August 18, 2006 - From the August, 2006 issue

Port of L.A.'s Knatz Leads Basin's Effort to Implement Clean Air Plan

Though new to the Port of Los Angeles, new port director Geraldine Knatz is no stranger to the San Pedro Bay. A longtime executive at the Port of Long Beach, Knatz is well aware of the ports' importance to the local-and global-economies as well as the dangers they pose to the surrounding communities. While growth in traffic is nearly certain, questions remain about how the ports will handle millions more containers per year and how to curb pollution from the ships, trucks, and trains that move the goods. But answers are emerging, and MIR was pleased to speak with Ms. Knatz not only about her new post but also about the landmark Clean Air Action Plan recently released as a joint venture of the two ports, and about the port's plans for redeveloping the San Pedro waterfront.


Geraldine Knatz

Two months ago the ports released a comprehensive clean air plan covering a range of polluters including ships, trucks, and trains. Can you give us a summary of that plan and the reaction of your board and the community?

The two ports came together to devise the Clean Air Action Plan (CAAP), which is a five-year plan that sets three levels of standards: a San Pedro Bay-wide standard, a project specific standard, and a suite of detailed standards for different types of equipment that are used in the port, including ships, trucks, trains, etc.

Along with the standards, the CAAP includes a nested set of implementation strategies: different mechanisms we can use to impose the standards, the primary one being leases. We'll also look at San Pedro Bay-wide tariff measures. We wanted a couple of strategies in case one of them ran into some legal issues. But, I envision that the leases will be the primary mechanism for implementing the standards.

The report's overview starts out with the port's recognition that we haven't done enough. Our plan this go-round is to focus on reducing the health risk as much as possible. There are a few firsts in the plan: the first time that the two ports have come together on something with respect to air, the fact that we have the three agencies signed on, and it's the first time ever that the two ports have published information about our leases, with the lease expiration dates and opportunities for opening up those leases because of ongoing projects or environmental reviews that are underway. That was included to give people a way of knowing when all this might happen.

This issue of MIR features an interview with Senator Alan Lowenthal about clean air and his bill SB 760. Growth at the port is likely to triple in the next two decades, yet the community will not tolerate further environmental impacts. How you reconcile these two agendas?

I think there is consistency in those two agendas. What Senator Lowenthal is saying is that the industry has a part in this. Our plan also puts a lot of costs on the industry. Prior to that the port had been looking at incentivizing everything just to get industry to do that, and we've backed away from that. If any kind of fee is collected, it is important to keep those fees here. The way I understand the latest version of SB760, it is not clear that funds collected could be used for highway-related infrastructure. Nevertheless, I think the bill has catalyzed discussions between the ports and industry about their role in this plan and in infrastructure.

What is the significance of November's bond measures as they relate to the port's agenda?

The infrastructure and the environmental bonds are critical, and not just for Port of L.A., for the state as a whole. If those bonds don't pass, the state takes a big leap backwards. For too long there has been no attention paid to the infrastructure in the state. The bonds are consistent with where we are going, greening and growing the port. I can do a lot down here, but if there is no way to get the cargo through the region, it's not going to be a good situation. I also see the $1 billion environmental bond helping with one of the key things that we have to do over the next five years, which is to get cleaner trucks calling on our ports.

Leon Billings and Wally Baker of LAEDC told MIR a couple of months ago that the federal government was not carrying its load even though infrastructure requires federal assistance. Do you agree with their assertion?

I think that's true. A lot of the issues we are dealing with on the trucks can be tied to the Clean Air Act, and the EPA hasn't stepped up. The money that came to the San Pedro Bay ports through SAFETEA-LU did not amount to a whole lot: there was $100 million for the Gerald Desmond Bridge, which is a key project for both ports, but there wasn't a lot. I have met with federal Department of Transportation people and they basically tell me, "Don't count on us." If we get something together here and if we get industry participation they might come in with the last dollar, but they are not going to lead the way. We're going to have to lead.

You moved from Long Beach to be the director of the L.A. Harbor. Is it much of a change, and what is at the top of your priorities?

It was a big change for me because I moved into a position that has a lot more visibility, and I came into a situation with a backlog of work. I felt it was important to take on were the clean air action plan, because everything else on my agenda comes from that. Getting that plan adopted is going to be a focus. And then implementing it-getting through a backlog of environmental impact reports and capital development projects that have languished for a number of years, and getting the port staff back to work again on what we should be doing are my primary goals.

