Port of L.A. Expects Lift From Razing Structures

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Port of L.A. Expects Lift From Razing Structures
Oil tanks in the foreground at the former Westway terminal.

How much does it cost to demolish a decades-old tank farm located on prime waterfront real estate at the Port of Los Angeles?

Less than nothing, as it turns out.

Contractor Standard Industries of Ventura will pay the port $455,000, and possibly as much as $705,000, to tear down oil tanks and dozens of other structures at the former Westway Terminal Co. oil terminal next to the port’s main channel.

According to Standard Industries’ bid, the demolition will cost about $1.1 million, but the scrap metal and other salvage materials at the site will be worth $1.8 million. The site is home to 116 massive oil tanks, some with 1 million-gallon capacity.

“We asked around and nobody here can remember a construction project that had a below-zero bottom line,” said Michael Christensen, the port’s deputy executive director of development. “This is the only time we’ve had the whole contract be money back to us.”

The demolition, set to start in January and wrap up by late next year, is just the first step in a years-long process to redevelop the Westway terminal and surrounding land.

The plan is to turn the entire peninsula between the port’s main and east channels into a marine research facility called City Dock No. 1. Early phases of that plan, which are still years away from construction, would build teaching and research facilities on land just west of the oil terminal.

The Westway terminal itself, Christensen said, could eventually be home to the world’s largest saltwater wave tank, a research tool that could be used to study climate change, tsunamis and other weather phenomena.

But first, the port will have to clean up contamination at the site, which has been used as an oil terminal since the 1920s.

“We’ll drill some holes and see what’s down there,” Christensen said. “It’s a process that will take a while, probably a number of years.”

Oh, Canada

Canadian mining company Polaris Minerals Corp. thinks Southern California’s construction market will heat up again soon.

So the Vancouver, British Columbia company’s U.S. distribution subsidiary, Eagle Rock Aggregates Inc. in Vallejo, wants to build a terminal at the Port of Long Beach to import construction sand and gravel.

Bill Terry, Eagle Rock chief executive, said California quarries won’t be able to provide enough aggregate once the region’s construction economy returns to full strength.

“When the housing market and the commercial market come back, they will need these materials,” Terry said.

Polaris operates quarries on Vancouver Island and exports aggregate by ship to Hawaii and to Northern California through a terminal at the Port of Richmond.

The Long Beach terminal, planned for an 8.3-acre site in the northeast corner of the port, is at the beginning of the environmental approval process, with the port about to prepare an environmental impact report.

If all goes well, Terry said he expects to begin dredging and construction of storage facilities and conveyor systems in the middle of next year and be operating by early 2013.

The terminal would be able to handle about 3 million tons of sand and gravel annually. Construction and dredging are expected to cost between $5 million and $7 million.

Polaris isn’t the only foreign company betting on the return of the construction industry. Mitsubishi Cement Corp., part of Tokyo giant Mitsubishi Corp., has plans to spend $20 million on upgrading its cement import terminal at Long Beach.

Frigid Fruit

Asparagus, tomatoes and strawberries grown in California and bound for customers in Hawaii were the first perishable cargo processed at Apollo Freight Inc.’s new refrigerated warehouse near Los Angeles International Airport.

The facility, which has 16,000 square feet of refrigerated space, more than doubled the company’s capacity for perishable goods near LAX. That means more space to handle California produce headed to Asia and the Middle East, as well as more space for processing goods stopping in Los Angeles on the way from Central and South America to Europe and Asia.

David Herbst, executive vice president of L.A.-based Apollo parent Mercury Air Group, said the company invested about $850,000 in its latest facility, including installing new refrigeration units, because perishable cargo is a growing industry resistant to economic woes.

“Perishables are recession-proof,” Herbst said. “Folks in the Middle East want their strawberries from California. The Japanese want South American roses.”

Apollo previously opened a 13,000-square-foot refrigerated warehouse on airport property in April 2009, mostly to handle flowers imported from South America headed to Asia and to domestic destinations.

The new warehouse, which is leased from San Francisco logistics giant Prologis Inc., opened Oct. 26. It will mostly be used to process and repackage produce coming into Los Angeles through the ports of Los Angeles and Long Beach, and on international flights into LAX.

Mixed Reviews

L.A. Mayor Antonio Villaraigosa last week trumpeted his latest effort to boost local business: the new Los Angeles Regional Export Council. However, the group won’t offer services or advice to local companies that want to export products.

Instead, the council will act as a kind of clearinghouse to refer companies to existing export services offered by the Port of Los Angeles, the U.S. Department of Commerce, USC, UCLA and others.

Bruce Winston, an import-export consultant with Makor Group International in Culver City, said he wasn’t impressed.

“It seems like a duplication of labor,” Winston said. “It will give you one central number to go to, but is it that much more effort to get two phone numbers and talk to the port and the airport separately to find out what they offer?”

But Richard Drobnick, director of the USC Center for International Business Education and Research, said the council should have one tangible benefit: making it easier to find local companies to participate in MBA programs at USC and UCLA.

The programs assign MBA students to help companies export to new markets.

“It’s not easy for USC to go out and find these companies,” Drobnick said. “Now, the Department of Commerce will be identifying companies, the port might identify some companies. That will help refocus our activity on the local economy.”

Staff reporter James Rufus Koren can be reached at [email protected] or at (323) 549-5225, ext. 225.

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