In an effort to resolve a longstanding lease dispute, Los Angeles port officials Wednesday voted to pay $26 million to buy 99 acres of city-owned land in San Pedro.
The price falls $9.5 million below the appraised value of the land, leading harbor-area Councilwoman Joan Milke Flores to question whether the city got the best deal possible.
"It seems low, considering an outside appraiser said it is worth $35.5 million," said Ann D'Amato, Flores' harbor deputy. D'Amato said Flores has asked the city's chief legislative analyst to study the deal before it comes to the City Council for approval.
Both the City Council and the State Lands Commission, which oversees the port's administration of state tidelands, must approve the deal.
Ezunial Burts, the port's executive director who helped negotiate the sale with City Administrative Officer Keith Comrie, described the price as fair. Burts said the appraised value is higher than the purchase price because it includes improvements to the land made by the port since it began leasing the property in 1955.
The property, which Burts described as "uneven with hills and ravines" when the port took control of it, has been improved to include John S. Gibson Boulevard in San Pedro, the American President Lines terminal and administration building, the Korean Shipping America, Inc. terminal, a railroad right-of-way and bike path.
"You are looking at improved property out there," Burts said. "It is a good deal for us and a good deal for the city."
Jun Mori, president of the Board of Harbor Commissioners, which approved the sale Wednesday, described it as "very reasonable and needed."
According to the deal, the port would pay the city $17.5 million within the next five weeks and the remaining $8.5 million before June 30, 1988. The money, which city officials said has been included as revenue in both the 1987 and 1988 city budgets, would go in the city's general fund.
D'Amato said Flores has concerns about how the city would spend the money.
"She is looking into the possibility of earmarking some of it for the district," D'Amato said.
Burts said the port decided to purchase the property to end a dispute with the city over how much rent the port should be paying for it. In 1977, the port agreed to pay a certain percentage of the fair market value of the land based on how much revenue it provides, Burts said.
But the two sides have been unable to agree on whether the rental formula should include dockage and wharfage revenues collected by the port that are not generated on the city land but from related operations. The city has argued that the wharfs and docks would not be as productive without the city-owned land to use for storing cargo. The port has maintained that state law prohibits it from passing money on to the city that was generated from state tidelands.