By Joshua H. Silavent
November 5th, 2012 – The Long Beach Board of Harbor Commissioners today approved the $14.25 million purchase of a 176,000-square-foot building at 4801 Airport Plaza Dr. for the Port of Long Beach administration’s relocation in a 4-1 vote. The sale is expected to close December 27. Port spokesperson Art Wong told the Business Journal that the move would likely occur sometime next summer.
Commissioner Thomas Fields cast the lone ‘no’ vote, expressing his continued opposition to the move to the airport. “So to me, moving out of the downtown to the airport just does not make sense,” both economically and environmentally, he said. “But a temporary move to the airport is disruptive.”
Several commissioners acknowledged their preference to move the port administration offices downtown, but that circumstances would not allow it.
Commissioner Nick Sramek outlined his main priority: “No. 1 is the staff,” he said. “We need to get them out of this building and into a safe and secure home. You may not appreciate what I’m doing. But this decision had to be made.”
Commission President Susan Wise concurred. “The problem as I see it is that no proposal offered everything that each commissioner wanted. I can tell you this was not my first choice,” she said, before adding that she was glad a decision had finally been made on a safe and secure location for port staff.
Commissioner Doug Drummond said security was the key reason why he supported the move to the airport. “The World Trade Center would be a disaster for us” with regard to security, he said.
Commissioner Rich Dines, in an effort to assure critics of the move to the airport, said he was confident that the move would only be temporary and that the harbor commission is committed to eventually building a headquarters in Downtown Long Beach. “I believe a new building can bring economic activity to downtown,” he said. “There is no desire to abandon downtown.”
Criticism was strong during the public comment portion of the meeting, which took place prior to the vote. A representative of Legacy Partners, the negotiating entity for the World Trade Center, said the move to the airport did not make financial sense, while a move to the WTC would bring a greater return on investment.
Kimball Wasick, who was part of the marketing team at Cushman & Wakefield that helped orchestrate the sale of the airport building, said the move made the most short-term sense because the airport building is the right size and provides a secure location.
“Your decision will save the port millions of dollars and the port can move on toward the construction of a new, permanent headquarters in downtown,” he added.
Local union representatives also expressed support for the move.
Meanwhile, representatives with the Downtown Long Beach Associates, Long Beach Area Chamber of Commerce, realty firms, the Hotel Maya and other businesses in the downtown area said the move to the airport was bad economics, bad for the environment, reeked of political cronyism and lacked intellectual honesty. They were not swayed by commitments to make the move to the airport temporary.
At the end of the hearing, commissioners expressed their intent to approve a motion at their next meeting directing staff to immediately begin looking into building a permanent headquarters downtown.
The acquisition of the airport site includes more than $9 million budgeted for tenant improvements, security, outfitting, voice/data cabling, deferred maintenance and a 30 percent contingency balance, bringing the total acquisition price to $23,310,227.
The Long Beach City Council must approve the deal because it requires an amendment to the harbor department’s fiscal year 2013 budget. City Clerk Larry Herrera told the Business Journal that the council would likely vote on the deal at its November 20 meeting or sometime thereafter.
The current budget already includes $6 million for moving and related expenses. This figure will be reduced by $5 million, making the net budgetary increase for the purchase and move $18,310,227. The deal also includes annual ground rent payments of $255,360 and two additional rental payments in July of 2013 and 2014 of $156,000 each. The sellers are OC Investors, Inc. and Long Beach Airport Business Park II.
The eight-story airport building, which previously housed Boeing C-17 program employees, will serve as an interim headquarters for about 350 harbor department personnel. The commission’s insistence that it would eventually build new headquarters in the downtown area could possibly include a new civic center development encompassing city hall.
The current port administration building has been deemed structurally unsafe, particularly in the event of an earthquake. Negotiations for the move have been especially contentious in recent months. As first reported in the Business Journal September 5, Commissioner Doug Drummond had alleged that fellow commissioner Thomas Fields and other city officials were illegally conspiring to orchestrate the sale or lease of the One World Trade Center in Downtown Long Beach as the new administration headquarters for the benefit of the Inco Company. Drummond reportedly later apologized for his unsubstantiated claims.
Previously, Mayor Bob Foster vetoed a $300 million plan to build new headquarters on a site adjacent to the current administration building. And a deal to move to the One World Trade Center property was stymied when Harbor Commission President Susan Wise recused herself due to a potential conflict of interest, leaving the commission deadlocked on the deal.