April 28-May 11, 2015

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2015 SOUTHERN CALIFORNIA

11th Annual

Pulse of the Ports: Peak Season Forecast Wednesday, April 29, 2015 | 7 to 10 a.m.

Event will be webcast live at www.polb.com/pulseports

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2015 SOUTHERN CALIFORNIA

11th Annual

Pulse of the Ports: Peak Season Forecast Make your reservations online at www.polb.com/pulsersvp Wednesday, April 29, 2015 | 7 to 10 a.m.

Pacific Ballroom (Sports Arena) at the Long Beach Convention Center 300 E. Ocean Blvd. Long Beach, CA 90802 Event will be webcast live at www.polb.com/pulseports Event Parking: Parking structure next to the Pacific Ballroom Complimentary breakfast and free parking

All Clear? Ready ffor or o a Peak?

With the Por ts of Long Beach and Los Angeles digging out and getting back to normal, is the supply chain ready for this year ’s peak shipping season? Hear industry exper ts with their forecasts.

Panelists

Mario Cordero, Chairman Federal Feder al Maritime Commission

Dr. Walter Kemmsies, Chief Economist Moffatt & Nichol

Katie Farmer, Group VP, Consumer Products Railway BNSF Railway

Donna Lemm, VP of Global Sales Mallor y Alexander International Logistics Mallory

David Duncan, COO, owner Duncan and Son Lines, Inc.

Allen Clifford, Exec. VP Mediterr anean Shipping Compan y (USA) Mediterranean Company

Noel Massie, President UPS, South California California District

Q&A Moderrator ator Bill Mongelluzzo, Senior Editor Commerce Journal of Commer ce

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April 28-May 11, 2015

www.lbbusinessjournal.com

SPECIAL REPORT – FOCUS ON THE SAN PEDRO BAY PORTS – PAGES 20-36

Port of Long Beach Chief Executive Jon Slangerup

Port of Los Angeles Executive Director Gene Seroka

The Port Of Long Beach

The Port Of Los Angeles

Working Towards A Better Supply Chain And Planning For A Competitive Future

Improving Supply Chain Efficiencies And Investing In The Future

■ By SAMANTHA MEHLINGER Senior Writer

■ By SAMANTHA MEHLINGER Senior Writer

ene Seroka assumed the role of executive director of the Port of Los Angeles ast August, Jon Slangerup became chief executive of the Port of Long Beach (POLB) L during one of the most challenging times in its history, as it contended with unprece- G (POLA) in the midst of what he and others in his field have often referred to as a dented levels of congestion and gridlock throughout the supply chain. As the port comes “perfect storm” of changing variables impacting the supply chain – a labor dispute, a shortout on the other side of that congestion, Slangerup is focused on restoring port operations to full velocity, and creating the superior infrastructure and supply chain efficiencies necessary to compete with other ports, not just regionally but throughout the world.

“Our goal here collectively through the port complex is to not just recover but to actually increase and improve our value proposition through certainty of [cargo] delivery and ve-

age of truck trailers needed to move containers, larger vessels calling the port and other issues all converged at once to create unprecedented congestion. That storm resulted in a massive line of 35 ships at anchor in the early months of 2015, and cargo stacked on docks waiting for distribution and shipment.

Since then, the dispute over longshore workers’ contracts has been settled and both San

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(Please Continue To Page 26)

Changing Economic Factors And Potential Impacts To The Financial Services Industry ■ By SAMANTHA MEHLINGER Senior Writer espite slower than expected growth in the national economy in the first quarter, economists have a positive outlook for the national and state economies for the remainder of the year. Strong economic fundamentals such as job growth and rising incomes lend themselves to more spending and investment activity, which should boost the financial services industry. The main caveat to that outlook is the unanswered question as to what effect an expected increase in the federal funds rate will have on the industry.

During the first quarter of 2015, the U.S. economy was hindered by a few factors, all of which were temporary disruptions. According to Mark Vitner, managing director and senior economist for Wells Fargo, and Steven Cochrane, man-

D

aging director of Moody’s Analytics, those factors included: massive congestion at West Coast ports, which hindered shipments and retail sales; a drop in oil prices, which caused decreased investment and hurt job growth in the energy industry; and bad winter weather in the Northeast.

“All of that could very well have cut the pace of economic growth by about half of what we might have expected in the first quarter,” Cochrane said. For the most part, with the exception of a lag in investments in energy, the factors causing the slower growth are in the rearview mirror.

Although economic growth was stifled a bit on the national scale, Vitner said California fared better.

“While the U.S. economy slowed in the first quarter, there is really no evidence California’s economy slowed,” he said.

“We’re seeing that job growth re(Please Continue To Page 12)

City’s Police, Fire Departments Seek ‘Alternative Funding Sources’ As Budget Cuts Loom ■ By SEAN BELK Staff Writer Councilmember-elect Daryl Supernaw and his wife, Cheryl, are all smiles after declaring victory on election night. See story on Page 5 (Photograph by Diana Lejins)

Former U.S. Secretary of Commerce and Trade Representative Mickey Kantor sat down with the Business Journal to discuss some of his views on international trade. Ambassador Kantor is being honored by the Los Angeles Chamber of Commerce at the World Trade Week Kickoff Breakfast on May 5. See story on Page 31. (Business Journal photograph by Michael Gougis)

ith a $12 million budget W cut to public safety expected over the next three fiscal years because of rising pension costs and declining oil revenue, police and fire departments, already operating with skeleton crews, are now exploring “alternative funding sources.”

The Long Beach City Council’s Public Safety Committee, at an April 17 meeting, discussed the options, including applying for grants, imposing a first responder fee, partnering with nearby agencies and creating a fire district.

The committee is composed of 3rd District Councilmember Suzie Price, who serves as chair, 8th District Councilmember Al Austin, who serves as vice chair, and 5th District Councilmember Stacy Mungo, who serves as a member but who was absent.

During a budget study session of the city council on March 3, city staff projected a three-year budget deficit of $17.6 million from Fiscal Year 2016 to Fiscal Year 2018.

Next fiscal year, which starts October 1, the city will see only a $1 million shortfall, according to city staff. However, staff is expecting a $9.3 million deficit in Fiscal Year 2017 and a $7.4 million deficit in Fiscal Year 2018.

Using “proportionate share” targeted budget reductions that cap public safety at about 70 percent of the General Fund, staff expects an $8.73 million budget cut to the police department and a $3.34 million cut to the fire department over the next three fiscal years.

Price and Austin both expressed concerns about the projected cuts to police and fire departments, adding that both departments have (Please Continue To Page 7)

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2 Long Beach Business Journal

Inside This Issue 5

10 14

April 28-May 11, 2015

16

Newswatch

• Daryl Supernaw Overcomes Union, Money To Win • Long Beach Transit Recommends BYD Buses, Again • New, Restored Shops Open Aboard The Queen Mary • ‘Discover Zaferia’ Treasure Hunt Is May 2 • ‘Smart’ Parking Meters Being Installed, Higher Rates • Kashiwabara Assistance League’s First Executive Dir. • On Stage Music Academy Celebrates Grand Opening • Beyond LED Lighting Opens In North Long Beach

Real Estate

• Ocean Center Building Construction Begins In Summer • Scoping Meeting On Civic Center Project Is April 30 • Belmont Pool Public Hearing Is May 2 • Commercial Real Estate Council Luncheon Is May 21

Financial Services

• Wells Fargo Continues Small Business Initiative • House Passes Cybersecurity Legislation, Senate Next

18 19 20

Perspective

Realty Views By Terry Ross HealthWise By Gary Feldman, M.D. Trade And Transportation By Tom O Small Business Dollars & Sense By Ben Alvarado Effective Leadership By Mick Ukleja

Art Matters

Presented By The Arts Council For Long Beach

The Nonprofit Page

Presented By The Long Beach Nonprofit Partnership

Special Report: San Pedro Bay Ports

International Trade Overview Port Of Long Beach’s Slangerup, continued from Pg. 1 Port Of Los Angeles’ Seroka, continued from Pg. 1 Environmental Progress At Each Port Focus On Security At Both Ports U.S. Customs: Stopping Countefeits In Their Tracks Interview With Former Commerce Secretary Kantor Nautilus International Holding Moving To Long Beach World Trade Week Calendar Of Events

Free: Long Beach Business Journal Digital Edition, Monday Morning Coffee, NewsFlash Sign up at: www.lbbusinessjournal.com • Follow us on Twitter: @LBBizJourn

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2015

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April 2

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April 28-May 11, 2015

NEWSWATCH

Daryl Supernaw Overcomes Union Money, Local Endorsements To Win Council Seat ■ By GEORGE ECONOMIDES Publisher Facing a large war chest funded primarily by unions and a near-unanimous endorsement of his prime opponent by local elected officials, Daryl Supernaw pulled out a convincing victory on April 14 in a special election for the vacant 4th District Long Beach City Council seat. He is scheduled to be sworn into office at the May 2 city council meeting.

Supernaw’s decades of involvement in the 4th District – which stretches from El Dorado Park on the east to parts of Cambodia Town on the west – separated him from his top opponent, Herlinda Chico, who was unable to point to any community service for district residents.

The opposition to Supernaw may have been unprecedented in Long Beach City Council elections. Supporting union favorite Chico were: Mayor Robert Garcia; Vice Mayor Suja Lowenthal; Councilmembers Lena Gonzalez, Suzie Price, Dee Andrews, Roberto Uranga, Al Austin and Rex Richardson; the Long Beach Police Officers Association; Long Beach Firefighters Local 372; Congresswoman Janice Hahn; State Senator Ricardo Lara and Assemblymember Patrick O’Donnell.

And it didn’t stop there: Current school boardmembers John McGinnis and Megan Kerr, city college trustee Sunny Zia, former assemblymember Bonnie Lowenthal and former state senator Betty Karnette also opposed Supernaw.

Simply put, it was a who’s who of the Long Beach liberal, pro-union establishment.

It was O’Donnell’s vacating of the 4th District seat that resulted in the special election, costing Long Beach taxpayers more than $160,000. O’Donnell had been elected to a third term in June 2012, beating Supernaw and telling voters he would serve his full four years. Less than 18 months into his term, he ran for state assembly, replacing Lowenthal, who had termed out. Speculation is that O’Donnell thumbing his nose at his 4th District constituents contributed to Chico’s loss.

The unions invested heavily to get her elected: $44,150 from the Los Angeles County Federation of Labor AFL/CIO; $22,000 from the Long Beach Police Officers Association; and $11,100 from the Long Beach Firefighters Local 372. Additionally, Chico raised more than $65,306 in donations (as of April 8), primarily from union groups or individual union members, resulting in more than $140,000 between independent expenditures and donations.

Those numbers may increase slightly when the final tallies come in.

Supernaw raised $23,424 in direct contributions. Independent expenditures came from Long Beach Citizens in Support of Daryl Supernaw ($19,733); Long Beach Chamber Political Action Committee ($3,331); and Los Angeles County Busi-

Long Beach Business Journal 5

Special Election Results 4th District City Council Seat Daryl Supernaw Herlinda Chico Don Lindemann Voted at Precincts Voted by Mail Voter Turnout

2,293 1,940 205

51.7% 43.7% 4.6%

6.4% 10.2% 16.5%

Source: City Clerk’s Office, City of Long Beach

ness Federation ($2,969), resulting in a total of $49,457 or about one-third of the money backing Chico.

