JMBM Development Rights Newsletter: Gambol Industries, Inc.'s Open Letter to the Los Angeles City Council

JMBM Development Rights Newsletter Fall 2010

Gambol Industries, Inc.’s Open Letter to the Los Angeles City Council

From Robert Stein, President Gambol Industries, Inc.

For more than three years, JMBM’s client, Gambol Industries, Inc. has been negotiating with the Port of Los Angeles to develop a ship repair and ship building facility in an unused portion of the port. Gambol proposes to invest approximately $75 million in private capital, which will create more than 1,000 direct and indirect jobs. The Port of Los Angeles however, continues to resist Gambol’s efforts, prompting the company’s president, Robert Stein, to circulate an open letter to members of the Los Angeles City Council. The following is an edited version of his letter:

We thought we had a good idea three years ago when we proposed re-opening the historical former Southwest Marine (SWM), site for use as a ship building and repair yard. The site has been a shipyard since the 1920s, but in recent years, has been unused and in decay. Believe it or not, neither the ports of Los Angeles nor Long Beach currently house such a facility. This necessitates those needing these services to sail down to San Diego or up to San Francisco. This is unacceptable for the nation’s largest port complex!

For reasons best known to its staff, the Port of Los Angeles continues to resist our efforts. Initially their reasoning related to the Main Channel Deepening Project (MCDP) which the port is undertaking with the assistance of the Army Corp of Engineers. They claim they need the Southwest Marine facility to store the dredged materials which they want to relocate behind a rock dike to be installed across the face of the SMW site. Once this process is undertaken it will preclude the ability to develop a world class ship building and repair facility in San Pedro Bay.

Gambol has always maintained there is a better alternative to solving the problem of containing the dredge materials. We proposed constructing a vertical steel wall containment system which would accommodate the same amount of dredge material and preserve 50% of the slips as open water to be used by a shipyard. The costs of this process would be comparable to the port’s proposed containment system.

Recently, another opportunity presented itself, which makes even more sense: the Port of Long Beach is seeking 2.5 million cubic yards of dredge material for its Middle Harbor Redevelopment Project (MHRP). It will need this in early 2011, which is well within the time frame of Los Angeles harbor’s MCDP. Providing this material to the Port of Long Beach will preclude the need to build a rock dike or a steel wall, open up all the SWM slips and save the Port of Los Angeles $25 to $30 million. The cost of transporting the dredged materials a few miles will surely be a mere fraction of these savings. Additionally, air quality around the ports will be enhanced, and there are obvious environmental benefits in creating and preserving open water. Unfortunately, despite these obvious benefits, the Port of Los Angeles disputes the value of this cooperative plan and continues to maintain that it will delay its MCDP!

Another reason given by the Port of Los Angeles for rejecting Gambol’s plan is the port’s claim that it needs to completely fill the SWM due to hazardous sediments located at the bottom of the slips. At the request of the Port and with the supervision of the Department of Toxic Substances Control (DTSC), we tested the sediments and found them to be non-hazardous, effectively removing another objection to our proposal.

Regardless, the Port Authority continues to resist our efforts. A variety of rumors are circulating as to why it has taken this position. One of them has to do with the possible relocation of wet fish processors from Fish Harbor to SWM.

We have no interest in speculating about the reasons for this resistance. However, after spending millions of dollars working with the Port of Los Angeles, Gambol stands ready and willing to bring ship building back to Los Angeles.

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