Villaraigosa Urges Delay in Port Votes

Los Angeles Mayor-elect Antonio Villaraigosa, in his first public foray into the city’s business since his May 18 victory, called on the Harbor Commission on Tuesday to delay votes scheduled for this morning on two major port financial matters.

Villaraigosa faxed a letter Tuesday evening to Commission President Nicholas Tonsich, asking that commissioners postpone approving the annual budget until port staff reassesses projected revenues, a spokesman for the mayor-elect said.

In a separate letter to Tonsich, Villaraigosa also asked that the port delay action on a 50-year, $75.6-million agreement with Westrec Cabrillo LLC to develop and operate the port-owned Cabrillo Way Marina.

“I am generally concerned that this and other issues are being addressed by the department without sufficient review during this transitional period,” Villaraigosa wrote. “I would ask that we all take an opportunity to hold off making commitments of such a profound nature at this time.”

The proposed agreement has stirred concerns among port staff, and city Chief Administrative Officer William T. Fujioka recommended against it in February, calling it too financially risky.

The port budget must be approved in June, before Villaraigosa takes office July 1. But a 45-day delay requested by Villaraigosa on the Westrec lease would allow him to become involved in contract deliberations.

Port officials could not be reached for comment on the letters.

Villaraigosa has kept a low profile in city affairs since his landslide win over incumbent Mayor James K. Hahn last month. But with the two letters to the port, he has indicated his intent to become immediately involved in the operations of one of the city’s largest and most powerful agencies.

Hahn lives in San Pedro, where the port is located, and has championed a number of ambitious and expensive projects to redevelop the San Pedro waterfront and beautify areas around the port. The agenda for today’s meeting includes several San Pedro-area items, including a $4.05-million contract for landscaping and a $926,867 agreement for a bike path, walkway and landscaping along Pacific Avenue.

The single biggest item on today’s agenda, however, is the proposed $693.5-million budget for 2005-06. That budget includes a nearly 16% increase, even though port operating revenues have flattened with lower-than-expected income from cargo.

The budget also includes 94 new positions and $28 million for San Pedro waterfront redevelopment.

Villaraigosa spokesman Joe Ramallo said Tuesday that the mayor-elect wants the budget vote delayed so the revenue figures can be reviewed. In the letter to Tonsich, Villaraigosa asked that commissioners review the 2005-06 budget projections in light of the “the more modest growth revenue trends.”

“These are important projects -- we understand that -- but they need to deal with realistic budget numbers,” Ramallo said.

In a separate item, commissioners are being asked to approve an agreement with Westrec Cabrillo to develop and operate a port-owned marina. Parts of the existing marina would be demolished, and Westrec would add restaurants, shops and other commercial improvements.

The owner of Westrec Cabrillo is Michael Sachs, who contributed $1,000 to Hahn in 2003. Two other Westrec officials each gave $1,000 to Hahn the same year.

In a February report to the mayor, Fujioka, the city’s chief administrative officer, said the port should reconsider the lease because of “the low rate of return, financial risks and other uncertainties associated with the projected revenues.”

A Westrec official has called Fujioka’s report inaccurate, saying it seriously understates the port’s rate of return from the project.

The port staff, in a report to commissioners dated October 2004, acknowledges that the project has changed considerably since the port awarded the lease in 1998 to a joint venture of Westrec and Koll Real Estate Group, which withdrew from the project four years later.

Some of those changes “place some additional risk on the city,” the staff report states, but it adds that the risk is minimal compared to having the city build the marina itself.

Port spokesman Arley M. Baker said Tuesday afternoon in an e-mail that the port needed to move ahead. “We are completing a seven-year odyssey with this agreement,” Baker wrote.

Fujioka’s report states that the likely internal rate of return for the project would be 3.92%, compared to the board policy of 12% for such projects.

Baker said the commission is not bound by its rate-of-return policy. “Our marinas and fishing industry tenants would never make the Board-adopted 12 percent rate-of-return goal,” he wrote.