Harbor Commission

Special Meeting Notice and Agenda Sept. 18, 2014

 

September 12, 2014

NOTICE OF THE SPECIAL MEETING OF SEPTEMBER 18, 2014

SUBJECT: SPECIAL MEETING OF THE LOS ANGELES BOARD OF HARBOR COMMISSIONERS THURSDAY, SEPTEMBER 18, 2014, AT 3:00P.M.

The Los Angeles Board of Harbor Commission has called
for a Special Meeting to be held on:

Thursday, September 18, 2014 at 3:00p.m.
(open session is anticipated to begin no sooner than 6:00 p.m.)
Banning's Landing Community Center
100 E. Water Street, Wilmington, CA 90744

The attached agenda specifies the business
to be conducted at the special meeting.
NO OTHER BUSINESS WILL BE CONSIDERED.

AMBER M. KLESGES
Commission Secretary

 

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BOARD OF HARBOR COMMISSIONERS
Ambassador Vilma S. Martinez, President
Vice President David Arian
Commissioner Patricia Castellanos
Commissioner Anthony Pirozzi, Jr.
Commissioner Edward R. Renwick

A. OPENING STATEMENT - AN OPPORTUNITY FOR MEMBERS OF
THE PUBLIC TO ADDRESS THIS BOARD

PERSONS IN THE AUDIENCE MAY ADDRESS THIS BOARD IN CONNECTION WITH ANY AGENDA ITEM OR DURING THE PUBLIC COMMENT PERIOD.

AS PROVIDED BY THE BROWN ACT, THE BOARD HAS LIMITED EACH INDIVIDUAL'S SPEAKING TIME TO THREE MINUTES. ANYONE DESIRING TO SPEAK DURING THE PUBLIC COMMENT PERIOD IS REQUESTED TO COMPLETE A SPEAKER CARD AND SUBMIT IT TO THE COMMISSION SECRETARY, VIA THE SERGEANT AT ARMS, PRIOR TO THE START OF THE MEETING.

B. CLOSED SESSION

1. CONFERENCE WITH REAL PROPERTY NEGOTIATORS
(Government Code Section 54956.8)

Provide instructions to its real estate negotiators with respect to the proposed ground lease for Ports O' Call site:

Property: Berths 74-83, San Pedro, California

City Negotiator: Michael Galvin

Tenant Negotiators: Eric Johnson, Brian Saenger

Negotiating Parties: City and LA Waterfront Alliance

Under Negotiation: Price and Terms

2. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION
(Subdivision (c) of Government Code Section 54956.9)

Initiation of litigation pursuant to subdivision (c) of Section 54956.9: three cases.

PUBLIC HEARING - CANCELED

C. COMMENTS FROM THE PUBLIC ON THE PUBLIC HEARING

 

Real Estate

RESET COMPENSATION UNDER PERMIT NO. 827 WITH APM TERMINALS PACIFIC, LTD.

Pursuant to Section 3(h) of Permit No. 827 issued to APMT Terminals Pacific, Ltd., as amended, conduct a public hearing for the purpose of determining the fair rental value of Permit No. 827’s premises for the period of August 1, 2012 through July 31, 2017.

• Port Staff Presentation (20 minutes)

• APMT Presentation (20 minutes)

• Port Staff rebuttal (5 minutes)

• Question and Answer and deliberations by the Board

  Real Estate (NEW ITEM)

  C(1) Re: ORDER NO. ____________ - RESET COMPENSATION UNDER PERMIT NO. 827 WITH APM TERMINALS PACIFIC, LTD. AND RESOLUTION NO. ____________ FOR THE SIXTH AMENDMENT TO PERMIT NO. 827
  
  Transmittals
  
  SUMMARY: Pursuant to the Charter of the City of Los Angeles (City Charter), Section 607(b) and the terms of Permit No. 827 (Permit), the Board of Harbor Commissioners (Board) is required to adjust the compensation for the Pier 400 container terminal facility for the period of August 1, 2012 to July 31, 2017 (Reset Period). Staff herein presents for consideration by the Board, its information regarding the fair market rent for the premises and its recommendation for approval of an increase in rates as negotiated by APM Terminals Pacific, Ltd. (APMT) and the staff of the City of Los Angeles Harbor Department (Harbor Department). Also included herein is the Sixth Amendment to the Permit, to amend the compensation provision of the Permit as necessary to effectuate the negotiated agreement. However, as required by the Permit, if the Board does not approve this recommendation, the Board should set this matter for a full public hearing to determine the appropriate rental adjustment all as more fully discussed below.
  Recommendation: Board resolve to (1) set the rental rates for the period of August 1, 2012 through July 31, 2017, by determining (a) all Twenty-foot Equivalent Unit (TEU) rates, (b) the Minimum Annual Guarantee (MAG), and (c) the Intermodal Rail Facility (IRF) Rate, as follows:
   
