May 19, 2023
SPECIAL MEETING NOTICE - TIME CHANGE ONLY
SUBJECT: LOS ANGELES BOARD OF HARBOR COMMISSIONERS SPECIAL MEETING – THURSDAY, MAY 25, 2023
The Los Angeles Board of Harbor Commissioners are scheduled for a Special Meeting on Thursday, May 25, 2023 @ 9:00am.
This meeting is in lieu of their previously scheduled Regular Meeting at 1:00pm on the same date and location.
Port of Los Angeles Administration Building
Board Hearing Room, Second Floor
425 S. Palos Verdes Street
San Pedro, CA 90731
Please refer to the posted agenda at www.portoflosangeles.org for further details.
AMKlesges
AMBER M. KLESGES
Board Secretary
Los Angeles Board of Harbor Commissioners
Harbor Administration Building
425 S. Palos Verdes Street
San Pedro, California 90731
SPECIAL MEETING AGENDA
THURSDAY, MAY 25, 2023 AT 9:00 AM
Board of Harbor Commissioners
Edward R. Renwick, Vice President
Diane L. Middleton
Michael Muñoz
Lucille Roybal-Allard
Lee Williams
ORDER OF BUSINESS
OPEN SESSION
A. Roll Call
B. Executive Director Remarks
C. Comment from the Public on Non-Agenda Items
D. Report from the Neighborhood Council Representatives – An opportunity for Neighborhood Council representatives to provide remarks on Neighborhood Council Resolutions or Community Impact Statements filed with the City Clerk which relate to any agenda item listed or being considered on this agenda for the Board of Harbor Commissioners.
E. Reports of the Commissioners
F. Board Committee Reports
None
G. Approval of the Minutes
- Regular Meeting of May 11, 2023
H. Presentation
1. Cal Maritime Academy – Naval Rear Admiral Thomas A. Cropper
I. Level I Coastal Development Permit
None
J. Board Reports of the Executive Director
Consent Items (1 – 2)
Office of the City Attorney
Summary: The Office of the City Attorney (Office) at the City of Los Angeles Harbor Department (Harbor Department) requests approval of a Third Amendment to Agreement No. 15-3308 (Third Amendment) between the Harbor Department and Meyers Nave Riback Silver and Wilson APC (Meyers Nave). The proposed Third Amendment increases the Agreement authority by $623,500. The current eleven-year Agreement expires on February 28, 2026, and there is no term extension requested. The current Agreement authority is $4,084,242 and the proposed Amendment would add $623,500 and increase the authority to $4,707,742. The additional funding will allow Meyers Nave to continue to represent the Port of Los Angeles in the defense of various claims of violations of the law and improper actions with respect to the China Shipping Terminal located at Berths 97-104 brought by the South Coast Air Quality Management District, the State Attorney General, the California Air Resources Board and the Natural Resources Defense Council (NRDC). The Harbor Department will continue to be financially responsible for payment of expenses incurred under the proposed Amendment.
Recommendation: Board resolve to (1) find that the Director of Environmental Management has determined that the proposed action is administratively exempt from the requirements of the California Environmental Quality Act (CEQA) under Article II Section 2(f) of the Los Angeles City CEQA Guidelines; (2) find in accordance to Charter Section 1022 that the scope of work of the proposed Agreement can be more economically and feasibly provided by an independent contractor than by City employees; (3) approve the Third Amendment to Agreement No. 15-3308 with Meyers Nave, to increase the agreement authority by $623,500 from $4,084,242 to $4,707,742; (4) authorize the Executive Director and Board Secretary to execute and attest to the Third Amendment; and (5) adopt Resolution No.____________.
Cargo & Industrial Real Estate
Summary: Staff requests approval of the continuation of a revocable permit for Premises located at 813 South Seaside Avenue, Terminal Island, for the purposes of operating a marine machine and sheet metal shop. Subject to Board of Harbor Commissioners approval, staff would issue a new revocable permit to Marine Sheet Metal Works that would serve as the successor to RP 1006, which has been in place since 1968. Under this new revocable permit, monthly revenue to the City of Los Angeles Harbor Department (Harbor Department) would be $1,562.88, subject to annual Consumer Price Index (CPI) increases of no less than three percent annually from July 1, 2024.
