Land Ahoy for Hueneme : Surplus Military Parcel to Increase Port’s Size, Opportunities

After almost four years of bureaucratic haggling and planning, the Port of Hueneme will finally acquire 33 acres of Navy land in a March 25 ceremony--a transfer that will expand not only the port’s size, but also its prospects for new business.

But the occasion marks the beginning rather than the end of years of work on the site marked by a stunning view of the Pacific Ocean and a collection of abandoned and decrepit buildings that formerly housed the Naval Civil Engineering Laboratory.

The tiny, land-hungry port, in conjunction with the city of Port Hueneme, plans to spend as much as $25 million to transform the tract into much-needed parking lots and warehouses, a business park for raising fish and marine life and, eventually, a seafront promenade complete with interpretive center in the historic lighthouse.

Some of the ambitious ideas have outpaced financial reality. The city lacks money to build the pedestrian path envisioned as long ago as 1978, and the modest port’s big plans are dependent on the vagaries of a highly competitive global market.

But the free land is still seen as a potential economic bonanza.

Officials estimate that the 30% increase in the port’s size will bring a proportional jump in its income and between 70 and 250 new jobs and translate into as much as $1 million a year in revenue for the cash-strapped bedroom community in the next decade.

“The port is really at kind of a crossroads right now,” said Kam Quarles, manager of marketing and trade zone services. “We’ve built out our existing acreage. In order to keep growing we have to have more land. The NCEL, because it’s adjacent to the port, creates a tremendous opportunity for that.”

The only deep water port between Los Angeles and San Francisco, the Port of Hueneme has spent the 1990s remaking itself from an offshore oil industry base to a diverse importer and exporter of automobiles, fruit and other cargo.

International Trade Keeps Port Booming

Offshore oil shipments have dropped 38% since 1990. Fuel oil imports have dropped from almost 196,000 tons in 1990 to zero.

By contrast, banana shipments have jumped 127% since the start of the decade. Fresh fruit imports and exports leaped more than fourfold to almost 240,000 tons in the same period. Total cargo handled hit a record 987,000 tons in 1995, up from about 762,000 tons in 1990.

“It would have been deadly had the port not gone out and looked for international trade,” Quarles said.

The construction in 1993 of an $11-million refrigerated fruit terminal--at 140,000-square-feet the largest structure of its type on the West Coast--and the addition of another 40,000-square-foot fruit shipping facility in 1995 have largely contributed to the cargo growth in that type of commodity.

But both projects were downsized due to the 65-acre port’s physical constraints. Indeed, Port Hueneme ranks fourth in tonnage among California’s 12 ports, yet is smallest in size.

Hemmed in by the ocean, the city of Port Hueneme and the massive Naval Construction Battalion Center, the port has few expansion options.

But when the civil engineering lab site was targeted for closure in 1993 as part of ongoing defense base closures, the port saw an opportunity to acquire land valued at $9 million for nothing.

The joint port district-city plan eventually won out over other proposals that included a prison, Cal State University campus or one-stop center for the homeless suggested by a coalition of charities. However, a portion of the money generated on the site must, by law, be funneled to homeless programs.

“It’s been relatively noncontroversial,” Quarles said of the proposed expansion. “It has been remarkable how everybody has rallied around this.”

Indeed, no jobs were lost in what will be the nation’s first transfer of surplus military property to a port district. The previous occupants, 500 civilian Navy workers, moved in April 1996 to a $20-million state-of-the-art structure on the adjacent Seabee base.

While no community opposition surfaced, conflicts instead arose between the city and the Oxnard Harbor District, the public agency that runs the port.

In 1995, a five-month debate ensued over how much money the city would receive from the port for police protection, roads and other services.

An agreement was eventually signed just before a federal deadline that increases the city’s share of port revenue from the present 5%--about $400,000 a year--to 6.25% initially and as much as 8% depending on how much more money is generated from the additional land. The city will also receive a $150,000 lump sum when the property is transferred.

City Manager Dick Velthoen concedes the added revenue will help, but said the windfall won’t come “even close” to solving the cash-strapped municipality’s chronic financial problems.

City, Port District Tout Partnership for Future

Without high sales tax-generating businesses and with half its land taken up by the nontaxpaying military base, Port Hueneme has long struggled to find the money necessary to pay for police and other basic services, let alone its mothballed cultural center and other amenities.