Additionally, Supernaw had the support of retired police officer John Watkins, who finished a close third in the 2012 primary for the 4th District, and L.A. County Supervisor Don Knabe. Supernaw also had editorial endorsements from the Business Journal, Press-Telegram and Beachcomber newspapers.

Supernaw told the Business Journal that he plans to establish a field office “that will be maintained throughout my tenure.

Many 4th District residents have expressed the need.” ■

Long Beach Transit Recommends BYD (Again) For Battery Bus Contract ■ By SAMANTHA MEHLINGER Senior Writer A little more than a year after Long Beach Transit had to cancel its contract with Chinese-based company Build Your Dreams (BYD) Motors Inc. for 10 zeroemission battery powered buses, the transit company’s board of directors was expected to vote yesterday, April 27, on whether to yet again award the contract to BYD. The final negotiated terms of the contract with BYD for the purchase of the buses, plus supporting technology and parts, is $9,675,410. After factoring in the implementation of wireless electric vehicle charging equipment and a contingency budget, the total project cost is $11,069,319, according to a Long Beach Transit (LBT) staff report.

“BYD’s proposal was deemed the most responsive and responsible, and met LBT’s requirements for zero-emission buses,” LBT’s staff recommendation report explained. The report noted that BYD has provided 20 battery-powered buses to American customers since 2014.

Last year, BYD and Long Beach Transit mutually agreed to cancel the original contract when the U.S. Federal Transit Administration (FTA) informed the two parties that BYD had not been in compliance with its disadvantaged business enterprise requirement at the time the contract was awarded in March 2013.

Meeting that requirement was necessary for LBT to use a $9.5 million grant it had received from the FTA to fund the purchase of zero-emission buses.

LBT reissued a request for proposals for the project last September. Other bid(Please Continue To Page 6)

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6 Long Beach Business Journal

Transit Board Expected To Select BYD Bus (Continued From Page 5)

ders included Proterra, a North Carolinabased company with a track record for providing battery powered buses to municipal governments and agencies, and New Flyer, a Canadian bus manufacturer with facilities in Minnesota and Alabama. Proterra has provided electric bus fleets to five American transit agencies.

Information about New Flyer’s past customer base is not readily available, although the company does have a contract to replace the San Francisco Municipal Transportation Agency’s entire fleet with electric buses.

When BYD originally won the project contract in 2013, it had no facilities in the United States. To meet the FTA’s Buy America requirement, it built a facility in Lancaster, California, to construct the buses. As the contract progressed, some basic framework was still performed in China. Faulty work from that facility necessitated LBT to send inspectors to China to assess the situation.

From that point forward, a number of roadblocks arose. In December 2013, the

April 28-May 11, 2015

NEWSWATCH FTA halted Altoona testing, required of all buses hitting U.S. roadways, on the bus model intended for Long Beach Transit when questions arose as to whether or not the correct bus was being tested.

BYD’s Lancaster facility came under fire in late 2013 from the state department of industrial relations, which cited the company for paying Chinese workers at that location less than minimum wage, providing inaccurate or incomplete wage statements, and not allowing two 10minute rest breaks each shift. The minimum wage citation was dismissed while the latter two issues were upheld with reduced fines.

In the midst of these issues, BYD hired famed attorney Lanny Davis, perhaps best known for his work for Hillary and Bill Clinton, to represent the company’s interests.

If approved, the project is to be funded by the FTA’s $9.5 million Transit Investments for Greenhouse Gas and Energy Reduction grant, California Proposition 1B Bonds and a $700,000 grant from the Port of Long Beach.

LBT spokesperson Kevin Lee said that, if everything goes smoothly, the buses should be delivered by fall of 2016. ■

‘Discover Zaferia’ Treasure Hunt Is May 2 The East Anaheim Street Business Alliance (EASBA) is hosting its third annual “Discover Zaferia” treasure hunt event this Saturday, May 2. Registered participants will walk the historic business district along East Anaheim Street between Junipero Avenue on the west and Pacific Coast Highway to the east, looking for answers to clues they receive at the start of the event. Participants will find prizes and answers while collecting raffle tickets from participating businesses along the way. For a $5 registration, participants receive an event t-shirt and lunch. At the conclusion of the event, participants will have several chances to win prizes worth up to $5,000. The finish line festival, sponsored by Farmers & Merchants Bank (F&M), features family-friendly activities. Registration begins at 9 a.m. at the F&M Bank parking lot at 3104 E. Anaheim St. EASBA represents nearly 400 businesses that are part of the East Anaheim Street Business Improvement District. For more information or to register, visit www.zaferia.com or call 562/494-3800. Pictured are: Rod Wilson, left, EASBA president, and Jim Scallon, managing partner of Coastal Motor Group Collision Center. (Photograph by the Business Journal’s Evan Patrick Kelly)

New, Restored Shops Open Aboard The Queen Mary ■ By SAMANTHA MEHLINGER Senior Writer

The wine tasting room and emporium at the Queen Mary is one of several new shops put in place by Event Network, a firm hired by the Queen Mary to revamp its shopping gallery. Johanna Felix (left), media representative for the Queen Mary via Freeman McCue Public Relations, celebrates the opening of the new shops with Jennifer Wolfe, wine tasting room manager.

Restored to recall its glory days of more than 80 years ago, the shopping gallery at the Queen Mary formally opened on April 23 with all new shops, after undergoing months of renovation.

The gallery, located on the ship’s Promenade Deck, encompasses 2,000 square feet of retail and lobby space.

Restoration began when Event Network, a merchandising and retail services company, was hired by the Queen Mary operators to revitalize the ship’s shopping experience.

The task of restoring the shops to their former glory involved attention to detail such as matching original wood surfaces, according to a press release from the Queen Mary. In some cases, it was discovered that original features of the ship had been covered up for functionality purposes. During the ceiling restoration process, for example, acoustical tiles were removed to uncover features that had long been concealed.

“We are willingly obliged to ensure that any repairs or improvements to the ship are in keeping with original designs and historic preservation standards,” John Jenkins, general manager of the Queen Mary, said in the Queen Mary’s statement. “These demands resulted both in challenges and construction delays; but the end-result is certainly worth the effort, and I’m sure our guests will agree.”

The Queen Mary’s new Starboard Shop sells men’s accessories and apparel as well as furnishings and gifts.

Throughout the shops, restoration work included matching and installing linoleum flooring, restoring a marble fireplace hearth and installing “rectangular tufted leather panels” reflective of work done to the Queen Mary following World War II. Non-original light fixtures were also removed and replaced.

“These and other painstaking upgrades were made for one reason alone; there is no other ship anywhere like our Queen Mary,” Jenkins stated.

New shops include: the Portside Marketplace, with women’s gifts, apparel and souvenirs; the Centerline Boutique, with gourmet foods and desserts; the Starboard Shop, with men’s accessories and furnishings; and a wine tasting room serving Malibu Family Winery vintages. There is also a new Wyndham Vacations Visitor’s Center.

“When Cunard designed the ship’s interior spaces, there was a master plan,” Jenkins stated. “Warm, luxurious interiors welcomed shoppers with a nautical elegance that was all Queen Mary. To resurrect this experience and to rekindle that spirit throughout the ship . . . including our retail outlets . . . continues to be my priority.”

The shops at the Queen Mary are open daily from 10 a.m. to 10 p.m., subject to change. ■ (PhotographS by the Business Journal’s Evan Patrick Kelly)

Queen Mary visitors enjoy glasses of Malibu Family Wine vintages outside the ship’s new wine tasting room and emporium, which is part of its recently renovated shopping gallery.

April 2

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April 28-May 11, 2015

Alternative Funding For Public Safety Sought (Continued From Page 1)

already been scaled back because of prior budget deficits.

“I just don’t know how they could function given the needs of our city and the current staffing levels at both of those departments,” Price said at the committee meeting. “It’s just inconceivable to me that we could have a functioning police and fire department with another $12 million cut. Both departments have taken a major hit.”

Austin noted that the police department’s gang enforcement unit was eliminated two years ago because of budget cuts, adding that then-Police Chief Jim McDonnell had stated the department would direct other resources to make up for the loss.

“The gang enforcement unit was eliminated and I had some great reservations about that and I still do,” Austin said. “I think we need to focus more in that area in terms of crime and activity throughout a large part of our city.”

Long Beach Deputy Police Chief David Hendricks said an additional funding option is for the police department to try to tap into more state and federal grants.

He said the police department already applies for federal grants through the Urban Areas Security Initiative (UASI) and the Port Security Grant Program and state grants through the California Coverdell Program and the State Community Oriented Policing Services (COPS) Grant Program.

Hendricks said the police department also receives funding through AB 109 and grants from the California Office of Traffic and Safety.

Fire Chief Mike DuRee said the fire department is looking at similar grant opportunities; however he noted that some grants come with hiring requirements and “financial burdens” that the department might not be able to fulfill.

“Some fit and some don’t,” he said.

“The ones that do fit we compete for, and, as I mentioned earlier, we get a pretty good amount of those and we try to deploy the funding appropriately.”

The next funding option the department is looking at, DuRee said, is utilizing a “first responder fee,” which would involve charging for emergency medical and ambulance services.

He said pending state legislation would allow the city to receive a larger portion of federal funding if the city were to impose a first responder fee that DuRee said would recover costs for treating and assessing patients on the scene.

He said fire agencies in California that utilize a first responder fee include the cities of Anaheim, Sacramento, Glendale, Pasadena, Folsom and Novato.

“The fire department continues to explore the first responder fee as a potential revenue source and we do plan on providing written communication on this subject to the full city council in the coming weeks,” DuRee said.

In a memo sent to Councilmember Price, the Long Beach Firefighters Association (LBFA) Local 372 proposes that the city form a fire district as an al-

Long Beach Business Journal 7 ternative funding source, adding that there is no more room to cut at the fire department.

According to the memo, the fire department’s staff is at a “historic low” of 111 personnel, and since 2004 the department has had to cut 77 sworn firefighters and eliminate six fire engines and one fire truck.

The LBFA states that response times for fire service are increasing and the department is running out of ambulances available to respond to 911 calls, adding that there is no surge capacity when major incidents occur, and that the department is running out of operational personnel to handle the current call volume.

“The fire department has endured devastating cuts over the past decade and, to be frank, further cuts to sworn operational personnel will result in putting citizen’s lives at risk along with the lives of our sworn firefighters,” the memo states.

In a phone interview with the Business Journal, Rex Pritchard, president of the LBFA, said that creating a fire district would work similar to the city’s enterprise funds for gas and water departments in that it would be separated out from the General Fund.

The way it would work is that a portion of property taxes would be dedicated specifically to support the fire department. Residents would have the option of possibly increasing the property tax allocation, but that wouldn’t necessarily be a requirement, he said.

“We can’t go down the same course we’ve been going down,” Pritchard said.

“There’s something that has to be looked at . . . There are many different ways to approach this, but something has to happen. We just can’t cut sworn firefighters anymore.”

According to the LBFA, the cities of Brea and Fullerton have already implemented such a model.

Another option is for the fire department to subcontract out its services to neighboring government agencies, such as the City of Signal Hill or Los Angeles or Orange counties, which would enable to city to receive additional funding.