Recommendation: Board resolve to (1) find that the Director of Environmental Management has determined that the proposed action is categorically exempt from the requirements of the California Environmental Quality Act (CEQA) under Article III Class 1(14) of the Los Angeles City CEQA Guidelines; (2) approve the continuation of Marine Sheet Metal Works use and occupancy of City of Los Angeles Harbor Department property; and (3) adopt Resolution No.____________.
Regular Items (3 – 9)
Environmental Management
Summary: Staff requests approval of the proposed First Amendment to Agreement No. 22-9896 (Agreement) with Ocean Blue Environmental Services, Inc. (Ocean Blue). Under Agreement No. 22-9896, Ocean Blue provides as-needed emergency response and hazardous waste management services for the City of Los Angeles Harbor Department (Harbor Department). The proposed Amendment increases the not-to-exceed contract amount by $977,000, from $2,000,000 to $2,977,000, with no change in contract term. The First Amendment is required at this time due to an unplanned, high amount of work requests received to support continued development along the San Pedro Waterfront. The Harbor Department will continue to be financially responsible for payment of expenditures incurred under the Agreement.
Recommendation: Board resolve to (1) find that the Director of Environmental Management has determined that the proposed action is administratively exempt from the requirements of the California Environmental Quality Act (CEQA) under Article II Section 2(f) of the Los Angeles City CEQA Guidelines; (2) approve the First Amendment to Agreement No. 22-9896 with Ocean Blue Environmental Services, Inc. to increase the contract amount by $977,000 for a total not-to-exceed amount of $2,977,000; (3) authorize the Executive Director to execute and the Board Secretary to attest to said Amendment for and on behalf of the Board; and (4) adopt Resolution No.___________.
Environmental Management
Summary: Staff requests approval of the proposed Cost Share Agreement between the City of Los Angeles Harbor Department (Harbor Department) and the Port of Long Beach (POLB) to fund a Clean Air Action Plan (CAAP) Technology Advancement Program (TAP) project with SSA Terminals, LLC (SSA) to design, manufacture, and demonstrate two zero-emission Hybrid Hydrogen Fuel Cell (HFC) Top Handlers (Project). The total cost of the Project is $6,482,295. TAP funding in the amount of $2,191,000 will be split equally between the Harbor Department and POLB. SSA and their project team will be responsible for the remaining costs as part of the manufacturing of the top handlers and the demonstration at SSA’s POLB terminal. As lead agency, POLB has already entered into an agreement with SSA to implement the Project. If the proposed Cost Share Agreement is approved, then the Harbor Department would be financially responsible for funding $1,095,500 of the proposed TAP amount.
Recommendation: Board resolve to (1) find that the Director of Environmental Management has determined that the proposed action is administratively and categorically exempt from the requirements of the California Environmental Quality Act (CEQA) under Article II Section 2(f) and Article III Class 6(2) of the Los Angeles City CEQA Guidelines; (2) approve the Cost Share Agreement between the City of Los Angeles Harbor Department and the Port of Long Beach for the reimbursement of $1,095,500 for the SSA HFC Top Handlers Project; (3) authorize the Executive Director to execute and Board Secretary to attest to said agreement for and on behalf of the Board of Harbor Commissioners; and (4) adopt Resolution No.____________.
Community Relations
Summary: Staff requests that the Board of Harbor Commissioners (Board) authorize the dues expenditure for the Harbor Department’s membership in the California Association of Port Authorities (CAPA). The dues amount is determined annually at the CAPA Budget Committee meeting in October for the coming year and is based on each of the eleven California state port’s percentage of total tonnage. Annual dues are beyond the $150,000 maximum Executive Director authority; therefore, Board approval is required. Staff requests that the Board approve authorization of payment on CAPA dues not to exceed $177,724.24 for the period of July 2022 - June 2023. The Harbor Department is financially responsible for payment of CAPA membership dues.
Recommendation: Board resolve to (1) find that the Director of Environmental Management has determined that the proposed action is administratively exempt from the requirements of the California Environmental Quality Act (CEQA) under Article II Section 2(f) of the Los Angeles City CEQA Guidelines; (2) approve the authorization of expenditures for $177,724.24 for CAPA dues for the July 2022-June 2023 period; and (3) adopt Resolution No.____________.
