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• MINUTE ITEM

12. r:~.c!GATION AND TITLE DISPUTE SETTLEMENT AGREEMENT REGARDING LANDS IN THE WILMINGTON DISTRICT OF THE CITY OF LOS ANGELES, CALIFORNIA

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C,.tlendar Item 12 attached, was pulled from the agenda prio~ to '~he meeting.

Attachment: Calendar Item 12 (12 pages).

CALENDAR PJ\Or! __ l·~ .. ?i J. :

MIN~TE Pf\GE I U .

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CA{ .. ENDAR I 1i'EM

·12.

LITIGATION AND TITLE DISPUTE .SETTLEMENT . AGREEMENT REGARDING LANDS Iti TH)!:

WILMINGTON DiSTRICT .OF THE CITY OF 1~0$ .ANG~L'ES, CA:LIFQRN:tA

(Cjt~ of Los Angeles y,. LQS Angeles, and Salt).:.:.:...~e. Railroad Companv [Union Pacrnc

Railroaa.·CdimP.eny]; State ol t:aLifornia; et al., - · t:os Angeles -Superfoi:--"'C'Ourtlfo :""9"6lfJ46 >

:PARTIES TO A(.rn.J!:.~MEWr; City of Los .Angel~s State of Cal1forriia Union Pacific Land

Resource~ Corp.or~t;:ion Champlin Petroleum Company

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This ifem recommerids seLLLemenc of ch~ Union Pacl£lc case, de!:!cribed fibove, by the approval of ancl autfioriza·tion to execute t;he Litigati9n a'll.d Title Dispi:i:te SettlemeQt Agr~~ment, which has been proposed by the· par~ies. That Settlement Ag~eement comtemplates the resolution of the title controversie~ presented in thE;! !!_nion Pacific laws,uit by means of an excharige of i~ngs a,nd mutual conveyances to effectuate the $ettlement. The land exchange will be made on an equal-or-greater-value basis in favot. of the City and State.

As a result of the settlement, the City will acquire an 80+ acre parcel immediately adjacent to lands presently administered by the Port of Los Angeles, thus giving the City the benefit of a larger and more usable contiguous parcel of harbor property.and enabling it to implement more rap~dly the planned expan~ion of its port facilities and operdtions. Also, the City will receive title to the Consolidated Slip channel, thereby creating an additional 40! acres of navigabl~ waterways fo+ increased harbor usage. The Oity 1s Harbor Department expects substantially increased revenue from this area within a short time after this settlement is finalized •

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CALENDAR ITEM NO. ..,12 .(CONTD)

The immediate dispute among the parties arose in 1969 when ~he City of Los Angeles suer the Los Angeles and Salt Lake Railroad Company-, ?redecesf;)or in d.-nterest to the Union Pacific R~ilroad Company (which is affiliated with the Union Pacific Lang Resources Corporation a~d the Champlin Petroleum Company) to quiet tit;l~ to. certain l~nds si:t;uated in the vicinity of Gpnsolidated Slip an~ Ce~ritos Channel in the Los Angeles Harbor are~ of the City. The Stat~ of .California. wias joined as a defendant in the case because granted b:ust lands--were invo1yed an'd~ its joinG.er ,is ~t:quife<l by Section 630~ of the PuQlic Resources qode. (Beginning in 1911, the ti~elands and. $UQmerge~ land~ wtthi~ its boundaries were granted in ·trust to the City by the ·Leg$.sleture ~)

In that ~ase': the Ci:ty and State have con~ended that a portiqn of the l~nds ~n ·qltestion cons~sted of histo+ical ... .:,..i .... 1 ...... ..i ... --..i, .... 'h.mo ... a.011 1 .i:inn~ -lmni",:>s<>ed "·1 1· th t:' h"' sou·er:'ei"'n \.o,..a.,u.~,L;.e&&~uo at.&'-& P~"'· .. ~-0-- ----- ...-•-r-- ~· .,., W::- ·, .._..·~-~~ ..... ~~ ;,5 public tr~st for commerce, naviga~ion and fishery) whi¢~ l~nds were never inc;Luded'originally in th Rancho San ,p~dro grl;lnted by the governor of Mexic\J a-rid later confirmed ~y patent i~sued by the United States. Rather, those pprtions of the lands were contained among those lands underlying the navigable wat;ers of the Inner Bay 9~ San Pedro an~ th.tis exce'ptetl ~ri.d: excitjded iron the· ·~a11r:;h.::r grant. en the ot~et h~nd, Union Pacifi.c an!:l Champlin, .as succ.e~rnors in interest to the or~gtnal grante~s a~d patentees of the Rancho San Pedro, have challenged the contentions of the Oill:y and State and have asserted that a large part of the S\.\bject l~nds was contained in the Rancho patent and was not excluded from the Rancho as among the lands o~ the I~ner Bay Exception thereto.

