California Coastal Commission Letter dated April 11, 2014 to Playa Capital "Unpermitted Drains Located in Ballona Ecological Reserve".

CALIFORNIA COASTAL COMMISSION

South Coast Area Office
200 Oceangate, Suite 1000 Long Beach, CA 90802-4302 (562) 590-5071

April 11, 2014

Playa Capital Company, LLC c/o Rick Zbur
355 South Grand Avenue
Los Angeles, CA 90071

Re: Unpermitted drains located in Ballona Ecological Reserve Dear Mr. Zbur:

Thank you for your December 11,2013 response to our June 12,2013 letter. Our June 12letter described installation of two drains and drain lines in the Ballona Ecological Reserve without the required coastal development permit. After carefully reviewing the information that you included with your letter, our position on installation of the drains at issue has not changed: installation of the drains requires a coastal development permit from the Coastal Commission. As explained below, the unpermitted drains were not authorized, as you contend, by Coastal Development Permit No. 5-91-463, as amended ("the CDP"), which authorized construction of the Ballona Freshwater Marsh ("BFM"). Moreover, the subject drains are located in the Ballona Ecological Reserve within natural habitat and a wetland that rely on water to function. Thus the presence of the subject drains is clearly detrimental to natural habitat and the hydraulic functioning ofthe wetland.

The two unpermitted drains at issue ("Unpermitted Drains") are located in the Ballona
Ecological Reserve, one north of Culver Boulevard and the other south of Culver Boulevard. The Unpermitted Drains are not located within the BFM, but instead within natural saltmarsh and habitat areas separated from the marsh area of the BFM by Jefferson Boulevard. The Unpermitted Drains are not described in the CDP application, nor are the drains identified in the plans submitted with the application and presented to the Commission for approval. Thus the Unpermitted Drains were never authorized through the CDP, or by the Commission in any way that we are aware of.

As a point of clarification since your letter appears to conflate several separate structures, the Commission-approved BFM main drain line and the two other outlets from the BFM (in addition to the main drain line) that are critical to maintaining water levels in the BFM, and which are specifically identified in the CDP application and accompanying plans ("Approved BFM Drain" and "Approved BFM Outlets"), are not at issue in this enforcement matter. Each ofthese components is identified and described in the CDP application and accompanying plans, which comprise the development approved by the Commission via the CDP. By contrast, the Unpermitted Drains were not identified in the CDP application or its accompanying materials or plans. For reference I've attached a site plan submitted to the Coastal Commission that show the Approved BFM Drain and the Approved BFM Outlets. I've also annotated the plan to show the locations of the Unpermitted Drains, which are not depicted on the approved plan.

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Below, I respond to points raised in your December 11 letter related to the Unpermitted Drains. However, first I provide some background and clarification on the purpose and functions ofthe BFM in order to explain that the Unpermitted Drains function inconsistently with the habitat enhancement, water quality and flood control objectives of the BFM and in no way does the BFM rely on the Unpermitted Drains to perform its necessary functions. Please note that some of our responses to the points you raised in your December 11 letter are provided in the background section below.

Background

The BFM was approved by the Commission pursuant to CDP No. 5-91-463 (as amended) on September 13, 1991. The project is designed to integrate water quality protection functions, habitat creation and restoration, and stormwater control. The first function of the BFM is to collect runoff via inlets specifically identified in the CDP application and accompanying plans. Each of these approved inlets flow into the BFM. The CDP application describes the process by which the BFM achieves its water quality objectives:

The water quality functions would be performed by the input of a year-round supply of clean freshwater into the system and through the natural processes of a wetlands - sedimentation, adsorption, and transformation - which would reduce levels ofpollutants in stormwater and other urban runoff that drains into the system. The freshwater wetlands system would trap and remove pollutants in stormwater runoff as the water moves slowly through the system. Water cleaner that the stormwater runoff originally put into the system would then flow into the Ballona Flood Control Channel or into the salt marsh, thus enhancing the resource values of those areas. [Appendix 5, page 2]

The Unpermitted Drains do not support the water quality objectives ofthe BFM; the Unpermitted Drains do not direct water into the BFM to be subject to the wetland treatment processes described above. Instead, water flows into the Unpermitted Drains, then untreated into the Ballona Channel.