Cargo & Industrial Real Estate
Summary: Staff requests approval of the following:
- Permit Nos. 958 and 959 between Pasha Stevedoring & Terminals, L.P. (Pasha) and the City of Los Angeles Harbor Department (Harbor Department);
- Settlement and Mutual Release of Claims Agreement (Settlement Agreement) between Pasha and the Harbor Department to resolve a dispute concerning past due compensation under Space Assignment No. 09-01 for Berths 206-209 for the period of 2009 to 2012; and
- Three individual guaranty agreements furnished by The Pasha Group (Pasha’s parent company) concerning Permit Nos. 958, 959 and the Settlement Agreement, respectively.
With respect to Permit Nos.958 and 959, the term of each proposed Permit is five years. Guaranteed compensation for each Permit is as follows for the first year:
- Permit No. 958 (concerning Berths 174-181) will be $3,371,760 on 40.07 acres; and
- Permit 959 (concerning Berths 206-209) will be $4,201,320 on 23.03 acres.
Year one (i.e. Calendar Year 2023) compensation under each Permit will be pro-rated based upon a compensation year end of December 31, 2023. The MAG under each Permit will be adjusted based upon scheduled increases through December 31, 2025, with annual adjustments occurring in Calendar Years 2026 and 2027 based upon the year-over-year change in the Consumer Price Index (CPI), subject to a floor of 2 percent. Regarding the companion Settlement Agreement, Pasha agrees to pay $1 million to resolve disputed Space Assignment charges that accrued between 2009 and 2012.
Recommendation: Board resolve to (1) find that the Director of Environmental Management has determined that the proposed action has been previously evaluated pursuant to the requirements of the California Environmental Quality Act (CEQA) under Article II Section 2(i) of the Los Angeles City CEQA Guidelines; (2) find that entering into Permit Nos. 958 and 959 is in the best interest of the City of Los Angeles despite certain exceptions to the City of Los Angeles Harbor Department’s Leasing Policy, Section XI, concerning a 2 percent non-refundable holdback on security instruments for a maintenance fund; (3) approve Permit No. 958 with Pasha Stevedoring & Terminals, L.P.; (4) approve Permit No. 959 with Pasha Stevedoring & Terminals, L.P.; (5) approve the Settlement Agreement with Pasha Stevedoring & Terminals, L.P.; (6) approve the Guaranties furnished by The Pasha Group concerning Permit Nos. 958 and 959 and the Settlement Agreement Pasha Stevedoring & Terminals, L.P.; (7) authorize the Executive Director to execute and the Board Secretary to attest to Permit Nos. 958, 959 and the Settlement Agreement; and (8) adopt Resolution No.____________.
Cargo & Industrial Real Estate
Summary: Staff requests consent to the transfer of 49 percent in the aggregate of the direct and indirect ownership of TraPac, LLC (TraPac), a tenant of the City of Los Angeles Harbor Department (Harbor Department) under Permit No. 881 (Permit). Currently, TraPac is 100 percent owned by International Transportation, Inc. (ITI) (to be renamed TraPac Holdings, LLC), which is 100 percent owned by Mitsui O.S.K. Lines, Ltd. (MOL). Under the proposed transfer, two funds or investment vehicles managed and controlled by a subsidiary of Macquarie Group Limited (MGL) will acquire an aggregate 49 percent direct and/or indirect equity interest in TraPac, as follows: (a) Skipjack Terminal Holdings, L.P. (Skipjack Terminal Holdings), will acquire approximately 22.2 percent of the equity interests in ITI from MOL; and (b) Skipjack (ECI) Holdings, LLC (Skipjack (ECI) Holdings) will acquire approximately 34.5 percent of the equity interests in TraPac from ITI. MOL will retain the remaining 51 percent equity interest in TraPac. There is a related item on the Board of Harbor Commissioner’s agenda for May 25, 2023, also concerning a change to TraPac’ s upstream ownership and guaranty which will be considered separately and independently from this current action. No changes will be made to the Permit or terminal operations under this action.
