North Coast Dems Tighten Their Grip
by Darwin Bond-Graham, December 27, 2011
In what is probably a first in the history of wine's conquest of all arable land in northern California, a 528-acre expanse of former wetlands in southern Sonoma County is set to be converted into a grape vineyard and olive plantation, with perhaps other crops in the mix.
Or is that the plan? The developers behind the project are known for audacious business ventures, and in recent years their various alliances with other entrepreneurs and some of the North Bay's politically connected rainmakers has caused much speculation about their ultimate goals.
Called the Carneros River Ranch by its owner, this sprawling flat land of deltaic forces at the confluence of the Petaluma River and the San Pablo Bay was once upon a time a thriving marsh. The winter floods of freshwater flushing down from Sonoma Mountain to the East, and Mt. Burdell in the West, and tidal flows reaching up beyond Haystack Landing (roughly where the Highway 101 Freeway now crosses over the River), produced over several millennia a rich habitat for fish, birds and all other manner of life. Before Petaluma's white pioneer immigrants forcefully displaced native Californians, and built levies to hem in the River and hold back the sea, the salt marshes stretched for well over 12,000 acres. In fish and game the Petaluma River watershed, especially its lower reaches in the salt marshes, were likely unsurpassed by any other spot in North America.
The original sin of building levees along the Petaluma destroyed an unimaginably fertile cradle of life, especially for migratory birds. In place of the natural bounty that once sustained the most densely populated towns of California's pre-Franciscan and pre-Fremont cultures, the new American settlers imposed fenced in ranches for cultivating livestock feeds like hay, and grains like wheat for the global commodity markets that were already demanding California crops in the 19th Century. The Petaluma River in turn became the main agribusiness export point for the North Bay's burgeoning wheat farms, and later its fruit and nut cultivators and egg farmers.
This land-tenure pattern has imposed itself on the region throughout the 20th Century, characterized by large ranch holdings perpetuated on deforested and “reclaimed” lands. The coming of liberal environmentalist ideologies like conservationism has ensured that the area remains “preserved” of its “rural character.” Thus even slight changes in land uses have been excessively regulated and arbitrated through state commissions, county planning and zoning boards, private foundations, and referendum politics.
Ironically then the conversation about the wetlands and rural hill country of southern Sonoma county, and across much of northern California, is caught between liberal desires to preserve an image of rural beauty, even if this image embodies an impoverished ecosystem that is cut off by levees (or dams, or deforestation, or mono-crop plantations, or ranching, you take your pick of picturesque countryside activities), and the schemes of regional real estate and natural resource capitalists who continue to push ahead with the goals of urbanization and intensified extraction, goals that a few generations ago fashioned the very rural environments now fetishized by conservationists and wealthy residents as nearly sacred landscapes requiring absolute protection.
What a pickle.
It's into this strange cauldron of land-use politics that the owners of the Carneros River Ranch are proposing to virtually create land, and lots of it. Although farming is the stated purpose of building these millions of cubic yards of earth, the project's origins seem to be in a more industrial operation that was halted and then altered by court mandate a few years ago. These origins, and the sheer novelty of the project, and additionally the company behind it, has North Bay environmental groups second guessing the agricultural angle, hypothesizing that all this fill is instead the first step toward something much larger and more industrial in character, perhaps having to do with the convergence of barge, truck, and rail freight traffic, perhaps spanning Sonoma, Marin, and Mendocino Counties.
The project is as follows. Over the span of about twenty years dredge materials from the San Pablo Bay, and perhaps elsewhere, will be barged into the Port of Sonoma. This heavy clay sediment will be offloaded into specially assembled barges capable of mixing this muck with marina water to create a “slurry.” The slurry will then be piped under Highway 37 where it will be spit out into “cells” on the ranch site. More fill material will come in, from somewhere, by truck. The Ranch is located directly across the highway from the Port, and the owner of the port is the same as the owner of the Ranch — Berg Holdings.
