Port Ordered to Disclose Income From Leases

A Los Angeles Superior Court judge has ordered the city’s Harbor Department to disclose financial analyses that reveal how much the Port of Los Angeles earns from leasing space to its tenants--information that port officials have claimed is confidential.

In a case brought nearly two years ago by the San Pedro News-Pilot, Judge Miriam Vogel ruled last week that refusing to release the analyses violates the California Public Records Act.

The judge also invalidated a policy, adopted in 1986 by the Board of Harbor Commissioners, that prohibits the release of any information that port officials believe would place them or one of their tenants at a competitive disadvantage.

“Obviously, we are delighted,” said Edward J. McIntyre, a lawyer for the newspaper. “I think it is important not just for the News-Pilot, but also the media and consequently the public that we serve . . . that the court again enforced the proposition that public entities are to do their business in public.”

The city attorney representing the Harbor Department, however, said port officials “are very concerned” about the ruling and said they may simply do away with the financial analyses and keep the information in another form to prevent disclosure.

The analyses, which include financial information about prospective tenants, details of the proposed leases and the opinions of the port’s financial staff, are prepared for the Board of Harbor Commissioners, the five-member panel that approves leases.

“If we are not permitted to generate a written report, we will probably find a way to get this information for the board otherwise,” said Assistant City Atty. Catharine Vale. Perhaps, she said, the port’s financial staff would “just have to keep remembering things” rather than committing their opinions to paper.

Vale said the harbor commissioners will likely consider whether to appeal the ruling at their Wednesday meeting. Under the state’s open-meetings law, the discussion can be held in closed session because it pertains to litigation, but any votes must be disclosed.

Vale said it is not clear whether an appeal would delay the release of the records requested by the News-Pilot. The News-Pilot lawyer said he expects the records to be forthcoming as soon as the judge, who issued her decision orally, enters a formal written ruling.

In 1985, according to court briefs, News-Pilot reporter Teresa Simons sought an analysis of the port’s agreement to rent 115 acres to American President Lines “which would indicate the rate of return the port gets or is projected to get on the lease and how that rate of return was arrived at.”

Simons subsequently asked for additional information about the port’s lease arrangements with other tenants, including the Korea Shipping Corp.

Port officials, however, insisted that releasing the information would put them at a competitive disadvantage with other ports, and could also cause financial harm to tenants who expect that information they share with the port will remain confidential.

In July, 1986, the harbor commissioners adopted a policy stating that it would not release any information that would give competitors of the port, or customers or suppliers of its tenants, an unfair advantage in the marketplace.

Vale said the Harbor Department’s position is that the public is the beneficiary of the port’s financial success, so the public is better served by keeping the information secret than by having access to it.

The News-Pilot, however, argued in court briefs that “disclosure of the lease analysis provides an immediate and effective means for the public to monitor the government’s business. Disclosure of the analysis is required in order to safeguard the accountability of the government to the public.”

Judge Vogel agreed, saying the financial analyses are precisely the type of information the public needs.