3 Major Economic Projects Could Define the L.A. of 21st Century

In the early 1990s, Los Angeles weathered a triple-hit to its economy that few cities could have survived: The aerospace industry contraction cost hundreds of thousands of jobs; the 1992 riots destroyed confidence in the city’s safety; and the 1994 earthquake ripped apart roads and other infrastructure.

Now, with the region’s economic recovery taking hold, the city is poised on the cusp of three gigantic public works projects that, although they could radically expand Los Angeles’ place in the regional and global economies, have become magnets for passionate opposition.

Retrofitting and improving the Port of Los Angeles, construction of a high-speed railway linking the harbor to downtown, and expansion of Los Angeles International Airport represent billions of dollars in local and federal investment and potentially more than 700,000 new jobs--an extraordinary increase with profound implications for the local economy.

Together, say proponents, the projects could turn Los Angeles into the world’s most important trade center, the industrialized world’s gateway to the still-developing economies of Asia and Latin America. If all goes as planned, Los Angeles would be positioned to dominate its half of the world just as New York City overshadowed American trade with Europe in the early 20th century.

“We want to make it so that all roads lead through Los Angeles,” said Rocky Delgadillo, Mayor Richard Riordan’s deputy for economic development. “It’s the new Rome.”

As they move ahead, however, the three projects also challenge city leaders to answer deep questions about what type of city Los Angeles will be as it crosses the millennium.

On one side are an assortment of City Council members and others who warn of environmental damage and unraveling communities--which they fear will be the byproducts of the expansion projects. Councilwoman Ruth Galanter, whose district includes the airport and whose council committee oversees local commerce, is chief among the critics of LAX expansion, and she is trying to build a coalition of like-minded opponents.

She is joined by some long-standing skeptics of the Alameda Corridor. Some economists, for instance, believe that the corridor and port expansions may do wonders for coal miners in Wyoming but not much for tortilla makers in South-Central. In fact, some believe that local industries may actually be hurt as the corridor construction diverts truck traffic and damages relationships between Los Angeles suppliers and their customers.

“One has to be concerned with what will happen to the firms in this corridor,” said UC Santa Cruz professor Manuel Pastor Jr., who has extensively studied poor neighborhoods in Los Angeles. “While the construction is underway, it might slow the ability to go to market. Those customers could find other suppliers, and the firms in the corridor could be hurt.”

Pacific Rim Ambitions

On the other side are advocates of commerce and industry, led by Mayor Riordan, who see Los Angeles’ future as the leader of the Pacific Rim and beyond. Their mission is as simple as it is audacious: to make Los Angeles the largest trading center on Earth and to build a powerful local economy so linked to international economics that it is relatively immune to regional ups and downs.

Riordan relentlessly touts his vision of Los Angeles as the center of, as he often says, “what’s new and what’s next.” What that means, he said in an interview last week, is a city that stands at the center of a vibrant global economy, rooted in the Pacific Rim but reaching literally every country on Earth.

“International trade is arguably the most important part of the future of Los Angeles,” Riordan said. “We can be the most important international trade center in the world.”

In an effort to take that message to the nations whose business Los Angeles most covets, Riordan intends to lead a local delegation on a 16-day tour of Asia early next year. The trip includes stops in Japan, Korea, China and Taiwan. There, Riordan and the delegation plan to advertise the city’s investment in its rail, port and airport--investments that senior mayoral advisor Steven Soboroff said prove “we’re serious about putting our money where our mouth is.”

The city’s gritty, working port is an essential part of its international ambitions. Hundreds of millions of dollars are being poured into improvements to see that it comes true. New loading and unloading facilities, as well as terminals, dredging and other improvements, are being constructed and coming on line.

Already, the port is bustling with business. It ranks alongside Long Beach as the nation’s largest, and port officials expect another sharp increase in traffic next year, partly because the price of goods from many Asian countries is dropping.

“Imports,” said Al Fierstine, the port’s director of business development, “are soaring.”