Recommendation: Board resolve to (1) find that the Director of Environmental Management has determined that the proposed action is administratively exempt from the requirements of the California Environmental Quality Act (CEQA) under Article II Section 2(f) of the Los Angeles City CEQA Guidelines; (2) approve and consent to the transfer of approximately (i) 22.2 percent of the ownership of ITI from MOL to Skipjack Terminal Holdings and (ii) 34.5 percent of the ownership of TraPac from ITI to Skipjack (ECI) Holdings, resulting in Skipjack Terminal Holdings and Skipjack (ECI) Holdings holding in the aggregate a 49 percent direct and/or indirect equity interest in TraPac; (3) ratify a 2022 transfer resulting from a repurchase of 49 percent interest in TraPac by MOL that was previously held by Brookfield Asset Management, Inc. (Brookfield); (4) direct the Board Secretary to transmit to City Council pursuant to Charter Section 606: (i) the consent to transfer of approximately 22.2 percent of the ownership of ITI (which, prior to the transfer, directly owns and controls 100 percent of TraPac) from MOL to Skipjack Terminal Holdings; (ii) the consent to transfer of the ownership of approximately 34.5 percent of TraPac from ITI to Skipjack (ECI) Holdings; and (iii) ratification of the 2022 transfer resulting from a repurchase of a 49 percent interest in TraPac that was held by Brookfield to MOL; and (5) adopt Resolution No.____________.
Cargo & Industrial Real Estate
Summary: Staff requests the Board of Harbor Commissioners (Board) i) consent to the transfer of 51 percent of the aggregate of the direct and indirect ownership interests in TraPac, LLC (TraPac), a tenant of the City of Los Angeles Harbor Department (Harbor Department) under Permit No. 881 (Permit); and ii) approve termination of the existing guaranty provided by Mitsui O.S.K. Lines, Ltd. (MOL) in favor of new guarantees furnished by Ocean Network Express Holdings, Ltd. and Ocean Network Express Pte. Ltd. Currently, TraPac is 100 percent owned by International Transportation, Inc. (ITI) (to be renamed TraPac Holdings, LLC), which is 100 percent owned by Mitsui O.S.K. Lines, Ltd. (MOL). Under this proposed transfer, United Pacific Ports B (UK) Ltd. (UPP), a wholly owned subsidiary of Ocean Network Express Pte. Ltd. would acquire 51 percent indirect ownership in TraPac via a 77.8 percent ownership interest in ITI. There is a separate but related item also subject to the Harbor Department’s consent concerning the remaining 49 percent interest in TraPac. If both items are approved, Ocean Network Express Pte. Ltd through its subsidiary UPP would own 51 percent of TraPac and the Macquarie Infrastructure Partners Inc.(MIP)-controlled funds or investment vehicles (i.e. Skipjack entities) will hold, in the aggregate, the remaining 49 percent direct and/or indirect equity interest in TraPac. No changes will be made to the Permit or terminal operations under this action.
Recommendation: Board resolve to (1) find that the Director of Environmental Management has determined that the proposed action is administratively exempt from the requirements of the California Environmental Quality Act (CEQA) under Article II Section 2(f) of the Los Angeles City CEQA Guidelines; (2) approve and consent to the transfer of 77.8 percent of the ownership of International Transportation, Inc. from Mitsui O.S.K. Lines, Ltd. to United Pacific Ports B (UK) Ltd., a United Kingdom Private Limited Company; (3) approve the guarantees furnished by Ocean Network Express Holdings, Ltd. and Ocean Network Express Pte. Ltd.; (4) approve the termination of the existing guaranty furnished by Mitsui O.S.K. Lines, Ltd., subject to both Ocean Network Express Holdings, Ltd. and Ocean Network Express Pte. Ltd. furnishing guarantees on or before the termination of the existing guarantee furnished by Mitsui O.S.K. Lines, Ltd.; (5) direct the Board Secretary to transmit to City Council pursuant to Section 606 i) the consent to the transfer of 77.8 percent of the ownership of International Transportation, Inc. from Mitsui O.S.K. Lines, Ltd. to United Pacific Ports B (UK) Ltd., a United Kingdom Private Limited Company; and ii) related items concerning the guarantees from Mitsui O.S.K. Lines, Ltd., Ocean Express Holdings, Ltd. and Ocean Network Express Pte. Ltd.; (6) authorize the Executive Director to execute and the Board Secretary to attest to any instruments necessary to terminate the guaranty furnished by Mitsui O.S.K. Lines, Ltd.; and (7) adopt Resolution No.____________.
