As the end of the year approaches, there are a number of loose threads, ongoing projects and upcoming policies that stand to impact the City of Long Beach. The following items address unfinished business in Long Beach ahead of 2017, from city labor contracts to international flights at the Long Beach Airport to the sale of RDA properties and more, with the most up-to-date information available.
Feasibility Study For International Terminal Coming To City Council
The city council will consider the addition of a federal inspections facility at Long Beach Airport (LGB) following a presentation at its December 13 meeting, rescheduled from its November 15 meeting, which will include public input from two Long Beach Airport Advisory Commission meetings.
According to Long Beach City Manager Pat West, the delay was to “allow for additional time for review and collection of public input and to ensure all councilmembers can be in attendance.”
The 697-page study conducted by Jacobs Engineering – “Feasibility Study for a Federal Inspection Service Facility at Long Beach Airport” – was released to the city and to the public on October 4 for review. Jacobs began the study in January after being awarded the nearly $350,000 contract by the city council.
The prospect of building a U.S. Customs facility to allow for international flights has been controversial since JetBlue Airways first requested the study in early 2015. Many residents have voiced concerns that allowing international flights could possibly threaten the airport’s noise ordinance. Others have claimed that the noise ordinance is in jeopardy only if the city does not move forward allowing international flights. The noise ordinance allows for 51 daily commercial flights from LGB. That number would not increase if the city council approves the facility.
Impact Of Hanjin Shipping’s Bankruptcy
Bankruptcy proceedings for Hanjin Shipping, the world’s seventh largest shipping line, are ongoing, according to Port of Long Beach Chief Commercial Officer Noel Hacegaba. The shipping line owns a majority stake in Total Terminals International (TTI) at the port.
After the shipping line went belly up in August, its ships were stranded all over the world. Thousands of containers sat idle on dock in Southern California, including in Long Beach. The bankruptcy caused reduced cargo volumes moving through the port in October.
“Hanjin’s volume has been reduced significantly as a result of the bankruptcy,” Hacegaba said. “However, TTI continues to operate and they continue to pursue business opportunities to keep the terminal moving forward.”
A South Korean bankruptcy court approved the sale of Hanjin’s Asia/U.S. trade network to Korea Line for $31 million on November 14, according to Hacegaba. He expects Korea Line ships will at some point begin calling the Port of Long Beach.
However, the court’s decision did not include the transfer of hard assets like ships and terminals. “The status of Hanjin’s ownership in TTI is under the supervision of the South Korean bankruptcy court. So we are awaiting further information as to the status of those assets,” Hacegaba said. There is a possibility that Korea Line will seek to obtain Hanjin’s stake in TTI, he acknowledged.
“Because TTI is such a valuable asset and because it is known internationally as one of the most valuable and advantageous assets, we have confidence that there will be a suitable outcome in terms of TTI’s ownership,” Hacegaba said. “And that will put us in a position to remain competitive and remain the gateway of choice for our customers.”
In the meantime, the port has taken action to reduce the impacts of Hanjin’s bankruptcy. “To give you one example, at one point there were as many as 10,000 empty Hanjin containers that were scattered across Southern California,” Hacegaba said. “That number has since been reduced to approximately 4,000. The biggest dent to that number came recently when the Port of Long Beach and TTI partnered to charter a vessel that called at TTI in order to evacuate 4,300 Hanjin containers.”
Sales Tax And Minimum Wage Increases Effective January 1
The state’s new minimum wage policy starts taking effect on January 1, when businesses employing 26 employees or more must begin paying $10.50 an hour as a minimum wage. Businesses with 25 employees or fewer must begin paying the same amount on January 1, 2018.
Also on January 1, the City of Long Beach sales tax increase approved by voters in June is going into effect. The tax increases the city’s existing rate by one percentage point for six years. For the following four years, the sales tax will be reduced by half a percentage point. After 10 years, the measure sunsets. The January increase will bring the city’s sales tax rate to 9.75%. On April 1, the overall sales tax rate in the city will rise to 10.25% due to Los Angeles County’s Measure M, a sales tax increase to fund transportation infrastructure improvements, which passed on November 8.
