An account provided by former commissioner Padilla conforms with Malcolm’s description of his role in driving the negotiations. The city of Chula Vista hired an outside attorney — John Lormon of Procopio, Cory, Hargreaves & Savitch LLP — to help with bayfront talks. Not all councilmembers were informed of this step. Lormon first drew up a terms-of-agreement sheet that included the decommissioning of the plant, rent arrangements between the port and Dynegy, and site remediation. This was the agreement that Padilla submitted to the port on October 18. (The agreement became moot when the state agency decided to decommission the plant.)
Then, according to Padilla, David Malcolm and Councilmember Bensoussan called a meeting at the South Bay Fish and Grill on October 27. At that meeting, Malcolm and Bensoussan presented Padilla with a new document, a draft letter of intent, which had been prepared by Lormon. The letter effectively said that Dynegy was going to assign the decommissioning obligations and remediation to the city of Chula Vista and that the port acknowledged and agreed to the assignment.
Padilla said he was stunned. He said, “To my knowledge, even at this time, only two councilmembers knew of this agreement.” He asked Malcolm and Bensoussan, “You want the city of Chula Vista to assume the risks and obligations of cleaning up the power plant site?” Padilla said they wanted him to present the draft letter of intent at the next port meeting.
An October email from Malcolm to Padilla also shows Malcolm’s hand in shaping the agreements. Among the email recipients was Malcolm’s cousin Dan, who had been chosen to replace the retiring port commissioner from Imperial Beach in January 2011. The email contains attachments, and Malcolm’s instruction reads: “[Steve] Peace can open and so can Dan Malcolm.… There are only a few changes in the redline. Spelling of Dynergy and #7 as added. Except as set forth in the definitive agreements, the rights and obligations of the parties under existing agreements shall remain in full force and effect including, without limitation, the Environmental Remediation Agreement, the Facility Services Agreement and the Easement and Covenant Agreement. Only other changes are spelling and grammar errors.”
Another email, written last October, again illustrates Malcolm’s role in the negotiations. In the email, he seems to be attempting to persuade members of his team that the power plant site won’t need much cleanup. “Their [Dynegy’s] desire is to pay an agreed upon fee up front and be released. They will share their 16 bids on the demolition of the plant with us. You must remember, [San Diego Gas and Electric] remains liable for certain ground contamination (if any). I will tell you the number of soils tests we did BEFORE the purchase of the plant were extensive. The Port didn’t want to get in line of title of a possible toxic situation and maybe more important Duke didn’t want to take on a possible expensive mitigation project. Both the Port’s and Duke’s environment people ‘poked’ holes through the property and found nothing. If we assemble the right team to review the bids, review the soils reports this could be a BIG gain for the So Bay and specifically CV.”
The email is at odds with his statements in the February 7 interview, at which time he said, “San Diego Gas and Electric has to clean up everything from the 50’s all the way up through 1999, which was the vast majority of time when they had bad things like PCBs and transformers, all those things that leaked. Those things haven’t existed since Dynegy became involved.”
He proceeded to elaborate how excess cleanup money might be spent. “Chula Vista could decide to use some of the leftover money to restore some wetlands down there in the South Bay Wildlife Refuge and use some money to help the Nature Interpretive Center.”
In early February, I interviewed former commissioner Padilla. He commented on the difficult position he had been put in trying to serve the Chula Vista City Council and the port. Padilla said that negotiations between the city and Dynegy ultimately needed port approval. “We [the port]…said we’ll get you any information you need, but you need to know that at the end of the day, Chula Vista will have to provide evidence of how they can financially do this [clean up the site] and how they’re going to perform. And that’s standard to any tenant — to any lessee — in the port, and Dynegy is no different.”
The way the negotiations were set up, Padilla said, was like “taking a chance on starting World War III. Frankly, it seemed like some people wanted to create this conflict between the city and the port when there didn’t need to be one. And it really centered around these same people, and I think, frankly, some of this was by design. They were looking for a fight with the port instead of working with the port to advance the bayfront.”
When asked point-blank if Chula Vista should secede from the port, Malcolm said, “I’ve always thought that Chula Vista ought to control its own future. The port was formed in 1963 because the San Diego Harbor District was bankrupt, and National City had the most money in their harbor district, followed by Chula Vista. So the port district was put together to save San Diego Harbor District. Now, if you ask each of the city councils if they ought to be controlling and planning their own waterfront, I think they would tell you yes. The only one who would be opposed to that would be Imperial Beach because they’re heavily subsidized by the port.”
Padilla responded to the idea of breaking up the port by saying, “If these people think that without a financial partner like the port that the Chula Vista bayfront can go forward, if they think the city of Chula Vista can manage the wetlands and tidelands, deal with all the state regulatory agencies, that the port tidelands and bay tidelands are all going to be managed piecemeal, if these people think that’s good policy for the environment, that it’s going to be welcomed with open arms by the environmental community statewide, I think they’re smoking pot.”