DuRee said he isn’t sure Signal Hill would be open to the option since the city discontinued contracting with Long Beach for fire services years ago, opting to stay solely with the Los Angeles County Fire Authority. However, he said subcontracting out services to the City of Compton might be another possibility.

“If the opportunity was there, we would be interested in exploring that discussion, sure,” DuRee said.

Meanwhile, both departments are looking at additional ways to tighten their belts and streamline operations.

For instance, Hendricks said that by the end of this year the police department is implementing a new system that allows citizens to file their own police reports online for nonemergency property crimes, thereby dedicating resources toward more serious crimes.

Price ordered that the discussion be continued to the next Long Beach Public Safety Committee meeting in the next few months before being forwarded to the Long Beach City Council’s Budget Oversight Committee and the full city council for further review. ■

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8 Long Beach Business Journal

NEWSWATCH

Kashiwabara Is the First Executive Director Of The Local Assistance League

Long Beach Installing New ‘Smart’ Parking Meters, But The Rates Are Higher

Annette Kashiwabara was recently named executive director of the Assistance League of Long Beach (ALLB), a nonprofit organization with more than 900 volunteer members and 10 philanthropic programs benefiting the local community. ALLB is the largest chapter of the Assistance League, a national nonprofit. Kashiwabara has served as ALLB’s director of development since 2009, and now becomes the organization’s firstever executive director. Prior to joining the staff of ALLB, she served as executive vice president of the California Conference for Equality and So-

■ By SEAN BELK Staff Writer The City of Long Beach has begun installing more than 1,600 “smart” parking meters that accept debit cards and credit cards, phasing out coin meters, in the downtown area and on 2nd Street in Belmont Shore.

With the new parking meters, however, rates will increase from 50 cents to 75 cents an hour in Belmont Shore, to $1 an hour in the downtown area, to $1.50 an hour in the downtown “core” and to $2 an hour at The Pike.

According to a statement from the city, the smart meters will “improve Long Beach’s on-street parking to meet consumer needs and desire for payment convenience.”

As parking meters are installed over a four-week period, the new rates will take effect immediately, according to city staff.

The city is offering a “First Five Free” program that allows drivers to park free for five minutes for quick errands.

The new meters come with large, backlit screens that inform motorists when a meter is not enforced for a holiday or special event. Users can also prepay time up to two hours before paid parking periods begin.

Motorists will also eventually be able

April 28-May 11, 2015 cial Justice, and has worked in marketing and community relations roles at the Long Beach Day Nursery and Community Hospital Long Beach. She is a boardmember of local nonprofit groups Long Beach Cares and the Long Beach Community Foundation, and has been recognized by Mayor Robert Garcia for her work in the community. Kashiwabara holds a bachelors in nursing from California State University, Long Beach and a masters in nursing from University of California, Los Angeles.

Jose Silva, an employee for the Long Beach Public Works Department, installs a new “smart” parking meter in Downtown Long Beach. The city is installing 1,600 new smart meters that accept credit and debit cards in downtown, Belmont Shore and the Pike, replacing coil-only meters.

(Photograph by the Business Journal’s Evan Patrick Kelly)

to locate parking on a smart phone app that identifies open parking spaces, according to city staff.

City staff said that the city is maintaining its practice of net revenue neutrality, so the costs of the meters don’t exceed revenue collected.

The new meters don’t accept “cash keys” but will accept credit cards at no extra charge, according to city staff.

The parking meters are enforced from 10 a.m. to 7 p.m., excluding holidays, in Belmont Shore; 9 a.m. to 9 p.m., including holidays, in the downtown core; 9 a.m. to 6 p.m., excluding Sundays and holidays, in downtown; and 9 a.m. to 9 p.m., including holidays, at The Pike. ■

On Stage Music Academy Celebrates Grand Opening Husband and wife Bill and Tam McRae, pictured, held the grand opening for their new business, On Stage Music Academy, on April 18 at 2221 Palo Verde Ave., Suite 2-I. A long-time teacher and professional musician and composer, Bill McRae had been toying with the idea of opening a music school for many years, he told the Business Journal. With the help of the Small Business Development Center administered by Long Beach City College, he was able to achieve that goal. The school, which is open Monday through Saturday, offers lessons in pop and rock instruments including voice, guitar, drums, bass, piano and keyboard, saxophone and ukulele. All ages are welcome to take courses at the academy – students’ ages range from younger than 1 year old to more than 60 years old, McRae said. Special parent-children classes are offered for children up to 5 years old. For older kids, there is a program for students aged 5 to 10 years old. Individual lessons are also available. “We’re about getting people an experience of being a musician – not just learning lessons, but being an actual musician,” McRae said.

“That includes learning enough skills so that students can play together in a band setting, actually perform, record and have the interactive experience of working with other people, which is so much different than if you just play in your room by yourself.” On Stage Music Academy currently has five instructors, and McRae is looking for more. The academy’s hours are: Monday to Thursday from 10 a.m. to 9 p.m., Friday from 10 a.m. to 6 p.m., and Saturday from 9 a.m. to 5 p.m. For more information, call 562/5980111 or visit www.onstagemusicacademy.com. (Photograph by the Business Journal’s Evan Patrick Kelly)

Beyond LED Lighting Opens In 8th District Engineer Derek Gong, pictured, shows off products available from Beyond LED Lighting, a new store in Long Beach’s 8th Council District. The 15,000-square-foot store held its grand opening at 2010 E. South St. on April 16 with city officials, including 8th District Councilmember Al Austin, attending. Beyond LED Lighting, which is owned by Aamir Notta and co-owned by Sales & Marketing Manager Jasmine Lynn, provides energy-efficient indoor and outdoor lighting solutions for commercial, industrial and residential properties. The company operates both as a retailer and wholesaler of these products. “Beyond LED Lighting can take on any project, regardless of size,” a statement on the company’s website said.

“From customer specifications we can specify, design and manufacture all types of built-to-order LED products, from lights to huge-scale displays.” For more information, call 800/959-2786 or visit www.BeyondLEDLighting.com. (Photograph by the Business Journal’s Evan Patrick Kelly)

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Moffatt & Nichol Appoints Sam Mansour As VP Of Rail/Transit Director International engineering firm Moffatt & Nichol, which is headquartered in Long Beach, named Sam Mansour as its new transit director and vice president of rail. Mansour has more than 30 years of experience in the field of rail transit and rail freight transportation. He worked for Metrolink for over a decade in design and project management roles, and served for four years as director of engineering services for Southern Pacific Railroad’s Western Region. The majority of his career has been in senior management “providing planning and design services for commuter rail, transit, grade separation, freight, intermodal facilities and rail yard projects,” according to a statement from Moffatt & Nichol. Mansour holds a bachelors degree in civil engineering from the University of Utah and is a registered professional engineer in California and Colorado. He is also a member of several engineering and rail-focused national or-

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ganizations, including the American Society of Civil Engineers and the Railway Association of Southern California.

Randall Lert Joins Halbert Hargrove As Co-Chief Investment Officer Halbert Hargrove, a Long Beach-based financial investment company, appointed Randall Lert to the position of co-chief investment officer. He comes to the company after retiring from global investment consulting firm Russell Investments, where he held roles as chief investment officer and chief portfolio strategist. In those positions, he oversaw research, development and portfolio management. He also has experience in financial modeling, investment strategies and technology systems, and more. Prior to his work at Russell Investments, he co-founded an asset management firm called Parametric Portfolios. In his new position, he is responsible for “ongoing analysis of the firm’s asset allocations and investment offerings,” according to a press release from Halbert Hargrove. “Halbert Hargrove is a stronger company today because Randy [Lert] is a part of it,” Russ Hill, chairman and CEO of Halbert Hargrove, said in a statement.

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Governor Names Jesse Torres Deputy Director For Small Business

Comprehensive Child Development Names Peter Bostic As New Executive Director

Gov. Jerry Brown appointed Jesse Torres as the deputy director for small business and small business advocate for his Office of Business and Economic Development. Torres has served as the regional director of the Los Angeles Small Business Development Center (SBDC) Network at Long Beach City College – the 7th largest federally funded SBDC in the nation – since 2011. At the SBDC, Torres oversaw budget operations. Previously, he served as regional director of the Orange County and Inland Empire SBDC Network. From 2005 to 2011, Torres held roles as Pepperdine University’s director of alumni and corporate relations, and director of alumni relations. Prior to that, he held the position of associate director of development, grants and communications for the Geffen Playhouse from 2002 to 2005. Torres has a masters degree in business administration from Pepperdine University.

Comprehensive Child Development (CCD), which provides early childhood education and care to disadvantaged families from Long Beach, San Pedro and Wilmington, announced that it has hired Peter Bostic as its new executive director.

Bostic, who has more than 30 years of nonprofit management experience and worked for the YMCA for 20 years, replaces Tammie Kyle, founder and 30-year veteran of CCD. Bostic also has a decade of experience raising charitable gifts for higher education and is the former executive director of Leadership Long Beach and the Long Beach Public Library Foundation. CCD serves 3,000 children daily and operates five childcare facilities, supports 20 family childcare homes and oversees close to 700 nutrition programs throughout greater Los Angeles

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10 Long Beach Business Journal

Ocean Center Building Construction Slated To Start In Early Summer ■ By SAMANTHA MEHLINGER Senior Writer Work to transform the historic Ocean Center Building at 110 W. Ocean Blvd. into a mixed-use property with multi-family housing units and ground floor retail is expected to start this summer, according to Michael Bohn, design director and senior principal of project designer Studio One Eleven.

The adaptive reuse of the building from an office use into residential and retail uses has been approved by the city. “We are just waiting for the building permit,” Bohn said.

The permit should be issued early in the summer, and construction will then begin immediately. If everything goes smoothly, the project should then be completed within 15 to 18 months, he projected.

Office users, all of whom received two months’ notice to vacate, had occupied about 30 percent of the building, Bohn said. The owner, Levy & Associates, was required to give only one month’s notice but felt it appropriate to provide extra time for the businesses to relocate.

The Downtown Long Beach Associates (DLBA) has made efforts to help those businesses relocate elsewhere in the downtown area.

“The DLBA is dedicated to assuring that all downtown tenants keep their home in Downtown Long Beach, which is why we

April 28-May 11, 2015 hosted a special gathering of brokers to provide resources to vacating Ocean Center tenants at Rock Bottom Brewery on March 11 of this year,” DLBA President and CEO Kraig Kojian said in a e-mailed statement to the Business Journal. “We are absolutely committed to keeping their presence in downtown,” he said.

Kojian continued, “How we organize and facilitate in a leadership role is key to our operations; we go beyond acting as spectators in these situations and actually exercise proactive measures. After all, the complexity and difficulty of moving a business in such a short period of time can be overwhelming and we provide assistance in any way we can.”

The cost of the Ocean Center project is currently unknown, as Levy & Associates hasn’t yet selected a contractor to perform the work, but Bohn said he expects the investment to be at least $13 million.

Built in 1929, the building holds the status of a historic landmark, necessitating what Bohn called “sensitive demolition” on the interior. “It would be the demolition or the removal of insensitive additions that have been done over time,” he explained.

Over the years, “There were a lot of horrible additions and renovations that were done that were just completely out of context [to the building’s character].”