Repr~sen~~tiyes of th~ parti~~ ~~ve conducted ipdep~nden~ eng~neering and other studies with the advice of their resp~ctive coupsel to att~mpt to asQertain the location of the last natural positi~n of the mean high-water line in. the vicinity of the property in controversy, bµt the ev·idence each has uncovered is c~mflicting. Thus, no agreement among them has been made nn that subje:t. The absence of ag:reement is due in large part to the estensive alterations of the lands by artificial processes (such &s dredging ~Yl:d filling) and the present lack of. complete and accurate m(!

1ps, surveys and other records of the area prior to the

i.t1tervention of man.

A further complication to the parties analyses of the situation at hand has been the assessment of the legal

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GALENDAR ITEM NO. · 12 .(CONTD) - ' . .,. _______ ..,. ___ _ ef.fects of two p~.eceding cases, Wheat'ley v~ San Pe.dro, Los Angeles' and Salt Lake.Railroad ~ompan~, and Cit¥ of ~os Angel~-~ v. ~ P6a\".o, Los, Angeles . and Sal: t. Lake ~!!J.roa? c..:orn.J!_a,&, ooth 9f wfifc.:h· were ~lc-imately de.cidea ·hy the Cal1Iorn~~ Suprem~ Cour.:t. ··~ti ~acb ·of th,os~ cases, the line ox mean ~igh-,t:Lde wa·s 11djudged ~s to certain portions. of the Inner Bay of San Pe~ro lying ;lJ~ t.he vic;nity of the lands :kn the present c.U,"ppute. Howevex, there ·are inconsist~ncles -hetwE<~11. t:hE;\ .t;w.<>. c~a.s@9. ~~&~"f'ging the ad)udicat:ed lines.

Poitowtng extensive and prot;racted negotiations, r.~ptesenta­t:iv.~s tjf tlV~ pli-rt:t.~~ h~ve re~9hed an agreement in princ.iple for resolv7.:ng 1~l;le title questions ptese11ted i.n the Union Pacific li!tiga;tion by· way of a land' exchange~. The s.ettlement bf th~ ~ft.le ~nd. bound~'ty ~is:putes ip. that: ·;ashion .lta~ peen ~\lthoi:'·~~~d sp~cifically py ,~h~ Leg:L~J,_at;~r~ i.tl ;.t:8-enactment of ·ohap.ter 976 of the. Stat\.t"~es of 1 'H9. Ch:apter 926 .p~rmits the Gity <;>£ Lps Artgel'es, as trust g.rantee, to enter into exchanges of its g~~nted lands fo~ the purpose of settling such di,sputes, provi9ed that th~ lancls acquireq by the Gity at-$ of equa~ or greate~ value than those relin­quished. The i979 legisi4t$on a1so proviqe~ that the $tate 1,.~ml;:s. GQ(1_1111,i:~si:t,.Jrt n_?ti~.t. a·pl'rvve ,any cuch: e~chang~ ~ Th~- {!t::;mmi i;si-on is also authcY~i:(.etl to t·e;rmina~~ th~ public t~ti~t which exists' over th~ l~nds relinqi..'J.,i.S:hed l>ursuant to the land exchange. - ·

Resolutic;m of thi·s cot1tr.1;rv-e1,~y by agre,ement, in lieu of trial, would be in the ,pu1;1.ic tn:terest because, in pnrt 1 of the expen$e, b~rden, lengthy t·ime and u.ttpredictal,le outcom~ of trial to ~ecide the many compiex fa~tua! and legal issues presented.

