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Political Issues Cloud San Pedro Seaside Revival

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Times Staff Writer

The Logicon building, one of the tallest in San Pedro, sits empty, its garish black “Available” sign visible across the harbor. Residents closest to the waterfront live in a dingy public housing project with barred windows. Rail tankers bearing chemicals rumble past in the shadow of looming harbor cranes.

The shoreline of San Pedro remains shabby. But this summer, orange-vested workers have been laying pavement, and backhoes are carving out flower beds. Newly planted palms parade down Harbor Boulevard, some with their fronds still tied like straight-up ponytails.

If officials of the Port of Los Angeles have their way, this will be the start of Bridge to Breakwater, an ambitious 30-year, $779-million plan to build restaurants, shops, parkland, marinas and passenger terminals on 418 acres along the eight-mile stretch of waterfront from the Vincent Thomas Bridge to the breakwater at Cabrillo Beach.

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Officials see the project, plus several smaller efforts in San Pedro, as a kind of payback for decades of air pollution, traffic and industrial blight.

The project was the centerpiece of an effort by former Mayor James K. Hahn to improve his home region. His successor, Antonio Villaraigosa, has not yet revealed his plans for it. Even so, work has begun on parts of the project, at a cost of millions in public money. And even as the work progresses, some port and city officials have questioned whether some of the proposed projects are financially sound and whether others are legal.

The port’s senior managers have kept most of those concerns under wraps. They have also failed to provide detailed information on some facets of the projects to the public and, in some cases, to the Board of Harbor Commissioners, which oversees the port.

Documents obtained under the California Public Records Act and interviews with more than 30 current and former port employees, tenants and residents show:

* The port’s finance director protested last fall that the agency was drastically overestimating the rate of return on its investment in the Bridge to Breakwater development. But senior managers, who disagreed with his figures, withheld that from the Harbor Commission.

* Another senior financial official at the port cautioned that a plan to allow a private firm to develop a marina would shortchange the city. Senior managers never told commissioners of those concerns, but pressed them to approve the deal. The commissioners put the discussion on hold at the request of Villaraigosa.

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* The city attorney’s office advised the port that plans to start construction on part of the San Pedro waterfront before public hearings were held and a full environmental report was completed might violate the law. The port is moving ahead.

The port’s senior leadership strongly defends the San Pedro investments, saying they will inject new vitality into a community long overlooked by the port and City Hall.

Planning is proceeding briskly even though the projects lost their champion with the defeat of Hahn, a San Pedro resident.

In the weeks before Villaraigosa was sworn in, the Harbor Commission took several votes to move the work along, including approving $1.9 million to pay for the required environmental impact report on the Bridge to Breakwater construction.

But some San Pedro residents remain critical of the waterfront plan. Some community leaders have drafted their own alternative, accusing the port of arrogance for quietly planning what they see as a grandiose shopping and cruise-ship complex that would do little to meet the needs of local residents.

Port Town

San Pedro is just 25 miles south of City Hall, but the middle-class community seems a continent away. It has more in common with brawny seagoing cities such as Providence, R.I., and New Bedford, Mass. Many residents trace their roots to Croatia and Italy and to the fishing and canning industries that once dominated the waterfront. Many work on the docks today.

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Many who live there have long felt that Los Angeles treated San Pedro like an indentured servant, reaping the riches of its seaborne trade while ignoring its residents.

When Hahn took office, he promised to force the port to change. He named three fellow San Pedro residents to the five-member Harbor Commission, formed a powerful community advisory committee and pledged to hold air pollution at or below 2001 levels.

The harbor, he said in December 2002, must be “an asset to people who live around the port, instead of a burden.”

Today, the Bridge to Breakwater project promised in Hahn’s speech remains a top priority at the port, under the leadership of Bruce E. Seaton, interim executive director, and Stacey Jones, director of engineering development. Both owe their current jobs to the Hahn administration.

But to the surprise of port officials, the plan has generated vocal opposition from some in the community. Opponents of the plan say they were blindsided by a proposal that called for more than 2 million square feet of retail space, 1,200 condominiums, 2,000 hotel rooms and time shares and thousands of parking spaces, rather than the grassy parks and waterfront access they were hoping for. In response, port officials have scaled back some aspects of the project.

Even after those changes, representatives of the area’s three neighborhood councils have crafted an alternative they hope to present to commissioners by late summer. And some residents complain of secrecy by port officials.

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Last week, members of the port’s community advisory panel learned of a March 31 report -- obtained by The Times from a source at the port -- that contains detailed maps, cost estimates and timelines for the Bridge to Breakwater development. The panel had never been told of the report.

“We should not have to have secret sources revealing to us what has been done,” said June Burlingame Smith, chairwoman of the advisory panel’s committee monitoring Bridge to Breakwater.

Jones, the engineering director for the port, said the report was prepared for use internally, but added, “If they would like to see it, we have no problem releasing it. There is nothing in there that is confidential.”

Jones said she was troubled by charges that the port is secretive. “I find that alarming, that we would be perceived as not being open,” she said. “When I was assigned this project, that was one of my primary goals, for us to be as open as possible.”

Jones added that port officials would do nothing that might jeopardize the harbor’s financial stability and would carefully review the project to ensure that it is fiscally responsible.

Financial Questions

Significant questions, however, remain about the public cost and financial soundness of Bridge to Breakwater.