The design entails retaining the full original character of the exterior of the building and the “vast majority” the interior’s character, such as marble wainscoting, Bohn said. Some corridors will be reduced in size, he added. These plans were approved by the Long Beach Cultural Heritage Com-

April 2

2015

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April 28-May 11, 2015

REAL ESTATE

Los Alamitos Construction of a new 70,000 square-foot multi-tenant medical office building on the campus of the Los Alamitos Medical Center (LAMC), located at 3751 Katella Ave., was recently completed. The $37 million project, developed by Mission Hillsbased Pacific Medical Buildings (PMB) and designed by Irvinebased Boulder Associates, also includes a six-level, 1,077-space parking structure (pictured) that serves both the hospital and the medical office building. The project is the first phase of LAMC’s master plan, a part of an integrated medical campus.

The plan includes construction of a 167-bed care facility, three medical office buildings and the Total Care Pavilion, providing cancer, imaging and infusion services. The second phase of the master plan will include a new 92-bed patient care building and expanded services. (Photograph provided by PMB)

mission and the state government.

Plans for the building include as many as 80 multi-family units, the majority of which will be studios, Bohn said. Some one-bedroom and two-bedroom units are also planned. The building’s tiered design features a few outdoor roof decks, which may be used for a community room, dog park, and health and fitness area. The design is aimed at appealing to the millennial generation, according to Bohn.

National retailers have already expressed interest in occupying ground floor retail space, although no leases have been signed, Bohn said. “There is a very well-known national sit-down restaurant that wants to be in there,” he said. A coffeehouse, wine bar and fast-casual dining establishment have also expressed interest in the location, he added.

Once leases have been signed for the ground floor retail space, Studio One Eleven plans to work with tenants to design parklets for outdoor dining along Pine Avenue. Bohn hopes the presence of retailers at the Ocean Center building will help better connect the oceanfront to the downtown core. ■

Scoping Meeting On Civic Center Project Set For April 30 ■ By SEAN BELK Staff Writer A draft supplemental environmental impact report (EIR) on the Long Beach Civic Center rebuild project will be discussed during a public scoping meeting this Thursday, April 30, from 5 to 6:30 p.m. at the Long Beach Main Library, lower lobby, at 101 Pacific Ave., downtown.

The project, being developed by Plenary

Edgemoor Civic Partners (PECP) through a public-private partnership, includes building a new city hall, a new port headquarters and a new main library in addition to redeveloping Lincoln Park and adding private development with a 30-story residential tower.

The city is moving forward with the major downtown redevelopment after seismic studies, conducted in 2005, 2006 and 2013, indicated that the current city hall building and the main library, which were both built in the late 1970s, would be public safety risks in an earthquake and are “significantly seismically deficient.”

For more information on the civic center project, visit www.lbciviccenter.com. ■

Public Meeting Scheduled May 2 On Belmont Pool Rebuild ■ By SEAN BELK Staff Writer The public has a chance to provide input on and learn about the latest plans for the more than $103 million project to rebuild the Belmont Pool facilities in Long Beach.

A public meeting on the project is scheduled for 9 a.m. on May 2 in the Empire Room of the Seaport Marina Hotel, located at 6400 E. Pacific Coast Hwy. City officials will present updates on site and facility layout plans along with an overview of the design philosophy, guiding principles and project constraints and opportunities, according to a meeting notice.

The public will have a chance to provide input on the conceptual design and program requirements that were approved by the city council last October. The public will also review architecture of similar facilities.

Long Beach Business Journal 11 City staff will present an anticipated schedule for the draft environmental impact report (EIR) for the project and for future public meetings.

For more information, contact Rachael Tanner, Long Beach program specialist, at rachael.tanner@longbeach.gov.

Local Commercial Real Estate Council To Host Luncheon May 21 ■ By SEAN BELK Staff Writer The Long Beach Commercial Real Estate Council is hosting its annual luncheon from 11 a.m. to 1 p.m. on May 21 at The Westin Hotel, 333 E. Ocean Blvd. in Downtown Long Beach. The luncheon theme is “Designs of Tomorrow,” as commercial real estate professionals will discuss key trends and new practices in development that are shaping the future of commercial real estate, including paperless/address-free offices and sustainable practices.

During the event, Long Beach Mayor Robert Garcia will give a welcoming address, followed by honored speaker Ryan Altoon, executive vice president of Anderson Pacific, LLC, who will discuss sustainable building practices; and keynote speaker Lewis Horne, president of CB Richard Ellis Greater Los Angeles.

Tickets for non-members are $85 ($95 after May 15). For more information, please visit www.lbcrec.com. ■

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12 Long Beach Business Journal

The Economy And Financial Services (Continued From Page 1)

mains very strong and hours worked among those folks who are working have increased, so they are earning a whole lot more money,” Vitner noted. Cochrane agreed. “People are finding new jobs and often getting 10 to 15 percent pay increases when they quit one job and move on to the next,” Cochrane observed. “And job growth is pretty broad across most industries . . . with the exception of the energy industry,” he added.

Stronger economic fundamentals are evidenced by positive activity in the banking industry, according to Henry Walker, president of Farmers & Merchants (F&M) Bank, which has $5.6 billion in assets and, as of December 31, 2014, was ranked 136th in the country (out of 1,778 large commercial U.S. banks) by the Federal Reserve Board. “In banking, we’re reflective of the overall economy, and there is good money and a good inflow of deposits in 2015,” he told the Business Journal. “There is good, strong loan demand in 2015 and credit quality is exceptional right now.”

These factors, as well as increasing incomes and job growth, seem to point to a positive outlook for lending. “From a financial perspective, where we are in the business cycle is that conditions have been strong enough for a long enough period of time that we are beginning to see folks take on the types of endeavors that usually involve borrowing money,” Vitner said.

“We should see stronger demand for consumer lending, and particularly mortgage lending,” Cochrane projected. Vitner explained that stronger job market fundamentals are having a corresponding impact on home sales. “Now that home prices have re-

FINANCIAL SERVICES bounded, job growth has picked up and rents are rising pretty dramatically, we’re seeing home buying increasing,” Vitner said.

Cochrane said that banks might begin easing up on lending standards for mortgage loans to generate more business, which would ultimately be positive both for banks and homebuyers. “It may just take a while for the banks to recognize where that demand is and manage their lending standards to accommodate that demand,” he added.

Commercial real estate is also experiencing investment growth, Vitner observed.

“The strength in California’s job market has meant that commercial real estate has done very well, and demand for office and industrial space has been very strong,” he said. “We have seen the dollar volume of sales of commercial properties has increased pretty dramatically.”

Michael Miller, president and CEO of International City Bank (ICB), a Long Beach-based independent business bank, told the Business Journal that the commercial real estate lending portion of his bank’s business has experienced the largest percentage growth in comparison to its other services so far this year.

Income and job growth is also positively impacting the wealth management and investment industry. “If we see continued improvements in wage increases, that will definitely contribute significantly to continued growth,” Nathan Lee, first vice president of wealth management and financial advisor at the Long Beach branch of Merrill Lynch, told the Business Journal. He said his industry is also “getting a tailwind . . . from the large rapid decrease in petroleum prices,” which have dropped from about $100 per barrel to around $57 per barrel.

While job growth and rising incomes are positive economic factors, Lee said those elements necessitate more risk assessment.

“As a result of what people perceive to be a stronger economy, you start to see shifts in people’s comfort level with risk,” he said.

“We have to continue to talk about managing risk,” he emphasized.

For the past year or so, at the forefront of any conversation about the financial services industry has been the question as to when the Federal Reserve (Fed) will increase the federal funds rate, which essentially functions as the base rate of interest rates offered by U.S. lenders. Vitner, Cochrane and Walker all said they expected the Fed to raise interest rates by September of this year – but not by more than 100 basis points (1 percent).

Both ICB and F&M are planning for an interest rate increase. Lee said Merrill Lynch projects interest rates will remain lower for a longer period than others are predicting. Lee, Miller and Walker all indicated that 2015 should be a year of growth for their businesses.

Assuming interest rates don’t increase by more than 1 percent, Walker sees no threat to the banking industry. “It is probably not going to be any good for banking, but I don’t think it is necessarily going to hurt banking,” he said. “But I don’t think it will be well received. I think anything about 50 basis points will stifle the economy,” he added. “The consensus from a lot of people is that, if they [interest rates] do move, they just can’t move much.”

Cochrane pointed out that most entities in the financial services industry are ready for an increase in interest rates. “The industry expects this to happen,” he said. “It would almost be more of a surprise at this point if the Fed didn’t raise interest rates in September.”

Still, the Fed’s activities may pose some risk to the financial services industry, according to Vitner and Cochrane. Due to an international and national weakness in

April 28-May 11, 2015 bond markets, the Fed may have to increase its short-term debt obligations more frequently, Cochrane explained. “If the Fed has to continue moving on raising shortterm rates, we could get a very flat yield curve so there is very little difference between the Three-month Treasury Bill and a 10-Year Treasury Note,” Cochrane said, referring to short-term and long-term debt obligations issued by the Fed. “As the yield curve flattens, it makes life more difficult for banks that want to take in . . . [short-term] deposits with usually a low cost and lending it out at a higher rate longer term,” Cochrane explained. “That’s how banks work. And so any time the yield curve flattens, it makes it more difficult for them to manage the pricing of loans.” Cochrane said he wouldn’t expect to see this effect until 2017, and only if there is still downward pressure on long-term bond yields.

“The other risk is that, with interest rates this low, we have had a lot of folks going out and trying to find higher yields someplace else,” Vitner said. “I am concerned that when the Fed begins to raise interest rates that we will see that some of the valuations of companies that have been established through private equity investments may unravel a bit.”

On the other hand, keeping rates too low may cause problems as well. “I do think that where the Fed may be a little complacent is they say, ‘What’s the risk of keeping rates down so low?’ I think that one of the risks is that it may allow for bubbles to develop in some parts of the economy,” Vitner explained. He speculated that the Fed might not see any threat to the financial services industry if it keeps rates low because it is gauging risk based on problems that sparked the Great Recession. “What trips us up in the next recession is not likely to be the same thing that got us in the last recession,” Vitner asserted. ■

Henry Walker, president of Farmers & Merchants Bank, believes the outlook for the banking industry in 2015 is stable, if not positive. The bank recently reported that its interest and dividend income was $48.7 million in the first quarter of 2015. Other first quarter financial results included a net interest income of $46.9 million and a net income of $16.7 million. Each of these figures represented increases from the same time period last year. Walker stands by the teller window still serviced by his father, Kenneth G. Walker, who celebrated his 88th birthday earlier this month. (Photograph by the Business Journal’s Evan Patrick Kelly)

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2015

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14 Long Beach Business Journal

April 28-May 11, 2015

FINANCIAL SERVICES

Wells Fargo Continues Small Business Initiative With Assistance In Capital And Online Resources

Ben Alvarado, regional president of Wells Fargo’s Southern California region, overseeing operations in San Diego, Orange and Imperial counties, as well as Long Beach, said the bank’s initiative for small businesses focuses on providing resources regarding “growth, knowledge, capital and community.”

The website is: www.wellsfargoworks.com. (Photograph by the Business Journal’s Evan Patrick Kelly)

■ By SEAN BELK Staff Writer With optimism among small business owners at its highest level since the recession, Wells Fargo is continuing a commitment to help them find capital while providing guidance and online resources, whether for startups or expansions.