The essential elements of the Settlement Agreement are as follows: · "

1. The Ci!:y will acquire from Union Pacific ar.d Champl.in title to th~ surface estate of an 80± acre parcel northerly of the Consolidated $lip and adjacent to lands currently b~ing manag~d by the City Harbor Dep6rtment as part of its port operations, along with three p~rcels totalling 5.5 acre~ southerly of ~onsoldated Sli~. Union Pacific and Champlin will reset've and retain the mine\al ~lnt·erest Ut\derlying those surface lands together with sut·f::tc-·e entry rights appurtenant thereto for continued development

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CALENDAR ITt;M NO. 12 .(CONTD)

of the reserved mineral estate. The surface reservations will be in effect until productiop in the Wilmington Field within 3 Kilometers of the 80+ acre parcel ceases.

2. The City will also acqutre fee title to 40.t acrP.s of property ~n and underlying the Consoli~ated Slip, subject to certain access rights retained •by Union P.ac~;fic for the benefit of its property i·y· ;.n~· - · - ·~ 1~ -~-"''···~ .--~ ~'-- n'1 .. t- .nit...-... -.:~-.,._,,.."""'j ;,f.~t-.n ...... oor ...... g s9u~ner.i;y ",1. tout:: .:J.L..J,;"J:'• ·.a.u1;= 111.a..u ..... -........................ ~ ..

in these C~ty lands will be le~sed to Union Pacific and· Cpamplin for a per-i,od .of 35 years, with the consideration for the lease being accounted for in the totality of bhe consideration passing in the Settlement ~greernent.

3. .Fee titie in certain iands sitµated ~outherly of the Consolid~ted Slip wil~ be confirmed in Union Pacific and Champlin. The s·overeign or public trust interest in those lrpds to the exte~t existing will pe terminated by the City and State. The parcel contains 120± acres.

4.. A~~ti,on~ll--y the Git}' :!:s -r·ec.eiYing t:=onfirmati.on of titl~ to 4 pa~ccls in the im~ediate vicinity totalling 67± acres.

s. The City will pay to Union Pacific the sum of six million and no/100 dollars ($6,000,000.00).

The City and U~ion Pacific each have had separate app~~isals p~~;ormed ~f the ygl~~s 9~ the righ~s and inte~ests to be exchanged, retained and re~inquished by the respective parties. The staff of the State Lands Commission has reviewed those appraisals e~d, though not adopting or accepting any of such in its entirP.ty, has independently analyzed and evaluated the values of the respective property interests covered under the Set~lement Agreement. The staff analysis and evaluation indicates that the rights and interests received by the City and State are equal or greater in value than thelr claims and interests being relinquishcpd and extinguished, together with the monetary considerat1.on payable und~r the Agreement. 'I1he Attor,ney Gener~l 1 s Office has advised the staff as to the applicabl~ legal principles throughout this as well as other aspects of the settlement

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CALENDAR ITEM NO. 12 • ( CON'TD)

Copies of the Settlement Agreement, its attachments and exhibits and all other documen~s necessary to accomplish the foregoi~g transaction.are on file in the office of the State Lands Commissi9n. By this reference they are i1:1corporated herein as i:f set forth fully.

A Negative Declaration .wa$ prepared by the Po~t of Los Angeles pur.~ua.~t to C~QA and implementing regulations. A notice of determination.has been received.

Thi"~ projec~ ~$ situated on State land identif~ed as poss~ssing. signi·fic~nt ~nvironm~ntal values pursuant to P.R.C. 6~70.1, and iS, cla·ssified tn a use category, Class B, which authorizes limited use. Staff revi-cw indicates thl;\t tqere will .~e no significant effect upon the identified envi~onmental va:l,\ues .•

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Th(a minerql \lea~e t<;> Union Pacific and Champlin has b~en negotiated in accordapce with. Section 7051 et seq. of the Public ~c=sources Code. The present transact-ion should qe exempted· frQm the prQvi·sions of Sections 7958. 5 ~'1d· 7059 of that Code because adhering to the proc·edures cailed f'or '1..-herei.' ~ .. wv-··ld 'h. ... .; ___ .. .,.t4 ,.. ... , .M.vo to ti..,... _"', ... t.:.onl·· .... , .. ~ &.l , u ·vti;;. .a.usv1..-~'- """"'-"""' ..... ..,.'-fl,._ u.c ""._.a ,.."',.....,. ~,

~mAlJ. size o~ th~ p~ll'.9-ei t;a b~ leased. Ente.t:ing i,n~q ~u~h mineral l:eas~ and perfo:;-mance thereunder would-be in the public interest ~nd woula ~ot impair the publi~ trust for comm~rce, navig~tion and fisheries in the City's remaining granted lands.'