Once there, the water is evaporated and drained off, leaving behind heavy clay earth. The dirt, unfit in this state for agriculture because it lacks organic matter, and because it is salted, is then to be ripped, mixed with worm castings sourced from a vermicomposting operation also on site, and then planted with various cover crops. The final cover crop in nearly finished cells, according to J.T. Wick, the project's manager, will be tomatoes. Tomatoes, according to Wick, can soak up any remaining salts in the soil, and tomatoes can also fetch a profit on the back end of the whole process, long before the grapes and olives and pricier crops go into the ground.
Over 20 years and in multiple phases the entire ranch will rise in elevation from its current one foot above sea level, to between seven and eleven feet above sea level. No longer bound by the few inches of salt free soil that currently exist on Carneros Ranch, the owners say the new six to ten feet of root depth will allow grapes and olives to flourish. And it's all to be done with dredge spoils that must be disposed of somewhere.
According to Wick, “the long term value comes from the land once it's elevated. At the existing elevation averaging one foot below sea level, brackish groundwater about 18 inches below ground allows only marginal hay farming yielding about $200/acre. At the higher elevation, we grow produce such as tomatoes at approximately $3,000/acre, olives at $5,000/acre, and wine grapes at $10,000/acre.”
Seen from this angle the project sounds altogether like a win for conservationists and the company behind it, in addition to the various marinas and ports throughout the Bay that need a place to dump their dredge spoils.
“Over the last 14 years,” says Wick “we've been accepting dredging materials from Port Sonoma and public agencies like the Bel Marin Keys CSD, all with County, State, and Federal Permits.” Wick notes that disposal of dredge materials in other locations has proven a contentious issue in recent years. Much of it ends up being dumped back into the Bay where it interferes with recreational and some commercial navigation.
Major corporations that use the bay to ship goods have complained for decades about increasingly “tough” and “complex” environmental regulations that have stymied their attempts to cheaply dispose of dredge material. Without cheap disposal sites their operations are threatened. One response was the creation of the Bay Planning Coalition (BPC), an industry-led association that fights for its members' rights to maintain and expand levees, channels, port facilities, and other heavy industrial activities along the waterfront. Berg Holdings is a member of the BPC, as are the region's major ports, and companies like the Dutra Group and Eagle Rock Aggregates, and Chevron, Valero, Shell and other oil companies with waterfront operations stretching from Richmond to Vallejo. In 1996 BPC was designated by the California Coastal Conservancy to head up the state's Dredged Material Rehandling Site Study Project. That and other work by the BPC and its members has led to new policies (that will benefit upstream landowners like Berg) with respect to disposing of dredge materials which until quite recently, and somewhat hazardously, have been dumped further “downstream” in the depths of the Bay.
The most famous, and foolish result of the laissez faire dumping policies of yesteryear are the artificial shallows near Alcatraz Island. In the 1890s, as the recently devastated Sierra Nevada mountains were storming down the Sacramento and San Joaquin Rivers as mud from hydraulic mining operations, the southern side of Alcatraz Island was still one of the Bay's deepest pockets, the island's wall dropping almost vertically into a crater-like depression. As the wasted-soils of California's upstream goldfields began to settle in the Bay's shallows, the current program of yearly dredging began. As the Bay Area grew into a center of global commerce, dredging intensified to clear new ports and channels to handle container ships and cargo vessels. Over the years much of the mud, contaminated as it is with mercury and other toxins, was tugged on barges to Alcatraz and dumped into what was once thought of as a bottomless ocean pit for disposal. By 1997, however, 8 million cubic yards of spoils had created a mass of submerged land swelling up toward the surface, threatening to soon crest the waters — Alcatraz minor.
Berg Holdings has marketed the Carneros project to regional decision makers as a way to prevent Alcatraz minor from growing, along with other shoals in the Bay. In sheer quantities the Carneros Ranch actually stands to receive more spoils, 9 million cubic yards dry, than the 8 million that now crowd Alcatraz's southern slope. It will be a literal island quantity of dirt received over two decades, by barge, and some also by truck. The source of the truck fill remains something of a mystery though.
