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L.A. Council OKs $180-Million Coal Export Terminal : Environment: Despite concerns about dust, supporters say the Terminal Island project will generate badly needed jobs and money for the area.


LONG BEACH — Over the objections of Long Beach officials, the Los Angeles City Council has approved plans for a $180-million coal exporting facility that backers say will bring thousands of jobs and millions of dollars in new revenue to the harbor area.

Long Beach officials contend that wind-blown coal dust from the terminal could present a health hazard. The city filed a lawsuit two weeks ago challenging the adequacy of the proposal's environmental impact report. The lawsuit claims the Port of Los Angeles and other partners in the project understated the potential for coal dust to blanket waterfront properties nearby.

The suit seeks further study of the project's environmental consequences.

The Los Angeles council voted unanimously Tuesday, granting a 35-year port lease for the terminal. Port officials say they hope that by this time next year, work will begin on the 120-acre complex at Pier 300 on Terminal Island, replacing an existing dry bulk terminal near San Pedro.

But first regional environmental agencies must determine whether the project qualifies for air and water quality permits.

Plans call for the coal to be stored in an open yard equipped with a computer-controlled sprinkling system to control dust. Long Beach officials want the coal stored in an enclosed warehouse.

Despite the legal action, Tuesday's council vote was taken without discussion. Tay Yoshitani, the port's deputy executive director of maritime affairs, said the vote of support for the facility means the project's investors will provide some $9 million for the drafting of detailed design plans and other preliminary work.

As currently envisioned, the so-called Los Angeles Export Terminal would be the largest dry bulk facility of its kind in the nation. The port's economic analysis suggests that the project will provide up to 5,600 jobs during its construction and operation. It will also add hundreds of millions of dollars to the regional and national economies through payroll, taxes and other business revenues, officials say.

For the Port of Los Angeles, the project also holds some promising rewards based on current financial projections. With an estimated rate of return of 12% to 14%, officials say the coal facility will generate an estimated $139.4 million in the next decade and $15 million annually in income beginning in the year 2005.

Moreover, they say, the project has the potential to improve the nation's trade imbalance with Asia by significantly increasing coal exports to Pacific Rim nations.

The project is designed to serve the massive coal requirements of Japan, Korea and Taiwan. The three nations now import almost all of their coal from overseas. Over the next 20 years, officials say, the nations are expected to require 260% more coal than they use today. The port's proposed terminal, they say, could by itself meet 10% of that new overseas demand, producing a ten-fold increase in the port's coal exports.

The terminal would be built and operated by a consortium of 36 public and private investors, including the Harbor Department. The port's role in the project would include constructing terminal buildings costing $56 million and providing acreage valued at another $74.7 million.

A partnership agreement calls for the port to be among the project's majority shareholders. Those shareholders, owning 51% of the endeavor, will also include Southern Pacific and four U.S. coal producers. Forty-nine percent of the project will be owned by Japanese partners that include utilities, shipping lines, trading firms and banks.

Coal Export Project

The City Council has approved plans for a new coal exporting facility on Terminal Island. Port officials say the $180-million project will increase local coal exports by tenfold and bring new jobs and millions in revenues to Los Angeles.

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