Santa Ana Readies Trade Zone Bid : Long Beach to Oppose Plan for Rival Duty-Free Complex

Government and business officials in Santa Ana say they are confident the city will win its bid for establishment of an independent foreign trade zone despite opposition from the City of Long Beach.

The first public showdown will come Tuesday, when the Commerce Department is scheduled to hold a public hearing in Santa Ana on the city’s application for a duty-free import-export zone.

Long Beach officials have said they will formally protest the application because they don’t believe Santa Ana should have a foreign trade zone that is operated independently. Long Beach officials point out that the Long Beach zone was established to serve all of Southern California, said Mike Powers, traffic manager for the Port of Long Beach.

If the Commerce Department approves Santa Ana’s request, Orange County’s first foreign trade zone would eventually cover 43 acres, cost about $25 million to build and create 300 to 400 temporary construction jobs and about 1,500 permanent industrial positions, according to Hank Cunningham, executive director of Santa Ana’s Economic Development Corp.

The city is insisting on independence from the trade zone administered by Long Beach to preserve an Orange County identity and enable Santa Ana to negotiate directly with businesses interested in locating operations within the zone. There are only about 60 foreign trade zones in the world.

If the plan is eventually approved by the three-member federal Foreign Trade Zone board, companies in the Santa Ana Foreign Trade Zone would be able to import raw industrial materials duty-free, manufacture high-technology equipment and then export the finished products duty-free or sell them domestically, Cunningham said.

“Foreign trade is an area of business that has not reached its potential here in Orange County,” he said. “There is a vast potential, and the foreign trade zone would act as a catalyst for new business, serving the entire county.”

Santa Ana’s application has been endorsed by the World Trade Center Assn., the Economic Development Corp. of Orange County, the Orange County Chamber of Commerce and the Greater Santa Ana Chamber of Commerce, Cunningham said.

The city has called a press conference this morning to explain why a foreign trade zone would be beneficial--especially one independent of the Long Beach operation.

Mayor Daniel E. Griset and City Manager Robert C. Bobb will be joined by Donald Miller, chairman of the World Trade Center Assn. of Orange County and president of Marine National Bank, and Koichi Beckwith, an international trade specialist with the Commerce Department.

Trade Group Gives Support

Miller said Tuesday that the World Trade Center Assn. strongly supports Santa Ana’s application for an independent foreign trade zone. He said Santa Ana considered the option of becoming an “affiliate or subzone of the Long Beach Foreign Trade Zone, but it was felt that Orange County would be better served by having a separate foreign trade zone.”

“It’s a matter of identification,” he added.

Powers, the Port of Long Beach official, agreed with Miller that “Santa Ana might be concerned about an identification problem, that by being part of the Long Beach zone it would lose some individuality.” But, he continued, “that’s not necessarily true.” Long Beach is willing to sit down and discuss the issue with Santa Ana to reach an amicable solution, he said.

Since its foreign trade zone status was approved in 1979, Long Beach has expanded into San Diego and Ontario, and there is no reason it could not expand into Orange County, Powers said.

“We’ve offered the people of Santa Ana the chance to do exactly what they want to do under the wing of Long Beach,” Powers said. “They’ve declined that offer to date.”

The Long Beach Foreign Trade Zone consists of an 11.5-acre site in North Long Beach, a smaller subzone--the Toyota Motor Manufacturing plant, also in North Long Beach--a National Steel and Shipbuilding facility in San Diego and the 1,350-acre California Commerce Center project in Ontario.

Cunningham said that Santa Ana has “no plans to engage in conflict or competition” with Long Beach, and noted that as the official Customs Port of Entry for the Southern California area, including Orange County, Long Beach would continue to be the way station for products coming from overseas.

Long Beach, Cunningham said, has “basically a warehouse-type operation, while we’re looking at more of a manufacturing operation.”

Sees Potential for Rivalry

Santa Ana would import “high-value, light-weight products--nothing at all bulky like automobiles,” he said.

Powers, however, questioned the contention that there would be no competition between the two cities in the growth of their respective trade zones. He said that although it is true that the Long Beach zone is generally a warehousing operation, “we have the capability of handling high-tech equipment and we do have manufacturing capabilities. I don’t agree with the statement of Santa Ana that there would be no competition.”

Dennis Puccinelli, a Commerce Department foreign trade zone analyst based in Washington, D.C., said the public hearing, set for 9:30 Tuesday morning, is “the very beginning of the (application) process.” Next on the agenda is a public comment period, followed by reviews by Customs and Commerce Department officials, and, finally, a vote by the Foreign Trade Zone board, consisting of the secretaries of the departments of Commerce, Treasury and Defense, Puccinelli said.

The entire process could take about nine months, he said.