Port Shifts Focus After Cosco Deal for Base Unravels


Although Congress has killed a deal to lease the abandoned Long Beach Naval Station to a Chinese shipping company, the Port of Long Beach vowed Friday to find new tenants for the controversial base and to make other accommodations to keep the China Ocean Shipping Co. from leaving the harbor.

John W. Hancock, president of the Board of Harbor Commissioners, said the port will begin talks as soon as possible with three or four major shipping lines that are interested in acquiring more terminal space. The companies, which Hancock declined to identify, already hold leases in the Port of Long Beach.

Port officials said they would try to find a new site for China Ocean Shipping if other shipping lines in the harbor move onto naval station grounds. Cosco, which is one of the largest shipping lines in the world, has operated in the port since 1981.


“Congress has thrown two years of effort out the window due to a ridiculous political climate,” Hancock said. “Our plans are to go forward posthaste with development of the base. There is time to get new tenants.”

The embattled Cosco deal came to an end Thursday night, when congressional conferees submitted to Congress the 1998-1999 defense authorization bill.

The legislation’s final language effectively prohibits the Chinese company from leasing any part of the Long Beach Naval Station after it is converted into a cargo terminal. Officials said there is virtually no chance of amending the bill.


Leading the effort to block Cosco from the facility were Sen. James M. Inhofe (R-Okla.) and Reps. Duncan Hunter and Randy “Duke” Cunningham, both San Diego-area Republicans.

They and their conservative colleagues assert that Chinese Communists could use the former base for military purposes and intelligence-gathering.

Port officials and Cosco supporters said that two recent Department of Defense reports show that the shipping line does not present a national security threat to the United States.


No one was concerned about Cosco when the naval base was open, harbor officials pointed out. But now that it is closed, the company has been transformed without justification into a military threat.

The pro-Cosco forces lost ground in the debate because of controversies surrounding the export of U.S. satellites to China and alleged Chinese political contributions to President Clinton and the Democratic Party.

On Friday, local politicians and harbor officials criticized Congress for jeopardizing trade with China and punishing the port for no reason. Already, the Chinese have indicated that they may reject proposals to build terminals for two U.S.-based shipping lines.

“We are dismayed that members of Congress could push through legislation this destructive and ignore the facts of the situation,” said Yvonne Avila, the communications director for the Port of Long Beach.

Harbor officials contend that the ban will temporarily hamper redevelopment of the base and adversely affect the state’s economy. Cosco, they noted with irony, can still operate in Long Beach or any other port in the nation.

“This is an affront to the nation’s seaport system,” said Long Beach Mayor Beverly O’Neill. “Their efforts set a dangerous precedent by denying the ability of a local community to reuse closed defense property to its highest and best use.”


O’Neill chastised Congress for making a behind-the-scenes deal despite overwhelming interest in the issue on the part of shipping companies, politicians from seaboard states, port authorities and dockworker unions. “I don’t think they realize the implications of what they have done,” she said. “They could be jeopardizing future trade agreements.”

Cosco executives, whose plans to lease the base have been frustrated by local lawsuits as well as Congress, declined to comment on the situation. They said they will issue a public statement next week.

The Port of Long Beach fears that its longtime tenant could simply move across the harbor to a new berth in the Port of Los Angeles. Officials there have presented Cosco with a proposal to lease space at Pier 400, which is being built. They last met three weeks ago.

New talks were planned for next month, but those have been canceled, said Barbara Yamamoto, public information director for the Port of Los Angeles.


Cosco’s foes in Congress have threatened to expand the ban to the Port of Los Angeles, which receives federal funds for dredging operations.

“There is nothing definite at this point,” Yamamoto said. “The political concerns have to be considered seriously. Who knows? Congress might say Cosco can’t call on facilities in our port.”


Despite their defeat, Long Beach officials said they will push ahead with plans to convert the 400-acre base into a new cargo terminal and ship repair facility.

Hazardous waste is already being removed from the facility and preparations are underway to demolish structures on the site. The Navy, which now leases the base to the port, is scheduled to transfer title to the property by 2000.