Field of (bad) dreams

If you build it, they will come. At least that’s what happened to one national propane marketer’s major supply point for California’s Sacramento and San Joaquin valleys.

Suburban Propane’s huge 24-million-gallon refrigerated storage facility – even now one of the nation’s largest – was erected in remote Elk Grove, Calif. some 30 years ago. Now, a local developer and a national mall management firm want to build a huge regional shopping mall right next door. Many housing projects already have begun to crowd in, too, squeezing out agriculture in what has been called one of the worst cases of urban sprawl in the United States.

So what happens when you sensibly locate a major propane storage plant far from homes and businesses, and operate it safely for decades, only to have local planning and zoning restraints designed to keep farms around you melt away like snow in a spring thaw? What can you do when profit-driven urbanization rushes right up to your door?

Nearby State Highway 99 carries an increasing load of commuters back to their new homes.

Suburban is looking for some answers to those questions and more in northern California.

The saga of Suburban’s Elk Grove facility is truly an ironic reversal of the usual “Not in my backyard” syndrome. For once, it’s the company – not the residents – that has been most vocal in opposing development that will mean high-density residential and commercial neighbors within a mile on land that until last year was zoned for long-term agricultural use with minimum lot sizes of 80 acres.

New homes, built just beyond the Suburban Propane property lines.

The Elk Grove plant was built in 1972 – long before all the houses, apartments and major commercial developments that are now crowding it. So its managers are understandably concerned about the proximity and number of new neighbors. Sacramento’s downtown business district, county supervisors and even a state agency commissioned to safeguard farm land are unhappy, too, about the tenacious urban sprawl in the region.

Caught squarely in the middle is Suburban, one of the largest and most respected national propane retailer/wholesalers. The Whippany, N.J.-based company is increasingly forced to cope with worsening traffic on local roads, encroaching residential and commercial development, and rising public fear in the wake of terrorist attacks in New York and Washington, D.C. last fall.

Hot Spot

The saga began when Vangas, Suburban’s predecessor, built a pair of state-of-the-art refrigerated storage tanks in the remote, industrial-zoned area where agriculture had been a way of life for more than 100 years. At the time, the closest development was almost four miles away.

The Elk Grove plant was – and continues to be – a convenient, safe LP gas distribution point for the entire Sacramento Valley and the northern end of the San Joaquin, says company lawyer John Fletcher.

Growth in the immediate region was relatively slow until the second half of the 1990s, when prolonged national prosperity and a lack of affordable housing near Sacramento led profit-hungry developers to seek inexpensive farmland.

Property in the county generally sells for $2,500 to $4,500 per acre. Land approved for development can be worth up to $80,000 per acre, according to local appraisers.

Area developers don’t believe Sacramento County officials will hold the line on development and stick to the growth limits set by county planners. When county officials extended water and sewer facilities, improved roads and then granted rezonings, developers began building far from the county’s urban center.

The American Farmland Trust recently ranked the San Joaquin and Sacramento valleys as the most endangered region in the United States in terms of development pressure on prime agricultural land.

A California Department of Conservation survey found that 1,300 aces of Sacramento County farmland was converted to urban uses from 1996 to 1998. A study two years later found a quickening pace with 3,462 acres developed from 1998-2000.

The population in that part of the county is projected to double – from 216,000 to 428,000 – between 1995 and 2020.

In Elk Grove, four new single-family housing tracts, a large apartment complex, an auto mall, a drug superstore and a private elementary school already had converted 380 acres of former farmland to urban uses by 2000.

None of those raised the storm of controversy that followed the county’s rejection of a $500 million regional shopping mall planned near Suburban’s plant.

Mega-mall

The project, targeted for a 295-acre family farm about 15 miles south of Sacramento along State Highway 99, is the biggest retail project ever proposed in Sacramento County. Four major department stores already have signed on, including Dillard’s, Gottschalks, Macy’s and Robinson-May.

The Lent Ranch Mall project includes 3.3 million square feet of retail space and 300 apartments. Its planners are Sacramento developer Martin Feletto, San Francisco-based M&H Realty Partners, and General Growth Properties (Chicago), owner and operator of more than 100 shopping malls nationally.

An artist’s rendering of the proposed regional shopping mall that developers want to build within a half-mile of Suburban Propane’s huge propane storage facility in Elk Grove, Calif.

