"Buy land, they're not making it any more."
That 19th century injunction by Mark Twain is the shorthand explanation offered by Vice Mayor Larry Klein and Councilman John Barton for why Palo Alto should buy an abandoned Los Altos sewage-treatment-plant site at the baylands end of San Antonio Road -- for $6.5 million.
But "they" are making cars. And the treatment plant land might provide much needed land for some of Palo Alto's dealerships, despite about a third of it possibly being classed as protected wetlands.
Due to quirks in financing of local governments, California cities get a critical chunk of their revenue from vehicle dealerships.
Councilman Bern Beecham, who has led the push in recent years to safeguard Palo Alto's revenue base, supports the idea of using the former sewage plant site -- abandoned when Palo Alto contracted to treat Los Altos' sewage years ago -- as a place to store or sell cars.
Beecham as mayor in 2004 focused on trimming city costs and stabilizing sharply declining sales-tax revenues. He recalled Monday that John Anderson, owner of Anderson Honda, informed city officials that Honda had warned him he'd better make his Embarcadero Road dealership bigger and more visible or else. City leaders took notice, Beecham said.
They investigated replacing the Municipal Service Center on East Bayshore Road with dealerships in 2005 and in December 2006 looked at using six acres at the Palo Alto Airport to store Anderson's inventory. They found the service center would cost too much to relocate and using extra land at the airport countered plans toward less, not more, development in the Baylands.
Now the council is expected to approve the $6.5-million purchase of the former treatment plant along San Antonio Road, bordering Highway 101.
And although the property's future as a dealership, or vehicle storage lot, isn't guaranteed, it did motivate the council to reopen negotiations for the land this summer, Beecham said.
The property, which includes wetlands and 2.5-acres of "fill" soils, served as Los Altos' sewage treatment plant from 1958 to 1972, Real Property Manager Bill Fellman reported.
Some treatment ponds and a building remains, Barton said.
Palo Alto signed an agreement with Los Altos in 1984. For $2 million, Palo Alto would acquire a half-ownership of the land and manage it, Fellman wrote. The agreement also indicated that Palo Alto was interested in eventually owning the property, he said.
The Utilities Department uses it for storage and pays the city's Refuse Fund $60,000 a year and the City of Los Altos $60,000 a year, he said.
But the agreement spawned a sometimes bitter rift between the cities. For many years, Los Altos would not even provide Palo Alto a copy of its deed, Fellman said.
But in January, Los Altos indicated a willingness to resolve the issue and by April, the cities had entered into negotiations -- with Barton and Councilwoman LaDoris Cordell representing Palo Alto and Mayor Curtis Cole and Councilman Ron Packard representing Los Altos.
Agreeing on a price was tricky, Fellman wrote. Although land is scarce, the former plant contains wetlands needing restoration and it has some contamination. Palo Alto has estimated clean-up work will add $4.6 million to the $6.5 million purchase price, he said.
"I thought it was a win-win," Cordell said. "We got this land and they'll get the pay-out on it. I think everyone was quite satisfied."
Los Altos had no pressing need to sell the land, Packard said. But it also doesn't have a use for it.
"It makes sense for (Palo Alto)" to use it for car dealerships, Packard said. "We are neighbor cities; why not accommodate them?"
Packard said he hoped the goodwill generated by the sale will spill over into other areas.
Under the deal, Palo Alto would pay Los Altos three installments of $2.17 million beginning this January and ending in January 2010.
Even if the property costs Palo Alto more than $10 million, it will make "a good amount" of money for the city if used for an auto dealership or even vehicle storage, Klein told the Weekly Monday, based on projections by Administrative Services Director Carl Yeats.
Although auto dealerships are the favored use for the land, it could also serve as a new recycling center or composting facility when the landfill closes in 2011. Others have suggested relocating the Animal Services facility, which needs significant remodeling, to the treatment plant land, perhaps using the center's current East Bayshore Drive property for a dealership.
Klein said the land could be ready to use in two to three years.