Thi.s S~ttlement Agreement and underlying transaction are exempt from the requirements of the S~bdivision Map A9t, pursuant to Section 66412(e) of the Government Code, The agreemept artd trs.nsaction iG a1s6 exempt from the provtsions of the Califoi-nia Coastal Act, pursuant to Section 31416(c) of the Public ·Resources Code.

~his settlement proposal has been revi6wed and approved in its entirety by the Office of the California Attorney General as to comeliance with applicable law and rules amt regulatim.1s of the State Lands Commission.

EXHIBITS: A. Si..te Map. B. Parcel Map. C. Negative Declaration

IT IS RECOMMENDED THAT WE COMM!SSION:

1. FIND THAT THE E~CHANGE OF L~~DS, AND R~GHTS AND INTERESTS THEREIN

1 SRT I?ORTH IN. THE SEl'TLEMENT AGREEMENT RE'FERRED

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CALENDAR ITEM NO. 12 I ( CONTD)

TO ABOVE AND DESCRIBED IN PARAGRAPH 3 BELOW IS IN THE BEST INTERESTS OF THE STATE AND THE PUBLIC AND IN FURTHER­ANSE OF THE PUBLIC 'T:RUST PURPOSES OF COMMERCE, NAVIGATION AND F~SHERY·; THAT .IT WILL NOT SUBS'J;ANTIALLY INTERFERE WITH THESE TRU~~T PURPOSES., BUT RATli.~ WILL ENHt~NCE AND ENt,.ARGE T~~ PUBLIC RIGlfrS AND U'fILIZATION OF THE WATERWAYS INVOLVED IN THIS SETTLEMENT .•

2. FIND THA'l' THE VALUE OF 'fHE Tt'.fLES AND INTERESTS U~ THE tANDS ACQUIRE'i> BY-THE CITY AND STATE FROM UNION PACIFIC IS EQUAL TO OR GREArER THA~ THE V~LU~ OF Tij~ T·lTLE:S ANI> INTERESTS IN. THE LANDS BEING JJlXT-lNGUISHED~ REMOVED A~D 'RE~INQtiISHEb AS A RESULT-CF T~ts SETTLEMEN~ TOG£THER WITH THE MONETARY CONSIDERATION PAYABLE T~EREUNDER.

3~ ARP.ROVE AND· AUTHORIZE THE EXECUTIO~l OF THE LITIGATimt AND TITLE DISPUTE SETTLEMENT AGREE..~ENT REGARDING LANDS IN THE WILMINGTON DIS'l'RICT OF' THE CITY OF LOS ANGELES, CALIFOR~.i:A, AMONG. THE CIT'.l OF LOS ANGELES, STATE OF CALIFORNIA, UNION PAOIF:tC LANDS RESOURCES CORPORATION A~D CHAMPLIN ·PETROLEUM COMPANY, A COPY OF WHICH AGREEMENT IS ON FILE IN THE OFFICE OF THE STATE LANDS COMMISSION AND BY rHiS REFERENCE 'MADE A PART HEREOF AS IF SE! '.FOR1.'H l··uLLr • - . ·-- - --. -.. - . -

4. FIND AND DECLARE THAT: A. THOSE LANDS DEf!RlBED IN ANNEX I ·OF EXHIBIT I TO

THAT SETTLEMENT AG.REEMENT HAVE BEEN IMPROVED, FILl..ED, RECLAIMED AND EXCLUDED FROM THE PUBLIC NAVIGATIONAL CHAN~ELSi Artn NO LONGER AVAILA~LE, USEFUL OR SUSCEPTIBLE OF ~EING USED FOR NAVIGNJ;'ION, FISHING OR OTHER T~Q~A PVR.PO~~s; AR~ NO ~ONGE~ i~ rACT TIDELANDS OR SUBMERGED LANDS; AND THEREFORE, IN FURTHERANCE OF A PUBLIC PROGRAM OF HARBOR DEVELOPMENT, UPON THE DELIVERY AND RECORDATION OF THE PATENT REFERRED TO IN PARAGRAPH 5, SHALL BE FREED FROM THE PUBLIC TRUST;

