved a redevelopment strategy which would turn the ground into an industrial park, and in February 2007, Kamilos’s West Park project was selected from two qualified proposals. In April 2008, the board made the final decision to proceed with the West Park project.

At those meetings, Kamilos said he would keep to a timeline which would have seen grading, paving and infrastructure work on the facility begin in 2010.

 “You made quite a lot of promises to the county which you have not kept,” DeMartini said.

But Kamilos said development was stymied when, in May 2008, the City of Patterson and partners filed suit against the project in Superior Court. West Park prevailed both then and on a subsequent appeal, but the proceedings froze all work on the project for 20 months, Kamilos said.

“In my 20 years as a developer, this is the first time I’ve actually been sued on a project prior to the EIR being certified,” Kamilos said.

Kamilos said it could have been easy and justifiable to walk away from the project in fall 2008, knowing the costs entailed with the lawsuits, “But that’s not the way we do business,” Kamilos said. “We made a commitment to deliver the best possible project to the county and the community, and we’re still committed to it.”

Kamilos’ development group has already spent more than $5 million in initial development costs and legal defense costs combined, he said.

The lag caused by the lawsuit, added to the worldwide economic collapse – including that of planned financiers Lehman Brothers – forced Kamilos to “right size” the project, he said.

The revised project is 41 percent smaller in square footage, dropping from 4,800 acres to 2,796 acres. Correspondingly, the number of jobs created by the project was reduced from about 37,000 to approximately 17,000.

The drastic drop caused DeMartini to cry foul; when Kamilos proposed the project, he said it would only be financially possible with the economies of scale created by the large, 4,800 acre development.

“The assumptions have changed so much since you were here at the last time,” DeMartini said. “...I wonder, why do you think this is going to work now?”

Kamilos said a new revenue stream – a 650 acre, 100 megawatt solar farm, to be built in partnership with San Diego-based Spinnaker Energy – would offset those losses.  The solar project would be built on ag land west of the former Naval Air Station, which could be returned to farming after the solar farm has run its life, Kamilos said. The Spinnaker partnership would also include on-building solar and smart grid management for the entire West Park project.

But some funding elements remain in the air, including a $22.4 million chunk allocated by the California Transportation Commission which may no longer exist, and approximately $31 million which was to come from redevelopment funding. Redevelopment funding may be eliminated by Gov. Jerry Brown in the upcoming state budget, but Kamilos said he believed the budget gap could be filled in “some way.”

The inland port, a key component of the design which would use short-haul rail to move goods from West Park to the Port of Oakland and vice versa, will remain constant in terms of physical size – 170 acres. But the inland port will receive only two trains a day, rather than the previously proposed six trains per day.

And, unlike when the project was first proposed, the Union Pacific Railroad has signed on as a partner, Kamilos said, and will supply the trains engines and cars for the project, greatly reducing startup costs. In the initial proposal, West Park would have purchased and operated its own trains, requiring more activity to recoup its investment.

Kamilos also said the Port of Oakland has expressed interest in participating in the project, unlike in the initial proposal.

The changes will see the project reduced from four phases to two. The former Crows Landing Naval Air Station will still be developed before the surrounding ag land, and that initial development will include infrastructure for Crows Landing.

To contact Alex Cantatore, e-mail acantatore@turlockjournal.com or call 634-9141 ext. 2005.

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