Is competition between the two ports a good thing?

Yes. We're not competing in the sense that we were before because there aren't any wide-open spaces or brand-new terminals. Long Beach has Pier S and they pretty much have a customer for it. We're looking at ways that we can improve the throughput of our existing land and to better use our existing assets. The competition is more in customer service and efficiency. We're not trying to steal a big customer because we have some big, new terminal; those days are gone.

Let's turn to the terror threat and port security. How prepared is the port, and what do you still need?

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We have an outlook for about a three-year period, and we have a number of projects in the pipeline. A key focus for us now is business resumption planning and we are also working with Port of Long Beach on implementation issues with the new federal transportation worker identity card (TWIC). Upgrading the passenger terminal is a major focus, not only screening the freight but looking at passenger I.D. systems and things like that. Increasing our police force and having a greater presence around the port and on the water is a major focus.

We are also trying to move the container inspection station project forward as well. That project could be $90 million to $100 million, and we only got a little bit of money from the federal government for it. We are getting the stakeholders together to talk about, "Hey, maybe we shouldn't focus on the physical aspect of this project-the building-maybe we should focus on the function and try to bring everybody together, even if we have to do it in a makeshift way." Unfortunately, when I arrived, Noel Cunningham, our director of security and emergency operations, was leaving. I am recruiting to fill that position, and I have other vacancies at the senior level. I don't have the full complement of management staff, but I am working hard to get there sometime this fall.

Roughly $5 billion in U.S. Customs collections come from the ports of L.A. and Long Beach, but none of that money is earmarked to come back to the two ports for either infrastructure or security. Is that ever going to change?

Actually a small amount has come back in the form of the harbor maintenance tax collection because the port has relied on the federal government to do some dredging work. But you are right in that we put most of the money in and we get very little back.

In certain respects, we are subsidizing the maintenance of all the other ports around the country. That's an ongoing battle. If you look at the plans in terms of, for instance, the Doha round of trade negotiations, the goal is to eliminate tariffs. So that pot of Customs money may shrink. So to think that custom receipts is going to be a big opportunity for the ports to tap into is probably not likely if trade negotiations go the way they have been going.

What role is the harbor is playing in the San Pedro waterfront enhancement projects, which have spilled over from one administration to the next? What is the status of that effort?

In April the board approved $44 million of improvements along the waterfront. We'll go to bid to construct those projects at the end of this year and we'll start construction early next year. It will continue the public promenade, upgrade the entrance to the cruise terminal with a water feature, open up additional areas for public use along the waterfront and make some improvements at Ports of Call.

In September we will be presenting to the board the results of our market study on a potential new outer harbor cruise terminal. Nothing is more telling about the fact that we need a new cruise terminal than when you see the Queen Mary II back down the channel because the ship's can't fit under the Vincent Thomas bridge and so it can't turn around.

Then I am going to brief the board on the elements of the Bridge to Breakwater project that the port is committing to go forward with. I believe the way to catalyze investment in San Pedro is for the port to improve the waterfront and improve the access to the waterfront. I'm going to get the people to the waterfront, but we will be looking for others to make investments over time in commercial activities. Although we have consultant drawings which show how development like hotels could be accommodated along the waterfront, without any concrete proposals, its speculative at this time

If the port does its part well, and by that I mean improving the waterfront, I think five years from now we'll generate more interest in the parcels that will be available for development. That goes along with what is going on across the street from us: the Pacific Trade Center was demolished, and new condominiums are going in. I saw what happened in downtown Long Beach: you fill up all those condominiums with a lot of young people and people that are going to frequent the restaurants and utilize the businesses downtown. It will change the complexion of the area, and that's exciting.

If you were to recommend priorities for Mayor Villaraigosa regarding the port, what would you say?

The mayor has already done a lot. He has been out here at the port, he supported the industry; he came down to support Maersk's effort to use low-sulfur fuel. I'd tell the mayor that my priorities are his priorities, which is to grow and green the port, to reduce the health risks to the local community, to make the waterfront attractive, and help the businesses grow, because the mayor is supportive of the growth of port businesses.

He supported the creation of an economic development unit within the Harbor Department. That will be a focus that we've never had before. I want to create partnerships with other city departments like CRA and the Planning Department and work on some of the links between the port and the city and to make them better than they have ever been.

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