Still, it has not been all good news for the port. A prolonged strike by pilots disrupted some business, and a shortage of rail equipment needed to move goods out of the port and into the national economy persuaded some companies to send their business elsewhere. That resulted in short-term problems and raised the threat of long-term ones: The big fear for port officials was that companies would find other harbors that worked for them and then refuse to return once the Los Angeles problems were back under control.

Fierstine, however, said he thought that catastrophe had been averted.

“I don’t think we’ve lost people for good,” he said. “We have people coming back already. . . . This is where the market is.”

Indeed, Los Angeles’ location at the edge of the Pacific Rim, along with the easy access it offers to the nation’s rail and highway networks, makes it a hard place to pass up.

The city already is the nation’s largest center for international trade. Last year, the local customs district was America’s busiest, recording $170.1 billion in import and export traffic. That accounted for 12% of the nation’s total imports and exports and surpassed every city in the country.

Trade Need Is Conceded

Even critics of some of the new projects acknowledge that Los Angeles badly needs that trade.

Councilwoman Galanter, for instance, stressed that despite her criticism of plans to expand LAX, she strongly believes that new airport space is important to the region. International trade, she said, supplies the region with half its jobs, and holding onto that trade in the coming century is essential to providing a safe and prosperous city.

Nevertheless, Galanter said she is convinced that adding runway space to the city’s already overcrowded main airport is a solution that ultimately will be bad for everyone.

“I agree completely . . . that there is an enormous need to increase airport capacity in the region,” Galanter said. “I disagree just as vehemently that the way to do it is through this LAX expansion.”

Instead, Galanter has proposed that the city focus on expanding the airports in Ontario and Palmdale. She argued that expanding the Palmdale airport and building a rail to it would make the airport economically viable and would help create jobs in that area. That, in turn, would keep many Palmdale residents from commuting to Los Angeles for work, which would reduce freeway traffic, improve air pollution and free up more Los Angeles jobs for local residents.

It is an all-inclusive vision, but an expensive one. And Riordan dismisses it as wildly impractical.

“How do you make this happen?” Riordan asked, shaking his head in disbelief. “Where are you going to get the money for all these pieces? You have to be realistic.”

By contrast, work on the Alameda Corridor already has begun. Scheduled for completion in 2001, that high-speed rail project has weathered significant opposition, but advocates have pressed ahead. By the time it is completed, the corridor is expected to have created about 9,000 construction jobs. City officials are working with local companies to train Los Angeles workers for those positions.

What concerns some observers, however, is that the jobs that the corridor and port expansion create in the long run--as many as 700,000, many of them high-paying ones--will not be confined to the local economy, but scattered across the Western United States. In addition, some of those skeptics fear that the corridor and other projects will help enrich already prosperous businesses and people far outside the city, but will do little to help those most in need, the relatively poor residents of South Los Angeles, through which the corridor will run.

The Pacific Council on International Policy, a prestigious Los Angeles group based at USC, recently launched a study to examine questions such as those.

“Plans to expand ports and airports meet with strong local opposition because of financial concerns but also because the link between the infrastructure for international trade and the economic welfare of distinct groups in the region is not sharply drawn,” the group said in a statement announcing its study.

Pastor, who is part of the study, echoed those concerns. “Behind the hoopla, people need to ask about the long-term impact,” he said. “What are the plans to connect local industry to these export markets? That hasn’t really been thought through.”

Benefits for South Central Questioned

What, for example, will a high-speed rail do to the merchants at Martin Luther King Boulevard and Vermont Avenue, whose stores burned in the 1992 riots and who have weathered a long struggle back? What is their place in the global economy that so animates the mayor and his allies?

The question angers Riordan.

“If you’re always worried about each step, about what it’s going to do for each individual, then you never take big steps,” he said, adding that the impact for local businesses would be like the economic benefits that come from having the movie industry in Los Angeles.

“People ask: ‘Why should we allow the movies to shoot in my neighborhood?’ ” Riordan said. “People in the movie industry need to go to doctors and need to call lawyers. They go to restaurants, and they go to the barbers. . . . The same is true for longshoremen and the people at the port.”

