Port Seeks Exemption to Parking Tax : Harbor: Companies that store and process cars after their arrival here were never meant to be included in the new levy, L.A. officials say.

The Los Angeles City Council on Wednesday tentatively agreed that the city’s new parking tax should not apply to any of the huge lots in the harbor where about 250,000 cars each year are stored and processed for sale after their arrival at the port.

The exemption is being sought by Port of Los Angeles officials who fear the tax might drive away the harbor’s seven auto storage and processing companies. In all, the tax would cost the firms $250,000 to $500,000 each year.

The city’s new tax, devised by Mayor Tom Bradley, took effect in August and adds a 10% surcharge to parking in the city. The levy is expected to generate about $30 million annually, according to city budget analysts.

If the council decides against the exemption and any companies decide to leave, their business will be welcome in other harbors like Port Hueneme and San Diego, said officials there.

City lawmakers already have modified the tax once, to exclude apartment buildings. The council is now moving toward an exemption for the port businesses, arguing they were never meant to be included in the new levy. A final vote on the waiver is expected in several weeks.

The exemption, proposed Wednesday by Harbor-area Councilwoman Joan Milke Flores, would not affect the city’s revenue estimates from the parking tax because the businesses were not specifically included in the original study of the tax, city officials said Wednesday.

Nevertheless, officials said, at least one of the companies that stores and processes new cars on 270 acres in the port recently received a tax assessment on parking from the Los Angeles City Clerk’s Office. That surcharge led the Harbor Department and Flores to push for the exemption.

In a motion that was approved without discussion Wednesday, Flores argued that the council had approved the new parking tax with the understanding that it would only apply to commercial parking lots, such as those in the city’s many business districts.

Applying the tax to the port businesses, Flores told her colleagues, was not only unintended but could lead the companies to leave the harbor, jeopardizing hundreds of jobs and “a significant part” of the port’s annual income.

The concern, port officials added, is that the tax could hurt the Harbor Department in its competition with other West Coast ports that vie for auto shipments--a business that generates an estimated $6 million to $7 million annually for the Port of Los Angeles in land leases and wharfage fees.

Though the Port of Los Angeles accounts for about 25% of all West Coast shipments of autos, port officials said the market has become increasingly competitive in recent years. That competition, they said, is evident from auto shipments to Port Hueneme and San Diego, which recently opened its first auto storage yard. And the competition extends to the Pacific Northwest, where at least one port has offered free land just to collect the wharfage fees on new autos passing through the port.

“The tax would hurt us. It would be a problem,” claimed Michael Lemke, property manager for the Port of Los Angeles.

The specific exemption voted Wednesday would amend the city’s parking tax law to exclude auto service companies preparing unregistered cars for sale or export. It would apply to Crown Auto Warehouse Co., Pasha Marine Terminal Inc, Fred N. Noonan Co., Import Dealers Service Corp., Distributors Auto Services Inc., Matson Terminals and TNT Auto Warehousing Inc.

Before the proposed amendment returns for final action by the council and mayor, it is also expected to be reviewed by the city administrative office, where one analyst said Wednesday that the exemption for the auto storage companies is essentially a policy decision for the council.

“It is clear (the port companies) are not like other businesses that were to be affected by the ordinance. On the other hand, they are in the business of paying to park and store vehicles. . . . “ said Rexford Olliff, an analyst in the administrative office. “It’s a balancing act and one the council will have to decide.”

Officials at other ports saw Los Angeles’ tax as a potential opportunity.

“I hope the parking tax discourages people from using Los Angeles,” said Port Hueneme’s Deputy Executive Director Bill Buenger. “I don’t know that it has or that it will, but I hope it does.”

While his harbor now accommodates only two storage yards for new cars, Buenger said Port Hueneme has plenty of space for additional business if it comes. “We’ve got acres of farmland around here, and that land could easily be converted,” he said.