The second function of the BFM, habitat creation and restoration, is the product of collecting stormwater and treated groundwater within the marsh area of the BFM. This process fosters vegetation growth and, in turn, provides wildlife habitat. The habitat function ofthe BFM and its reliance upon stormwater is further described in the CDP application:

The 52-acre freshwater wetland system proposed by Maguire Thomas Partners - Playa Vista, includes a 25-acre riparian corridor and a 27-acre freshwater marsh. This system is to be planted with marsh vegetation, willow woodland and mixed riparian habitat over a three-phase construction period lasting 10 years. It is designed to create new and restore currently degraded freshwater wetland habitat and to enhance their associated uplands. In order to maintain the proposed vegetation and habitat ofthe system, a water supply ofreliable quantity and quality is needed.

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• Using two sources of supply (storm runoff and treated groundwater) that are consistent with the urban setting of the Playa Vista project, a completely satisfactory quantity of fresh water would be provided to establish and sustain 52-acres ofwetland vegetation and the freshwater need ofwildlife. (Appendix 11, ps. EXl-2)

As noted above, the Unpermitted Drains do not drain into the BFM, thus they do not contribute water to the BFM and thus do not contribute to its habitat function. In fact the effect of the functioning of the Unpermitted Drains is deleterious to habitat because the Unpermitted Drains direct water away from habitat areas within the Ballona Ecological Reserve, including a wetland area.

Another function of the BFM is stormwater management and this indeed was a stated objective for constructing the BFM. In contrast to the functioning of the BFM, during all but the most extreme storm events, the Unpermitted Drains do not provide any necessary flood protection because of the elevation of adjacent Culver Boulevard. The BFM project engineer, in describing the value of the Unpermitted Drains, or lack thereof, notes in July 11,2013 email to staff at the Santa Monica Bay Restoration Commission, and others, that: "If these inlets were plugged, there would be no chance of any flooding ever reaching the adjacent roadways as the roads are about three feet higher than the surrounding grades. A three foot storm would be something on the order ofthe 1,000,000-year event (purely a guess, but you get the idea) and L.A. would not notice a little flooding here."

Moreover, the Unpermitted Drains are not designed to function when flood control devices would be expected to, i.e. during storm events. During storm events when the water levels in Ballona Channel are elevated, the flapgates in the Approved BFM Drain close in order to prevent from flowing from the Ballona Channel and out through the Approved BFM Outlets into the BFM. When these flapgates in the Approved BFM Drain close during storm events, water will not flow through the Unpermitted Drains into the Approved BFM Drain, consequently, water will pond in the location ofthe Unpermitted Drains. Thus, it appears that the idea that stormwater control benefits are provided by the Unpermitted Drains is, at best, dubious. However, as a result ofbelow-grade and at-grade inlets in the Unpermitted Drains, the Unpermitted Drains remove water in the ground and on the surface at all other times water is present. This is a continuous detriment to wetland hydrology and habitat that relies on water to function.

Coastal Development Permit Required

The Unpermitted Drains were not identified in the CDP application or accompanying plans and materials. Therefore, the Unpermitted Drains were not reviewed by the Coastal Commission and installation ofthe Unpermitted Drains was not authorized via the CDP. Furthermore, the Unpermitted Drains do not, as detailed above, perform any ofthe intended functions of the BFM and thus could not have been somehow approved in concept by the Commission.

