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With plans to build a cargo terminal on the site of the former Long Beach Naval Station unraveling, how will the Port of Long Beach accommodate its fastest-growing tenant, the China Ocean Shipping Co.?

That was the question in L.A.’s international trade community last week, after a Los Angeles Superior Court judge dealt a devastating and potentially lethal blow to the controversial project.

Judge Robert H. O’Brien ruled that the port violated state environmental laws by committing itself to the project before completing an environmental impact report.

The decision in response to a lawsuit by preservationist groups seeking to save some historic buildings on the site could erase five years of planning on how to use the former military site, effectively forcing Long Beach to start again at square one.

Long Beach officials say they will appeal the decision. But that process could take as long as a year. Meantime, the port needs to determine how to hold on to Cosco, the national shipping line of China and one of its most promising tenants.

There are not a lot of options.

Even as it appeals the decision, the port can restart the base-reuse process, and draw up new environmental reports in an effort to get the 145-acre terminal project back on track.

In the meantime, port officials “can try to see if they can juggle their existing customers around to accommodate Cosco’s needs,” says Jay Winter, executive secretary of the Foreign Trade Association.

Cosco itself is faced with a number of difficult questions.

The fastest-growing shipping line in the world, Cosco needs a larger terminal to accommodate its growing cargo volume. Shipping executives said the company could move some of its intermodal operations that is, cargo moving through Long Beach to Midwestern and East Coast cities to another West Coast port, such as Seattle-Tacoma.

That would free up its current Long Beach facility to handle shipments destined for California and Arizona which accounts for about half its total cargo volume through Long Beach.

Cosco also could move its operations to the neighboring Port of Los Angeles.

L.A. port officials have approached the company about leasing a 315-acre site on its Pier 400 landfill site, which is currently under construction. That pier project could be completed by the year 2003.

Port of L.A. officials refused to comment on the likelihood of Cosco moving its Long Beach operations over to Pier 400.

Port of Long Beach spokeswoman Yvonne Avila said officials of the Chinese shipping line have been briefed on the situation and will make a decision once the judge makes a final ruling, expected at the end of June.

Judge O’Brien has ordered the plaintiffs to come up with suggestions on how to protect the historic structures at the former naval base. The port will have a chance to respond to those suggestions. After that, the court will make its final ruling on the matter.

Despite last week’s setback, Long Beach officials continue to believe that the best use for the former naval station is as a port facility.

“That will be in the long-term best interests of the city of Long Beach,” says Long Beach City Manager James C. Hankla. “I don’t think the city is going to be operating it as a historic site.”