A Port in a Storm : Will Long Beach Turn the Corner?
There’s a city larger than Cincinnati or St. Louis hidden at the center of Southern California that has suffered more than anywhere from the downsizing of the Pentagon and the shocks of the recession.
But it’s a city that may well be turning the corner today, with lessons for Los Angeles and everywhere else in the region.
Its name is Long Beach, and after 20 years of dashed hopes, it is beginning to come back, thanks to surging economies in Asia that have spurred trade through the Port of Long Beach and begun unlocking new possibilities for this city of 450,000 people.
Growth of traffic through the port has already led to a successful expansion of the Convention Center. Next it will bring construction of a modern aquarium.
Ultimately it could lead to a waterfront district of smart retail stores, offices and restaurants called Queensway Bay that would finally redeem the area that once held a raffish amusement park catering to sailors in the old Navy town’s bygone days.
But like Southern California’s economy overall, nothing is certain right now for Long Beach. The city is fighting to keep the Navy’s shipyard with its 3,100 jobs, but it’s probably a losing battle because the Pentagon itself has marked the yard for closure.
Unemployment is still at 8%, down from more than 10% during the recession. Lower real estate values and property tax revenues are taking their toll on business and redevelopment efforts.
And despite economic downturns in recent decades, Long Beach has received an influx of immigrants from Latin America and Asia who are having their own struggles.
“There are about 50,000 Cambodians in Long Beach, the largest settlement outside Phnom Penh,” says Sandy Arun San-Blankenship, president of the Cambodian Business Assn. Life is not always easy, she reports. “Two weeks ago, a gang burned down a Cambodian restaurant.”
Long Beach is fascinating because it didn’t suffer only in the recent recession. Rather, the challenge of redeveloping its economy dates to 1970, when the Navy first said it was abandoning the Long Beach Naval Station.
Thus, the city provides an example of just how difficult economic redevelopment can be, while also offering clear evidence of how powerful an economic engine foreign trade is becoming for Southern California.
James Hankla, who is Long Beach’s city manager today, recalls that “after the Navy’s first notice that it would close the station, we knew we couldn’t depend entirely on defense work--McDonnell Douglas was worse off then than it is today.” So blue-ribbon commissions came up with a lengthy agenda of diversification.
“We decided to rekindle our tourist and convention business,” Hankla says, “then to re-establish downtown as a retail market and an office market. Also, we had to seek other industrial opportunities and at all times maintain extensions of the port.”
But the best-laid plans ran into problems--some of Long Beach government’s own making. Litigation over noise has held up full utilization of Long Beach Airport to this day.
Retail sales in the downtown area have been chronically low. One reason: Long Beach failed to act aggressively while nearby Lakewood and Cerritos built malls that drew away shoppers and sales tax revenues.
Auto dealers on Long Beach Boulevard moved to separately incorporated Signal Hill after long and frustrating arguments with Long Beach city government.
One problem was complacency: The site of oil discovery and the beginning of local manufacturing at the turn of the century, Long Beach fed on easy money for a long time.
But money ran out in the late 1980s. New office buildings on Ocean Boulevard ran into the recession, bankrupting developers.
Two years ago, Walt Disney Co., owner of the Queen Mary, contemplated putting a marine-oriented theme park in Long Beach but decided against it. Not all was lost: The architects who did the study for Disney are now designing the proposed Queensway Bay project.
Ambitions to attract and hold industry are only now showing signs of success. Long Beach’s promise to pay for training workers helped persuade McDonnell Douglas Corp. to bring MD-11 fuselage work, and 2,000 jobs, back to its big plant there--where employment has careened from 10,000 in 1970 to 47,000 five years ago to 17,000 today.
The future lies in communications. GTE has installed computer-telecommunications capabilities in Long Beach industrial parks. Hughes Communications is locating the headquarters of its Latin American satellite broadcast operations there. And Eugene Anton, an organizer of venture capital, is starting a business incubator with computer facilities for entrepreneurs.
But the Port of Long Beach has been the unqualified success of the city’s development plans, especially in the past decade as Asian trade boomed.
The port, which more than doubled its annual income to $71 million in the past 10 years, has expanded through landfill and land purchases and has been able to offer terminals to fast-growing shippers from South Korea and China. It has now surpassed Los Angeles to be the largest container port in the nation.
“Here shippers can get a decision in five days; in Los Angeles, where the City Council must rule, it takes five months,” says Robert Langslet, a Long Beach developer and former harbor commissioner.
It’s a friendly competition. The two ports are collaborating on plans for expanded facilities and the Alameda Rail Corridor to handle a doubling of traffic in the next 25 years. That expansion should create upward of 1 million jobs in every kind of occupation from stevedore to banker, truck driver to lawyer. And that may be more jobs than defense ever generated.
Long Beach, which as much as any community symbolized Southern California’s rise and fall on the Pentagon dollar, now is signaling the direction of the new economy.
*
More James Flanigan
* For a collection of recent columns by James Flanigan, sign on to the TimesLink on-line service and “jump” to keyword “James Flanigan.”
Details on Times electronic services, B4