It’s all part of an initiative rolled out last year called “Wells Fargo Works for Small Business,” which focuses on providing small business owners with access to financing, online tools and help from business-focused bankers across the country.

Ben Alvarado, regional president of Wells Fargo’s Southern California region that serves customers in San Diego, Orange and Imperial counties as well as Long Beach, told the Business Journal that, despite new and growing small businesses seeing healthier financials, many are “underserved” and lack access to resources, such as banking and credit.

“We know that, in order to keep the economy going and continue the rebound that we’re seeing, we need to help small businesses,” he said. “This initiative is really about putting the tools and resources that small business owners can use in one place that’s really easy to access and provide them with online knowledge as well as in-branch knowledge from one of our business bankers.”

According to the U.S. Small Business Administration’s Office of Advocacy, the 28 million small businesses in the United States account for 99 percent of employer

April 2

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2015

April 28-May 11, 2015 firms in the country and 64 percent of the net new private-sector jobs in the economy.

Wells Fargo’s initiative was unveiled in May of last year to coincide with the company’s Small Business Appreciation Celebration, an annual event from May 1 to June 30.

Starting before National Small Business Week, the event highlights the accomplishments of small businesses and provides business owners with offers to save time and money, including a Business Platinum Credit Card with rewards,

House Passes Cybersecurity Legislation ■ By GEORGE ECONOMIDES Publisher On Wednesday, April 15, the House of Representatives passed the Protecting Cyber Networks Act in a 307 to 116 vote.

The bill, which is awaiting a vote on a similar bill in the U.S. Senate, aims to make it easier for corporations and government agencies to share data related to cybersecurity threats, including information about hacker attacks.

The bill was opposed by 55 civil liberties groups, including the American Civil Liberties Union and Freedom of the Press Foundation, claiming in a letter that the legislation “significantly increases the National Security Agency’s access to personal information,” and allows the federal government to use the information for “purposes unrelated to cybersecurity.

However, the American Bankers Association, which calls itself the “voice of the nation’s $15 trillion banking industry,” sent a letter thanking Congress. In the letter, ABA President & CEO Frank Keating wrote: “ABA congratulates the House for passing the Protecting Cyber Networks Act and the National Cybersecurity Protection Advancement Act. These bills would foster a more robust cyber information sharing framework while providing liability protections that balance the need for privacy protection.

“It is critical that Congress pass threat information sharing legislation to address today’s challenges and stay ahead of tomorrow’s threats. We appreciate the strong leadership shown by Chairmen [Devin] Nunes and [Michael] McCaul and Ranking Members [Adam] Schiff and [Mike] Thompson in steering this critical legislation through the House with strong bipartisan votes.

“We are encouraged by the House’s actions and urge the Senate to move forward soon on the Cyber Information Sharing Act, similar legislation sponsored by Chairman Richard Burr and Vice Chairman Dianne Feinstein. Banks invest hundreds of millions of dollars annually to put in place multiple layers of security to protect sensitive consumer data. Implementation of these bills would continue to build upon the existing cybersecurity partnership across sectors, which is critical to protecting our country from these threats.” ■

FINANCIAL SERVICES as well as Merchant Services and OptRight Payroll Solutions.

Last year, Wells Fargo introduced the small business initiative with the launch of its website, www.wellsfargoworks.com, offering business and financial guidance.

Alvarado said the website provides help on four key subjects that small business owners said they need information on the most: “growth, knowledge, capital and community.”

Through articles and online videos, the site gives owners tips on how to grow their business, how to build an effective business plan, etc. The knowledge piece provides education and answers to questions about running a business, he said.

In terms of capital, the online resource and bankers provide small business owners with information about how to access such funding sources as a line of credit

or financing for equipment or real estate.

Lastly, the site helps businesses learn how to connect with their community, such as other businesses and peers, Alvarado said.

Since the initiative was launched in 2014, the most common need for small businesses has been access to capital, Alvarado said.

“Confidence is building with our small business owners,” he said. “So whether they want to buy that extra piece of equipment or they want to hire a few more employees, oftentimes they’ll look for capital, how they can get approved for financing and what source of financing is the best for them.”

Wells Fargo, which states that it has been the top lender for small businesses in the United States for 11 consecutive years, launched the initiative with a goal

Long Beach Business Journal 15 to extend $100 billion in new lending to small businesses by 2018.

In 2014 alone, Wells Fargo extended more than $18 billion in new lending to small businesses, Alvarado said. Focusing on helping customers find access to credit has helped Wells Fargo maintain its high status for small business loans, he added.

Alvarado pointed out that small business owners may connect with other business owners and experts through the website. Business owners are also able to share and discuss on social media or through a blog at www.wellsfargoworks.com/run/blog-for-success.

Business owners may also speak with one of Wells Fargo’s 32,000 business-focused bankers located at branches across the country, he said. To make an appointment by phone, call 800/416-8658. ■

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16 Long Beach Business Journal

April 28-May 11, 2015

PERSPECTIVE

HealthWise

Small Business Dollars & Sense

Attention deficit Hyperactivity disorder (AdHd): Understanding the diagnosis

decoding Five Myths About Security And data Breaches

A

ttention deficit hyperactivity disorder (ADHD) is one of the most common childhood brain disorders in the United States. According to the Centers for Disease Control and Prevention, approximately 11 percent of children 4 to 17 years of age, 6.4 million kids, have been diagnosed with ADHD as of 2011.

A child with ADHD might have trouble focusing on tasks or subjects because the parts of their brain that controls attention and filters

By Gary Feldman, M.d. out distractions is underactive and less mature compared to a child without ADHD. Common symptoms of ADHD include difficulty staying focused, difficulty controlling behavior and hyperactivity.

A child with ADHD might do some of the following things more frequently than other children: daydream a lot; frequently forget or lose things; squirm or fidget; talk too much; have trouble taking turns There also are several different types of ADHD, depending on which symptoms are the strongest in the child: • Predominantly Inattentive Presentation – It is hard for the child to organize or finish a task, pay attention to details, or follow instructions or conversations.

• Predominantly Hyperactive-Impulsive Presentation – The child fidgets and talks a lot. It is hard for the child to sit still for long periods of time and feels restless and has trouble with impulsivity.

• Combined Presentation – Symptoms of the above two types are equally present in the child.

There's no way to tell if a child has ADHD from blood tests, X-rays or other medical investigations. Doctors diagnose ADHD based on history, interviews and special evaluations – such as rating scales, computer-based assessments and learning tests.

The causes and risk factors for ADHD are unknown, but current research shows that genetics plays an important role. In addition to genetics, researchers are studying other possible causes and risk factors including: • Genes – Researchers are looking at several genes that may make people more likely to develop the disorder.

• Brain injury – Children who have suffered a brain injury may show some behaviors similar to those of ADHD. However, only a small percentage of children with ADHD have suffered a traumatic brain injury.

• Environmental exposures – Studies suggest a potential link between cigarette smoking and alcohol use during pregnancy and ADHD in children. In addition, preschoolers who are exposed to high levels of lead may have a higher risk of developing ADHD. • Premature delivery – Premature children face higher rates of health problems as a result of being born early, and are also more susceptible to developing ADHD. If your child has ADHD, you can help by structuring situations in more positive ways.

For example, restrict the number of playmates to one or two, to prevent overstimulation.

Your child may be eligible for school-based support for their difficulties in attention.

In order to make sure that your child is receiving the proper attention at school, be sure to discuss their specific needs with their teacher or school counselor.

If you or your doctor has concerns about ADHD, you can take your child to a specialist such as a child psychiatrist, child psychologist or developmental pediatrician.

(Gary Feldman, M.D., is the medical director of the Stramski Children’s Developmental Center at Miller Children’s & Women’s Hospital Long Beach)

Effective Leadership Tomorrow’s entrepreneurs: energy Waiting To Be Tapped

A

uthor Rchard Florida reminds us that the greatest periods of economic gloom happen to also be the greatest periods of economic innovation.

So we have doom and gloom followed by periods of high growth and living standards.

And it’s not the government or central

By Mick banks, but the younger generation that will UklejA drive its upsurge. The economic ingenuity is being democratized more every day. It is so much easier to set up a business with many customers . . . thanks to cyberspace. A 20-something can come up with an idea and present it to 500+ friends on one social media instrument alone. It used to take much longer to get your message out to that many people. Now it can happen with the push of a button.

S

ecurity and data breaches don’t favor one organization or industry over another, and are taking place every day. Companies should consider the “how” of a breach (as opposed to the “who”) to evaluate their exposure to a similar event. Retail operations remain a target to hackers due to the volume of information in their systems: credit card information, confidential information for loyalty programs, and employee data. The victims of these attacks are an organization’s most valBy Ben ued assets, employees and customers.

AlvArAdo Until recently, many thought data risk was trivial compared to other threats such as theft, slip and falls and workplace violence. But with data compromise occurring at much greater frequency, it’s one risk you shouldn’t underestimate. Reputational harm stemming from a poorly managed data breach can be catastrophic.

Five myths you can’t afford to believe: 1. Data theft is not a problem for me, my company is too small. Data privacy is a concern for organizations of any size, though between rogue employees, data thieves, negligence, careless staff and unscrupulous business associates your company could be at risk.

2. We can afford to self-insure the risk. According to a recent Ponemon Institute study, the average cost for a small breach could easily exceed $200,000 – a sum that many companies cannot easily absorb. The majority of funds to respond to a breach need to be liquid. Breach vendors typically look for payment before or at the time service is rendered, and payment for postage is required when the letter is mailed, not 30 days later.

3. Coverage is expensive and hard to get. Competition, claims experience, and a larger pool of buyers have made network security and privacy liability coverage more cost effective and easier to obtain than even just a few years ago.

4. Our general liability policy will cover us. General liability insurance covers bodily injury and property damage as well as advertising injury and personal injury. The courts have consistently stated that data is not property because it is intangible, therefore not covered.

5. We have vendors who handle our sensitive information and credit card transactions; if they have a breach, it’s their problem not ours. The data owner (the person or entity collecting the data) is ultimately responsible for what happens to that data. Thus, a breach at a trusted business vendor could still lead to your obligation to provide notification and a decision whether to offer credit monitoring. Your contracts may require indemnification by your vendor, but if the breach is large enough, indemnification might not be enough to cover the costs or your vendor could file for bankruptcy.

Organizations can’t afford to figure things out after a breach occurs. It’s much more cost effective to have a ready-to-use incident response plan, an on-call forensics expert, and a privacy attorney on retainer. Then, when a potential issue is identified, your organization can act to mitigate the effects of a breach, deter any potential litigation, and respond to inquiries from regulators. Employers should also look for insurance partners who can help them identify financial risks and develop customized solutions to better protect their organization.

(Ben Alvarado, a 23-year veteran of Wells Fargo, is the president of the bank’s Southern California Region, which stretches from Long Beach to Orange, Imperial and San Diego counties.)

One of the attributes that Millennials share is an imaginative orientation. They are much more experimental than older generations as a whole. These are the digital natives. Technology is their first language. This group (2.1 billion worldwide – 80 million in the U.S.) will sense and seize this entrepreneurial spirit in far greater proportions than the older generations.