Feletto approached the Lent family, longtime owners of the ranch on which the mall would be built, in 1988. The partners announced the project in 1997.

In October 1999, the Sacramento County Planning Commission voted 4-1 against the project, saying it was too big and would create too much pressure for development south of nearby Kammerer Road, which is the county’s official urban growth boundary for the region. Beyond that line, the Nature Conservancy of California controls 30,000 acres of preserved open space and natural habitat along the Cosumnes River and in the Sacramento River delta.

Developers wouldn’t take no for an answer. The usual tactic of appealing the ruling was not their next step, however. There would be no attempt to reverse that decision, or to take the matter to the county’s board of supervisors.

The rural landscape that for decades served as the backdrop to Suburban Propane’s Elk Grove storage site has succumbed to the pressures of land development.

Rather, the Lent Mall project became the fulcrum of a campaign to create an independent city government that would be eager to collect the estimated $6 million in annual tax revenue the massive project would generate.

Changing Elk Grove

Elk Grove, located southeast of Sacramento, consists of 51 square miles. It had more than 54,600 residents in 2000 and was growing at the rate of 7 percent annually. At the end of 2001, one consultant estimated the city already had an annual growth rate of 15.9 percent, and an average household income of $75,308.

Apple Computer is the largest employer in Elk Grove with 1,800 local employees. Some area residents commute south to high-tech jobs in California’s Silicon Valley, while more work for the state of California and commute daily to Sacramento.

Living in a remote bedroom community plagued by traffic jams and far from major commercial and employment centers, many residents considered it their right to shop without driving miles to Sacramento or other suburbs. Their emotional rally cry was “to keep our tax dollars here in our own community.”

Sacramento County officials’ veto of the mall project effectively rallied residents around the right to make decisions locally. Even though three previous bids for cityhood had been defeated at the polls, Elk Grove residents in 2000 overwhelmingly voted for incorporation.

Campaign funding

The campaign’s lead organization – Incorporation 2000 – received more than $6,500 in donations from the Lent Ranch Mall developers. Mall developers were the biggest campaign contributors to subsequent city council races, too – donating nearly $32,000 to candidates and drawing public outcries for steering the elections.

The newly formed Elk Grove City Planning Commission gave the controversial project a crucial green light in April 2001. Last June – less than 20 months after the County Planning Commission rejected the same project – the Elk Grove City Council unanimously passed the Lent Ranch Mall. A zoning change to facilitate the project was approved one month later.

Developers say they hope to be able to open the first phase of the project for business by early 2004.

The Elk Grove City Council has approved a raft of new housing tracts and other developments proposed by other builders, too.

The Sacramento Area Council of Governments estimates that the 24,707 houses and apartments in Elk Grove in 2000 will mushroom to 62,399 residential units by 2020, a 152 percent increase. Some experts say the city is already growing faster than that estimate.

The new town is actively looking for new, clean businesses that want to relocate to the Sacramento suburbs. Because Elk Grove does not have much commercial land for new business parks, it’s also gazing longingly north, toward Sacramento, for more territory.

Cause for concern

Amid the momentum for local growth, hundreds of Elk Grove residents in February 2000 turned out to voice concerns about their proximity to the propane plant.

Suburban’s attorney told the gathering that fears were largely unjustified, especially after safety and security improvements the company made during the preceding year. “We spent a ton of money improving the plant to the same level of security that you would find at a nuclear power plant or a high level security prison,” Fletcher declared.

But two months later, residents of the new Hampton Village subdivision filed suit against the developer for building some of the homes only 3,200 feet from the facility. The suit asks for unspecified damages and alleges that the sellers either failed to disclose the risk associated with the close proximity of the propane facility or misrepresented it to the more than 552 homeowners in the subdivision. The case is pending.

For years, Suburban Propane and the local fire department have consistently opposed new commercial or residential development within one mile of the plant. But the incorporation of Elk Grove has proven to be a potent tactic in breaking down traditional barriers to development.

The Elk Grove City Council in December 2000 approved a new residential development within 600 feet of the propane site. Lewis Construction got the green light to start building its Silver Creek subdivision – 151 homes on a 35-acre site – within a mile of the plant.

