Mystery in Morro Bay - - - We're Just Wondering

Commentary by Kari Olsen

Unanswered questions have arisen in connection with a proposed project that would completely change the face of Morro Bay.  Some residents allege that there are clear indications that something very big is going on behind the scenes.  Is it simply coincidence, or is there a connection between a group of situations and events that appear, to some, to be connected?  Is a small group of people secretly working to make major changes in the town—changes that may not be welcomed by many of those who live there? 

Major Development Proposed

When a small firm, Westpac Energy Group, suddenly appeared on the scene in June, 2009 with well-developed plans and designs for a "green university," residents were surprised.  None recalled being asked if they wanted a huge project that would completely change the face of the town and significantly increase its population. Yet the elaborate presentation, made by Westpac Energy Group president Tom Fee, included detailed designs for a large complex to be built on the Dynegy power plant property.  As reported in a July 8, 2009 New Times article by Patrick Howe  , the facility would eventually have 2000 students and 1000 employees, and would include a new hotel, retail offices, a sporting club, a new marina, a convention center, and a new city hall.

Westpac Connections

Some wondered if Fee's company was affiliated with a San Luis Obispo firm, Westpac Development.  According to an August 19, 2006 story in the Aspen Post  " . . . a search of the Securities and Exchange Commission's EDGAR system revealed that "Westpac, one of Australia and New Zealand's largest commercial and institutional banks, owns Westpac Investments LLC, which is based in San Luis Obispo."

According to Howe's New Times story, "In response to requests for more information by a planning commissioner, Fee said his company has 'no affiliation to' the Westpac Development Corporation that has built and promoted several development projects in San Luis Obispo or any others that share the name.

"Despite the assertion, the companies appear to have numerous ties. For one thing, when a New Times writer called Fee, the office phone had been forwarded to a cell phone of Kari Hamilton, an accountant for Westpac Investments, which is affiliated with Westpac Development Corporation.  Asked about the connection, Hamilton repeated that there is 'no affiliation' between the companies but allowed that Fee formerly worked for Westpac Development. She also said a former partner in the energy group did work with the other Westpac companies."

 Westpac's California operations are conducted under the umbrella of Westpac Companies whose mission is, according to the firm's website, "Developing exceptional investment opportunities with a long term objective of optimizing yields while safe-guarding capital."  It is noted on the site that the firm employs a total of about 350 people.  A list of key officials of the firm names Hamish Marshall, a native of Australia and Vice-President of WestPac Investments, Inc, as "one of the principle partners for WestPac Development Corporation,"  and states that Marshall "oversees acquisition and financing of properties for development in California, as well as his native country of Australia." 

LNG Offloading Suspicions

The connection to the Australian Westpac, a conglomerate that, according to its website, serves ten million customers around the world, was of interest to a group of Morro Bay residents who suspected that recent events could indicate a clandestine attempt to bring LNG offloading back to Morro Bay.  The group found that the Australian firm had close ties to BHP Billeton, another Australian conglomerate.  That firm is reported to be the largest mining company in the world and also has a sizeable oil exploration and drilling operation. The group learned that BHP Billeton was behind several recent failed attempts to establish LNG offloading facilities in California.  Further research revealed that several high-level Westpac employees appeared on the list of BHP Billeton corporate officers and directors.

Residents told the City Council of their suspicions that plans for a Morro Bay LNG offloading facility were in progress and made note of the connection between Westpac and BHP Billeton.  Shortly thereafter, Fee announced that the name of the firm working on the Green University Project was now Ecobaun.

Among the concerns fueling suspicions that a liquid natural gas (LNG) offloading scheme was in the works was a phone survey of Morro Bay residents to determine how they would feel about LNG offloading coming to Morro Bay. The survey had been conducted about a year prior to the presentation of the Westpac Energy Group/Ecobaun green university plans.  In addition, the group of residents had learned that in addition to operating power plants Dynegy, which had reportedly agreed to provide land for the green university project, was also in the business of marketing and exporting "natural gas liquids." 

Another reported cause for concern was an attempt to convince the City Council to allow 100-foot industrial tugboats south of Tidelands Park area, an environmentally sensitive area.  Local businessman Frank Loving attempted to gain approval to restore the old cannery wharf and use it as a place to berth his industrial tugs.  Residents noted that there was no current use for large industrial tugs in the area and speculated that there might be plans to use them in LNG offloading operations.  One resident reported being told by a ship fitter that he was working on a project to rig a locally-owned tug for offshore oil operations.

Many residents asserted that Morro Bay's General Plan and Local Coastal Plan clearly indicate that the area south of Tidelands Park is for small recreational boats only.  An investigation request was filed with the California Coastal Commission by concerned residents.  The residents challenged the City Council's approval of a motion to allow commercial operations in the Bay south of Tidelands Park, alleging that the intent of the motion was clearly to allow berthing of the tugs.