Walk into a classroom or workplace that is saturated with Millennials and you will walk away with the impression – as subjective and anecdotal as it is – that there is a lower proportion of pessimism and gloom than in other groups. Some write this off as naivety, elitism and entitlement. What is overlooked is the imaginative entrepreneurial spirit that exists.

Look at some facts. In 1998, surveys showed that in Britain 48% of young Millennials (those who are today in their late 20s and early 30s) wanted to start their own businesses. In 2012 it went up to 49%. Both groups surveyed were teenagers.

In the U.S. the entrepreneurial energy is waiting to be tapped. This will help drive future job creation since small businesses are responsible for creating most of the new jobs.

According to the Gallup-HOPE Index, nearly 8 in 10 students (77%) in grades 5-12, say they want to be their own boss.

45% say they plan to start their own business. 42% say they will invent something that changes the world. The majority of the students also demonstrated persistence and a willingness to assume risk. 91% were not afraid to take risks

even if failure was a possibility. 85% said they never give up.

Yet, even though the American student population demonstrates attitudes that describe entrepreneurs, they are not getting all the help they need from adults or the educational system.

Parents, schools, and businesses can make a difference by creating an atmosphere and opportunities to cultivate the imagination of these young people who range from preteens to those in their late 20s. If their entrepreneurial spirit is encouraged, they will achieve more than has ever been done.

This creative spirit is not just for profit. Much of their energy is directed toward social enterprise and nonprofits.

They focus just as much on social change as they do on commercial gain.

Our educational system should take note. There needs to be a strong priority in encouraging risk-taking, entrepreneurialism and the development of technical skills.

Let’s keep their minds and hearts engaged by using their well-developed imaginations to solve problems and innovate.

The future success of our economy relies on young people.

(Mick Ukleja keynotes across the country on topics related to leadership. He is president of LeadershipTraq and author of several books, including co-author of Managing the Millennials. His clients have included Fortune 500 corporations and non-profit organizations. Check his weekly blog at www.leadershiptraq.com.)

April 2

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2015

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April 28-May 11, 2015

PERSPECTIVE

Realty Views Socal Housing needs not Met

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ack in the good old days before the Great Recession when Southern California homes regularly appreciated at double-digit rates and people referred to their houses as ATMs, it wasn’t unusual for economists and government agencies to bemoan the fact that the available housing and new housing being produced were not enough to

By Terry provide for the number of people in our local area. roSS That all came to a halt with the housing bubble and the economic calamity that ensued. Homes in Southern California – and around the country – couldn’t sell for the asking prices, or even in many cases the mortgages against them. So supply was not a real problem.

Now, the pendulum is swinging back to that time when available housing was at a premium. It is no secret the builders left the market in droves during the recession and have come back in with trepidation and new challenges – such as difficulty finding available land, which is a growing issue in the coastal areas of our region.

According to information provided by the website, Zillow, there isn’t enough new housing being built to accommodate new residents. The situation is even more critical when you look at the highly urbanized city centers and the demand in these areas. U.S. Census information from July 2013 to July 2014 shows that only 254 units were being built for every 1,000 new individuals in the L.A. area; in Orange County it was 428 units; in San Diego it was 205 units; and in Riverside it was 177 units for every 1,000 new individuals.

Granted not every single new individual reported needs a new place to live. About 40% (give or take depending on the area) of each county’s residents are under 18 and thus don’t require additional housing units. However, even after accounting for this reduction, new adults moving to the area still outpace new units being built – something that is a problem again just like before the Great Recession.

Many prognosticators believe that the shortage of land in the higher-priced coastal areas will drive many residents to the Inland Empire and the various markets of Riverside-San Bernardino counties where there has traditionally been more bang for the buck when it comes to housing prices. But this also brings the question

of highways to accommodate workers if they need to go west for jobs – or will the employers go where the workers are, and move into these outlying areas?

Steve PonTell, president and CEO of Rancho Cucamonga-based National Community Renaissance, said cities and counties need to start planning for more housing if Southern California is going to grow, and noted that the state as a whole is a million housing units short of meeting demand.

“In Southern California alone, that number is 600,000, which means we would need to build 600,000 units just to break even,” he said. “When demand exceeds supply to that level, prices rise and fewer people – fewer workers – can afford to live here. Employers then leave because they can’t afford to pay their employees enough. The ripple effect on our overall economy is staggering.”

According to the California Association of Realtors, 47% of households in the Inland Empire could afford a median-priced home during the third quarter of 2014, versus 32% throughout Greater Los Angeles. In Orange County, only 20% of households could afford a median-priced home. Even so, the affordability index for the Inland Empire has dropped during the past year, from 51% of households being able to afford a median-priced home during the comparable period in 2013.

Because of this affordability factor, more people are opting to rent rather than buy in today’s market – but they still need places to live, and this is leading the way to more multi-family housing demand.

In 2014, the vacancy rate in California was only 1.2% for property otherwise occupied by homeowners (including those sold to a homebuyer and awaiting occupancy, and unsold, as well as vacant homes not for lease), and 4.5% for rental (apartment) properties.

For historical comparison, 1.2% is about average for California homeowner vacancies, having settled at this level after rising during the overbuilding years of the Millennium Boom and dropping during the following recession. However, today’s rental vacancy rate is well below average. This indicates these new residents are primarily seeking rental properties, not ownership. When rental vacancies fall below average, the price of rents naturally rises.

Thus, new residential construction will undoubtedly be concentrated in the multi-family sector to accommodate this trend. But, as of now, all residential building is lagging behind the increasing demand because of the number of new residents coming into Southern California.

(Terry Ross, the broker-owner of TR Properties, will answer any questions about today’s real estate market. E-mail questions to Realty Views at terryross1@cs.com or call 949/457-4922.)

Trade And Transportation The Whole Story

I

f you’re like me, your email inbox is full of news summaries from any number of news outlets.

There’s more information available to review on a daily basis than ever beBy ToM o’Brien fore. Of course, that makes it even more critical to be a discerning reader, otherwise you risk getting only part of the story, and it’s often the part you want to hear.

Case in point: this past week I received two press releases from the American Association of Port Authorities (AAPA) on the same day. Both had to do with the health of the nation’s trade sector. The first announced the release of a report prepared on behalf of AAPA by Pennsylvania-based Martin Associates on the economic impact of the nation’s coastal port system.

The report is an update of a similar study done in 2007, prior to the economic downturn. It concludes that, between 2007 and 2014, tax revenues at all levels (federal, state and local) generated by the port and trade sector increased by more than 50%;

jobs (both direct and indirect) generated by port-related activity increased 74% to 23.1 million; and personal wages tied to port-related employment doubled to $1.5 billion. The Martin Associates report also concluded that the average annual salary of those directly employed by port-related businesses is now roughly $54,000.

Bottom line impact: the movement of cargo through coastal ports was responsible for more than a quarter of the U.S. GDP in 2014.

The second press release was the other side of the coin. It presented the findings of a survey of port authorities as part of AAPA’s 2015 The State of Freight report, and cautioned that the health and wellbeing of U.S. ports is threatened by a lack of investment in the landside infrastructure that makes port operations possible. The headline was that one-third of U.S. seaports need infrastructure improvements in order to be able to accommodate growth through 2025, let alone longer term increases in trade volumes.

Landside infrastructure includes access roads, bridges, tunnels and rail corridors.

Each of these has suffered as a result of increased traffic placing increased pressure

on a network never designed for the amount of cargo now moved through the ports. While levels of congestion vary, one-third of U.S. ports report that $100 million of improvements in their landside connections are needed in the short term.

In the absence of these improvements, congestion at the docks will translate into congestion at the gates which will then spill over on to the local road and rail networks. Intermodal transfer points can be particularly challenging bottlenecks. All of this has a negative impact on port productivity of course, but has broader implications for the supply chain as a whole. The AAPA State of Freight Report suggests that some ports in this country have seen a 25% decrease in productivity due to rising cargo volumes and the resulting congestion. They’re not alone in making this argument. The American Society of Civil Engineers gave the U.S. infrastructure a grade of D+ in its 2013 report card.

It’s not surprising that the two AAPA reports were released at the same time. U.S. ports should be touting their successes, particularly after a prolonged period of negative and/or flat growth in the wake of the economic recession. In Southern California, showing signs of recovery is even more important given the black eye the ports took as a result of the very visible impacts of congestion-related delays in mov-

Long Beach Business Journal 17

Vol. XXVIII No. 8 April 28-May 11, 2015

EDITOR & PUBLISHER George Economides SALES & MARKETING EXECUTIVE Heather Dann STAFF ASSISTANT Larry Duncan EDITORIAL DEPARTMENT SENIOR WRITER Samantha Mehlinger STAFF WRITER Sean Belk CONTRIBUTING WRITER Michael Gougis PHOTOJOURNALIST Evan Patrick Kelly COPY EDITOR Pat Flynn The Long Beach Business Journal is a publication of South Coast Publishing, Inc., incorporated in the State of California in July 1985. It is published every other Tuesday (except between Christmas and mid-January) – 25 copies annually. The Business Journal premiered March 1987 as the Long Beach Airport Business Journal. Reproduction in whole or in part without written permission is strictly prohibited unless otherwise stated. Opinions expressed by perspective writers and guest columnists are their views and not necessarily those of the Business Journal. Press releases should be sent to the address shown below.

Office South Coast Publishing, Inc. 2599 E. 28th Street, Suite 212 Signal Hill, CA 90755 Ph: 562/988-1222 • Fx: 562/988-1239 www:LBBusinessJournal.com Advertising and Editorial Deadlines Wednesday prior to publication date. Note: Press releases should be faxed or mailed. No follow up calls, please. For a copy of the 2015 advertising and editorial calendar, please fax request to 562/988-1239. Include your name, company and address and a copy will be sent to you. Distribution: Minimum 22,000.

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ing cargo in 2014. The backlog is still being cleared.

While many people pointed to labor negotiations as the cause of the congestion, it was a much more complicated set of circumstances that caused the problem, circumstances that have not yet been fully resolved. These include equipment shortages exacerbating both the congestion and the resultant delays.

But they also included the impact of larger vessels discharging larger and larger amounts of cargo at peak periods, placing unprecedented demands on the system. If this fact was not highlighted in the AAPA report, it’s perhaps because the audience for the State of Freight is not the ocean carrier but the policy makers (and consumers) who struggle to take on the added burden of paying for infrastructure improvements despite the costs of congestion and the benefits (environmental, economic and otherwise) of an efficient supply chain. So the ports are wise to offer a not so gentle reminder that business is good but could be better.

Both messages need to be heard amid all the noise.

(Dr. Thomas O’Brien is the executive director of the Center for International Trade and Transportation at CSULB and an associate director for the METRANS Transportation Center, a partnership of USC and CSULB.)