Suburban weighs in

The next month, Suburban Propane filed suit in Superior Court, charging that the city failed to give it proper notice of a hearing on its appeal of the project’s approval. “They had a hearing on our appeal without us,” protested Fletcher.

On a rehearing ordered by the court, the council again rejected Suburban’s appeal.

Suburban also has been highly critical of a study commissioned by the mall developers that declared that the massive propane tanks would pose no threat to the mall. Fetcher said he believed the report, part of the environmental impact statement for the mall project, was tainted by the developers who paid for it and failed to properly assess the possible impact an accident could have.

“We think an accident is statistically almost impossible,” he said. “But if there is one, we acknowledge that the consequences will be catastrophic. We don’t want homes on our back fence line. We don’t want them a half mile away.”

Fletcher estimates that it would cost Suburban $200 million to move its Elk Grove terminal elsewhere.

Joining the fight

The owners of Sacramento’s Downtown Plaza shopping mall have since joined Suburban Propane and environmentalists in publicly opposing the project. They claim it could cut business in downtown Sacramento by 23 percent .

The Environmental Council of Sacramento and the Sierra Club have both threatened to sue, citing possible effects on air pollution, traffic congestion and pressures for additional development south of previously delineated urban growth. Legal Services of Northern California suggested the project did not include enough affordable housing to accommodate low-wage mall workers; and the California Department of Conservation declared that not enough had been done to preserve farmland paved over by the project.

Last July, the Environmental Council of Sacramento and the Sierra Club joined with the South County Citizens for Responsible Growth to file suit seeking to block construction. SCCRG is an watchdog group with business owners, environmentalists, farmers and public employees on its board. The suit, expected to be heard this spring, argues that the city did not examine short- and long-term effects of the project as required by California’s environmental laws.

In August, the California Department of Conservation also filed suit seeking injunctions against the Lent Ranch Mall project, citing a need to protect farmland from development. It was the first such case ever filed by the state.

The suit charges the mall “will permanently disrupt and destroy the project site’s soils, vegetation and wildlife habitat, thereby creating unmitigated loss of agricultural land of statewide significance, huge cumulative and growth-inducing impacts, erosion, water pollution, air pollution, traffic impact and other irremediable harm to the existing environment.”

It also alleges that Elk Grove failed to adequately weigh safety considerations in approving construction of a mall less than a mile from 24 million gallons of propane.

On Sept. 11, after the horrific terrorist attacks in New York and Washington, D.C., Elk Grove City Manager David Jinkens issued a statement to residents deploring the incidents and declaring that although “Elk Grove is not a likely prime target for terrorist activity,” police and fire personnel were “on a state of high alert,” and everyone was asked to report any suspicious activity.

“Officials of Suburban Propane have been working cooperatively with law enforcement officials to ensure safety at their facility,” he said.

At a City Council hearing two days later, Suburban’s attorney continued the company’s opposition to the Silver Creek subdivision. The plant is as safe as it can be, he said, but Suburban cannot guarantee against problems that might result from terrorist activity.

Worst-case scenario

Throughout public hearings and lawsuits over the last two years, the issue of the worst-case scenario has loomed even larger than the giant propane tanks over Elk Grove.

Studies paid for by Suburban and Sacramento County agreed, more or less, that a one-mile safety zone should be upheld around the plant.

A study done for the city and paid for by the mall developers, however, placed the chances of a massive explosion at the propane plant at one in 10 million. The report also claimed that a moderate level of damage in case of an explosion would extend only 915 feet from the blast. Approval of the mall – planned to rise 3,650 feet away – was based on that study, which concluded that even if there was an explosion at the Suburban plant, damage was likely to be “light” at the mall.

A report sponsored by the Sacramento County Sheriff’s Office and the Elk Grove Fire Department projects extensive damage to people and property within a half-mile radius if both tanks exploded.

An editorial in the Sacramento daily newspaper noted the varying opinions from experts about the potential for disaster at the Elk Grove terminal.

“It seems evident that it’s not a remote notion that those with damage to our society in mind would notice an enormous tank of propane so close to a shopping center with thousands of people,” the newspaper opined.

“Even if the city proceeds with this mall at this location, it needs to know what it’s getting into and how to minimize the risks. Assuming that the risks are minimal is the wrong approach. In the changed world in which we all now live, the basic question still holds: Is this sensible?”