• Increase the TEU Rate by 2 percent effective January 1, 2014, and escalate this rate by CPI-U (CPI, All Urban Consumers, Los Angeles-Orange-Riverside Counties) for the remainder of this five-year reset period of August 1, 2015 and August 1, 2016, with a floor of 0 percent and a cap of 3 percent; provided that until July 31, 2017, to the extent that percentage increases of TEU charges, the MAG and/or IRF Compensation occur in a compensation year through application of Section 3(c)(2) of the Permit, in the case of TEU changes, the compounded percentage increases of such charges resulting from CPI-U adjustments shall be deemed to constitute full increases of such TEU charges as required by application of Section 3(c)(2), if any;
   
• Increase the MAG by 8 percent effective January 1, 2014; and
   
• Maintain the current IRF Rate of $49,768 per acre per year.
  
  (2) adopt the matters set forth in this Board Letter and findings set forth herein, including the finding that while it is the policy of the Board that pricing for use of Harbor Department property shall be structured to enhance the Harbor Department’s competitive position and advance the Port of Los Angeles (Port) as a positive place to do business while working to achieve minimum Rates Of Return (ROR) on land and on improvements consistent with Harbor Department financial management policies (current goal of 10 percent ROR target on land and 12 percent ROR target on improvements, blended rate of 10.92 percent), the Board finds that it is more commercially reasonable given the state of the market at this time to gradually move APMT towards achieving the Board’s target rate of return by imposing a less than full market rent rate at this time with CPI-U increases for the TEU rates in each of the next two reset anniversary dates, leading to a ROR of 8.06 percent for this reset period; (3) authorize the Board Secretary to attest to the Order resetting rental compensation; (4) adopt Order No.____________, which Order effectuates the adjustments summarized above; (5) approve the Sixth Amendment to Permit No. 827 with APM Terminals; (6) direct the Board Secretary to transmit the Sixth Amendment to the City Council for approval pursuant to Section 606 of the City Charter; (7) authorize the Executive Director to execute and the Board Secretary to attest to the Sixth Amendment upon approval by the City Council; and (8) adopt Resolution No. _____________, which constitutes this Board’s approval of the Sixth Amendment.

OPEN SESSION ITEMS (D-J)

D. COMMENTS FROM THE PUBLIC ON NON-AGENDA ITEMS

E. EXECUTIVE DIRECTOR REMARKS

F. REPORTS OF THE COMMISSIONERS

G. BOARD COMMITTEE REPORTS

H. APPROVAL OF THE MINUTES

August 21, 2014 Regular Meeting

I. PRESENTATION

J. BOARD REPORTS OF THE EXECUTIVE DIRECTOR

CONSENT ITEMS (1 - 4)

Commission Office

1. Re: RESOLUTION NO. ____________ - APPROVAL OF TRAVEL FOR COMMISSION VICE PRESIDENT DAVID ARIAN ON A BUSINESS DEVELOPMENT TRIP TO HOUSTON, TEXAS

Recommendation: Board resolve to adopt subject Resolution No.____________.

 

2. Re: RESOLUTION NO. ____________ - APPROVAL OF TRAVEL FOR COMMISSION VICE PRESIDENT DAVID ARIAN ON A BUSINESS DEVELOPMENT TRIP TO EUROPE
Recommendation: Board resolve to adopt subject Resolution No.___________.

Real Estate

3. Re: ORDER NO. ____________ - SECOND AMENDMENT TO PERMIT NO. 893 WITH PACIFIC MARITIME ASSOCIATION

Transmittals

SUMMARY: Under Permit No. 893, Pacific Maritime Association (PMA) is allowed to develop a new dispatch hall and parking spaces on approximately nine acres of City of Los Angeles Harbor Department (Harbor Department) property located on the southwest corner of the Alameda/Anaheim intersection in Wilmington to replace the current International Longshore Warehouse Union (ILWU) Local 13 Dispatch Hall, which is situated on a one-acre site. As part of this transaction, PMA agreed to construct a bike path on a portion of the premises along a segment of Anaheim Street and Alameda Street as a condition of the Permit. However, given that the area reserved for the Bike Path premises will not be needed by the City of Los Angeles (City) in the immediate future, the Harbor Department and PMA have mutually agreed to allow PMA the use of such area for additional parking, with the caveat that the Harbor Department will retain the right to reinstate PMA's obligation to construct the Bike Path improvements when the need for the bike path arises. The additional area will allow PMA to increase the parking capacity of the proposed facility from 581 parking spaces to 771. The proposed Second Amendment will amend Permit No. 893 to change the time frame requirements for the commencement and completion of the construction of the Bike Path improvements, which PMA will construct at its sole expense.
Recommendation: Board resolve to (1) approve the Second Amendment to Permit No. 893 with Pacific Maritime Association; (2) direct the Board Secretary to transmit the Second Amendment to Permit No. 893 to the City Council for approval pursuant to Charter Section 606 of the City Charter; (3) authorize the Executive Director to execute and the Board Secretary to attest to the Second Amendment to Permit No. 893 upon approval by City Council; and (4) adopt Order No.____________.

