A big break for COSCO deal

A major roadblock to the transfer of the 576-acre Long Beach Naval base to the Beijing-based China Ocean Shipping Company (COSCO) will be removed if eight historic preservation groups finalize a $4.5 million deal with the city of Long Beach, port of Long Beach, the Department of the Navy, the State Historic Preservation Officer, and the Advisory Council on Historic Preservation.

In a memorandum of agreement dated Jan. 27, the organizations — which include Long Beach Heritage, the L.A. Conservancy, and the National Trust for Historic Preservation — agree to drop their opposition to the transfer of the base to the city of Long Beach and the construction of a cargo container terminal at the closed facilty, even though this may very well result in the destruction of historic buildings. It was the specter of demolition which prompted Long Beach Heritage, one of the organizations, to file a lawsuit blocking the city’s proposal for conversion of the site to a cargo container terminal.

Though not all parties had signed by the middle of last week, they were expected to do so by the weekend, according to Yvonne Avila, spokesperson with the Public Affairs Office of the Port of Long Beach. An official announcement confirming the transaction is expected early this week, Avila told WorldNetDaily.

Neither COSCO, nor the Chinese government which owns the firm, are cited in the memorandum, but the contract leaves the door wide open to eventual leasing of the site to COSCO — an action long-favored by the Clinton White House which has actively lobbied for its implementation.

The agreement comes despite the outpouring of public outrage, which ignited a year ago when Americans learned of the pending base conversion. Critics of the plan have been forthright in voicing concerns over the potential the Chinese government, through COSCO, would have to use the converted base as a center for espionage and smuggling operations — importing millions of tons of uninspected goods, including illegal drugs, weapons and products made by slave labor.

Bending before a barrage of criticism from across the nation, the city in November cancelled its lease with COSCO, and the Navy shifted its stance from full approval of the deal to consideration of other uses for the base. It is currently looking at three alternatives. A decision is expected in May.

“We can do nothing until a decision is made about how the land should be used,” said Yvonne Avila. “The Navy is looking strictly at how the land should be used. We can make no decision until then.”

Asked if the tenant could be COSCO, Avila admitted it was possible. “They [COSCO] are still interested in the property, and Los Angeles has also indicated it is interested in having them. They have operated here for 17 years –and are in eight other sea ports in the U.S. They are a potential tenant for the site. Other tenants would also be considered if they are interested,” she said.

Researcher Gene Crocker points out that the Secretary of the Navy is Clinton-appointee John H. Dalton, a former top executive of Stephens, Inc., the Little Rock, Arkansas-based investment banking firm headed by Jackson Stephens. Stephens has strong ties to Indonesian billionaire Mochtar Riady and the Lippo conglomerate, and through them to China Resources, a wholly owned company of the Chinese government.

“The U.S. Navy is making the report and it will be for Communist China,” Crocker predicts.

The city’s proposal, one of the three plans under consideration, would require demolition of all historic buildings to make way for the construction of new container terminals and an 18-acre ship repair facility. Despite the fact that this plan would generate less jobs than either of the other two proposals, at the same time costing more money, the city remains committed to it. City officials insist the project is “vital” to the continued growth of the port and economic recovery of the area.

In the event the Navy chooses that option, thereby giving the green light to destruction of the buildings, the city will set up a $4.5 million Long Beach Heritage Fund, to be used for preservation projects at other sites. A similar offer was made last year, but preservationists turned down it down, demanding $20 million.

In addition, the city would prepare a 30-minute “professional quality” video of the base, display and store photos, salvage some of the architectural and landscape elements for reuse, and make an “easily portable,” three dimensional model of the historic district, presumably for hauling around to schools and other institutions.

In exchange for these projects — and the $4.5 million — the groups must sign a highly restrictive Covenant Not to Sue, in which the organizations and individuals promise never to file suit, “participate in, encourage or provide assistance in any such suit” against the United States, the City of Long Beach or its departments or employees “relating in any way to past or future decisions regarding the disposal, reuse, redevelopment or demolition of the Naval Complex.”

Even if additional facts surrounding the city’s actions and decision-making come to light in the future, the covenant will remain “in full effect.” The heritage groups have effectively removed themselves from the debate over the future of the Naval Base.

