The Port of Long Beach, straining at its seams after two decades of robust growth, is looking to 1985 to complete $150 million in wharf, road and rail construction and to firm up another $400 million in building for 1986.
The port's year also is expected to be marked by the spirited biennial politicking that accompanies vacancies on the Harbor Commission. This year two of five commission seats, among the most prestigious in city government, will be available.
And, if tradition is followed, the mayor will nominate two of the city's most influential citizens for the jobs. Mayor Ernie Kell said that he would nominate millionaire businessman Robert Langslet for a second term on the commission, but he had not chosen the other appointee.
In addition, this will be the year the Harbor Department aggressively pushes a 35-year plan that would nearly double the size of the increasingly crowded port by the year 2020, said James McJunkin, its executive director since 1976.
"It will be a construction year," said McJunkin, 55, in an interview in his sixth-floor harbor office, where he runs the quasi-independent city department with its 325 employees and a $150-million annual budget.
The view from his office overlooks the cranes and wharfs of the West Coast's busiest port. He motioned toward a new breakwater off Pier A and in the direction of aging cargo sheds that will soon be replaced by larger ones.
"With our shortage of land, we're in a juggling act to intensify its use," said the folksy McJunkin, an up-through-the ranks administrator with Southern roots. "That puts us in the seemingly absurd position of tearing down sheds and building new ones on the same site."
Regardless of the new construction this year, McJunkin believes "the major story will be the planning (by the ports of Long Beach and Los Angeles), which by the end of 1985 will have committed all of their available land."
Even with projects that the two San Pedro Bay ports have planned for the near future and even if cargo increases by as little as 5% annually, McJunkin said, "in five years everything we can do with existing land will be done."
That forecast comes after an extraordinary 1983-84 fiscal year, which saw the volume of cargo handled by the Long Beach port jump 13%. It also follows a strong decade, during which cargo increased an average of 9.1% annually--from 24 million tons 10 years ago to 54 million last fiscal year.
Former 'Country Cousin'
Such growth underscores the Long Beach port's 20-year emergence from the shadow of Los Angeles harbor--"No question about it, we were the country cousin," said McJunkin--and makes it imperative that officials "juggle" their limited land resources with skill.
During the next 12 months, for example, the port plans to spend $75 million to shuffle tenants, replace aging warehouses and construct new wharfs to make room for a flow of cargo that is expected to double by the end of the century.
In addition, 1985 should bring the first $17 million in improvements in a $53-million project to upgrade harbor-area streets. It should also see building of a $50-million rail yard that would enhance trade while reducing truck traffic on local freeways, port officials said.
Three other large projects costing a total of more than $400 million could break ground by January, 1986, said McJunkin.
These private developments on port property include the $319-million World Trade Center, by far the largest development ever proposed for downtown Long Beach, and 350-room additions to both the Queen Mary and Queensway Bay Hilton hotels.
In general, the port is expecting another good year, said McJunkin. That is the case despite ever-declining exports from the port, a sharp drop in port profits last fiscal year and decisions by six shipping lines in mid-1984 to take their business elsewhere, officials said.
Positive Trend Seen
"We saw a profound (positive) trend in '84," said McJunkin, "with huge importation of manufactured goods, primarily consumer goods, from the Pacific Rim basin from Australia to Japan."
Those imports accounted for most of the 46% increase in 1983-84 in containerized cargo handled by Long Beach, which already was among the world leaders in that category. The port moved 19.5 million metric tons of cargo in the huge, box-like steel containers last fiscal year, compared to 13.4 million the year before.
McJunkin attributed that growth to Long Beach's construction of new facilities, averaging about $50 million a year for seven years, and close ties with Far Eastern shippers.
Most recent figures show the growth trends of 1983-84 continuing, despite losing as customers two shipping lines that went bankrupt and a half dozen that moved six months ago to the Port of Los Angeles.
"Our facilities were very crowded and L.A. had completed some terminals and suddenly there was some room," explained port information officer Elmar Baxter.
For the first quarter of the 1984-85 fiscal year, which began July 1, total cargo was up about 10% and container volume was 13.8% above 1983's first quarter.
Port officials, however, were reluctant to predict growth equal to the last year's, because much of the last fiscal year's volume came in the spring and early summer before the defections of the six shipping lines to Los Angeles. Cargo volume in the quarter immediately following those departures was down about 10%, said Baxter.
Still, port spokesmen are optimistic.
Jim Gray, president of the Harbor Commission, said he expects the port to recapture the tonnage lost with the departing lines within a few months. "You lose some of the less mature lines, but they're being replaced by expansion of the strongest shipping lines in the world," he said.
