2 Cities Wage High-Stakes Shipyard Battle : Defense: Tactics escalate as Long Beach seeks to save its facility and San Diego funds a lobbying effort to close it. Thousands of jobs depend on federal decision.

In this tale of two cities, San Diego is calling it “a friendly rivalry,” but Long Beach is calling it “war.”

Long Beach has accused San Diego of hiring a high-priced Washington lobbyist and paying him $75,000 extra as a “bounty” for closing the Long Beach Naval Shipyard. San Diego admits to hiring the lobbyist but says talk of a bounty is ridiculous.

At the very least, it is a war of words, facts and figures, as the Defense Base Realignment and Closure Commission, widely known as BRAC, ponders the fate of the shipyard, which is tentatively earmarked to be shut down.

The imminence of the decision and the inherent tension of the battle have ignited escalating tactics on both sides, giving insight into the high-stakes chess match that who-wins-with-BRAC has become from Maine to California, Miami to Puget Sound.

“Oh, it’s just a friendly rivalry between Long Beach and San Diego. And we’re trying to do the classy thing and stay away from it as much as possible--except to say it would be of enormous benefit to San Diego if (the) Long Beach (shipyard) closed,” said Howard Ruggles, military adviser for the Greater San Diego Chamber of Commerce.

“We’re not talking about one team beating another in the Super Bowl,” said an irritated Bill Gurzi, chairman of the Southern California Save Our Shipyard Committee. “This isn’t a game. It’s life and death reality. We’d lose 3,100 jobs at the shipyard alone and 7,000 spinoff jobs from Orange to Ventura counties. And unlike most federal establishments, we operate in the black!”

Last month, committee members charged at a conference in Long Beach that there was a conspiracy between San Diego shipyard operators and the Navy brass, who allegedly concocted spurious arguments to justify placing the Long Beach yard on the BRAC list and fudged the figures about potential savings from closure.

“Something isn’t exactly right between San Diego and the Navy,” Gurzi said.

A Navy spokesman said Friday that the placement of the Long Beach shipyard on the Defense Department’s hit list had been the result of a “thorough, fair and complete” review of the Navy’s needs.

“The recommendation for closure was driven by fiscal reality in a changed, streamlined Navy and Marine Corps,” said Capt. Gordon Peterson, director of congressional affairs for the Naval Sea Systems Command in Washington.

Should Long Beach close, the state as a whole would suffer, the Save Our Shipyard Committee warns, because private shipyards in San Diego are not equipped to deal with the volume and complexity of work that Long Beach has handled since the shipyard opened in 1943.

In addition, no dock in San Diego is able to service aircraft carriers, the specialty of Dry Dock No. 1, the concrete-lined, 1,200-foot-long centerpiece of the Long Beach yard. Nothing remotely resembling Dry Dock No. 1 is located anywhere else within 1,600 miles of San Diego, where 70% of the Pacific fleet is based.

So, should San Diego be unable to meet the Navy’s repair and maintenance needs--and Long Beach backers say that is inevitable--the Navy will, in desperation, they contend, turn to government-owned shops in Pearl Harbor, Hawaii and Bremerton, Wash., because private yards here won’t have the space or expertise to duplicate Dry Dock No. 1.

Or, they say, taxpayers will be asked to build a comparable dock in San Diego, which could cost up to $500 million, assuming the California Coastal Commission gives its permission.

“This is absolutely unconscionable,” Gurzi said. “At a time when the entire state is suffering unemployment levels reaching 20-year highs and trying to recover--clumsily, I might add--from military and aerospace downsizing, for one city to attack another in this manner is utterly indefensible.”

In the torrent of insults being exchanged--the likes of which haven’t been heard since some of the nastiest Raiders-Chargers games--Gurzi says retired and active admirals living in San Diego want the Long Beach facility closed “because they’d rather have their entire fleet in front of them, right there in their little bathtub, as they sip their mint juleps on the verandas in Coronado.”

At the same time, San Diego officials say that, if the Long Beach yard stays open, private San Diego shipyards are in danger of closing--and most important, the officials appear to have the backing of BRAC.

In figures heavily disputed by Long Beach, the panel says closing the Long Beach facility could save taxpayers $1.9 billion over the next two decades--the biggest single saving in this round of closings.

The panel will make its final recommendations to President Clinton on July 1, by which time several more skirmishes are likely.

In the most recent hearing March 1, when the Long Beach shipyard was officially placed on BRAC’s hit list, commission Chairman Alan J. Dixon said there was an outside chance the facility could stay open, provided the Pentagon saved enough money in other areas. However, Navy Secretary John H. Dalton said he had chosen to leave the Long Beach yard on the closure list because it lacks the capability of serving the Navy’s ever-expanding nuclear fleet.

