PG&E walks away from Wild Cherry Canyon park deal

Four years after the American Land Conservancy began negotiating to add 2,400 acres in Avila Beach to Montaña de Oro State Park, the deal has hit a new snag. PG&E is balking at signing over the title of the land to the State Parks Department.

Tom Jones, a spokesman for the utility, said PG&E does not have the resources to devote to closing the deal. All of its time and energy is being spent addressing safety concerns with its natural gas pipelines and at Diablo Canyon nuclear power plant.

“It is not our goal to be in this position,” he said, adding that earning the trust of its customers is the utility’s highest goal.

In order to close the deal, the state’s Public Works board must allocate the final $6.9 million for the $21 million purchase of the Wild Cherry Canyon property, located between Avila Beach and Montaña de Oro. But State Parks wants PG&E to agree to transfer ownership of the property to the state.

It could be next summer before the utility has the resources to devote to the transfer, Jones said. Newly installed top PG&E executives, including Chief Executive Officer Anthony Earley, must also be brought up to speed.

Until that happens, the Public Works board is not likely to schedule a final hearing on the project, said Kara Blakeslee, a local conservation activist negotiating the deal for the Land Conservancy. She hopes to go before the panel Oct. 14 to get conceptual approval of the project with a hearing for final approval sometime next year.

“Everything is perfectly aligned to do this deal,” she said. “There is no reason not to proceed.”

The holdup revolves around the fact that PG&E owns the underlying title to the property. Decades ago, it sold two 100-year development leases to a group of investors, including local developer Denis Sullivan. More than 160 years remains on those leases.

The owners tried unsuccessfully to develop the land and eventually agreed to sell their development rights to American Land Conservancy. PG&E has also agreed to the deal in exchange for an additional access route to Diablo Canyon and other benefits, including possible mitigations for renewal of the plant’s two operating licenses.

There is nothing legally stopping the Land Conservancy and the state from finalizing the deal, Jones said. He encouraged them to do so, giving the utility the time it needs to deal with safety issues.

These safety issues include getting state and local approval for seismic surveys around Diablo Canyon to better map earthquake faults there, as well as making improvements to natural gas pipelines after a deadly explosion a year ago in San Bruno. The biggest obstacle is state approval for high-energy offshore surveys, which require thorough environmental review. PG&E hopes to obtain permits for those surveys from the State Lands Commission next summer.

Once those permits are in hand, the utility could focus its attention on the Wild Cherry Canyon project. That would leave just enough time for the deal to come together. Several of the grants that make up funding for the deal expire at the end of 2012. While those grants could be extended, there is a risk that one of the funders could decide to spend the money elsewhere if the negotiations drag on past 2012, and the deal could fall apart.

Blakeslee said she is confident that won’t happen. PG&E has been cooperative in the four years that the deal has been in the works, and she’s optimistic it will find the resources to complete the deal.

“We don’t need much more of their time,” she said. “They are going to be part of this project’s success. I know it.”

Addition of the Wild Cherry Canyon property along with other smaller parcels in the Irish Hills that have already been acquired will result in a 65 percent expansion of Montaña de Oro State Park. The park would then stretch from Los Osos to Avila Beach and allow the creation of a new 20-mile stretch of the California Coastal Trail.