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On Monday, port officials said the current project estimate is $546 million. But that does not include an estimated $200-million cost for expanding an existing cruise-ship terminal and building a new one. Nor does it include $32 million to renovate a marina, which would bring the total to $779 million.

Also unclear is how much of the money would come from the port, a city agency that gets its money largely from rent charged to shipping companies.

Port officials say they are looking to other sources of money, including private investment, state and federal funds, money from a potential redevelopment district, corporate sponsorships, parking fees and donations.

Jones said the port staff would provide the Harbor Commission with a comprehensive Bridge to Breakwater business plan by late 2006, the same time the environmental impact report for the project is expected to be finished.

The port’s chief financial officer, Molly Campbell, said a full financial analysis would be premature until full project specifics are known.

Harbor Commission policy is that the port should invest its money with a goal of generating a 12% rate of return. Port officials, however, say that 12% is too much to expect from a project such as Bridge to Breakwater, in which more than half the land would be open space. Consultants hired by the port told commissioners last summer that they should be able to get roughly a 5% return from the project.

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But even that estimate has been called into question. Last fall, the port’s finance director Lou Colletta, who works for Campbell, warned other port officials in an e-mail that the project could yield a rate of return for the port of just 0.56%.

When harbor commissioners voted last September to move ahead with the Bridge to Breakwater project, they were not told of Colletta’s warning. The port’s public affairs director, Arley M. Baker, said senior port managers decided just before the vote to withhold a “business and financial plan” from the commissioners because it contained data that they considered preliminary, including the new, lower rate of return.

A few weeks after the commission voted, Baker dismissed Colletta’s estimate in an Oct. 20 internal memo to senior managers, calling it a “particularly negative and inaccurate memo.”

Colletta responded the next day in an e-mail that he copied to many of the port’s senior managers, in which he called the figures “critical information that the board should be made aware of as soon as possible.”

Soon after the exchange, Colletta left work on leave and has not returned. He has declined to comment. Baker said Monday that he misspoke when he called Colletta’s e-mail inaccurate, and that he immediately apologized to Colletta when he realized his mistake.

Jones and Baker acknowledge that the information has never been provided to the commissioners. Baker denied a request from The Times for the report, calling it sensitive business data.

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A similar dispute has surrounded plans to improve the port-owned Cabrillo Way Marina and surrounding port land.

Port managers crafted a proposed 50-year lease with a private firm, Westrec Cabrillo LLC, to remodel the marina, move railroad tracks and build stores, restaurants, offices and a marina club.

The costs were to be split between the port, which would pay $33.4 million, and Westrec, which would pay $42.2 million.

Campbell, the chief financial officer, criticized the lease a year ago in an analysis that said the agreement failed to adequately compensate the city. In February, the city’s chief administrative officer, William T. Fujioka, recommended against the deal, calling it risky.

Despite those negative assessments, port managers pressed the Harbor Commission to approve the contract on June 8. After a Times reporter asked Villaraigosa’s staff about Fujioka’s criticisms, the mayor-elect asked that the vote be postponed, and commissioners complied.

Port officials did not make Campbell’s report public until The Times requested it and have declined to say whether it has ever been provided to the commissioners.

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Although the overall Bridge to Breakwater project remains in the planning stages, one effort to improve the waterfront is nearing completion and another is scheduled to begin this fall.

Along Harbor Boulevard, green and white banners on fences tout the trees being planted and paths being built. Work is nearly finished on the $44.7-million refurbishing near the Vincent Thomas Bridge, including a cruise ship promenade with date palms, sculptures, benches, a boardwalk and a bocce court.

In October, port officials hope to start on a $44.1-million project to lengthen the promenade and make scattered improvements along the shore, including new piers, an 800-car parking lot, parkland and a 55-foot neon “San Pedro” sign on metal latticework, that closely resembles the sign for Seattle’s Pike Place Market.

Port officials are using a fast-track environmental review for that project -- an abbreviated version of a full environmental impact report -- which they say is proper because the project is relatively small.

The city attorney’s office, however, has questioned the fast-tracking.

Deputy City Atty. Christopher B. Bobo, in an e-mail to port environmental officials, said the fast-track review appears to be “impermissible” because it deals with “diverse, geographically far flung, and environmentally disparate elements of the overall Bridge to Breakwater project.”

He warned port officials against an attempt to “piecemeal” the project -- cutting it into small parts, which can mask the overall environmental impact.

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Port officials deny the fast-track project is part of Bridge to Breakwater and insist it is a beautification effort that stands on its own.

Celebration

Five days before Hahn left the mayor’s office, he went to the Port of Los Angeles for a ceremony at the cruise ship promenade that he helped build.

This strip of land near the Vincent Thomas Bridge was a dilapidated parking lot when Hahn became mayor. But on the day Hahn visited, it was alive with fluttering banners and Art Deco-style lamps. The occasion was the swearing-in of Hahn’s sister, Janice, to a second City Council term, but the crowd of port employees, tenants and nearby residents feted the outgoing mayor.

It was a celebratory day for those who had run the port the past four years and tried to refurbish the waterfront. Two city fireboats spouted water in a ceremonial display, and the horn of a nearby Disney cruise ship piped the opening bars of “When You Wish Upon a Star.”

Villaraigosa sat nearby, eclipsed by the acclamations for San Pedro’s Hahn family. But it is the new mayor, who already has raised questions about port operations, who will decide the future of the San Pedro renaissance.

Hahn’s name has vanished from a Harbor Boulevard sign touting the waterfront improvements.

Now, the sign credits Villaraigosa.

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