But its record of maintaining hundreds of conventionally powered ships speaks for itself, supporters contend, while also arguing that shutting down the facility would mean enormous costs elsewhere. About 60% of the yard’s 3,100 employees are members of minority groups, say proponents of the facility, which, according to an independent study, pumps $757 million a year into the regional economy.

“Orange County--which hardly needs another economic setback--would lose $300 million a year in shipyard-related business,” said Ray Grabinski, a former Long Beach councilman who assists Gurzi with the Save Our Shipyard Committee.

The loss of the facility would be an almost crippling blow for Long Beach, which in recent years has seen the closure of the Long Beach Naval Station and the elimination of 30,000 jobs at McDonnell Douglas, the city’s largest employer.

After Ruggles, the San Diego chamber executive, was quoted in the San Diego Union-Tribune as saying George Schlossberg, the city’s BRAC lobbyist, would be paid $75,000 “extra” if the Long Beach shipyard closed, the Save Our Shipyard Committee was not only quick to cry foul--it accused Schlossberg of being a bounty hunter.

Larry Taub, the Washington representative for the city of Long Beach, said he had no knowledge of Schlossberg being paid an additional fee should the shipyard close, but added: “I know the first thing I was taught as a lobbyist was never to take a contingency contract. It doesn’t look good, and there’s this big gray area on legality.”

Schlossberg, the Pentagon’s base closure counsel during the George Bush Administration, could not be reached for comment. But Ruggles emphatically denied that Schlossberg would be paid anything more than his hourly rate, saying, “There’s no bonus. He’s not a bounty hunter.”

Ruggles declined to disclose Schlossberg’s salary but admitted that the city of San Diego had assembled a $200,000 “war chest” to help reach its primary objective--the closure of the Long Beach Naval Shipyard.

Ruggles said San Diego is planning for the demise of the Long Beach facility and “feeling buoyant” about the future.

Anchored by National Steel and Shipbuilding Co., San Diego’s fleet of up to six ship-repair and maintenance companies can expect to take on “a whole lot of new work,” Ruggles said, without being more specific. They will repair and maintain, he said, the more than 80 ships whose home port is San Diego, including up to three nuclear-powered aircraft carriers by the year 2005.

Long Beach counters by saying that the Navy has barely begun to examine the environmental consequences of dredging San Diego Bay to accommodate the carriers, not to mention the problems of a Navy proposal to bury toxic sediment under the floor of the bay.

“Has anyone considered what it will mean to have three nuclear-powered aircraft carriers butting up against some of the most expensive real estate in California?” asked Grabinski, the former Long Beach councilman. “These carriers will be in Coronado--right next to downtown San Diego. Have the citizens of San Diego even thought about that?”

Ruggles counters by saying that the points in San Diego’s favor are obvious--that the Long Beach yard has outlived its usefulness.

“The benefit, of course, is that ship-repair work for ships homeported in San Diego would be done in San Diego, instead of the government--as it now does--taking ships from San Diego and putting them in Long Beach,” he said.

While other cities have been brought to their knees economically in the wake of base closures, San Diego, in Gurzi’s words, is making out like a bandit.

The Space and Naval Systems Warfare Command Headquarters is moving from Crystal City, Va., to Point Loma, bringing with it an annual budget of $4 billion and 800 to 1,000 jobs. The city also expects an increase in employees at the Naval Aviation Depot at North Island and the Navy’s research labs on Point Loma.

Ruggles said the closure of the Long Beach shipyard is a matter of “simple arithmetic” because the Navy wants to “concentrate its assets” in two facilities on each coast--Bremerton, Wash., and San Diego on one; Norfolk, Va., and Jacksonville, Fla., on the other.

The Navy also wants to pare down its fleet--which consisted of 545 ships in 1990--to 346 by the end of the year. In previous cuts, the Department of Defense moved to cut the Navy’s complement of East Coast shipyards from four to two, ordering the closure of facilities in Philadelphia and Charleston, S.C.

The eight-member panel has closed 250 bases since 1988, 22 of them in California, in a process of post-Cold War military downsizing.

But Long Beach officials say the numbers weigh in against closing the shipyard, which is expected to gross $266 million this year and is the only one in the Navy system that operates in the black. Shipyard managers have saved taxpayers $74 million since 1988 through a series of measures to cut costs and increase efficiency, according to Pentagon figures.

“The BRAC reality is bad enough, but consider this: Long Beach has taken its ship repair business and in the last six years come in $103 million under budget--that’s $103 million more the Navy gets to play with! “ Gurzi said. “So those of us in Long Beach are deeply offended when we hear that the Navy will save $1.9 billion in 20 years by shutting us down.

“It will save them nothing and will cost them dearly in the long run. And who will they have to thank for it? Our good neighbors in San Diego, that’s who.”