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Pursuant to Section 30600(a) ofthe Coastal Act, any person wishing to perform or undertake development in the Coastal Zone must obtain a coastal development permit, in addition to any other permit required by law. "Development" is defined by Coastal Act Section 30106 as:

"Development" means, on land, in or under water, the placement or erection of any solid material or structure; discharge or disposal ofany dredged material or any gaseous, liquid, solid, or thermal waste; grading, removing, dredging, mining, or extraction ofany materials; change in the density or intensity of the use of land, including, but not limited to, subdivision pursuant to the Subdivision Map Act (commencing with Section 6641 0 of the Government Code), and any other division of land, including lot splits, except where the land division is brought about in connection with the purchase of such land by a public agency for public recreational use; change in the intensity of use of water, or of access thereto; construction, reconstruction, demolition. or alteration of the size of any structure, including any facility of any private, public, or municipal utility; and the removal or harvest o f major vegetation other than for agricultural purposes, kelp harvesting, and timber operations....[underling added for emphasis]

Installation of the Unpermitted Drains constitutes development under the Coastal Act and, therefore, requires a coastal development permit. Any development activity conducted in the Coastal Zone without a valid coastal development permit, or which does not substantially conform to a previously issued permit, constitutes a violation ofthe Coastal Act.

Our goal is to resolve this situation amicably and as quickly as possible so that all parties can move forward. We greatly appreciate your time and input and look forward to discussing this matter further and working on a consensual resolution to this matter. To that end, subsequent to the substantive responses to your letter, below, I propose a potential path forward to resolve this matter collaboratively.

Staff Responses to Section A

You note, as a preliminary matter, that Playa Capital Company, LLC ("PCC") does not currently own the property upon which the Unpermitted Drains are located. You do not specifically argue that as a result ofthis lack ofproperty interest at the present time, PCC is not liable for installation 6fthe Unpermitted Drains, however, I note that liability for Coastal Act violations attaches to the property owner upon which unpermitted development is located and to the party that undertook the unpermitted development. Documents submitted to the City of Los Angeles regarding construction of the Approved BFM Drain indicate that installation of the Approved BFM Drain was commenced by PCC's predecessor-in-interest, Maguire Thomas Partners ("MTP"), and completed by PCC. The Unpermitted Drains connect to the Approved BFM Drain (but as noted above, do not contribute to the functioning of the BFM) and logically then were constructed by PCC and/or its predecessor-in-interest at the time the Approved BFM Drain was constructed. Contemporaneous construction of the Unpermitted Drains and the Approved BFM Drain does not establish, however, that the Unpermitted Drains were authorized pursuant to the CDP. As described above, the Unpermitted Drains are not described in the CDP application or depicted in the accompanying plans, in contrast to the Approved BFM Drain, which is described and depicted in the COP application and plans.

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You also provide in Section A your description of the function of the Approved BFM Outlets and equate the Unpermitted Drains with the Approved BFM Outlets. You assert that:

The outlet drains in question were initially incorporated in the Freshwater Marsh design with the approval ofthe City ofLos Angeles, to protect the Ballona salt marsh located to the west ofthe Freshwater Marshfrom imminent construction impacts, and, ultimately, to preventflooding ofthe roadways adjacent to the Freshwater Marsh during severe storm events in the long-term.

However, the Unpermitted Drains are distinct from the Approved BFM Outlets. The three Approved BFM Outlets (including the Approved BFM Drain) are identified in the CDP application and plans. These outlets allow for freshwater to be directed from the BFM into the Ballona Channel or into the saltmarsh west of the BFM when needed to adjust salinity levels in the saltmarsh. The CDP application specifically identifies the Approved BFM Outlets as such:

Three water management structures are included in the design ofthe system: a spillway system between the freshwater marsh and the salt marsh, a sluice-gate structure between the freshwater marsh and the salt marsh, and a control weir with a tide-gated outlet between the freshwater marsh and the Ballona Channel. [pgs. II-7-8]