“The city needs a lot more money than is projected from the business on that piece of property to make up for the lack of sales tax,” Velthoen said.

Moreover, last year, city officials insisted on tying the property conveyance to a promise that an expensive federal sand replenishment program would continue indefinitely, protecting Port Hueneme’s municipal beach, as well as the deteriorating sea wall on the site.

Port district officials contend that delays in resolving the yearlong dispute cost them at least two potential customers.

Although the political wounds remain, both sides say they are looking forward rather than back.

“It’s a true partnership,” municipal planner Greg Brown said of the plan. “Their success is our success out there.”

The most economically important components of what is envisioned to be at least a five-year project are unlikely to captivate the public’s imagination.

Starting this spring, the port plans to demolish 90% of the aging buildings on its 21-acre portion of the property for parking lots to house the luxury imports that are regularly unloaded from massive container ships. A record 125,000 Jaguars, Mercedes-Benzes and the like arrived in 1995.

The result will be about 15 more acres of auto terminal space, yielding a 60% to 80% increase in vehicle-handling capability, Quarles said.

“Nothing is more valuable to us than a paved parking lot,” he said.

A $2.3-million federal grant and $300,000 state grant will pay for much of the $3 million in basic infrastructure--roads, utilities and such.

Not included in that figure is building demolition and asbestos removal costs that could top $2 million. Half the price tag alone could be swallowed by a World War II-era, 70,000-square-foot administration building that sports foot-thick walls.

The fisheries industry is expected to use seven other buildings. Another refrigerated fruit terminal could also be built in the years ahead. A ring road and pair of 2,000-foot-long railroad spurs--a mode of transportation the port lacks--will also be constructed.

Even with the expansion, port officials have said there are more potential customers than available land. Critics aren’t so sure, pointing to the 9.4% drop in port revenues in the last fiscal year resulting from a decline in fruit and car imports.

“Just having more land isn’t necessarily the answer to having more business,” Velthoen said. “They need more dock space.”

Despite protracted negotiations to use a Navy wharf that would give the port a sixth berth, military clearance for its unlimited use has not been forthcoming. Those negotiations are expected to resume after the land transfer.

Still, Harbor Commissioner Mike Plisky believes the port will make efficient use of the site.

“It’s totally false to say we can’t maximize the use of that land,” he said. “We simply can’t make the big deals we would like to make until we acquire the port, but there are plenty of smaller deals we can make.”

Hueneme Banking On New Aquaculture Park

It is a succession of modest deals the city is counting upon to make its five-acre aquaculture park a success.

Ten 17,500-square-foot lots are available for commercial aquaculture operations that would raise fish and other seafood as well as host nonprofit marine research facilities. No comparable business park is believed to exist on the West Coast and interest has been strong, said Dick Keller, an Oxnard real estate consultant and developer the city has retained to secure tenants and negotiate leases.

“Of the 10 available lots it looks like eight of them are committed and we have interest in the other two,” Keller said. “[Aquaculture] is a growing industry.”

The over-fishing of abalone and other delicacies means product demand exceeds supply, said Janice McCormick, president of Ormond Beach-based Proteus SeaFarms International. The company is looking at two lots for raising abalone and white sea bass.

In addition, Ab Lab, a private abalone farm that has leased land on the site from the Navy for the last 20 years, has its own expansion plans.

Keller believes the aquaculture park could create 20 to 30 jobs and probably more.

“I’m hopeful that the success of this project can sort of be a model for Ventura County, and if we have other lands available there can be additional aquaculture parks,” he said.

Revenues will be used to make site improvements and partially pay for sea wall repairs estimated to cost $1.5 million.

With looming bills like that, perhaps the most doubtful aspect of the plan is increased oceanfront public access. About five acres has been set aside for a beachfront promenade, including a restaurant and some sort of interpretive center in the historic lighthouse.

“There’s no money for that,” Velthoen said flatly, adding that most of the city’s ambitious plans, proposed almost two decades ago, to develop its beach remain on the drawing board.

Recreation aside, the public still stands to benefit from the port expansion, even though restricted public access means most people will never see the scope of the operation. A 1994 study concluded port activity created 2,500 direct and indirect jobs and injects $275 million into the county’s economy. Since then, the cargo through the port has increased almost 30%.

“We need the land desperately and the only unhappiness related to the project is that its taken so darn long,” Plisky said. “It simply gives us the ability to expand and expansion means more jobs and more economic activity.”