By George Economides - Publisher

July 3, 2012 – The Long Beach Business Journal has learned that a high-security building formerly occupied by Boeing at the Airport Business Park has emerged as a strong candidate for the temporary headquarters of the 400-strong Port of Long Beach administrative staff.

In fact, based on several sources who did not wish to be identified, the decision has been narrowed to two buildings, the other being the World Trade Center on Ocean Boulevard downtown.

Earlier this year, after harbor commissioners reached a stalemate on what to do for a new headquarters, the port issued a request for information (RFI) and received eight “bids” as possible locations for temporary or permanent headquarters. The list included five buildings downtown, one by the 710/405 interchange and two at the Airport Business Park.

The RFI requirements included a minimum of 170,000 square feet of available office space, 568 parking spaces, availability by July 1 of this year for a minimum five years, and “within a 20-minute drive to the Harbor District.” The statement said, “The current administration building was built in 1959 . . . it is obsolete and overcrowded with many staff members located in office trailers adjacent to the building. The structure was built on fill material in what was previously open ocean, prior to current earthquake codes. . . . The Port now desires to lease and/or purchase a replacement headquarters facility . . . ”

The RFI further stipulated that commissioners “emphasized the importance of relocating to a seismically fit, secure facility.”

Reached last week, Harbor Commissioner Nick Sramek said he could not discuss the process, and would not confirm or deny what the Business Journal was told. “We continue to gather information and ask questions and, hopefully, we will have a decision to announce soon,” he said. “That’s all I can tell you.”

The airport’s eight-story, 176,000-square-foot building on Spring Street and adjacent to the Long Beach Marriott, once housed top-secret design projects for the military and, as one person described it, is already “fairly security tight.” It is adjacent to the 405 freeway and is on airport property.

Security was raised as a key issue last October during discussions to purchase the World Trade Center when Commissioner Doug Drummond, a former police commander, noted that the 575,000-square-foot building has multiple access points – including a large, underground parking area shared with the Hilton hotel – that would be difficult and costly to secure. The airport building provides a combination of surface and structure parking – but has no underground parking.

Several real estate brokers had previously told the Business Journal that security should not be a concern because a terrorist attack would target port infrastructure to block ship movements, not administrative facilities. However, the current port headquarters at 925 Harbor Plaza Dr. does have security personnel in the lobby who check bags, and visitors must sign in and show proper ID.

In addition to seismic, for which the Business Journal does not have updated information, three other concerns being addressed, according to one of the sources, are: the cost of leasing versus purchasing versus building a new headquarters; distance of the building to port facilities; and having sufficient time to make the “right decision” for the long term benefit of the city, the port, port employees and, most importantly, port customers.

Distance may be a stumbling block for the airport site since it is a 10- to 20- minute freeway drive to the port, depending on traffic and time of day. However, that is within the parameters set by the RFI.

To gauge how important the new headquarters’ proximity to the port is, commissioners sent a questionnaire to port vendors, customers and other stakeholders. Port employees were also allowed to respond to the survey.

Sramek would not share the results of the survey. “Maybe, when we make a decision, we will discuss the survey results, but not before.”

One of the sources indicated that the reason the airport building is attractive, beyond the issue of security, is that the cost to lease or purchase is “relatively inexpensive,” and “leasing buys time to determine the best course for the future.” Because of the condition of the current headquarters, moving administrative staff out becomes a bigger issue with each passing day.

The Business Journal also learned that the purchase cost of the airport building is somewhere in the $14 million to $20 million range. The Legacy Partners-owned World Trade Center building – with triple the space and with existing tenants – was offered to the port last year at a cost if $130 million. The Business Journal does not know if, through the RFI process, that cost was reduced.

Other individuals familiar with the various options conclude that while the airport building may be the most cost effective, in addition to buying time to make the best long-term decision, the “distance issue” may be the overriding factor. “There are obvious advantages to being close to port facilities,” one person stated, “especially for maintenance workers, engineers and for staff communications people who deal daily with visitors and press from all over the world. Time is money, so convenience has to be a major consideration.”

Another scenario several people noted is to lease the airport building on a temporary basis – thereby not investing a lot of dollars – then build a new headquarters downtown. One site mentioned is the current courthouse on Ocean Boulevard, which will be razed when the Governor George Deukmejian Courthouse is completed in the fall of 2013. Another site may be the proposed Golden Shore project where the current Union Bank and National Bank of Long Beach buildings stand, and which would overlook port facilities.