Clearly none of these descriptions pertain to the Unpermitted Drains. The Unpermitted Drains can be further distinguished from the Approved BFM Outlets in a number of ways. First, the Unpermitted Drains are not depicted in the CDP application or the plans, as the Approved Outlets are, and thus the Unpermitted Drains were not approved by the Commission. Second, the Unpermitted Drains are not outlet drains. The Approved BFM Outlets provide outlets for freshwater water to move from the BFM into Ballona Channel and into the saltmarsh west of the BFM for salinity level management purposes. In contrast, the Unpermitted Drains do not outlet water from the BFM. Thus, categorically, the Unpermitted Drains are not "outlets" from the BFM. Instead, they drain water from native habitat and a wetland area separated from the BFM by Jefferson Boulevard. Third, the Unpermitted Drains do not direct drained water into the saltmarsh, thus they also do not share the function ofthe Approved BFM Outlets to provide the saltmarsh with freshwater. Finally, the saltmarsh that is protected by the Approved BFM Outlets that is referenced in the CDP application and associated documents is west ofthe BFM. In contrast, the Unpermitted Drains are located in the saltmarsh and habitat area north ofthe BFM.

Regarding the assertion in Section A that the Unpermitted Drains are necessary flood control measures that were approved by the City of Los Angeles, the lack of any flood prevention provided by the Unpermitted Drains is addressed above. In addition, as you are no doubt aware, even ifthe Unpermitted Drains were approved by the City of Los Angeles through local processes, such approval is not a substitute for authorization from the Commission and does not waive the coastal development permit requirements of the Coastal Act. Furthermore, no regulation is cited in the City's letter attached to your December 11 letter that confirms that there is a basis for the City to require construction ofthe Unpermitted Drains for flood protection. Nor could City staff identify such regulation in its discussions with Commission staff. In fact, in discussions with us, City staff had no objections to removal of the Unpermitted Drains, which is not surprising since the Unpermitted Drains provide negligible (if any) flood control benefits.

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Staff Responses to Section B

In Section B, you again apparently confuse the Unpermitted Drains with the Approved BFM Outlets. As detailed above, in contrast to the Unpermitted Drains, the Approved BFM Outlets were approved by the Commission pursuant to the CDP and, again in contrast to the Unpermitted Drains, perform important habitat enhancement, water quality and flood control functions.

You also assert that staffwas made aware ofthe plans to construct the Unpermitted Drains prior to construction of said drains (but subsequent to Commission approval of the BFM) and that staff concurred with their construction. Regardless ofwhether this assertion is true, and it is not, as explained below, the Unpermitted Drains were not a component of the CDP application; were
not presented in narrative or graphic form, or in any manner to the Commission for review; were not authorized by the Commission pursuant to the CDP in any way; and there is no other Commission action that authorized the Unpermitted Drains. Furthermore, the assertion that staff was aware of plans to build the Unpermitted Drains prior to construction of said drains and concurred with their construction, which we did not, has no bearing on whether the Commission

authorized construction ofthe Unpermitted Drains.

To support your assertion noted above that staff was aware of installation of the Unpermitted Drains, you outline staffs receipt of plans that depict the Unpermitted Drains and staffs investigation of construction of the Approved BFM Drain, which you mistakenly describe as an investigation ofthe Unpermitted Drains. In 1995, subsequent to the Commission's approval of the BFM, staff was provided with a copy of the BFM Habitat Mitigation and Monitoring Plan ("HMMP") prepared by PCC's predecessor for the U.S. Army Corps of Engineers, which included plans depicting the Unpermitted Drains. This document was not a requirement ofthe coastal development permit authorizing the BFM, and therefore, staff was under no obligation to review and approve it. Thus, it cannot be concluded from the mere submittal of the HMMP that staff was aware of its contents. Furthermore, in reviewing compliance with the CDP, the HMMP document would not be central to staffs review since the Commission's approval is embodied in

the CDP application and accompanying documents, as wells as the CDP and staffreport, none of which depict the Unpermitted Drains.

