Hermosa hires oil attorney to assist with development agreement
Hermosa Beach has hired an attorney with expertise in oil issues to assist in negotiations with E&B Natural Resources, city officials announced Wednesday night.
Michael Mills of Sacramento-based Stoel Rives LLP Attorneys at Law will participate in meetings with the city’s subcommittee and E&B and also will be present at the June 10 City Council meeting. According to the firm’s website, Mills has experience with the oil and gas industries, as well as environmental litigation. The firm’s billing rate is $390 per hour. The council previously authorized City Manager Tom Bakaly to spend up to $20,000 for outside legal assistance in the E&B matter.
The city is negotiating a development agreement with E&B in case residents vote to overturn the ban on oil drilling in an upcoming election. The city entered an agreement with E&B last year that would allow the company to call for an election as early as November to lift Hermosa’s ban on oil drilling. If successful, the ballot measure would allow E&B to install 30 oil wells at the city’s 1.3-acre maintenance yard. The agreement also calls for the city to repay E&B $17.5 million if the ballot measure fails. E&B loaned the money to the city to help settle a lawsuit with Macpherson Oil. At the time, the city was facing up to $500 million in damages for breaking a 1984 agreement with Macpherson to allow oil drilling at the city maintenance yard.
City staff previously said they were considering a law firm from the Los Angeles area. That firm, Nossaman LLP, represented Angus Petroleum 25 years ago in a dispute against Concerned Citizens for Huntington Beach, over an oil project that was ultimately built and is now owned by E&B. The city said it decided against hiring Nossaman LLP in part because of its representation of Angus Petroleum.
Mills declined comment and said he would be directing all such requests to Michael Jenkins, the city attorney.
Bakaly said Mills likely will advise the city in its negotiations with E&B through July.
Correction: An earlier version of this story said the city “allegedly” broke its 1984 agreement with Macpherson Oil. The word allegedly is incorrect. The city lost the lawsuit with Macpherson Oil; what was left unresolved was the amount of damages it owed the oil company.