Deal Struck to Restore Salt Ponds in S.F. Bay

State and federal officials today plan to announce a landmark $135-million deal to buy and begin restoration of 16,500 acres of salt ponds in the south San Francisco Bay.

The tentative deal with Cargill Inc., an agricultural and industrial company, begins the largest wetlands restoration project in the state’s history. It is designed to help nurse San Francisco Bay back to ecological health, eventually returning the saltwater evaporation ponds to tidal marshes for birds and fish.

“This is more than just a purchase,” Gov. Gray Davis said in a statement. “We’re taking the first step toward restoring the San Francisco Bay.”

The multicolored evaporation ponds, which were diked for salt production during the California Gold Rush, now ring the bay’s southern shores from Mountain View to Hayward. They can readily be seen from planes flying into Oakland and San Francisco.

Most of the tidelands are expected to become part of the adjacent Don Edwards San Francisco Bay National Wildlife Refuge. The rest will be part of a state-run wildlife preserve.

Today’s announcement culminates four years of negotiations with Cargill to purchase the drained and desiccated wetlands--once offered for sale for $300 million. The process bogged down repeatedly until U.S. Sen. Dianne Feinstein (D-Calif.) brought the sides together with the help of four private, nonprofit foundations.

As the deal is structured, Cargill will receive $100 million for the purchase of 16,596 acres--roughly 26 square miles--and take a tax write-off of $143 million.

The company promises to donate the salt-making rights on an additional 9,000 acres of evaporation ponds that are now part of the national wildlife refuge.

The state government will apply about $72 million from voter-approved bond funds toward the $100-million purchase. The U.S. Fish and Wildlife Service will provide $8 million, and the difference will be made up by four Bay Area private groups: the David and Lucile Packard Foundation, the William and Flora Hewlett Foundation, the Gordon and Betty Moore Foundation and the Richard and Rhoda Goldman Fund. The purchase is set to be completed by Dec. 15.

The foundations also joined with the state and federal governments to supply $35 million to maintain the ponds and draft plans for their restoration.

“Cargill will retain the responsibility of operating and cleaning up the salt ponds,” said Mary Nichols, secretary of the state Department of Resources. “Then they will turn them over to the state and federal agencies, and we will restore them.”

Restoration will not be easy, or cheap. Some experts believe it may take decades and hundreds of millions of dollars to turn the ponds into wetlands, flushed by the tides.

After 150 years of operation, many of the ponds are contaminated with a production byproduct 10 times as salty as the ocean.

South San Francisco Bay cities have long relied on Cargill’s well-maintained system of dikes and levees as protections against flooding.

Still, restoring the wetlands has been a top priority of state officials and an array of environmental groups focused on improving the water quality of the bay and bringing back once-abundant fish and shorebirds.

“For more than 100 years, people have had these salt ponds in their backyards,” said Mike Spear, the state’s assistant resources secretary for land conservation. “Now they will have the bay as their backyard--an instant property upgrade.”