B. THOSE RIGHTS .ND INTERESTS EXCEPTED AND RESERVED IN PARAGRAPHS A AND B OF SECTION 1.i' OF ARTICLE FIRST OF EXHIBIT J TO THAT SETTLEMbNT AGREEMENT H.AVE BEEN IMPROVED, RECLAIMED AND EXCLUDED FROM THE PUBLIC NAVIGATIONAL CHANNELS; SUCH RIGHTS AND P 1TERE$TS ARE NO LONGER AVAILABLE, USEFUL OR SUSCEPTIBLE

·C·l 1 BEI~G USED FOR NAVIGATI0N, FISHING OR OTHER T~UST PURPOSES AND ARE NO LONGER IN .FACT INTERESTS i~ TIDELANPS OR SUBMERGED LANDS; AND rHEREFORE,

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C~LENDAR ITEM NO. 12, ( CONTl>~~,

IN FURT~ERANCE OF A PUBLIQ PROGR(\M OF HARBOR D~VELOPMENT, UBON THE DELIVERY AND RECOROATIUN, OF THE PATENT ~E~ERRED TO· IN PARAGRAPH 5, SUCH RIGHTS AND INTERESTS SHALL BE FREED FROM THE PUBLIC TRUST.

'S. AUTHORIZE THE EXECUTION AND I_SSUM~CE 9F A STATE PATEN~ TO UNION PAClFIC AND CHAMPLI:4 AS TO THE LANDS AND INTERESTS REFERRED TO ~~ EXHIBIT 1, ANNEX 1 OF THE SETTLEMENT AGREEMENT PURS~\NT TO THE TERMS AND CONDITIONS SPECIFIED THEREIN. - --- - ---- _ .. -- . - ..

6.. AUTHORIZE THE ACC£.PTANCE AND RECORDATION. OF THE CONVEYANCES TO Tl~E -STATE -- (AND ,cl.TY) BY UNION PACIFIC AND CHAMPLIN, AS PROVIDED IN THAT SETTLEMENT AGREEMENT~ -

7.. FlND THAT THE ISSUANCE OF A MINERAL LEASE TO UNION 'PAC!'FIC AND CHAMPLIN BY THE ClTY IN ACCOUDANCE Wt.TH THAT SETTLEMENT AGREEMENT ts PROPER AND APPROPRIATE; THAT IT IS EXEMPT FROM THE PROCEDURES .REQUIRED BY SECTIONS 70~8.~ and 7Q59 OF Tij~ PUBLIG ~ESOURGES CODE BECAUS~ ADHERING TO :.CHOSE F,ROCEDURES WOULD BE IMPRACTICAL BY REASON OF -THE RE'LATIVELY SMALL SIZE OF THE PARCEI .. TO xlE J,.]:_A§~;Q.; A~p '!'IiAT E~lTERING INT-Q THAT LEAS!!;. AND ITS P'ERFOR™NCE IS Iif TH~ l'lJBLI:'C INTEREST Al"D wILL NOT IMPAIR THE PUBLIC TRUST IN THE CITY'S REMAINING GRANTED. LANDS; AND, APPROVE THE ISSUA~CE OF THE MiNERAL LEASE AS ·CONSISTENT WITH THE TERMS OF THE TRUST GANT TO THE CITY. .

8. DETERMINE T~At AN EIR HAS NOT BEEN PREPA~~D FOR THIS PROJECT BY THAT A NEGATIVE DECLARATION HAS BEEN PREPARED BY PORT OF UlS ANGELES, ON -stPTEMBE~ 23 • 1.9 'Jlf . -

9. CERTIFY THAT THE COMMISS!:ON HAS REViEWED·AND CONSIDERED THE INFORMATION CONTAINED IN THE NEGATIVE DECLARATION.

10. DETERMINE THAT THE PROJECT WILL NOT HAVE' A SIGNIFICANT EFFEC:f ON THE ENVIRONMENT. ,

11. FIND THAT GRANTING OF THE PERMIT WILL HAVE NO SIGNIFICANT EFFECT UPON ENVIRONMENTAL CHARACTERISTI~S IDENTIFIED PURSUANT TO SECTION 6370.1 OF THE P.R.C.