1_LBBJ_APRIL28_2015_PortAnniversary 4/25/15 3:56 PM Page 18

ART MATTERS

Brought To You By The Arts Council For Long Beach • www.artslb.org

FAR-SITED: The UAM Celebrates 50 Years of Public Art This year, the University Art Museum and CSULB University Art Museum celebrate the 50th anniversary of the internationally acclaimed symposium and collection. However, over alifornia State University, Long Beach has a fifty years, the works have suffered the wear and tear prestigious history in the arts, with an interna- of the elements and are in need of conservation and tional reputation far beyond being a regional, restoration work. What would normally be a huge commuter school. In 1965, the undertaking for the campus bethen-called California State College comes the perfect case study for at Long Beach held the California the Getty Conservation Institute’s International Sculpture SympoOutdoor Sculpture Research initiasium. Organized by Sculpture protive. The GCI, conserving works fessor Kenn Glenn and artist Kosso worldwide, has prioritized the Eloul, it paired nine artists with sculptures on campus. Think local industrial partners like Bethabout what this means - for UAM’s lehem Steel, Fellows & Stewart collection, the campus, the city Shipyard, and North American Aviof Long Beach - we have worldation to create monumental works class artworks in our midst, worto be sited throughout the Edward thy of the Getty, and on par with Killingsworth designed midcentury those around the world. In a city campus. The first of its kind in the committed to the arts, this is a United States, the symposium source of pride. No culture in hisbrought to Long Beach interna- Installation of Piotr Kowalski’s Now, 1965. tory has thrived without strong tionally recognized artists to Image provided by CSULB University Archives. support of the arts, and Long merge art and technology, garBeach is no different. nered international press, inThis fall, the UAM presents spired further programs Far-Sited: Sculpture Sym(curatorial advisor to Glenn, posia 1965/2015, an exhibiMaurice Tuchman, went on to tion exploring the found LACMA’s famous Art and behind-the-scenes dynamics Technology initiative), and put of this historical event, inthe city on the art world map. cluding works of art, film, Intended to launch a greater press, personal letters, and public art initiative in Long more from the archives, on Beach, the nine pieces comprisdisplay for the first time. In ing the Monumental Sculpture addition, as part of the colCollection became the nucleus Joop Beljon, Homage to Simon Rodia, 1965. Image pro- laboration with the GCI, and of what is now the CSULB Out- vided by CSULB University Archives in partnership with the Mudoor Sculpture Collection. The seum of Latin American Art, international confercollection has grown to twenty-six works and includes ence Far-Sited: Creating and Conserving Art in Public Robert Irwin’s Window Wall, the site-specific landscape- Places, will be held at CSULB October 16-18, 2015, framing gem at the School of Art, work by local favorite examining new trends, technologies, and alternative Claire Falkenstein, and works like the iconic Carlson/Bloc practices in public art, and the role of conservation Tower, the centerpiece of campus (and subject of count- for art in the public realm. less postcards, diploma frames, and graduation anJoin UAM in our celebration, learn more, adopt a nouncements), which now adorn the campus with little sculpture for conservation, and sign up for the conunderstanding of their history or significance. ference at www.far-sited.org. ■ ■ By SHEFALI MISTRY

C

Gallery Corner Did you know that Long Beach is the home to world class traditional Khmer art forms? Beyond the fact that Long Beach has the largest concentration of Cambodians living outside of Cambodia, our city acts as host to a variety of groups that preserve and promote Khmer arts. Deep in the heart of Cambodia Town, Long Beach master artists are training the next generation of students to preserve Cambodian heritage. World class art organizations, like Khmer Arts Academy, are dedicated to fostering the vitality of these traditional arts. Khmer Arts Academy offers free training to apprentice artists, who then perform at a variety of locations and events around town. The organization works to train emerging artists in dance, costuming, mythology, and stagecraft. Outside of arts organizations, Long Beach hosts a multitude of parades and celebration events that honor traditional Khmer art forms. This month at the Cambodia Town Culture Festival, local artists and culture bearers presented a wide array of traditional culture exhibitions including classical dance and music, painting, religious practices, textiles, dress-making, Cambodian language and calligraphy, and more. However, the festival is just one part of the Cambodian culture vibrantly lived here in Long Beach. To learn more about the variety of Cambodian events and art forms in Long Beach, www.khmerarts.org, www.cambodiatown.org, or Khmer Krom troupe performing Chaiyam, a Cambodian visit www.cam-cc.org. dance, at the 2015 Cambodia Town Culture Festival.

Long Beach Business Journal 18 April 28-May 9, 2015

Art Matters in the Banking Industry

TH

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■ By SARAH BENNETT Arts Council for Long Beach Contributor

T

he banking industry and the arts might sound like two opposing worlds, but in Long Beach, they have always been seamlessly connected.

Two of the city's hometown financial institutions – Farmers & Merchants Bank and the International City Bank – both have long histories of supporting and engaging with local arts. And both have downtown locations full of rich creative histories in themselves.

Farmers & Merchant's main office is the Italian Renaissance Revival structure on the corner of 3rd Street and Pine Ave. Built in 1923 by noted Los Angeles architects Aleck Curlett and Claud Beelman, it resembles a Greek or Roman temple and to this day contains richly de- Detail image of Farmers and Merchants Bank 3rd and tailed terra cotta Pine Location cladding.

“It’s been maintained exactly the way it was when it was built, other than the computer and electricity systems that we installed,” says Phil Sblendorio, Senior Vice President at Farmers & Merchants Bank. “The compliments we get from our main office is very gratifying.”

Beyond maintaining architecturally significant structures as branches (its BellFarmers and Merchants Bank 3rd and Pine. flower location is also notable), Farmers & Merchant commits itself to the arts through a variety of philanthropic efforts. Last year, for example, the bank sponsored the Arts Council for Long Beach's State of the Arts address, and it makes annual donations to everything from the Long Beach Symphony to the Aquarium of the Pacific.

“In public schools, the arts have kind of gone to the wayside. It's not a big priority,” says Sblendorio. “That’s a problem because I truly believe that the arts really inspire creativity. The future of coming up with ideas and imagining comes from that side of the brain and we don’t put that much emphasis on it anymore unfortunately.”

Former International City Bank CEO Jane Netherton has always had a personal connection to the arts, one that she attached her employers name to whenever possible during her 28 years with the company.

Through Netherton sitting on the boards of local arts groups, co-chairing galas and assisting with fundraising efforts, the small community bank was able to support organizations like the International City Theatre and Musica Angelica without major financial input.

“Anytime I’m personally involved, the banks name is attached to me since I was the CEO, therefore the bank gets exposure,” Netherton says. “I live and work in Long Beach and I think it’s so important. If you live and work in a city you need to give back to it. That’s my personal feeling.” ■

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1_LBBJ_APRIL28_2015_PortAnniversary 4/25/15 3:56 PM Page 19

THE NONPROFIT PAGE

Long Beach Business Journal 19 April 28-May 9, 2015

Curated By The Long Beach Nonprofit Partnership

Nonprofit Board Membership Essentials One of the most important components of nonprofit management is forming and maintaining a great board of directors. As a nonprofit, you Jane Netherton might be looking Chair, Long Beach for new board Community members. As an Foundation individual you might be seeking to serve, or have been asked serve, on a board of a nonprofit. After many years of serving on and chairing nonprofit boards, I was asked to share my thoughts on this, which I am pleased to offer.

How to Find “Mr. or Ms. Right” Board Member

If you are looking to enhance a nonprofit board of directors, be certain of your needs. It is more important to fill board seats with individuals who have a sincere interest in the mission of your organization and can add value to it, rather than filling a seat for the sake of meeting a bylaw requirement. While having a full board is essential, adding “a friend of a friend” who is looking to get on a board - any board to enhance a resume could not only harm your organization by tying up an active seat, but could also damage its reputation and standing in the community.

Filling a vacant seat is only beneficial when it is occupied by an individual who can add value to your organization. Start with a face to face conversation with a candidate.

Be prepared by: • Having a document of expectations and requirements of board members so both you and the candidate can ascertain the appropriateness of an appointment.

• Asking the board candidate questions about what they will bring to the board and how they believe they can assist in achieving the goals of your mission statement.

• Having the Chair or Vice Chair at the meeting (if you are the Executive Director or CEO) indicates that the board is active. It also provides a different perspective on the meeting.

• Do not under sell board responsibility. A big mistake that has been made many times is to tell a potential candidate that it “doesn’t take much of your time” and “we do not ask a lot of our board,” as that could be exactly what you get.

Another major component of recruiting and maintaining your board, is succession planning. As board members age, have the next generation ready and trained to take a leadership role on the board. Build and grow your board carefully, looking for individuals that have expertise in areas that are important to your organization. The search for board members is ongoing. Don’t wait until a seat is available to start your search. Be mindful and always keep your eyes open for a person that would be a good fit for your organization. By doing this, you will be more successful in growing the organization’s ability to serve the needs of the community and individuals that the organization is founded to serve.

Capacity Corner: Upcoming Calendar of Events From the Nonprofit Partnership Essentials of Human Resources Certificate Program Thursdays, April 30-June 4, 2015; 2-5:00 pm (in San Pedro); This 6-session certificate program will provide the knowledge and practical skills for human resources administration and management.

Meet the Funders – Capcity Building: Advocating Your Position May 19, 2015; 8-9:30 am; Join select funders and grantees as they discuss best techniques in advocating for capacity building support.

How to Find the Right Nonprofit Board for You

First, let me just put this out there clearly: joining a board should not be done to enhance your resume. Not only are you doing the organization and its beneficiaries a disservice, you are taking a seat that could be filled by the many people in the community that are eager to add value by being an active participant.

Make certain you: • Understand the organization’s structure and mission and you are passionate, or at least somewhat passionate, about what they do.

• Reach out to either the Executive Director/CEO or the Board Chair and express your interest at becoming involved.

• Ask enough questions to see if you are a good fit.

• Can meet the board’s expectations and requirements • Understand that board members do not run the organization, but do play the role of assisting the Executive Director or CEO where needed and when asked.

• Can be an advocate of the organization.

• Think being a board member would be fulfilling to you, as well as the organization.

• Take the time to research the many organizations in our community, find out what their missions are, and how they deliver their programs to see which one fits with what you would like to be involved.

• Most of all, make certain that you are joining for all the right reasons, not just because someone asked you to do it.

The old saying that “you only get out of something what you put into it” is not just a cliché. It is a truism and the experience of being involved in something that makes people’s lives better or enhances the community can be extremely rewarding. Whether you are an individual looking to join a board or an agency nonprofit organization looking for a board

member, I wish you the best of luck in finding the right fit.

(Jane Netherton currently Chairs the Long Beach Community Foundation Board, the CSULB Board of Governors and the Queen Mary Heritage Foundation Board. She also serves on the Executive Committee of Musical Theater West, and is Past Chair and current Board Member of the Long Beach Area Convention and Visitors Bureau.)

A New Focus for Nonprofit Boards Shape Mission and Strategic Direction • Shape and clarify mission and vision • Engage actively in strategic decision making and policy decisions

Ensure Leadership and Resources • Select, evaluate and develop the CEO or Executive Director • Ensure adequate financial resources • Lend expertise; provide access to people (i.e. community, elected officials, funders) to meet organizational need • Enhance the reputation of the organization

Monitor and Improve Performance • Oversee financial management, ensure appropriate risk management • Monitor performance, ensure accountability • Improve board performance • Use board time effectively and efficiently Source: The ABC’s of a High Functioning Board, Mike Hoff, Hoff Consulting

Nonprofit News Welcome to . . .

Peter Bostic Executive Director Comprehensive Child Development Susana Sgniem Executive Director United Cambodian Community John Royce Membership Coordinator Historical Society of Long Beach

Introduction to Program Evaluation May 21, 2015; 9 am–4 pm; Demystify evaluation and receive tips and tools to help your organization get started on evaluation.

