Browning-Ferris ponders Eagle Mountain pullout; waste hauler's move comes as landfill nears approval.

Waste giant Browning-Ferris Industries Inc. may be looking to sell its 60 percent interest in the Eagle Mountain waste-by-rail regional landfill just as the giant landfill nears the end of a three-year approval process, a BFI official told the Business Journal last week.

Discussions between Houston-based BFI and officials of Palm Springs-based Mine Reclamation Corp., which was set up in 1982 to build the largest landfill in the Western U.S. in the California desert 60 miles northeast of Indio, have been going on "for a while," said Pete Block, BFI spokesman.

"I know we are talking about the project itself and its viability and what our interest is going to be," Block said.

Gary Johnson, vice president of development for MRC, said the company is considering selling BFI's interest to another waste hauler or another company.

Eagle Mountain is one of three major waste-by-rail projects being proposed by the major waste companies and railroads to be built in remote areas of California desert.

Waste experts say Southern California cities need to create these desert landfills and haul trash there by train to avert a trash crisis in the next century -- as many local landfills are expected to close in the next 10 years.

If the landfill plan gets final approval from state and federal agencies, one-third of Los Angeles County's trash could be carried 200 miles by train and truck to be dumped at Eagle Mountain, which will have the capacity to hold 700 million tons. Under the plan, trash would be taken by train along Southern Pacific's intercontinental line to the landfill.

Among the other regional waste-by-rail projects is a proposal by Torrance-based Western Waste Industries Inc. to use Southern Pacific lines to haul garbage to a 500 million ton facility in Imperial County.

Another plan, advanced by Oak Brook, Ill.-based WMX Inc., would carry refuse via Santa Fe railroad lines from Los Angeles County to a landfill with the capacity to hold 360 million tons in San Bernardino.

Waste experts say only one or two of the landfills will be needed, and the first to gain a permit will have the edge over the others.

Eagle Mountain is further along than the other two in the public approval process. Western Waste and WMX have recently released draft environmental impact reports for the projects. That marks the beginning of the public comment period needed for county approvals of those projects.

By contrast, Eagle Mountain received county approval from Riverside County in 1992 and now has in hand 15 of the 20 required permits needed to begin construction, Johnson said. It is expected that the remaining approvals from state and federal agencies will be obtained in the next six months and that construction on Eagle Mountain can begin in 1995.

But just as the project is expected to get its last approvals, according to MRC officials, its majority shareholder is considering pulling out.

Neither Johnson nor Block would explain why BFI may want to sell its stake. But both made statements that hinted BFI may be tired of waiting for a return on its investment of more than $20 million.

"How long has this (project) been going on now?" Block asked rhetorically.

Johnson said BFI officials "have investment return criteria and development goals they are looking at."

He said the fact that Riverside residents are challenging the landfill's environmental impact report in court this week had nothing to do with BFI reassessing its interest. BFI has known about that suit, which alleges the report violates the California Environmental Quality Act, for more than a year, he said.

Johnson added that MRC officials contend the landfill's environmental assessment does not violate CEQA.

Block said BFI reassessing its interest in the project "by no means" indicates the nation's second largest waste hauler is considering abandoning Southern California operations. "We have a very definite interest in Southern California," he said.

Last year, BFI signed an agreement to buy Western Waste in order to establish a larger presence in Southern California. But that deal foundered when the companies could not agree to terms after a month of negotiation.

Rich Widrig, spokesman for Western Waste, said that company was not interested in buying Eagle Mountain, because it believes its waste-by-rail project is superior.

"You've got to ask yourself why" BFI may want to sell its interest in the site at this time, Widrig said.

Stephen Weinress, an analyst with Irvine-based investment firm L.H. Friend Weinress & Frankson, noted the waste industry "is not flush and I think BFI is having some concern with their on-going commitment."

Eagle Mountain also may not be a logical or practical investment for BFI, he said. "Eagle Mountain makes a lot of sense for Browning-Ferris if they were a major player (waste hauler) in the Southern California market," Weinress said. "But Browning-Ferris' total presence in the L.A. basin is about 4 percent. That is why they tried to buy Western Waste."