Many environmentalists and long-time watchdogs of industry in the North Bay suspect that much more is going on than an agricultural solution to the problem of dredge spoils.
Former member of the Sonoma County Board of Zoning Adjustments Rue Furch questions the viability of agriculture on the Carneros Ranch. “With the amount of salinity in the soils, groundwater and brackish layer under the area — agriculture is hard to imagine as a viable enterprise. With the rise of sea level (and saline intrusion) due to Climate Change, this situation can only be aggravated.” According to Furch, some farms north and east of this area have been drawing up sea water from their wells for many years. “A couple of decades ago, serious consideration was given to pumping fresh water (recycled) into the ground to block increased saline intrusion. The salinity is only one issue — but it seems to be a big one.”
Furch notes that the economics of the project make sense without the agricultural angle tacked on: “the big payback is that they are paid to take the dredge, and we're told that they can more than cover the costs of the operation, and the project, just accepting the fill.”
Wick says it's not incredibly profitable. “Carneros River Ranch receives a tipping fee for accepting dredge materials that essentially covers the expensive land elevation process.”
According to one outside source who has analyzed the project, Berg Holdings will be paid about $15 per cubic yard received. If they do offload the 9 million cubic yards planned, that would amount to about $135 million in revenues, clearly an advantageous addition to the asset side of Berg Holdings' books.
In fact it appears that the elevation of the Carneros River Ranch began fourteen years prior mostly as a business venture, in cooperation with recreational and government marinas, to create a dumpsite for dredge materials from the Bay. Sonoma Land Trust executive director Ralph Benson described Berg Holdings' operations as recently as 2008 as a “mud dump” threatening the agricultural viability of the ranch. By then dredge spoils had already been disposed of on about 7 acres, lifting these areas of the ranch considerably. The Sonoma Land Trust sued Berg Holdings in 2006, halting the disposal of dredge materials because it was found to be in violation of a conservation easement the Land Trust owns. The easement requires that agriculture not be displaced by industrial or commercial activities. Prevailing in court, the Land Trust negotiated a settlement with Berg Holdings requiring any land used to dispose of dredge materials be returned to agricultural uses.
This might partly explain why the current proposal to fill the entire ranch has been framed primarily as an “agricultural enhancement” project, rather than a dumpsite for dredge spoils, even though Berg Holdings will be making good money over two decades for merely accepting the mud.
J.T. Wick sounds like a true believer and practitioner with respect to the farming that will be done on the new land, however. Wick says that last year they sold their tomato crop to Paradise Foods in Ignacio at a good profit. On the already elevated acreage Wick and company have 100 pinot and 100 syrah vines planted. “Carneros River Ranch is not some turn and burn, take the money and run development scheme,” says Wick. “We are in organic farming for the long run and the love of it.”
Skeptics of the project include the Sierra Club and other environmental organizations. The Sierra Club has appealed the County Board of Zoning's approval of a Mitigated Negative Declaration, essentially a pass on having to do a full environmental impact report for the fill project. The Sierra Club would like to see a more holistic study of the potential impacts this terraforming project will have along the shoreline. Among issues raised by the group are potential flooding effects on adjacent properties, impacts on the aquifer, diesel emissions from the new industrial activity at the Port where barges and off loaders will be delivering and processing the terra nova slurry, and other problems.
David Keller of the Petaluma River Council expresses support for the Sierra Club's appeal, noting that Berg and Co. already have a lot of the project's impacts researched and documented, and that simply moving this into a more public and inclusive EIR process wouldn't cause much delay, even if it would expose it to greater public scrutiny and input.
Lurking in the background of all of this is a couple decades of record. Berg Holdings, after all, isn't known as a company with great interest in organic farming. Instead Berg Holdings, controlled by Skip Berg, has become best known for pursuing some of the highest stakes real estate and business gambles in contemporary North Bay history.
