September 11, 2012 – (Note: The following lengthy exchange occurred between Mayor Bob Foster and Business Journal Publisher George Economides during the annual interview with the mayor, held September 6. It has to do with the pending decision by the Long Beach Board of Harbor Commissioners on where to relocate port administrative staff. The debate is over whether to lease, buy or build a new facility, where it should be located and the costs involved. For a more complete picture on this subject, also read the article related to Harbor Commissioner Tom Fields accusing a fellow commissioner of slander.)

LBBJ: Let’s talk about the port.

Foster: Okay.

LBBJ: So what’s your preference on the administrative building?

Foster: You mean the one I vetoed? [Nearly two years ago, the mayor used his line-item veto to nix a new admin building that port staff and harbor commissioners had planned to be built adjacent to the current building.]

LBBJ: You know what I mean. Do you want to see them lease? Do you want to see them buy? Do you want to see them build? The port staff can’t stay where they’re at due to seismic and other issues.

Foster: Let’s begin first of all with the history of this and I’ll get to answer your question fully. You know, I think we talked about this last time, but I vetoed that [original plan for a new] building because it was: a) in the port; and b) way too expensive. A thousand dollars a square foot or more. Port land is very valuable so I would like to see them downtown. I would like to see them in a permanent structure that’s theirs. I don’t care where it is downtown. I don’t care really much about what it looks like or who builds it or whatever.

I want them to act like a good business entity . . . I don’t think they have done that. I certainly got some pushback on vetoing the building . . . I know they have to move, I’m not arguing that, but to me, I don’t know any entity that calls itself a business that could justify spending that kind of money [the only public vote taken thus far by harbor commissioners was a year ago on whether or not to purchase the World Trade Center on Ocean Boulevard for approximately $120 million. That vote deadlocked at 2-2 with one commissioner recusing herself from voting on instructions from the city attorney] on an administrative building particularly when at the time it almost needed the identical amount of money to complete its bridge that really does have an impact on its revenues. They were not acting like a business. I mean that sincerely.

On the building, I would like to see them do a real competition. I mean, I don’t – and I’ve said this to the president of the harbor commission – I don’t feel it’s a good business tactic to tell one entity that that’s the only choice you have. To tell them, you know, we want to go here. There are other alternatives around and you’ve got to look at them carefully and, finally, I’ve told them, I don’t see how you can justify paying tens of millions of dollars above market for a building when there are other alternatives around. That to me is unconscionable. I don’t understand it.

LBBJ: They can lease though, right?

Foster: If you ask me what I prefer, I’d like them to find a cheap building somewhere and temporarily lease space, and that it’s clear that it’s temporary . . . there’s gonna be more and more security concerns in the future. I’d like to be able for them to secure their own location and I think they’re enough of a marquee entity, they ought to have their own building.

LBBJ: So it appears what you’re saying, is that the best thing for harbor commissioners to do is to lease for the short term, and during that time, examine the possibilities of building their own facility in the downtown area.

Foster: Yes, I would either find an inexpensive place that you could buy that you could get your money back temporarily or lease temporarily, that’s fine. Go on a relatively short term lease and in the meantime look at the options. You know, we may wind up being able, at no additional cost, to redo a Civic Plaza because we have the old Courthouse building too. It might be nice to have everybody located in one spot. You remove that possibility when you jump to go into buy something. . . . [There has been much speculation, including articles more than a year ago by the Business Journal, that the city might give the current city hall and library site to a developer in exchange for that developer building the city a new civic center along Ocean Boulevard where the current courthouse is located.]

I don’t want to get too much into their operations, but I will tell you, I know enough about running a business . . . Here’s what I hear from them: “We have competition, competition, competition . . .” Well, the best way to be an effective competitor in this world is to be as efficient as you possibly can, not only in your operations but in your deployment of capital. I just can’t see why you would use capital for a . . . well, turn it around. What if I came to you, George, and said, “You know, we’re going to spend an extra $40 million on a new city hall.” You’d go after me like you wouldn’t believe.

LBBJ: I don’t know.

Foster: No, you would! Come on. You’d say, “How could you use public money like that when you’ve got greater needs?” Let me tell you the article [you would write]: “You’ve got streets and you’ve got sidewalks and you’re gonna use . . .” It’s the same thing. It’s not any different. It’s an office building to house administrators. It’s the same thing.

LBBJ: Okay, but do you at least admit that right now we’re sort of at an impasse?

Foster: No!

LBBJ: . . . that the commissioners don’t seem to be able to make a decision?

Foster: No!

LBBJ: No?

Foster: No.

LBBJ: So you think they’ll be able to make a decision?

Foster: Yes.

LBBJ: Soon?

Foster: Yes.

LBBJ: You know something . . .

Foster: No, I’m just telling you I think they will be.

LBBJ: What about rumors . . . You want to dispel the rumors we keep hearing . . .