As you note in your letter, in 1996 staff investigated alleged unpermitted grading in the vicinity of the BFM. Commission staff investigated the incident and determined that the grading was undertaken in order to install the Approved BFM Drain. To investigate the report, staff reviewed the CDP application and associated plans, which describe and depict the Approved BFM Drain. Thus, staff confirmed that the Approved BFM Drain and associated grading was approved by the CDP and sent a letter dated July 10, 1996 to that effect to PCC's predecessor. Staff gave no indication in the letter or otherwise that we were aware of the plan to install the Unpermitted Drains. You claim that an April4, 1996letter from MTP to staffwould have made staffaware of the plan to install the Unpermitted Drains. Although the Approved BFM Drain is described in detail in the April 4 letter, there is no mention in the letter ofthe Unpermitted Drains, nor are the Unpermitted Drains identified in the attachments to the April4 letter. In fact, one of the exhibits to the April4 letter, which delineates the limits of work required for installation of the Approved BFM Drain, does not include in its delineation the areas where the Unpermitted Drains are located. Thus, far from making staffaware ofa plan to install the Unpermitted Drains, the letter

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would do the opposite and indicate that there were no plans to disturb the area where the Unpermitted Drains were ultimately constructed.

In addition, staff would not have been aware from visiting the site that MTP or Playa Capital planned to install the Unpermitted Drains. At the time staff visited the site, grading ·had occurred to begin the process of installing the Approved BFM Drain, but neither the Approved BFM Drain nor the Unpermitted Drains had been installed yet, so staff would not have been made aware of their presence in that way either.

Again, regardless of whether the April 4 letter made staff aware of the plan to install the Unpermitted Drains, which was not the case, the Unpermitted Drains were not a component of the CDP application; were not presented in narrative or graphic form, or in any manner to the Commission for review; were not authorized by the Commission pursuant to the CDP in any way; and there is no other Commission action that authorized the Unpermitted Drains. Thus the Unpermitted Drains constitute unpermitted development and a violation of the Coastal Act.

Staff Responses to Section C

You assert in Section C that the Unpermitted Drains have not had any adverse impacts on wetlands. You attach a memorandum from your biological consultant that purportedly supports this claim. However, the memorandum is limited in scope to a comparison of surveys of the vegetative communities around the Unpermitted Drains before and after installation of the Unpermitted Drains. There is no discussion ofthe effects the Unpermitted Drains might have on wetland hydrology.

Attached to the memorandum is a vegetation survey ofthe vegetation in the Ballona Wetlands area in 1990, prepared by MTP' s biological consultant, and results of a survey of the vegetation in 2006, undertaken by the California Department of Fish and Game. The prior survey show the vegetation around the Unpermitted Drains to be arguably upland before installation ofthe Unpermitted Drains, the subsequent survey shows seasonal saltmarsh south of Culver Boulevard and a mix of seasonal saltmarsh and riparian vegetation north of Culver Boulevard. You thus assert that wetland habitat has expanded since installation ofthe Unpermitted Drains. However, the dominance by wetland vegetation documented in the survey conducted after installation of the Unpermitted Drains is evidence of a trend to dominance by wetland vegetation that began at the time agriculture use ofthe site ceased in the 1980's, before installation ofthe Unpermitted Drains.

In a 1991 memorandum, the Department of Fish and Game, which delineated wetlands in the Ballona Wetlands area in 1991, stated "During the evolution of the now certified Playa Vista Land Use Plan, we predicted that, were it not for the then ongoing agricultural operation, wetlands in Area B would expand. These agricultural activities ceased for approximately three years prior to the Corps' wetland determination, and, as we predicted, the wetlands did expand into the area which was formerly used for the production of barley and lima beans." The Unpermitted Drains are located in such a formerly farmed area. The 1990 MTP vegetation survey notes ofthe area where the Unpermitted Drains are located that "All of this area at some

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time has been disturbed, and much of it has been used for agriculture, some within the past 10 years."

The survey goes on to say that "The elevations of the flats appear to reflect the original elevations and except for the elevated roadways, the areas appear not to have been artificially filled." Indeed the survey labels the areas where the Unpermitted Drains are located as "old marsh flats." It is not surprising then, given the history of the site, that the 2006 survey found that wetland vegetation has returned to much ofthe area around the Unpermitted Drains, despite the limiting effects on hydrology that the Unpermitted Drains have had.