The covenant’s restrictions apply only to the groups; government entities are not bound by any corresponding self-imposed injunction.

“We feel we got pretty much what we wanted,” said Nancy Latimer, a board member of Long Beach Heritage, one of the affected groups and to date a leader of the opposition. “We wanted a reuse study and a new environmental impact report, and we got those. If they destroy the buildings we get a $4.5 million heritage fund — Long Beach has never had that,” she explained.”

Latimer hopes the Navy selects a second option: developing an “institutional campus” with police, fire and port headquarters and training facilities housed in the historic buildings, plus a new 91-acre ship-repair faility. The Navy reports this use would generate 1,543 new on-site and 7,700 regional jobs — 50 percent more than the plan promoted by the city.

A third plan, an automobile importing facility, would save some of the historic buildings and produce 1,049 on-site and about 5,300 regional jobs. Both the “institutional campus” and a automobile importing facility would generate more jobs than the city’s cargo container terminal, which the Navy says would create about 1,047 new jobs, including 150 at the small 18-acre ship repair yard.

Despite capitulation by the heritage groups, the battle over the Long Beach Naval base is far from over. Public television host Huell Howser has a major law suit in the California courts, which if successful could permanently halt the destruction of the base and force the city to adopt other plans.

“We are the only ones now that stand between the destruction and the saving of the naval station,” Howser’s attorney Richard Fine told WorldNetDaily. “We stand between the people and the politicians. The people want the buildings saved, the politicians want to destroy them.”

Howser, through his attorneys, has also written the Senate Committee on Armed Services requesting a Congressional investigation of alleged improprieties surrounding the planned destruction of the Long Beach Naval Station — for example, the relationship between the U.S. government and COSCO, which resulted in the government assisting COSCO to obtain the Naval Station as a cargo container facility, the calls from the White House to preservationist groups to stop their opposition to the planned destruction, and the refusal of the Navy to allow other government agencies to occupy the base.

Howser’s lawsuit, which he filed as a concerned taxpayer and citizen of the state of California, does not emphasize COSCO. Indeed, Howser was active against Long Beach’s plans for the base months before it was known publicly that the Chinese company was slated to be the tenant. In September, 1996, his popular travel program, “California Gold,” galvanized state attention on the city’s intention to tear down the buildings and pour concrete over the site to create a container terminal.

“The Long Beach Naval Station is a national treasure and a historical landmark which should be preseved to show our children and grandchildren the culture of our society during the Second World War and the Cold War,” says Howser.

Richard Fine, Howser’s attorney, described the suit and its status in the courts. “We filed initially against the State Lands Commission, the city of Long Beach and the port,” he said. “By March, 1997, when the papers started hitting on what the Navy had done — by denying the base to the Marines, denying it to the Western Defense District, denying it to the Maritime Administration — we brought in the Navy as a party. When we learned about COSCO, we named them, too.”

Fine continued: “The Navy removed the case to federal court — then said we didn’t have jurisdiction over them and that we couldn’t sue the Navy. Judge [Andrew] Hauk agreed with them and dismissed our case from federal court — but he did so without prejudice for refiling in state court.” The decision is being appealed.

Meanwhile, Howser through Fine filed an action January 29 against the Lands Commission, the city and the port. COSCO is no longer named since the city terminated its lease.

For Fine, whose L.A.-based firm Fine and Associates specializes in suits involving government corruption and waste of public assets, the Long Beach case exemplifies his concerns.

“Our position is that this is a waste of over half-a-billion worth of assets. In the beginning, the city hid a lot of stuff. We’ve found out they paid $32 million for several cranes that COSCO built before the deal had been finally approved. We also found out they paid $5.7 million in 1996 to a consulting company to design the cargo container facility. The buildings and the land are worth $350 million. And the port will spend $182 million to convert the station into a cargo container facility. When you add up $350 million, $32 million, $5.7 million and $182 million — that is a waste of $569.7 million,” Fine observed.

Howser and Fine have requested the Navy to consider another plan, one that would be more publicly oriented than the others under consideration.

“We want the land used as a county, state, or national park,” said Fine. “We want to use all of the buildings for educational, institutional and commercial purposes. The idea of an ‘institutional campus,’ which the preservationists support, would place the base off-limits to the public.”