By DANIEL TAUB
Despite the current slowdown in trade between the U.S. and Asia, the amount of cargo moving through the L.A. and Long Beach seaports is expected to more than double during the next two decades a pressing reality that's causing billions of dollars to be spent on expansion and other improvements.
Much of that money is being used to increase the amount of space available to shipping companies at the ports of Los Angeles and Long Beach. Those firms are demanding more and more room for loading and unloading an increasing number of cargo ships.
The largest single project is the Alameda Corridor, a 20-mile rail-and-road project designed to speed cargo from the ports to an industrial area east of downtown L.A., where it will then be loaded on trains bound for other parts of the country. That project is being built at a cost of $2.4 billion.
Here is a closer look at the biggest projects impacting L.A.'s trade community:
The Port of Los Angeles is doing the same thing as other ports around the world facing a shortage of space creating more land.
In a $150 million project that began in July 1997, the Los Angeles Harbor Department is dredging 22 million cubic yards of ocean bottom material to build a landfill that will provide a 590-acre site for a massive new cargo terminal.
The cost of the new facility has yet to be determined, but the last terminal at the port, which was finished in 1997, had a price tag of $270 million. That terminal covered 232 acres, while the new facility will include about 315 acres. As a result, it is sure to be more expensive.
The first phase of terminal construction could be completed by the end of 2001, with the second phase coming on line two years later. The Port of L.A. is negotiating with several potential leaseholders, said port spokesman Jeff Leong, who would not name the companies.
"There should be an announcement probably within the next two months," he said.
One possible tenant could be China Ocean Shipping Co., which Congress prevented from moving into the former Long Beach Naval Shipyard and Station because of national security concerns. With some federal funds being used for the Port of L.A. dredging project, Congress conceivably could try to block Cosco from moving into Pier 400 as well.
The Port of L.A. is also planning an 18-month, $32 million channel-deepening project to begin in 2001. That project will help the harbor handle future generations of larger cargo ships.
In Long Beach, port officials are in final negotiations to find a tenant for a new cargo terminal to be built on Terminal Island, site of the now-closed Long Beach Naval Station and Shipyard.
Port spokesman Art Wong said several firms all current Port of Long Beach tenants looking to expand are being considered, but he would not identify them.
"The most likely scenario is that one of our existing shipping lines will move to Terminal Island," Wong said, explaining the move would free up space for other shippers at the main port.
Those interested could include the China Ocean Shipping Co.
"We're hopeful that once we get someone else to move to the naval station, we will have enough room to get Cosco more space," Wong said.
One or more new tenants could be selected in the next several weeks. After the selection, the size and cost of the terminal will be determined. The facility is expected to be at least 300 acres and cost $200 million to $300 million.
The project that the ports of Long Beach and L.A. as well as L.A. Mayor Richard Riordan call the most important for the trade community is the Alameda Corridor.
When completed, it will allow trains to speed along Alameda Street from the two ports to the train yards near downtown L.A. Much of the line will be below ground, with a series of overpasses being built over the subterranean structure to eliminate traffic congestion now caused by slow-moving freight trains.
Cargo transported from the ports would then be transferred to trains heading to destinations throughout the country.
The corridor is "critical for providing the inland transportation capacity for the ports' growth for expediting the movement of international trade through the Los Angeles area," said Gill V. Hicks, general manager of the Alameda Corridor Transportation Authority.
In January, contractor Tutor-Saliba Corp. was given a notice to proceed on the largest single aspect of the project, a $712 million trench to allow trains to travel beneath street level. The contractor is completing design work on the project, and is expected to begin construction in the next couple months.
Also in January, the Alameda Corridor Transportation Authority, the agency overseeing Alameda Corridor construction, sold $520 million in tax-exempt bonds and $643 million in taxable bonds. Those bonds, along with a $400 million federal loan and $747 million in grants from the Metropolitan Transportation Authority and the two ports, will fund corridor construction.
Corridor officials said there is an array of incentives to keep the trench on schedule and within budget. The contractor will be assessed $125,000 to $200,000 for each day of delay beyond the February 2002 deadline.
The ability to pay off the enormous debt hinges on the continued expansion of port business, at 3 percent to 5 percent a year. Port officials described that rate as conservative, given the expected trade increase in coming years.
Of importance to the economically depressed cities along the corridor are provisions designed to enhance employment opportunities for the disadvantaged. Under the Tutor-Saliba contract, 30 percent of all work hours spent building the trench will be allocated to people living in a defined area along the project path.
The route passes through the cities of Carson, Compton, Huntington Park, Lynwood, South Gate, Vernon and part of Los Angeles.
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