The Port of Los Angeles, re-embracing its historic association with the fishing industry, has approved a 10-year lease that will bring the squid processing operations of Fisherman’s Pride Processors Inc. to three vacant buildings that were once home to a Chicken of the Sea tuna plant.
The buildings, which have sat empty amid a general exodus of fish processing businesses from the port complex, will undergo a $7.5 million renovation. The deal also calls for the port to discount the rent it collects by 32 percent – roughly $1.5 million over the life of the deal – in exchange for a 12 percent share of the facility’s gross revenue.
Fisherman’s Pride, which operates as Neptune Foods, is expected to produce 15,000 tons of squid a year at the plant, of which 90 percent will be exported, once the plant begins production in the next few months. The port projects the business to add 30 to 40 full-time jobs in its Fish Harbor section and as many as 100 jobs during the peak winter season.
“We are starting to see a resurgence in recent years,” Jack Hedge, director of real estate at the port, said of the local fishing industry. “What drove Neptune Foods was a resurgence of the stock of squids in near waters.”
For Neptune, the presence at the port means it will no longer have to truck product from there to its Vernon manufacturing plant and back. It will also double the company’s processing capabilities.
Company representatives declined to comment on the lease.
The deal marks a return of fish processors to Fish Harbor after policy shifts and economic challenges led many to depart.
As cargo shipping increased in volume and importance for the region, the port at one point made it known that it was assessing whether fish processing facilities were among the best use of its real estate. While there was no formal policy shift to remove the processors, the news that it was under consideration led many companies not to renew leases in Fish Harbor. Chicken of the Sea, owned by Tri-Union Seafoods, at one point leased 14 buildings in Fish Harbor before leaving for good in 2011.
The port’s effort to revive its commercial fishing operations began about a year and a half ago, and Neptune is the first tenant to come in.
Hedge said the port is in negotiations with three other entities in fish processing, adding, “We are seeing quite a bit of activity right now.”
Fish Harbor, which opened in 1893 with a single cannery, was by the middle of the last century the nation’s tuna processing capital. The 92-acre artificial harbor on Terminal Island was home to canneries run by Star-Kist Co., Pan Pacific Fisheries and Tri-Union. In the 1950s, San Pedro accounted for 80 percent of the 12 million tuna cases produced annually in the United States.
“The industry’s heyday in San Pedro was from 1906 to 1960s,” said Andrew F. Smith, author of “American Tuna.”
As regulations got tighter and tuna supply dwindled, the industry gradually moved from the West Coast to the South Pacific. Big canneries began leaving the area in the 1980s; Chicken of the Sea was the last to cease processing operations, laying off 250 workers and closing its plant in 2001, though the company didn’t terminate its lease until 2011.
David Mathewson, the port’s interim deputy executive director for business development, said a major challenge for the Fish Harbor master plan is the urgent to need to maintain and upgrade many of those vacant buildings.
The vacancy rate in Fish Harbor is over 80 percent now, and the port wants to revive the area by bringing back some commercial fishing and processing. That’s one reason the port was willing to make such an aggressive deal with Neptune.
“Our overall rent should have to be a little bit higher,” said Hedge, the director of real estate. “We are taking a little bit more risk because we felt like there is a little bit better chance of return.”
While the heyday may never come back, Mathewson said, the port does see increasing interest from companies in bringing back processing facilities, especially squid, whose supply has been rising.
Bob Bertelli, a commercial fisherman who’s worked at the port for years, said while squid is abundant, regulations can limit how much is caught. He also said large canneries may benefit large fleets but not necessarily local fishermen.
According to Mathewson, of the 92 acres in Fish Harbor, 50 will be devoted to commercial fishing, while the rest will be used for maritime support, such as a research institute and a boat repair business.
“We understand that the majority of our activities is cargo handling, where we generate revenues are through container handling operation,” he said. “We want to remain a diversified port.”
Los Angeles City Councilman Joe Buscaino, who grew up in San Pedro and represents the district, said he was cheered by the effort to revive the local fishing industry.
“We need to preserve the fishing industry,” he said. “It’s part of our history in San Pedro and Wilmington.”
From a fishing family himself, Buscaino said the Neptune deal was personal for him. His mother and aunt worked in the Chicken of the Sea building Neptune will be renovating.
“They would come home and they would all dress in white,” he said. “They would come home smelling like fish. As kids, we said, ‘You smell, mom.’ And she’d say ‘It’s the smell of money, son.’”
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