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Port of L.A. sued after canceling agreement for a shipping container facility

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The Port of L.A. is facing a new lawsuit over a canceled agreement to build a container staging facility.
(Genaro Molina / Los Angeles Times)

A Los Angeles company is suing the Port of L.A., claiming it improperly terminated an agreement to negotiate the development of a $130-million container facility at the harbor. The termination came after the company couldn’t secure support for the project from the union representing dockworkers, according to the lawsuit.

In a 15-page complaint filed this week in L.A. County Superior Court, Harbor Performance Enhancement Center claims that it spent four years and more than $2 million on its planned facility at Terminal Island.

Shipping containers were to be stored and accessed at the site, using a “hub and spoke” model that would ultimately ease congestion at the port.

Port officials supported the project, according to the lawsuit, and granted the company an exclusive negotiating agreement. But last month, Gene Seroka, executive director of the Port of L.A., told the company that the facility was “infeasible.”

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Seroka didn’t provide a reason for ending the agreement, the lawsuit states. The Los Angeles Board of Harbor Commissioners, who are appointed by Mayor Eric Garcetti, and the City Council didn’t weigh in on the decision, which the company claims was necessary to validate it.

The lawsuit names the Port of L.A., the Board of Harbor Commissioners and the city of L.A., and asks a judge to overturn the decision.

A port spokesman declined to comment, citing the pending litigation.

The company’s lawsuit states it started working with the port on the proposed facility in 2015. It received a permit for a pilot study, conducted an environmental review on the site and secured $130 million in financing.

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In 2018, Seroka told the company it also needed to get support from the International Longshore and Warehouse Union, or ILWU, for the project to proceed, according to the lawsuit. The union represents more than 10,000 workers at the ports of Los Angeles and Long Beach.

The company would have to guarantee to grant the union jurisdiction and exclusive rights to provide trucking services, according to the lawsuit.

“Rather than help mediate with the ILWU or insist that the ILWU negotiate in good faith, Executive Director Seroka, in April 2018, advised petitioners in writing that they must accommodate the ILWU’s demands because ‘they [ILWU] run the Port,’ ” the suit states.

On May 10 of this year, Seroka sent a letter to the company stating that the port was terminating its agreement.

The company claims it was “continually rebuffed” by union representatives during discussions over the project, the lawsuit states. Jonathan Rosenthal, chief executive of Harbor Performance Enhancement Center, said in a statement to The Times that the requirements with the union were an “unexpected curveball thrown at us.”

“Beyond the time and money we’ve spent, it makes me worried for the city when a green, job-creating project is stymied by a single entity for their own narrow reasons, and none of our decision makers will step in to try to resolve it,” Rosenthal said.

Leaders of the local chapter of the ILWU didn’t respond to requests for comment.

The lawsuit comes amid another battle at the port. The Board of Harbor Commissioners voted Thursday to approve a permit for driverless cargo handlers to operate inside a facility over the objections of the dockworkers.

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Los Angeles City Councilman Joe Buscaino, who represents the harbor region, said he plans to ask the council to veto the project.

The container shipping company that won that permit, Maersk, has declined to say how many jobs would be affected.

Times staff writer Margot Roosevelt contributed to this report.

dakota.smith@latimes.com

Twitter: @dakotacdsmith


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