Fingers are crossed over a dispute that could delay the biggest construction project in a decade at Los Angeles.
An invisible one-year clock is ticking at Los Angeles port that could dramatically affect the surrounding region's economic future. Understandably, the port is extremely unhappy about it but has been forced to pretend that there is nothing to worry about.
The clock has begun ticking courtesy of boat and yacht builder Gambol Industries, which earlier this year almost scuppered the port's plan for dredging and deepening the back channel. Three million cubic yards of soil are at the heart of the dispute, the last 20 percent of a project that began seven years ago. The port wanted to dump the dirt on disused slipways that were used for shipbuilding, which peaked during the Second World War.
Trouble is, the slipways are on a site – Southwest Marine (previously owned by Bethlehem Steel in the Glory Days)-- now leased to Gambol, which has raked in a steady income from renting dilapidated buildings to film makers. (Chances are that at least half of the movies featuring very large industrial waterfront properties are at that location).
Just before the plans for dumping the soil were due to be waved through by the port and city, Gambol popped up with an amazing proposal -- reviving the shipyard (as opposed to boat building) – plus threatening a lawsuit if the proposal was ignored, which could delay the dredging for years.
Maritime insiders and the port have been skeptical about the whole concept. Shipbuilding in Los Angeles is seen as part of nostalgia and the industry has moved across the Pacific. This skepticism did not fade even when Gambol flourished an independent analysis by an independent think-tank, the Los Angeles Economic Development Corporation. The nub of it is that within five years the yard could employ 800 people and earn $100 million a year.
Unfortunately, those figures are based on estimates that Gambol provided and there was no opportunity to undertake a proper, impartial market survey.
But, they were interesting enough to attract the attention of influential city councilors and, so, a compromise was hatched whereby Gambol and the port agreed to work together on a one-year study to see if the shipyard "has legs", as one observer put it.
A few thousand tons of soil might seem to be of minor importance. Except for the fact that the dredging is needed for the Transpacific(TraPac) terminal expansion plan, which depends on a deeper and wider channel to get post-Panamax ships in and double container throughput to 2.4 million TEU a year.
That certainly has legs -- $250 million and 5,000 jobs.
A very large cloud of worry is now hanging over port officials. Once the year is up and the Gambol yard deemed unfeasible, there is no telling what will happen next. Another lawsuit threat might be on the way.
Likewise, business leaders are worried that the TraPac project could be delayed, further driving away shipping lines to Washington and British Columbia. Some serious private discussions are taking place to make sure the dredging gets done and Gambol gets some of the windfall.