4. Re: ORDER NO. ____________ - AUTHORIZING THE DISPOSAL OF ABANDONED VESSEL AT BERTH 162, WILMINGTON

Transmittals

SUMMARY: The City of Los Angeles Harbor Department (Harbor Department) is requesting that the Board of Harbor Commissioners (Board) declare a vessel abandoned that currently remains on Harbor Department property at Berth 162 in Wilmington, formerly occupied by Wilmington Marine Services, Inc. (WMS). The vessel, a 75-foot fiberglass fishing boat, has been at this site prior to the closure of WMS and bears no identifying numbers or marks. Attempts to locate the vessel owner have not been successful, despite notices posted at the premises for more than a year and the mailing of letters to possible owners. This action will formally allow proper and legal disposal of the abandoned vessel by the Harbor Department.
Recommendation: Board resolve to (1) declare the abandonment of the unidentified vessel pursuant to Port of Los Angeles Tariff No. 4, Item No. 1670; (2) authorize the destruction and disposal of the vessel upon the expiration of the prescribed ten-day notification period; and (3) adopt Order No.____________.

REGULAR ITEMS (5 - 7)

Planning and Economic Development

5. Re: RESOLUTION NO. ____________ - VOPAK MOTEMS COMPLIANCE PLAN

Transmittal 1
Transmittal 2
Transmittal 3
Transmittal 4
Transmittal 5
Transmittal 6
Transmittal 7

SUMMARY: The Port of Los Angeles (Port) has seven tenants operating marine oil terminals under separate permits. The Marine Oil Terminal Engineering and Maintenance Standards (MOTEMS) established new building code requirements for all existing and new marine oil terminals in California. MOTEMS requires replacement or significant upgrades of all liquid bulk wharves in the Port. Through ongoing discussions with the California State Lands Commission, which oversees MOTEMS, the City of Los Angeles Harbor Department (Harbor Department) has agreed to effectuate full compliance by 2018. In 2011, Harbor Department staff developed a MOTEMS Implementation Strategy (MIS) which proposed to relocate Vopak to Berths 148-151. On November 1, 2012, the Board of Harbor Commissioners (Board) directed staff to revise the MIS by relocating Vopak's berthing operations and selected tanks from Berths 187-190 to Berths 191-194 (Vopak Plan) instead of relocating to Berths 148-151. On July 2, 2014, Vopak informed the Port that the Vopak Plan was no longer financially feasible due to estimated project cost increases and prolonged market volatility. Vopak has requested to remain in their existing location conditioned on Vopak making an investment of $4 million in odor abatement and aesthetic mitigation and a $5 million contribution to community projects or programs in the Wilmington community. Harbor Department staff requests input and direction from the Board on Vopak's proposed revision to the MIS. Staff will then work with Vopak to implement MOTEMS compliance constistent with the Board's input and direction. >
Recommendation: Board resolve to (1) provide staff with input and direction on the proposed Vopak MOTEMS Compliance Plan, subject to compliance with all applicable laws including, without limitation, the California Environmental Quality Act (CEQA), the National Environmental Policy Act (NEPA), and the California Coastal Act (Coastal Act), as well as the execution of mutually acceptable agreements that will require the review and approval of City of Los Angeles (City) entities including, without limitation, the Board and the Los Angeles City Council, which approvals have neither been sought nor obtained. Notwithstanding any such staff direction (or responsive action by staff or others) the Board and City shall at all times retain full discretion to approve, disapprove, adopt or modify any and all agreements and environmental documents (including any projects, mitigation measures, project changes, and/or alternatives) related to this matter; and under no circumstances shall any such Board input and direction to staff be construed as a commitment, approval or determination of any kind by the Board, the City or other entity, whether under CEQA, NEPA, the Coastal Act or otherwise. (2) Adopt Resolution No.____________.