City Labor Contract Negotiations Continue
Contract negotiations continue between the City of Long Beach and 10 of the bargaining units representing its employees, according to Ken Walker, manager of labor relations for the city. All city employee contracts expired in September 2015 with the exception of public safety contracts for firefighters and police, which expired in September of this year.
There were previously nine city employee bargaining groups, but earlier this year three employee groups elected to split from the International Association of Machinists and Aerospace Workers (IAM), the union representing the largest number of city employees. Refuse workers and skilled/general employees are now represented by the newly formed Association of Long Beach Employees, and supervisor employees are now represented by the Long Beach Supervisors Employees Association, Walker said.
A contract agreement with IAM was reached in September. It gives the 2,700 city employees represented by IAM a 2% wage increase in 2016, 2017 and 2018, or a total of about 6%, according to Walker. The contract expires in 2019. A press release from the city at the time of the agreement indicated health care reforms to the contract would create cost savings for the city.
The contract with the Lifeguards Association was recently extended through this December. Lifeguards received a one-time 3% bonus as part of the extension.
Former Redevelopment Agency Property Sales Continue
When the California Redevelopment Agency (RDA) was dismantled at the beginning of 2012, the City of Long Beach was left with hundreds of parcels of land to deal with on its own.
In the nearly five years since, the city, as the Successor Agency to the RDA, has marketed and approved the sale of more than 100 properties for millions of dollars. Kathryn McDermott, interim director of Long Beach Economic and Property Development Department, points out that many of the sales include multiple parcels.
One such sale was the purchase of more than 30 parcels along the Atlantic Avenue corridor in North Long Beach by Costa Mesa-based LAB Holding LLC. The company is well known for The LAB Anti-mall in Costa Mesa and the Anaheim Packing District.
The parcels were part of the city’s for sale and future development property categories. Currently, the city is finalizing negotiations on the purchase and sales agreement with LAB Holding. Negotiations will be followed by opening escrow, at which time the company will create their site plan to present to the city and apply for entitlements and permits.
According to McDermott, to date the Successor Agency has sold 43 out of 53 for sale properties, 15 of which have already closed escrow. Of the original 141 future development properties – which are larger parcels that McDermott said the city is focusing most of its energy on – 104 parcel sales have been approved, and 19 parcels are in the process of being rezoned for government use, leaving only 18 parcels to be sold.
Net proceeds from the for-sale properties to date is $4.86 million, according to McDermott. She explained that the city receives approximately 21% of the proceeds, which is just above $1 million, of which 75% is intended for use in the project area where the property is located. The other 25% is for citywide use.
“All in all, we’re pleased by the development that we should see in the next several years that will come of the sale of these properties,” McDermott said.
Belmont Aquatic Center Lurches Forward
Since the demolition of the Belmont Plaza Olympic Pool in 2013, the proposed $103 million replacement in the form of the Belmont Aquatic Center has been delayed several times.
The project is currently in the entitlement stage. After the October 10 approval of the Local Coastal Development Permit by zoning administrators, Belmont Shore resident Jeff Miller filed a complaint alleging the city did not receive proper approval to install story poles, which give residents an idea of the height of the new complex.
This is the second time story poles have delayed the project. In early September, a planning commission hearing was canceled because the poles were not installed 14 days prior to the meeting.
Due to Miller’s appeal, the planning commission will hold a public hearing on December 15. Certification of the environmental impact report (EIR) and pool-related planning entitlements is expected early in 2017, according to city staff, and is “contingent upon planning commission approval on the Local Coastal Development Permit.”
Once completed, the pool complex will consist of two 50-by-25-meter pools – with seating for more than 1,200 people by the indoor pool – a recreation pool, a diving well, whirlpools, locker rooms and landscaping.
AES Planning Battery Energy Storage Facility
AES Southland Energy, LLC is planning to build a 300-megawatt battery energy storage facility at its existing AES Alamitos Generating Station on Studebaker Road at the Los Cerritos wetlands. The company bills the facility as the largest of its kind planned in the world.
A report to the City of Long Beach dated October 2016 indicated that the plant would maintain the reliability of the electrical grid, reduce greenhouse gas emissions and air pollutants from the electricity sector and reduce the marine impacts caused by existing processes. It would also “support increased and new electricity demand from non-traditional users such as transportation.”
