Harbor Panel Votes to Cancel China Shipping Company Lease

Following a judge’s order, the Long Beach Harbor Commission on Monday took a first step toward canceling its controversial lease with a Chinese state-run shipping line, city officials said.

The panel voted unanimously to ask Port of Long Beach staff to develop documents canceling the lease with the China Ocean Shipping Co., or Cosco. In the lease, signed in October, the port agreed to build a 145-acre terminal for the company on the site of the city’s closed Naval Station.

Monday’s vote followed an order from Los Angeles Superior Court Judge Robert H. O’Brien, who ruled last week that the panel must vote on the Cosco project and consider its environmental impact without any prior commitments, such as the lease.

The impact of the expected lease cancellation, which could come in another vote as early as next week, is unclear.

City lawyers have said that breaking the lease could expose the port to a breach of contract lawsuit. If both Cosco and port officials ultimately decide to proceed with the project, O’Brien’s order will almost certainly delay the start of construction. Under the existing lease, the port must compensate Cosco if the terminal is not ready by July 1, 1998.

The deal has come under fire from several quarters. Environmentalists decried the potential loss of a colony of black crown night herons on the base. Preservationists hoped to block the deal out of concern for the historic value of the buildings on the 55-year-old base. Two San Diego congressmen oppose the project because they fear Beijing would use the terminal as a base for espionage or arms smuggling.

Cosco officials could not be reached for comment. But the company that operates their existing terminal space at the port, where Cosco had been a customer since 1981, expressed its frustration.

“While the naysayers and their lawyers [list] a host of excuses for the obstructionism, not one of them has demonstrated an economically viable alternative to this project,” Jon Hemingway, president of Stevedoring Services of America, said in a statement. “Unfortunately for the port and the community, Cosco does have alternatives, although in the past they have maintained a commitment to long term relationships.”