The investigation request alleged that the motion constituted a change to the City's General Plan and Local Coastal Plan, and therefore must be filed with, reviewed and approved by the Coastal Commission.  The request stated, in part, "The approved motion is seriously flawed, as it ignores a critical fact: Land and water in the subject area are separately zoned, and are treated differently in the GP/LCP. While the GP/LCP clearly allows commercial uses on the land in the area, it just as clearly disallows commercial uses in the adjacent, separately zoned harbor. 1. The LAND in Area B is zoned R-1/PD and WF/PD above and below the bluff, respectively. These areas allow for clearly-defined, appropriate commercial uses. Conditions a. through e. above apply to the land. However, 2. The WATER below the tideline – the Bay, is zoned Harbor. With regard to harbor uses, he GP/LCP requires that commercial fishing boats, non- recreational vessels and larger boats be kept north of Beach Street, whereas, the area south of Beach Street is specifically designated for recreational boating and fishing.  The approved motion lumps the two together, implying that the fact that commercial development is allowed on the land means that large commercial boats are allowed in the harbor below. This constitutes a change to the GP/LCP."  

The issue has not yet been resolved by the Coastal Commission.  However, the recent announcement of plans to demolish the cannery wharf appears to indicate a reduced risk that industrial tugs could be berthed in the location originally targeted.

Possible Redevelopment Connection

Some Morro Bay residents believe that plans exist for something even bigger than the green university project.  They cite the fact that residential areas extending outward from the Dynegy property were targeted in the city's 2009 Redevelopment Feasibility Study.  As noted in a May, 2010 story in the Journal, the study was at odds with the recommendations of a financial consulting firm, Management Partners, that was hired to recommend ways to improve Morro Bay's financial health.  The consultants recommended redevelopment of the power plant property, Chevron property, and City-owned harbor properties.  Yet, the final study excluded all of those properties, and included only the residential areas.  According to statements in the consultants' proposal and in the final study, City staff provided the consultants with an area of interest that included the large tracts of residential properties. Some residents have alleged that the targeting of the adjacent residential areas could be part of a plan for extending the green university development far beyond the boundaries indicated in the Westpac/Ecobaun presentations.

Also of concern to some residents are the type of "blight factors"identified in the study, and the general approach to analyzing them.  An August, 2010 Journal story reported that, "Morro Bay residents have questioned whether an area can reasonably be considered "blighted" when the  alleged "blight indicators" most frequently cited are unpaved or deteriorated walks and driveways, paint-related issues, and inoperable vehicles.  In addition, residents allege that the system used by the consultants made it easy to inappropriately categorize a property as exhibiting significant blight problems.   For example, the system allows a property cited as having "poor site layout," overgrown shrubs, and chalking paint to be classified as "blighted."

Roadway Widening

In May, 2010, the Journal reported that the Embarcadero Road extension had been widened in violation of an order given by the California Coastal Commission.  The story noted that, "In March, 2006, the CCC approved a permit, with special conditions, for the Harborwalk.  Conditions included restriction of the Embarcadero Road extension to a maximum width of 22 feet." and, "  In June, 2006, three months after the CCC decision was issued, a resident observed heavy equipment on the Embarcadero Road extension and learned that the roadway was being widened and paved with ‘red rock'.  The resident took photographs of the work in progress.  At present, the width of the roadway is approximately 42 feet." 

This roadway lies to the west of, and adjacent to the Dynegy power plant property.  Some residents have asked if there is a connection between the major widening of a road where one seldom sees more than one car at a time, and the plans for developing the Dynegy property.            

Wastewater Treatment Plant Site

Some residents have also questioned whether an alleged Morro Bay City staff preference for the current wastewater treatment plant (WWTP) site has any connection to area development plans.  The plant site is located in very close proximity to the power plant property where the green university would be built. 

The City's Planning Commission recently criticized the Draft Environmental Impact Report for the project because the document did not include appropriate discussion of alternate plant sites.  The current site is in a 100-year flood plain, a tsunami zone, and an area containing many Native American artifacts and burials. 

Ecobaun's Big Plans for Morro Bay

Material on its website appears to indicate that Ecobaun still has very big plans for Morro Bay.  The site describes the planned development as "A new kind of research facility," and discusses the potential for establishing a means to sponsor productive relationships between "like minded institutions." 

The site includes a discussion of the harsh competition that traditional power production plants, related industries, and renewable energies are facing.  It is noted that the fact that Morro Bay has a close link to the regional energy business that is essential to the project.

Along with its vision for Morro Bay, the Ecobaun site presents information on the project team that has been assembled.  With a clear vision, project plans and facility designs, and a project team already assembled, Ecobaun appears ready to begin work. 

On one page of the site is the phrase, "Reimagination of Morro Bay."  Troubling to some Morro Bay residents is the fact that so much work has been done to "reimagine" their community without any effort to determine the preferences of residents.  Also troubling is the suspicion that the work would not have been done unless Ecobaun had received considerable encouragement from people who potentially have the power to make the vision a reality. 

The proposed sale of the Dynegy property to the Blackstone Group appears to present a new challenge for the Ecobaun project.  After the sale, the property would be turned over to NRG Energy.  No public announcements have been made of any discussions with the potential new owners regarding the green university plans.

Can Morro Bay Residents Solve the Mystery?

Have plans for a complete redesign of Morro Bay been in progress for years, with the participation of an unknown group of locals?  Are the issues and events described here simply a set of coincidences, or do some or all of them have a direct connection to the green university project?  Is the project even bigger than the one that has been publicly communicated on the Ecobaun website?  Why have things gone so far without anyone taking the trouble to ask Morro Bay residents if they want this project?  Will the sale of the Dynegy property end the project, or have there been behind-the-scenes discussions with the potential new owners?  What can and should residents do now?  Whodunit fans are invited to weigh in on this fascinating puzzle.

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