The biggest of all was the proposed mini-city Berg and partners wanted to build on the former site of Hamilton Air Force Base south of Novato in the 1980s. It was to be 2,552 homes with three million square feet of commercial space. Sale of the base's acreage fell through after a voter referendum struck down the development plan. Denying Berg the opportunity to cover the site with homes and malls made the company's $45 million purchase from the feds impossible.
Had Berg succeeded this would have been chalked up as an earlier example of the company's pattern of owning and developing former wetlands. Much of Hamilton Air Force Base was built atop “reclaimed” marshes not far to the south of the equally aquatic Port of Sonoma and Carneros Ranch. After being rejected as developer by Novato's electorate, Berg Holdings sold its option on the land to a different development consortium proposing a slightly less intensive commercial spread. Ultimately Novato's voters did fork up millions to pay for pumps, levees, and sewers to keep the Bay out what became “Hamilton Landing.” They could have instead restored all of the wetlands on the former base, but what was once “reclaimed” from mother nature tends to remain in the hands of industry.
Berg had long moved on by this point, purchasing the Sears Point Raceway and turning it into a top flight track through big expansions. It was a very profitable venture, especially the sell out to Speedway Motorsports in 1995.
Berg's biggest proposed projects have always been clustered right along the edge of the San Pablo Bay, and (perhaps not coincidentally?) along the Northwestern Pacific Railroad's mainline. Berg Holdings has always operated as a super-sophisticate in the development game of northern California, a game where public relations and political alliances mean everything, and where just a whiff of environmental problems or community dissent can sink the most lucrative scheme.
Skip Berg, J.T. Wick and their business partners know this game inside out, and are the consummate players, having battled for, won, and lost some of the biggest and most volatile development plums in Marin and Sonoma Counties. Thus they take extra care to convince both local business groups and environmental groups of the merits of their projects. In the case of the Carneros Ranch, the Sonoma Land Trust has already given its seal of approval. So have Friends of the Petaluma River, although this endorsement comes with the caveat that J.T. Wick is the organization's current chair.
Berg and his associates are understandably very focused on the political side of the development game. Step one of course is getting favorable politicians into the power seats, or at least currying favor from those running for office. In the North Bay this means funding the Democratic Party. Just since 2007 Skip Berg has contributed approximately $145,000 to the Democratic Party and Democratic candidates for federal offices, according to information from the Center for Responsive Politics. Berg employees have donated thousands more to federal candidates, making Berg Holdings one of the bigger sources of cash for Northern California Democrats.
The lost chance of Hamilton AFB's redevelopment in the late 1980s for Berg is illustrative of the kinds of larger puzzle of properties and monopolies Berg Holdings has sought for decades to assemble. The miniature city and mall that was the Berg-Revoir proposal was promoted partly by virtue of its location, right on the Northwestern Pacific Railroad route. One supporter of that project supportingly wrote in the Marin Voice in 1989, “use of the adjacent railroad lines is a strength that wasn’t even considered in the environmental impact report, which estimated the amount of traffic Hamilton could generate or the number of workers who could live on site.” The railroad and its corridor were even then considered a vast prize that could link together many real estate, industrial, and transit projects worth a princely fortune.
It's no wonder then that over a decade later Berg Holdings became the real estate partner within the Northwestern Pacific Railroad Company, the private corporation that has obtained a monopoly to operate freight along the old railroad route between Marin and Humboldt. This line runs up from Larkspur all the way to Arcata. It also forks off at Ignacio in Marin County, heading east where it passes directly by the Berg's Port of Sonoma, just across the Highway 37 from Berg's Carneros River Ranch.
In the 2006 business plan for the NWP Co., Berg Holdings was noted as the partner that will develop NWP real estate in Ukiah, Willits, and Eureka that are not needed to operate the railroad: “new real estate income will be produced from its development of property not required for railroad purposes in Ukiah, Willits, and Eureka, based on the real estate expertise of Berg Holdings, one of NWP Co.’s principal owners.” Neophyte farmer J.T. Wick is described in the NWP Co. business plan as the man who will deal with environmental matters and questions of entitlement on these properties.
