City Council Approves Port of L.A. Coal Facility Despite Long Beach Suit

After years of negotiations between port officials and overseas investors, the Los Angeles City Council has approved plans for a $180-million coal exporting facility that backers say will bring thousands of jobs and millions of dollars in new revenue to the harbor area.

The size and location of the project, however, have been questioned by the city of Long Beach, which filed a lawsuit two weeks ago challenging the adequacy of the proposal’s environmental impact report. The lawsuit claims that the Port of Los Angeles and other partners in the project understated the potential for windblown coal dust to blanket waterfront properties in Long Beach. The suit seeks further study of the project’s environmental consequences.

Despite the lawsuit, the Los Angeles council unanimously approved the project Tuesday, granting a 35-year port lease for the terminal. Regional environmental agencies will now determine whether the project qualifies for air and water quality permits.

Port officials say they hope that by this time next year, work will begin on the 120-acre complex at Pier 300 on Terminal Island, replacing an existing dry bulk terminal near San Pedro.

Tuesday’s council vote was taken without discussion. Tay Yoshitani, the port’s deputy executive director of maritime affairs, said the vote of support for the facility means the project’s investors will provide $9 million for the drafting of detailed design plans and other preliminary work.

As currently envisioned, the so-called Los Angeles Export Terminal would be the largest dry bulk facility of its kind in the nation. The port’s economic analysis suggests that the project would provide up to 5,600 jobs during its construction and operation. It also would add hundreds of millions of dollars to the regional and national economies through payrolls, taxes and other business revenues, officials say.

Moreover, they say, the project has the potential to improve the nation’s trade imbalance with Asia by significantly increasing coal exports to Pacific Rim nations.

For the Port of Los Angeles, the project also holds some promising rewards based on current financial projections. With an estimated rate of return of 12% to 14%, officials say the coal facility would generate an estimated $139.4 million in the next decade and $15 million annually in income beginning in 2005.

The project is designed to serve the vast coal requirements of Japan, Korea and Taiwan. The three nations now import almost all of their coal. Over the next 20 years, officials say, the nations are expected to require 260% more coal than they use today. The port’s proposed terminal, they say, could by itself meet 10% of that new overseas demand, producing a tenfold increase in the port’s coal exports.

Officials say, the new facility is expected to handle about 10 million tons annually when it opens, and quickly expand to twice that amount. It also would be the only terminal in the United States with facilities and equipment capable of loading 250,000 tons of coal onto a single vessel.

The terminal would be built and operated by a consortium of 36 public and private investors, including the Harbor Department. The port’s role in the project would include constructing terminal buildings costing $56 million and providing acreage valued at another $74.7 million.

A partnership agreement calls for the port to be among the project’s majority shareholders. Those shareholders, owning 51% of the endeavor, would include Southern Pacific and four U.S. coal producers. Forty-nine percent of the project would be owned by Japanese partners that include utilities, shipping lines, trading firms and banks.

Coal Export Project The City Council has approved plans for a new coal exporting facility on Terminal Island. Port officials say the $180-million project will increase local coal exports by tenfold and bring new jobs and millions in revenue to Los Angeles.