12. FIND THAT THE SETTLEMENT AGREEMENT AND THE SUBJECT TRANSACTION ARE EXEMPT FROM THE CALIFORNIA COASTAL ACT AND THE SUBDIVISION MAP ACT .

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CAJ:EN?AR _ lTEM NO. 12, ( CONTDJ

13. AUTHORIZE THE STAF~F OF THE COMMISSION AND THE OFFICE OF THE ATTORNEY GENERAL TC» TAKE ANY AND ALL FURTHER STEPS NECESSARY 'i'O IMPLEMJ!:t~T THE FOREGOING TRANSACTION, INCLUDING BUT NOT LIMITED TO EXECUTION OF DOCUMENTS AND APPEARANCES IN ANY LEGAl. PROCEEDINGS CONCERNING THAT TRANSACTION.

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CITY OF LOS ANGELES

• CAUFORNIA ENVIRONMENTAL QU.~LITY ACT 1970

NEGATIVE DECLARATION DEQ U:~

· <Article 7, No. 4 City EIR Guidelines)

Council Olstrict _ ___.1 ..... 5....-t--h _____ _ Dnte September 23, 1977

lead City Agency Los Angeles Harbor Department

Project Title/No. Con Dock Land & Consolidated Slip Acquisition

• I -I ~roject location ____ e~ .... r_t_h_2_0_0_a"'-,n_d_B_a_c_k l_a_o_d_S_o_u_th_-_e_as_· t_e_r..,;:ly'--o_f _A_n_ah_e_i_m_S_t_r_ee_t_be_t_w_ee_n __

Henry Ford Ave;iue and Berth. 200-A •.

Project Descript~oh Acquisition of the property. and c\lntinuation 'Of the existing and

· •. ·historical 1.Jse of this property. Existing tenants on the property include (Se~ Attached .Sheet;·

Name of Ap;:>licant if other than City Agency--------..,,.-------------

The Environmental Ana1yf,is Office of the Los Angeles Harbor Dept. • of the City of Los

Angele:.s has determlne9· that this project will r~t have a significant effect on the environment for the

folfoviing reasons; ]'~'e present occupants o.f the property a re in comp 1 i a nee with

,!EJ)licable air and water quality standards. Acquisition of the propertL_b....,Y.. ___ _

J...Qs..1.ngeles Harbor Department will not result in any substantial adyerse~a ...... m.g_e __

in the e~vironment. I

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lnll!al $,.,c1y prepattid by ·- ~~(~ · · Du1 .-.. 1u\.1:.

Copy may be obtained from Environmental Analysis, L.A. Harbor Department, Room_ 601._ .. 255 W. Fifth Streat, P. O. Box 151, San Pedro, CA 90733

ntV·:·.-.•. ·:·· ·•·. ····\' ·;::~ :J:=ncc: Si~ned SECRETARY rs THE DSARD OF ·· k~ , , . . 1 • ~ r :., .:r;: •• .: •• t Tith HARBOf{ C MMI SS I NERS

•~j~-·~~~i~.1t~li.ui11!a 90733 4-~a· t-r/- 7"-Name ~f pcmln pronaring this for "'1:.. __!lf!/J_j_~~"r-----poo _______ ...,...P

$ C 1:-V-I N HURST ' HD tl00277 Title Harbor En vi r ftti!e~ll ... . . .. .

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. . SCOPE & DESCRIPTION Or 'PROJECT (CQUT!.NUEO)

Tenant

Browning Forrh Chemical Division

Summit Wood Products

Chozen Trucking

Champlin Petroleum

Tidewater M~'rine Service . . .

o.c. Marine Inc.

Ocean Drilling Exploration Co .

Albert Perel & Leonard J. Doyle

f(,\f, Roiiins Jr.

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L•nd Use ,office. garage, storage

office & lumber storage

office. trutk parking, 1umbeit· storage

office. shops, truck repair, on extraction

mooring of vessels

mooring of vessels

outside stor11ge

leeward Bay Marina

!slan~,yacht anchorage U2

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DWR:crp

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