Today Wick says that Berg Holdings has officially exited the railroad corporation, and that he and Skip Berg are no longer on the company's board. Touring the Carneros River Ranch a few months back, two environmental activists who had expressed concern about the project asked Wick about the railroad, noting that the main line ran right next to the ranch, and noting also that there is plenty of space, especially after the ranch is elevated, to extend a spur for freight deliveries of bulk materials. Wick reportedly repeated that he and Berg have left the NWP Co. and that they have absolutely no plans for the railroad at Carneros River Ranch.
Still many can't help but wonder what's being assembled. Is it just a “mud dump” that's been converted by a well executed lawsuit, and by Wick's own desire to pursue agricultural, into a 528-acre farm? Or is it the first piece in a bigger puzzle?
“For those of us who watch patterns emerge,” says Furch in reference to decades of closely scrutinizing developers' plans, “all this is of interest. But as the responding Agencies stress, [the rail and ferry service] isn't in the project description so isn't analyzed. It is a good reason to require an EIR, however.”
The Sierra Club and supporters seem to be intervening based not just on their immediate concerns about water and air impacts of the project taken at face value, but also on suspicions that there may be something larger planned. Those who have followed Berg's other recent business ventures note again that the NWP Co. plan called for hauling garbage out of Sonoma County. Trash is the major moneymaker in the railroad's business plan. Again, as the railroad's business plan explains, “NWP Co.’s longer term objective would be to meld solid waste haulage from Mendocino County, and eventually from Marin County and Humboldt County, with that of Sonoma County to the Nevada disposal site which could accommodate all of those counties’ solid waste for more than 200 years.”
Although the railroad plan envisions this mass export of waste as occurring entirely via trains by linking the NWP route to Union Pacific and California Northern freight lines, some observers are asking, what's to stop Berg and company from someday building a trash terminal at the Port of Sonoma or Carneros River Ranch? Garbage from anywhere in California could be barged or trucked in, transfered to trains, and shipped out to the Nevada dumpsite. But then again Berg Holdings is no longer party to the NWP Co.?
J.T. Wick says this is “crazy,” as is ongoing speculation that the Port of Sonoma or Carneros Ranch would serve as a depot for aggregate mined in far northern properties held by other investors in the NWP railroad. Pointing out the poor economics of hauling rock only to compete with existing aggregate vendors like Shamrock, already on the Petaluma River, he has a point. However a lot of speculation about aggregate hauling on the freight line was focused on points far to the north. Do these poor economics apply to trash, a business for which there are few competitors who would be able to boast rail, port, and truck services?
Turning the Port and ranch into a garbage terminal would certainly seem to contradict a much more immediate plan of Berg Holdings — turning the Port into a passenger ferry terminal with launches connecting Sonoma to points in San Francisco and Oakland. Berg received upwards of $26 million in commitments from Congress already to pursue this project. Former Sonoma County Supervisor Jim Harberson has represented Berg's ferry terminal plan, saying that the train would eventually connect to the Port so as to provide passengers with a seamless way to tour Sonoma County wine country with their cars parked back in the Bay.
This notion of building a transit-hub that would be geared toward tourists heading north from the Port of Sonoma fits the official plan for the Carneros River Ranch. Turned into a vineyard with possibly a winery and visitor's center on site, Berg's ranch would sit right on the threshold of a lucrative entry point for the massive wine-tourism industry, and Berg would own both key properties. In fact the original name of the Carneros River Ranch was the “Lower Ranch.” The name change by Berg Holdings seems designed to capitalize on the cache of the Los Carneros AVA (American Viticulture Area) wine region, one of the glitziest and most profitable. Trains could pick up passengers fresh off Berg's ferry and bring them right to the doorsteps of Ukiah Valley wineries, all of which may just mean bigger wineries and thirstier vineyards for Mendocino County.
Whatever the plan is, it's too bad it doesn't involve knocking down the levies and restoring California’s wetlands.