Foster: Go ahead, spill the rumors.

LBBJ: . . . that you’re playing favorites.

Foster: Wrong. I’m not even going to dignify that with an answer. . . . Look, I told you where I am. I want them downtown, I’d like them to have their own building and I’d like them to spend their money wisely. You know, I’m tired of people believing that somehow it’s okay to waste money because they’re an enterprise fund. It is not okay.

LBBJ: Okay, so let’s just assume that they reach an agreement to lease space . . .

Foster: Happy for them.

LBBJ: And you want them downtown. That would be your preference?

Foster: I think it’s appropriate for them to be downtown in the long run. Temporarily they can be anywhere they want, but in the long run it’d be downtown.

LBBJ: Would you include them in discussions for a long-term plan to maybe look at a new Civic Center?

Foster: Absolutely. We’ve already talked to them about it.

LBBJ: Do you feel that the current makeup of the harbor commission is going to be able to reach an agreement on this?

Foster: Yes.

LBBJ: Because it seems like right now they’re all over the place.

Foster: They’re always all over the place.

LBBJ: Forty years of following the port and I’ve never seen it like this.

Foster: Look, they have a lot to do. Let them get to work. You know, whatever little quarrels they have let them get over it and get to work. It’s not, don’t even dignify all that stuff. It’s not useful.

LBBJ: All we do is report the news.

Foster: No. Not when you repeat rumors. Look, why don’t you go read the blogs?

LBBJ: We’re not repeating rumors.

Foster: No, really. Why don’t you go read the blogs?

LBBJ: I don’t read blogs.

Foster: I don’t either. But people come up to me, “You know what so and so said?” I mean, if I read that I’d go nuts. People accuse me all the time . . . Like, “You were fired from Edison.” Now you hear that and you . . .

LBBJ: What blog was that?

Foster: Look, doesn’t matter.

LBBJ: I may want to read that one!

Foster: People don’t deal in the truth. They do not deal in the truth. Most of the time people that do that have their own agenda.

LBBJ: We recognize that. Bottom line is, stay downtown, lease instead of buy.

Foster: Lease until you can get a permanent facility that will be a long-term home for you.

LBBJ: And you don’t really have a preference which building or where as long as it’s a good deal.

Foster: I don’t care. It has to be a business-like deal. And stop going around, you know, like a sailor downtown with money hanging out of their pockets.

LBBJ: Is that on the record?

Foster: Yeah, you bet.

LBBJ: That’s a good out-quote.

Foster: Yeah, I’d rather have them in their own structure and the reason for that is I think they’re a unique enough entity and I also think they have unique security issues. . . . I believe that it’s easier to secure a building from the start than it is try to put it all together.

LBBJ: Okay, if we eliminate the World Trade Center from purchase, maybe a lease, but not a purchase, that doesn’t leave anything else downtown large enough in a single building – they need about 150,000 to 170,000 square feet – to move the entire staff. Unless they lease in two buildings, which would be difficult?

Foster: What I care about is the wise use of resources. Let’s get this thing done. Where they go temporarily, I really don’t care. The only thing I’d be concerned about is I wouldn’t want them to move into a leased building that they decide they’re going to get real comfortable, even though it doesn’t work real well, and say, “Oh we gotta stay here now.” So I think they need to commit to a long-term plan. God help us if they actually have a long-term plan that says, “You know what? We’re going to build our own building. Temporarily we’re going to either move somewhere else or downtown.”

LBBJ: So the airport building, formerly occupied by Boeing, which we’ve reported previously as being on the short list, meets a lot of the criteria other than location.

Foster: The airport building is actually easier to secure. . . . and my understanding is it’s pretty cheap. And look, it’s another ten minute drive but . . . I understand why you want to be near your asset. I got that. It’s probably another 10 or 12 minutes to go from the airport to the harbor than it is from downtown to the harbor. I don’t think it’s a huge imposition for a short amount of time. But that really is their call.

LBBJ: But it does meet all the criteria other than maybe it’s further to drive.

Foster: It’s a little further. It’s a great building. It’s got it’s own parking.

LBBJ: We heard that when the harbor commission does reach an agreement, that it must go before the city council for approval. Is that true?

Foster: If it’s not in their budget, they have to come back for an appropriation, correct.

LBBJ: Okay, if it’s not in their budget?

Foster: That’s correct. And it’s not in their budget.

LBBJ: So the only thing they have in their budget . . . you haven’t approved the budget yet for this year, right?

Foster: No, [but] they have $6 million for transition costs.

LBBJ: That’s just moving the staff . . .

Foster: I don’t know what it’s for. I’m not sure I want to dig in there too hard. How much would it cost you to move?

LBBJ: I like it here.

Foster: I know you do.

LBBJ: Well, I think you’ve answered the question. Thank you very much.

Foster: You’re welcome.