Cosco/kanter/12 inches/dt1st/mark2nd

By LARRY KANTER

Senior Reporter

On most issues, Attorney General Dan Lungren stands in lockstep with his colleagues in the Republican party.

But on at least one matter, the GOP candidate for governor of California marches to his own tune the leasing of the former Long Beach Naval Station to the China Ocean Shipping Co., or Cosco, the controversial Chinese government-owned steamship line.

A proposal by the Port of Long Beach to lease a container terminal to Cosco on the former Navy base has been all but killed by Republican lawmakers in Washington, who fear that the facility could serve as a base for espionage, smuggling and other illegal activities.

“I disagree with them,” Lungren said in an interview with the Business Journal.

Lungren, a former U.S. Congressman who represented Long Beach in the House, said he was against shutting down the Naval Station in the first place.

“When they made a decision to shut it down, they said it wasn’t necessary to the national interests of the United States,” he said. “So how can you say on the one hand that it’s not necessary to the national interests of the United States, and on the other hand you can’t afford to let Cosco have it because it is in the national interests of the United States? The two just don’t come together.”

Lt. Gov. Gray Davis, Lungren’s opponent in the governor’s race, did not return phone calls seeking his opinion on the Cosco matter.

The Port of Long Beach was dealt a severe blow when Congress last week approved an annual defense authorization bill, which included language that would bar Cosco from leasing terminal space on the redeveloped site of the former Navy facility.

Port officials and their supporters including Lungren have argued that Cosco, a port tenant for 17 years, is simply a commercial operation that poses no national security risk. But recent controversies over technology transfers to China and alleged Chinese contributions to U.S. political campaigns have tended to overshadow such arguments.

“Now (Cosco) is just going to go to Los Angeles,” said Lungren, referring to an offer by the neighboring Port of L.A. to lease the shipping company a state-of-the-art terminal on its new Pier 400 landfill project.

But Long Beach has not given up yet on accommodating its fastest-growing tenant.

Rather than building a new terminal for Cosco on the Naval Station property, the port is examining ways to reshuffle other major tenants, such as Sea-Land Service, Maersk Inc. and “K” Line America Inc.

Under one scenario, the port would build a new terminal on the property for Sea-Land and Maersk, which operate together in a global alliance. Cosco’s current facility would be combined with the site occupied by Maersk, giving Cosco a 260-acre terminal with on-dock rail capabilities and no grounds for Congressional disapproval.

That’s just one possibility. The port is in negotiations with a number of other tenants as well, according to port spokesman Art Wong.

“We’re going to find them more space in Long Beach,” Wong said. “There is a lot of flexibility to move some existing lines and shuffle tenants around.”

Port officials hope to have an alternative arrangement finalized within the next several months, Wong added.