Port Police

6. Re: RESOLUTION NO. ____________ - LOS ANGELES PORT POLICE STRATEGIC PLAN
Transmittal 1
SUMMARY: A Strategic Plan has been developed for the Port Police Division (Port Police). In support of the Los Angeles Harbor Department, this plan communicates the vision and goals of the Port Police. This plan defines current missions as well as implementation of new initiatives and submits a staffing model that will support overall mission performance. The plan was developed to guide the Port Police as they address current and future challenges driven by the continued growth and changes of the Port. These changes are in response to the global maritime industry changes as well as the local communities that surround the Port. In accordance with past direction from the Board of Harbor Commissioners (Board), this plan is being submitted for Board approval.
Recommendation: Board resolve to (1) approve the Port Police Strategic Plan; and (2) adopt Resolution No.____________.

 

Real Estate

7. Re: ORDER NO. ____________ AND RESOLUTION NO. ____________ - PROPERTY EXCHANGE AGREEMENT BETWEEN THE CITY OF LOS ANGELES HARBOR DEPARTMENT AND SEAHAWK DEVELOPMENT, LLC FOR PROPERTIES LOCATED AT 211-241 N. MARINE, 214 N. FRIES AND 121-133 N. AVALON BOULEVARD IN WILMINGTON AND REVOCABLE PERMITS FOR ADJACENT PROPERTIES
Transmittal 1

SUMMARY: The proposed transaction is the private exchange of properties between the City of Los Angeles Harbor Department (Harbor Department) and Seahawk Development, LLC (SDL) for the furtherance of the Wilmington Waterfront Development Project (WWD Project). SDL is the owner of the property on Avalon Boulevard (SDL Property) that will be exchanged with the Harbor Department's properties on Marine Avenue and Fries Avenue (Harbor Department Property). SDL is a real estate holding company that has the same owners as the Harbor Department's tenant, Marine Technical Services, Inc. (MTS) dba Dockside Machine & Ship Repair. The proposed exchange includes a cash payment to the Harbor Department of $1,006,885 due to the difference in values of the parcels being exchanged. Also included in the transaction are the lease of adjacent Harbor Department vacant properties, and a leaseback of the exchanged property under revocable permits. The WWD Project was designed to provide waterfront access, commercial and economic development opportunities to the Wilmington community. The property exchange was analyzed in the Final Environmental Impact Report (FEIR) for the WWD Project certified by the Board of Harbor Commissioners (Board) in June 2009.
Recommendation: Board resolve to (1) find that pursuant to Section 385 of the City of Los Angeles Charter, the Harbor Department Property is not needed for Harbor Department purposes and authorize its private exchange; (2) find that pursuant to Section 7.27 of the City of Los Angeles Administrative Code, the proposed private exchange of real property owned by the Harbor Department with the SDL Property without notice of sale or advertisement for bids, including the lease of adjacent vacant properties, and leaseback of the Seahawk Development, LLC property is in the public interest, is a public necessity, and is in the best interest of the City of Los Angeles Harbor Department for the following reasons: a) the Seahawk Development, LLC property is required to further the ultimate development and completion of the Wilmington Waterfront Development Project; b) it allows the City of Los Angeles Harbor Department to realize rent revenues from the vacant properties adjacent to the exchanged properties until planned development is implemented; and c) it allows the City of Los Angeles Harbor Department to realize cost savings in ongoing maintenance and opportunities to rent vacant properties adjacent to the exchanged properties; (3) approve the Property Exchange Agreement and Joint Escrow Instructions authorizing the exchange of City of Los Angeles Harbor Department property valued at $2,332,170 with Seahawk Development, LLC’s property valued at $1,325,285, resulting in a cash payment to the City of Los Angeles Harbor Department of $1,006,885. The exact amount will be subject to pro-rates incurred in escrow, per the terms of the Property Exchange Agreement and Joint Escrow Instructions; (4) adopt Order No. _____________; (5) direct the Board Secretary to transmit to the City Council for approval the Order and Ordinance approving and authorizing the Property Exchange Agreement and Joint Escrow Instructions to the City Council pursuant to City Charter Section 385 and City Administrative Code and Section 7.27; (6) authorize the Executive Director to execute and the Board Secretary to attest to the Property Exchange Agreement and Joint Escrow Instructions, Grant Deeds, and associated documents upon approval by City Council; (7) approve the proposed Revocable Permits and Joint Revocable Permit to Marine Technical Services, Inc.; (8) authorize the Executive Director to execute and the Board Secretary to attest to the proposed Revocable Permits and Joint Revocable Permit; and (9) authorize the transfer of $225,000 from the Fiscal Year 2014-2015 Unallocated Capital Improvement Program Funds to Account 54260, Center 0330, Program 000, Job 637-00, Work Order 78067 to fund the soil contamination remediation activities on Harbor Department Property for the current year; and (10) adopt Resolution No. ______________.