Cargo & Industrial Real Estate
Summary: Staff requests approval of the following concerning Yusen Terminals, LLC (Yusen), a tenant of the City of Los Angeles Harbor Department (Harbor Department) under Permit No. 692 (Permit): 1) Thirteenth Amendment to Permit No. 692 which removes Nippon Yusen Kabushiki Kaisha, Ltd. (NYK) as the guarantor and adds Ocean Network Express Holdings, Ltd. and Ocean Network Express, Pte. Ltd; and 2) Guarantees furnished by Ocean Network Express Holdings, Ltd., and Ocean Network Express Pte. Ltd., in place of the existing guaranty from NYK. Yusen notified the Harbor Department of a pending change in its ownership composition. Ocean Network Express Pte. Ltd., through a subsidiary, would acquire 51 percent of the interest in Yusen from NYK, and Macquarie Infrastructure and Real Assets, L.P., a subsidiary of Macquarie Group Limited, would continue to own the remaining 49 percent. In connection with this change in ownership, Yusen requested that Ocean Network Express replace NYK as the guarantor. Under the Thirteenth Amendment, the existing guaranty provided by NYK would be terminated in favor of new guarantees furnished by Ocean Network Express Holdings, Ltd. and Ocean Network Express Pte. Ltd. Ocean Network Express Holdings, Ltd. is a joint venture which integrated the container shipping businesses of NYK, Mitsui O.S.K. Lines Ltd. (a/k/a MOL Lines), and Kawasaki Kisen Kaisha, Ltd. (a/k/a “K” Line). Ocean Network Express Pte. Ltd. is a subsidiary of Ocean Network Express Holdings, Ltd. No other changes will be made to the Permit or terminal operations under this action.
Recommendation: Board resolve to (1) find that the Director of Environmental Management has determined that the proposed actions are administratively and categorically exempt from the requirements of the California Environmental Quality Act (CEQA) under Article II Section 2(f) and Article III Class 1(14) of the Los Angeles City CEQA Guidelines; (2) approve the Thirteenth Amendment to Permit No. 692; (3) approve the Guarantees furnished by Ocean Network Express Holdings, Ltd. and Ocean Network Express Pte. Ltd.; (4) direct the Board Secretary to transmit the Thirteenth Amendment to Permit No. 692 to the City Council for approval pursuant to Section 606 of the City Charter; (5) authorize the Executive Director to execute and the Board Secretary to attest to the Thirteenth Amendment to Permit No. 692; and (6) adopt Resolution No.____________.
K. Closed Session
1. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
(Subdivision (d)(1) of Government Code Section 54956.9)
(Subdivision (d)(1) of Government Code Section 54956.9)
Natural Resources Defense Council, et al. v. City of Los Angeles, et al.
Los Angeles Superior Court Case No. BS070017
2. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
(Subdivision (d)(1) of Government Code Section 54956.9)
Natural Resources Defense Council, et al. v. City of Los Angeles, et al.
San Diego Superior Court Case No. 37-2021-00023385-CU-TT-CTL
3. CONFERENCE WITH REAL PROPERTY NEGOTIATORS
(Government Code Section 54956.8)
Provide instructions to its real estate negotiators with respect to Permit 999 with China Shipping Holding Company, Ltd.:
Property: Berths 100-103, San Pedro
City Negotiator: Michael DiBernardo
Tenant Negotiator: Paul Nazzaro
Negotiating Parties: City and China Shipping Holding Company, Ltd.
Under Negotiation: Price and Terms
4. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION
(Subdivision (d)(2) of Government Code Section 54956.9)
Significant exposure to litigation pursuant to subdivision (d)(2) of Section 54956.9:
(one case)
5. CONFERENCE WITH REAL PROPERTY NEGOTIATORS
(Government Code Section 54956.8)
Provide instructions to its real estate negotiators with respect to Permit 733 with Fenix Marine Services, Ltd.:
Property: 614 Terminal Way, San Pedro
City Negotiator: Marisa Katnich
Tenant Negotiator: Steven Trombley
Negotiating Parties: City and Fenix Marine Services, Ltd.
Under Negotiation: Price and Terms
L. Adjournment