The station would include three 50-foot high buildings, each containing 100-megawatt battery storage. An existing 8,815-square foot warehouse would be demolished to make way for a cooling plant for the new system.
A spokesperson for Long Beach Development Services told the Business Journal that the project is currently in the site plan review phase and is expected to come before the Long Beach Planning Commission in late January 2017.
East San Pedro Bay Ecosystem Restoration Study
The East San Pedro Bay Ecosystem Restoration Study, referred to by many as the “breakwater study,” should take about another two years to complete, according to Diana Tang, manager of government affairs for the City of Long Beach. The process, spearheaded by the U.S. Army Corps of Engineers, is expected to take three years. It began this February.
The study will address alternatives to the current configuration of the San Pedro Bay to restore its ecosystem. It will also take into consideration the priorities of the community and the Port of Long Beach, according to Tang. Peninsula residents, for example, have concerns about the safety of their homes should the breakwater be reconfigured. The port, similarly, wants to protect its maritime assets. The Surfrider Foundation, a nonprofit organization, would like to see waves return to the shores of Long Beach.
“We have agreed on a finite set of measures [for the study],” Tang said. “What we’re doing over the next year or so is playing with different iterations of those measures to come up with various alternatives.”
Tang continued, “The draft alternative plans are going to be the different options for restoring the East San Pedro Bay, which could include modifications of the breakwater. It could not. We at this point have not decided yet.”
Tang said she expects to have draft alternative plans available for public review by the end of next summer.
SteelCraft Nears Completion On Long Beach Boulevard In Bixby Knolls
After two years, Kim Gros is nearly ready to open L.A. County’s first permanent food lot built entirely from shipping containers – SteelCraft.
“It’s been a long process, so I think everybody just feels anxious to get going,” Gros, the developer and visionary behind the project, said. “The site looks beautiful. You go by it and it is definitely changing the look of the landscape.”
Contractors work to complete the SteelCraft project on the southeast corner of Long Beach Boulevard and Bixby Road. SteelCraft, Los Angeles County’s first permanent food lot built entirely from shipping containers, is expected to be completed before the end of the year, with a grand opening in early 2017. (Photograph by the Business Journal’s Larry Duncan)
Located on the southeast corner of Long Beach Boulevard and Bixby Road, which used to be a 14,500-square-foot dirt lot, Gros said SteelCraft’s construction will be completed by December 9, followed by a two-week training period for employees. This timeline should allow for the communal outdoor space to open before the end of the year, with a grand opening celebration after the new year.
Seven vendors will take up shop in the complex comprised of 10 custom shipping containers. After several lineup changes, and with the project nearing completion, the list of vendors has been finalized by Gros: Smog City Brewing Co. out of Torrance; The Fresh Shave, which will be the first mainland location for the Hawaii-based shave ice vendor from Kauaʻi; Nashville-based DeSano Pizza Bakery; “The Great Food Truck Race” finalist Waffle Love from Utah; Tajima, a ramen vendor from San Diego; Long Beach-local Steelhead Coffee; and one vendor that Gros said will remain undisclosed for now.
Vendors include Smog City Brewing Co. out of Torrance; Fresh Shave, which will be the first mainland location for the Hawaii-based shaved ice vendor from Kauaʻi; Nashville-based DeSano Pizza Bakery; “The Great Food Truck Race” finalist Waffle Love from Utah; Tajima, a ramen vendor from San Diego; Long Beach-local Steelhead Coffee; and one vendor that project developer Kim Gros said will remain undisclosed for now. (Photograph by the Business Journal’s Larry Duncan; Rendering courtesy of Kim Gros)
“The beauty of this is that we’re bringing vendors from all over the U.S. that the community’s never had the opportunity to indulge in,” Gros said. “This is new for all of us, so it has been a learning process.”
Though she did not want to disclose the exact amount, Gros said the project was not cheap, and expenses were a lot more than she had ever imagined. On top of the expenses, she said with the city approving ideas that have never been approved before, people are putting their names at risk on this project, as there has been nothing locally in the past to indicate the project will be a success.
“All I can say is, for the community, if they are looking for a place to enjoy really great food, sitting at a table with new friendships and old friendships, you can’t have a better place to do that,” Gros said. “A lot of creativity, a lot of sweat and tears, a lot of travel have made this possible.”