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In The News

Cargill to phase out land conservation contract
Move frees company from development restrictions

By Shaun Bishop, Daily News, 10/06/09

Cargill Inc. has opted not to renew a 40year-old land conservation contract with Redwood City that restricts the company’s ability to develop its 1,436 acres of salt evaporation ponds in the city.

The move last week by the Minnesota-based company starts a nine-year process to remove the land from restrictions under the Williamson Act, a 1965 state law that gives landowners tax incentives with the goal of protecting agricultural lands from being converted to urban uses.

Phasing out those conditions would mean one less barrier to the company’s plans to build a massive development on the site. The company’s joint proposal with Arizona-based developer DMB Associates, which the city is reviewing, includes up to 12,000 homes, 1 million square feet of office space and more than 400 acres of restored wetlands.

The salt ponds have been under a Williamson Act contract since 1970, when Leslie Salt Co. signed the agreement with the city. Cargill bought Leslie Salt in 1979.

Contracts under the act require a landowner to preserve designated property for agricultural or open space uses. In exchange, the property is assessed based on its actual use rather than its potential market value, saving landowners up to 75 percent in taxes, according to the state Department of Conservation.

But Cargill spokeswoman Lori Johnson said the company’s analysis showed the taxes on the salt ponds would be about the same, even without the Williamson Act incentives. The company submitted a non-renewal notice to the city on Friday.

“Because of changes in the tax code over the years, including Proposition 13, we don’t expect the property taxes to change,” Johnson said, though she declined to discuss details of the analysis.

On the other hand, if the site is developed, “it clearly would have a significant effect on the tax revenues from this property,” Johnson said.

City Finance Director Brian Ponty said he has asked the San Mateo County assessor’s office to look into the tax implications of the non-renewal.

Cargill’s tax bill on the property for this year is about $19,000, according to public records, based on an assessed value of only $1.8 million for the 1,400-plus acres. The market value of the property today is not known.

The notice of non-renewal marks the start of a nine-year phasing out period for the contract, during which the land restrictions are still in effect.

If Cargill wants to build on the site sooner, it would have to apply for a cancellation of the contract, a much more involved process, City Attorney StanYamamoto said.

“I think they’d have a hard time doing it,” he said.

One opponent to the proposal from DMB Associates and Cargill said the contract non-renewal proves Cargill has no plans to harvest salt on the site in perpetuity. The company has said it may continue operations if it fails to get a development application approved.

“It’s not a serious threat, it’s not a real longterm alternative for Cargill and DMB and that’s always been an empty threat,” said David Lewis, executive director of Save the Bay.

But Johnson said the removal of the land from Williamson Act restrictions has no bearing on salt making because the taxes will be about the same. “It’s irrelevant to that decision.”


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