And 12-year Harbor Commission veteran Richard Wilson predicted that "the port should have a very, very good year in '85 if the economy keeps moving like it is. Hopefully the President is going to get some more export activity in '85."
Wilson was referring to President Reagan's discussions Wednesday with Japanese Prime Minister Yasuhiro Nakasone about opening up Japan to more American goods, which would increase exports from Long Beach.
Exports, hurt because the strong dollar drives up the price foreigners must pay for American goods, are an area of continuing concern, said McJunkin, noting that 1984 saw a decrease in "basically all types" of products shipped overseas. Exports accounted for only 21 million tons of the 54 million handled by Long Beach last fiscal year, but lower interest rates in the U.S. may help boost them in 1985, he speculated.
Port profits, down from $25.5 million to $21 million, or 17.5%, in spite of cargo increases in 1983-84, should also be up this year, officials said. That is due in part to the absorption of the cost of the port's multi-year construction "binge," said McJunkin.
During the first four months of this fiscal year, July through October, the port's net operating income was up 29% over the same period the previous year, officials said.
The 1985 construction plans also will enhance earnings, said McJunkin. Foremost among the port projects are:
- The $50-milllion Intermodal Container Transfer Facility, a rail yard to be built in Wilmington about two miles north of the ports of Long Beach and Los Angeles. It will save shippers millions of dollars a year by eliminating 600 to 830 daily truck trips now necessary to move cargo 25 miles from the ports to the Los Angeles railroad yards.
The yard, a milestone because it is the first joint project by the competing ports, should be 70% complete and in operation by the end of the year, said Wilson. It is being constructed and paid for by the Southern Pacific Railroad, which recently sold $54 million in port-backed, tax-exempt bonds to finance the project. The combined ports handle more cargo than any other in the nation except the harbor of New York-New Jersey.
- The $50-million redevelopment of Pier A, where old sheds will be removed and new terminals built on 65 existing acres and 24 new acres of landfill. Expected to be finished by the second quarter of 1986, the project will increase port revenue from the pier from $1 million to $7 million a year, said McJunkin.
- The $15-million development of 20 acres for a steel terminal at the West 7th Street Landing in the northern harbor. The landfill, terminal and new wharf should bring the port about $3 million a year in new revenue, McJunkin said.
- The $10-million redevelopment of Pier G, where terminals will be expanded and a new wharf built to accommodate a third 950-foot supertanker, said McJunkin.
- The $17-million first phase of the federally funded harbor roads project, which affects both ports. Work in Long Beach this year includes making the Ocean Boulevard-Harbor Scenic Drive intersection "more of a full cloverleaf" and the repaving and widening of Ocean Boulevard from the downtown to Los Angeles Harbor.
By the end of the year, the port may also break ground on the World Trade Center and the two hotel additions along Queensway Drive, west of the Queen Mary, McJunkin said.
The massive trade center would cover about 13 acres north of Ocean Boulevard at the foot of the Long Beach Freeway. It will include three office towers, a 600-room hotel, a large federal office building, restaurants and shops.
Wilson said the port will sign a master lease this month that "fixes in concrete" the port's lease of the site to developers IDM Corp. of Long Beach and Kajima International Inc., a subsidiary of one of Asia's largest construction firms.
By the end of February, the Harbor Commission should have Wrather Corp.'s new plan for a 300- to 350-room addition to the Queen Mary Hotel, port officials have said. Corporate exhibits similar to those at Epcot Center at Disney World and a cluster of specialty shops like those at the Fulton Fish Market in New York also are planned, said Wilson.
Addition to Hilton OKd
The Harbor Commission already has approved a 350-room addition to the Queensway Bay Hilton, and it is on the city Planning Commission's agenda for Jan. 17.
Politics also will be part of the 1985 picture for the port.
At least by June, Mayor Kell will have forwarded the names of two candidates to fill Harbor Commission vacancies to the City Council. The jobs pay $50 a meeting, or $200 a month, plus substantial travel "perks," including an average of two foreign trips a year.
The terms of Wilson, a prominent lawyer on the commission since 1973, and Langslet both expire June 30. Langslet's reappointment seems assured, but Wilson has served the maximum two six-year terms allowed by city charter.
Kell would not say who he is considering for Wilson's slot, but commission President Gray said:
"I'd have to say a guy like John Brizendine, the retired president of Douglas Aircraft (Long Beach's largest employer), would be a good choice. (He's) somebody who really understands international trade and marketing and has run a very large business."