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In deep at the port of L.A.

A businessman's proposal to reopen a long-closed shipyard conflicts with the port's need to dig a deeper channel. The bigger question: Who's really in charge?

January 11, 2011|Jim Newton

Amid the mountainous shipping containers that crowd the Port of Los Angeles, an emblematic battle is underway — one that involves environmental protection, historic conservation, jobs, political turf and dirt. Lots and lots of dirt.

Port: A Jan. 11 Op-Ed column about the Port of Los Angeles misspelled attorney Ben Reznik's name as Reznick.—

The principal contestants in this faceoff are the staff of the Port of Los Angeles on one side and would-be shipbuilder Robert Stein on the other. Stein's company, Gambol Industries Inc., wants to reopen a long-shuttered shipyard at the port, one from which World War II destroyers once set out to sea. The old yard, known as Southwest Marine, includes two giant slips, 600 to 700 feet long and 300 feet wide, as well as some aging cranes and dilapidated buildings. Like all things at the port, it's huge. Stein imagines the reborn yard would build and repair ships of all sizes, generating nearly 1,000 skilled jobs and giving the port an industry less vulnerable to the volatile swings in the trade economy.

The port staff isn't opposed to the idea of a shipyard, but it has another imperative.

The city's aging port, staff members say, won't be able to accommodate increasingly large ships without deepening its channels and berthing areas so that the entire facility is at least 53 feet deep. That will become especially important once a widening of the Panama Canal is complete, probably within the next year or two. After that, ships from Asia that don't find an easy berth in Los Angeles can simply slip through the canal and tie up at deep ports in the Gulf of Mexico, disgorging their cargo — and their business — in the gulf states and onto national rail networks there. That would be a catastrophe for Los Angeles, where 75% of the port's business depends on international shipping.

"The main channel is our main artery," explains Geraldine Knatz, the highly regarded executive director of the Port of Los Angeles. "That channel is to the port what the runways are to LAX. Everything."

Stein's shipyard idea was initially met with encouragement from port officials, and they gave him exclusive rights to try to develop the idea. But they've concluded that it would get in the way of digging a deeper channel. Why? That's where the dirt comes in.

The dredging project will produce a lot of dirt: 163,000 cubic yards of it, and port officials say the only place they have to put it is in the vacant slips at Southwest Marine. This would serve two purposes, because the bottom beneath the slips is contaminated, so covering that area would be environmentally desirable as well. The Army Corps of Engineers has approved that plan, and warns that if the port changes direction now, it will have to submit another study of the project's environmental impact, potentially setting it back years. That, port officials say, could cost far more jobs than Stein's shipyard would create.

Confronted with such a choice, the city's Harbor Commission voted to end Stein's exclusivity. Stein, however, has long girded for a fight, and now he's waging it, insisting that the port can have its channels and his shipyard too. Stein's formidable lawyer, Ben Reznick, has deluged the port with accusations; his letters bristle with charges of bad faith, "outrageous manipulation," "duplicity" and the like.

And, this being an iconic Los Angeles political dispute, Stein's fighting with money too. He has so far spent more than $700,000 on lobbyists, lawyers and consultants, and used them to assemble a formidable community coalition. Labor likes his plan for the union jobs it promises, business for the potential economic growth, preservationists for the chance to save historic port buildings. He also dropped a little cash into the campaign coffers of his local councilwoman, Janice Hahn, but she was on board already. In effect, Stein's lobbying positioned Hahn perfectly: He built community support, then allowed her to become the community's champion on an idea she liked from the start.

"In this bad economy," Hahn said last week. "this would create new, skilled jobs at the harbor."

So Hahn introduced a motion to overrule the Harbor Commission, and her motion is before the council Tuesday. She's hopeful that the council will send the issue back to the commission with instructions to try again to come up with a solution that will allow both dredging and a shipyard. Mind you, the commission could still say no, but Reznick, who sees Knatz as his principal foe, hopes a council vote will show her and her staff who's really in charge.

In fact, that's really the question posed by this controversy, as it is so often in Los Angeles politics: Who really is in charge? City staff passed judgment, and the commission — appointed by the mayor, confirmed by the council and responsible for overseeing that staff — agreed. A wealthy businessman hired lawyers and lobbyists, and his team has fought well. A thousand jobs could be created if Stein is right; tens of thousands could be endangered if he's wrong. If the council backs him, it will find out soon enough who's right.

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