According to Soboroff, whose work helped create the Alameda Corridor, the principal benefit to South Los Angeles probably will be environmental, not economic. The corridor will replace an existing train track with dozens of local stops and will make it unnecessary for scores of trucks to ship goods from the port to the downtown rail yards, Soboroff said.

“We’re going to take all those slow-moving trains and tied-up traffic on the freeway and get rid of it,” he said. “It’s like adding a whole other invisible freeway.”

For Riordan, the projects represent pillars of the city’s economic future. But despite his discomfort with criticism directed at them, he knows firsthand that each has its opponents.

Just last week, the mayor attended the dedication of a major new addition to the city’s port, a $200-million export terminal that will link American coal mines to Asian utilities. The gleaming facility opened to great fanfare--orange smoke billowed from its towering loader while Strauss’ “Also Sprach Zarathustra” blared to a crowd of several hundred people. Just before yanking the switch to turn on the loader, Riordan effusively thanked the people behind the project.

The terminal, Riordan said, “will sharpen Los Angeles’ competitive edge in the global marketplace” and help ensure that the city “is the nation’s foreign trade leader going into the next century.”

Riordan’s remarks were warmly received by the crowd of businessmen and political dignitaries. But as he turned to leave, the mayor was approached by a lean man in tennis shoes and a baseball cap. He wanted assurances from Riordan that dust from the new coal storage areas would not blow across the harbor and pollute the area.

“I don’t know all the details, but I have complete confidence in my staff,” Riordan responded, talking as he walked toward his car. “We need to be concerned about the environment, but we also need to create good jobs for Angelenos.”

Persisting, the man asked: “Are you saying that good jobs and a clean environment are incompatible?”

“No, not at all,” Riordan answered forcefully. “I think we can have both.”

That seemed to satisfy the man, who shook Riordan’s hand and walked away.

Out of the man’s earshot, Riordan sighed and shook his head. “No good deed goes unpunished,” he said with a thin smile.

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Trade Central

Combined imports and exports through Los Angeles

1996: $170 billion

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Thinking Big

Three gigantic public works projects that could greatly expand Los Angeles’ place in the global ecomony are in the works. But critics worry about environmental damage and an erosion of the city’s cultural fabric. Here is a look at each project:

Alameda Corridor

Background:

* Construction has begun after years of controversy and discussion.

* Expected to cost $1.9 billion, a high-speed rail line will link the Port of Los Angeles to Union Station.

* Will vastly speed up cargo handling at the port.

* Proponents foresee reduced truck traffic on local freeways.

Projected Impact:

* 10,500 new jobs predicted, 9,000 in construction and the rest in professional and technical work.

* Port officials say completed corridor will dramatically increase their business. Overall jobs created by the Alameda Corridor and port expansion could top 700,000, through most will not be in the immediate area.

Lax Expansion

Background:

* In 1996, Los Angeles International Airport handled 1.9 million tons of cargo with a value of $60 billion, highest value in the world.

* 50 million passengers in 1996.

* 390,000 people are employed in businesses that directly or indirectly rely on LAX.

Expansion:

* Plan would add at least one runway, create a new terminal for commuters and reconfigure the current design.

* Could cost $8 billion to $12 billion.

Projected Impact:

* Proponents hope airport will handle 98 millilon passengers a year by 2015.

* Critics foresee increased delays at the airport, added pollution and ultimately a failure to deliver on the promise of a smoother operation for importers and exporters.

Los Angeles Worldport

Background:

* With the adjacent Port of Long Beach,the Los Angeles Harbor makes up the nation’s largest port.

* Handled about 3 million containers last year. An increase of 12% to 17% is expected in 1998.

Expansion:

* Two new terminals--one exclusively for coal--opened this year.

* Two more terminals are expected to open soon, and a third is under design.

Cost:

* Each terminal costs up to $20 million.

* The coat facility is a massive, $200 million loading system.

* Total port improvements are expected to cost about $650 million.

Short-term Impact:

* A tremendous burst of business this year caught rail and port officials unprepared. Combined with a long strike by port pilots, the surge resulted in cargo backlogs and caused some shippers to go elsewhere.

Sources: Los Angeles WorldPort; Los Angeles Office of International Trade; office of Mayor Richard Riordan