Current owner Charles Keenan is working to retain rights to the 93 water connections on Beachwood — a valuable possession estimated to be worth more than $3 million. That may be due to a mistake at the negotiating table last year when the city was hammering out a settlement with Keenan. Water rights on the Beachwood property reportedly went unmentioned in the settlement agreement and unnoticed during negotiations.
“In the Beachwood settlement, water connections were not addressed, so they remain the property of (Keenan),” said Dave Dickson, general manager of the Coastside County Water District. “It was surprising to many people the city did not address water rights in the settlement agreement.”
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Mayor John Muller says water rights on the Beachwood property were never put on the table during negotiations.
“No, it was never brought up,” he said. “Somebody missed the boat on it. It was a very important factor that nobody noticed until it was too late.
“It would’ve been an additional negotiation thing we could’ve used,” Muller added.
The city’s legal counsel gives a slightly different account. John Knox says water rights weren’t part of the property litigation the city was dealing with at the negotiating table.
“I don’t think it was neglected. I don’t think it’s fair to say that,” Knox said. “I’m not free to discuss the settlement negotiations.”
City leaders now see no other option to fulfill the Beachwood settlement agreement except paying $18 million by issuing bonds. They hope to recoup as much money as possible through limited development on the Beachwood property, possibly for as many as 65 homes.
But developing the property would require water connections, which the city, or an approved developer, would have to secure.
The local water district is currently reviewing an application from Keenan to transfer his water rights off the Beachwood property. Dickson says the transfer of water connections is largely a procedural matter, and he expects the water board to approve Keenan’s request this month.
Dickson said there are plenty of water connections available for the city to purchase. However, those connections aren’t cheap; they could cost about $35,000 each, or $2.3 million for 65 homes.
“At this moment, it might be a matter of just paying the price,” Dickson said.
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