Again your general assertion in Section Cis that the Unpermitted Drains have not had any adverse impacts on wetlands. As explained above, the memorandum attached to your letter does not persuasively support this assertion. Moreover, this assertion is both conceptually and factually incorrect. Water is the main requirement for a functional wetland. Any fill or alteration. of wetland hydrology reduces a wetland's ability to function. If water is drained or removed, or isn't present in the wetland for as long, then wetland function is degraded. Therefore, wetland function is degraded by actions that disrupt water supply through direct fill of a wetland or draining. The Unpermitted Drains disrupt water supply through direct fill and draining ofa wetland and habitat within the reserve.

Oneofthechiefcomponentsofwetlandhabitatiswetlandvegetation. Thus,removalofwetland plant species, whether through removal or physical preclusion of growth, reduces the habitat value ofa wetland. In addition, degradation ofwetland function through alteration ofhydrology means that the same plants may not grow and habitat value and wildlife use of the wetland are reduced. This has clearly happened in the vicinity of the Unpermitted Drains. It is readily apparent from a review ofthe vegetation in the vicinity ofthe Unpermitted Drain located in a wetland south of Culver Boulevard that the drain is precluding growth of wetland plant species. Moreover, since the Unpermitted Drain is designed to drain water from the soil in the wetland around it, as well as ponding water that flows into the drain, this deleterious effect would not be limited to just the immediate vicinity where water pools, but would extend to any area hydrologically connected to the Unpermitted Drain.

Y ou also point out in Section C that the Commission approved limited fill o f wetlands through authorization of the BFM project, and thus argue that fill of wetlands for purpose of constructing the Unpermitted Drains is consistent with that approval. Please note that the Commission did not review fill of wetlands for the purpose of constructing the Unpermitted Drains because such structures were never before the Commission for its review. The Commission did review the proposal for the Approved BFM Drain, since this structure was part of the application and proposal for the BFM. The Commission found that limited fill of wetlands for the purpose of constructing the Approved BFM Drain was consistent with the Coastal Act. Coastal Act Section 30233 allows for fill of wetlands through the coastal development permit process in certain circumstances, including for restoration purposes. The Approved BFM Drain is a necessary component of a restoration project, the BFM, approved via the coastal development permit process. However, in contrast, no coastal development permit was applied for nor obtained for the Unpermitted Drains, and the drains do not facilitate the restoration functions of the BFM, nor do they serve any restoration purpose independent of the BFM. In fact, the Unpermitted Drains

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detract from wetland and habitat function. Thus the Unpermitted Drains are both unpermitted and could not be found to be consistent with Section 30233 ofthe Coastal Act.

Resolution

As we have expressed to you throughout our discussions, we would like to work with you to resolve these issues amicably. One option that you may want to consider is agreeing to consent orders. Consent cease and desist and restoration orders would provide your with an opportunity to have more input into the process and timing of removal of the Unpermitted Drains and mitigation ofthe damages caused by installation and functioning ofthe Unpermitted Drains, and could potentially allow you to negotiate a penalty amount with Commission staff in order to resolve the violation without any formal legal action. Another advantage to agreeing to a consent order is that it replaces the need for costly and time consuming litigation. Further, in a consent order proceeding, Commission staff.will be promoting the agreement between the parties and staff, rather than addressing the violations through a disputed hearing, which could only highlight the violations of the Coastal Act for which the parties are responsible.

If you are interested in discussing the possibility of agreeing to consent orders, please contact me by no later than April25, 2014 to discuss options to resolve this case. Staff would be happy to meet with you before the date noted above to discuss the steps necessary to resolve the unpermitted development described in this letter and to discuss the necessary scope of that resolution. Our goal is to resolve this situation amicably and as quickly as possible so that all parties can move forward. We greatly appreciate your time and input and look forward to discussing this matter further and working together on a consensual resolution. If you have any questions about this letter or the pending enforcement case, please do not hesitate to contact me as soon as possible at (562) 590-5071.

Sincerely,

Andrew Willis Enforcement Analyst

cc: Rick Mayfield, Department ofFish and Wildlife Michael Patonai, City of Los Angeles

Encl: Annotated plan