From our Partners

2015 Nonprofit Benchmarks Study May 6, 2015; 11 am (webinar); Join this free webinar to learn how you can use NTEN’s benchmark study data to transform your online programs. For more info, visit: nten.org.

Professional Advisor Breakfast – Addressing Client Competency Issues for Attorneys, CPAs and Financial Planners May 7, 2015; 7:30-9:00 am; For more information and to RSVP, visit: longbeachcf.org.

Training Staff to Supervise Volunteers May 17, 2015; 9:30 am-Noon; Learn techniques and investigate methods to coach others to manage volunteers & broaden the impact of your programs. For more information, visit: doviala.org.

Meet Gilbert Tran of the federal Office of Management and Budget Wednesday, June 3, 2015; 7:30-10:00 am.

RSVP for this unusual chance to ask all the questions you have ever had about the OMB Uniform Guidance. For more information, visit: calnonprofits.org.

The area’s regional capacity builder, serving local organizations to strengthen and grow through leadership, education and collaboration. Offering: Professional Development & Training Networking & Collaboration Custom Training & Consulting Services Information Resources To learn more, visit us at www.lbnp.org.

4900 East Conant St., Building O-2, Suite 225, Long Beach, CA 90808 562.888-6530

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20 Long Beach Business Journal

April 28-May 11, 2015

SAN PEDRO BAY PORTS

Looking north toward the Port of Los Angeles and the Palos Verdes Peninsula. At bottom right is part of Pier T at the Port of Long Beach.

(Photograph provided by the Port of Los Angeles)

As The San Pedro Bay Ports Recover From Epic Congestion, Cargo Volumes Are Expected To Rebound ■ By SAMANTHA MEHLINGER Senior Writer he ports of Long Beach and Los Angeles both moved record-breaking amounts of cargo in March, making great strides in processing a buildup of ships waiting in the harbor and containers stacked high on terminals. Goods movement through the ports had been at a near standstill in the first month and a half of 2015, as a congestion crisis was pushed to gridlock due to heated and prolonged contract negotiations with longshore workers.

The congestion crisis began in August, ahead of the peak shipping season, due to a combination of changing factors impacting the supply chain. Ocean carriers formed alliances and began shipping their goods on much larger ships than West Coast ports had typically handled. As Port of Long Beach (POLB) Chief Executive Jon Slangerup discussed during his State of the Port presentation in January, the ocean carriers did not arrange their cargo in any particular order, creating difficulties unloading the massive ships. Also at issue was a shortage of chassis, the trailers used by truckers to haul containers.

In October, reports began surfacing that fewer longshore workers than normal were being deployed to the San Pedro Bay ports, further exacerbating congestion problems.

From January through early February, contract negotiations between the International Longshore & Warehouse Union (ILWU), which represents longshore workers, and the Pacific Maritime Association (PMA), which represents the employers of those workers, seemed to reach a standstill – and so did cargo movement through the ports.

T

In February, the Port of Los Angeles (POLA) experienced a 10.2 percent decrease in total cargo volumes in comparison to the previous year, while the POLB was hit with a 20.1 percent decline.

The ILWU and PMA reached a tentative agreement in mid-February, and work to move containers resumed its normal pace.

In March, the POLA had its second busiest month in its history, experiencing a 17.3 percent year-over-year increase in cargo volumes. The POLB had its busiest March ever with a 32 percent increase in cargo volumes from the same month in 2014. By mid-April, the backlog of ships at anchor in the harbor waiting for entry to the ports was completely cleared thanks to the ports’ speedy processing.

Through the first three months of the year, the Long Beach port experienced a 3.3 percent decrease in overall cargo traffic, while the Los Angeles port saw a 5.5 percent decrease. Still, economists and international

trade analysts expect the ports to rebound from the congestion crisis, regain business they lost and achieve growth in overall cargo volumes by the end of the year.

“If you were to set aside the congestion and the labor dispute [that occurred] at West Coast ports, theoretically this should be not just a very good year for port activity, but probably a record year or at least a near-record year for container activity at local ports,” Robert Kleinhenz, chief economist for the Los Angeles County Economic Development Corporation, told the Business Journal.

Steven Cochrane, managing director of Moody’s Analytics, explained that strong economic fundamentals ought to translate to a good year for the ports. “We’re seeing a bit of acceleration in wage growth . . . [and] hiring rates seem to be improving, and improving very quickly,” he said. Job switching – when someone leaves one job for a higher-paying position – is also on the Longshore workers at the Port of Long Beach oversee the placement of a shipping container on a chassis, equipment used by truckers to haul containers. On February 20, the International Longshore & Warehouse Union and Pacific Maritime Association agreed to a tentative labor contract for longshore workers at West Coast ports, bringing an end to months of protracted negotiations. (Photograph provided by the Port of Long Beach)

rise, he noted. “Income growth ought to be better this year than it was last year.

Stronger income growth [coupled with] a stronger dollar ought to bring in stronger import flows through the San Pedro Bay.” An April report by the National Retail Federation and international trade consulting firm Hackett Associates projected a 17.2 percent increase in imports through the San Pedro Bay ports over the next six months compared to the same time period last year. For the year, the report forecasted a 2.7 percent increase over 2014, equating to about 7.9 million twenty-foot equivalent units (TEUs) of total cargo volumes through POLA and POLB. Ben Hackett, principal of Hackett Associates, told the Business Journal there are three reasons he expected the San Pedro Bay ports to rebound from a difficult start to the year.

“One is the congestion, or the backlog, is clearing up fairly rapidly,” he said.

“Secondly, the cost of shipping to the U.S. East Coast is about twice as much to the West Coast.” During the congestion crisis, some shippers diverted cargo from Asia through the Panama and Suez Canals – but Hackett expected that the differential cost of doing so, which is about double, would bring that business back.

“Thirdly, the East Coast ports are congested due to too much cargo showing up,” Hackett said. “We think that, overall, the market shares [of trade to the San Pedro Bay ports] will revert back to what they were before December.”

John Husing, economist and owner of Irvine-based Economics & Politics, Inc., also said that the two ports would certainly rebound from the congestion issues they (Please Continue To Page 23)

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2015

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April 2

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April 28-May 11, 2015

San Pedro Bay Ports (Continued From Page 20)

faced over the past several months. His projection is that the ports should see record or near-record level growth this year. There is a good chance that, combined, the ports will exceed the record-level 8.2 million TEUs of cargo traffic they experienced in 2006, he said. “They will certainly exceed eight million TEUs,” he added.

The projected growth is mainly attributed to imports, with a stronger U.S. dollar and better income levels making imported goods more affordable for consumers. Exports, on the other hand, may take a hit this year. “The fact that the value of the dollar is on the rise means that our exports are less competitive,” Kleinhenz explained. “The export side of the story is one that causes us concern, and it’s not clear at this point how the exports are going to play out in the year.”

Cochrane said that U.S. exports have already begun a downward trajectory. “We have data on export flows of goods and commodities by region, and they have fallen in every region since late last year, and pretty sharply,” he said. Due to Asian economies being stronger than those in Europe, “The downturn in [exports in] the west has been less severe than elsewhere,” he noted. Hackett said exports ought to remain sluggish for at least six more months, if not longer.

Kleinhenz noted that the efforts the twin ports are making to resolve supply chain issues that caused the congestion crisis are also a factor in projected growth. Working with stakeholders throughout the supply chain, the ports are seeking to identify and

Long Beach Business Journal 23 resolve impediments to efficient goods movement. The ports are able to undertake this task under an expanded discussion agreement, which was authorized by the Federal Maritime Commission in February.

Executives from the two ports met in March for preliminary talks. On April 22, the ports held a forum on supply chain optimization at Long Beach City Hall with representatives from all components of the supply chain – ocean liners, labor, cargo owners, terminal operators, truckers, railroads and more.

Making these efforts is necessary for the ports to remain competitive, according to Cochrane, especially as a widened Panama Canal is set to open some time in the next year or two, which may divert some traffic to the East Coast. “Just in talking with people who work at some of the port authorities here on the East Coast, they definitely saw an uptick in shipments from Asia [during the West Coast ports’ congestion crisis],” Cochrane said, adding that data backs up that claim.

“This certainly illustrated a willingness to use alternative ports when they had to. So it does create some risk for the [San Pedro Bay] ports, particularly with the newer port expansions in the Southeast as the ports that have been gearing up for the [Panama] canal expansion,” Cochrane explained.

Husing and Kleinhenz don’t expect the Panama Canal expansion to be much of a threat, however, because, while it will be able to handle larger ships, it will not be able to handle the massive ships topping 18,000 TEUs currently on order by major ocean carrier lines. ■

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SAN PEDRO BAY PORTS

April 28-May 11, 2015

Phase I of the Middle Harbor project in the Port of Long Beach is expected to be completed this summer and operational in January 2016. The complex, operated by Long Beach Container Terminal, a division of Orient Overseas Carrier Line, features zeroemission technology and equipment to handle the world’s largest ships. (Photograph provided by the Port of Long Beach)

Jon Slangerup (Continued From Page 1)

locity improvements,” Slangerup said in an interview at the port’s headquarters.

In early 2015 – during the worst of the congestion caused by a confluence of issues including contentious labor negotiations, massive shipments of cargo and a shortage of the equipment truckers use to haul containers – more than 30 ships were at anchor awaiting entry to both the POLB and the Port of Los Angeles (POLA). On April 20, the POLB announced that the backlog of ships had finally been cleared.

“I don’t know that we’re completely normal, because we still have a bunching of vessels out there in the ocean,” Slangerup said in reference to ships seeking entry to the port. “But the good thing is we’re now processing [them] within a day or so.”

The port had the busiest March in its history this year after full operations resumed when a tentative contract resolution for longshore workers was reached between the International Longshore & Warehouse Union and the Pacific Maritime Association. Before that point, fewer workers than necessary were being deployed to move load and unload ships since at least October.

“All of the containers that were sitting out at anchor are now processed,” Slangerup said. “We’re congested, but we’re not at gridlock like we were during the height of the congestion crisis.”

Part of the reason the port is still contending with a backup of containers is that when cargo owners diverted their shipments to other ports due to the gridlock, the railroads repositioned their assets to accommodate those moves, Slangerup explained. About 70 percent of containers that pass through the port move by rail, he noted. The port is working with the railroads to rectify that issue.

Despite a lingering backup of containers,

Slangerup said the volume of cargo traffic through the port for the month of April is tracking at about a normal pace. “We should be back to where we normally are

by May. The question will be, how does May shape up, and beyond?”

That question may linger for some time as the port works to regain the confidence of the beneficial cargo owners who diverted their shipments elsewhere during the peak of the congestion crisis.

“The biggest job here is clearly dealing with regaining the freight that was diverted.

I mean, there is no question that there was a significant amount of diversion,” Slangerup said. “So we want to make sure that we get all or more of that back. We’re working very hard on that.

“A lot of people in various venues have asked me, ‘With all the things that have happened, what’s the new normal?’” Slangerup reflected. “In my view, the new normal must be better than anything we’ve ever had in the past. Take our best day, and it’s got to be a step [up] improvement over that.”

Improving The Supply Chain

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orking in partnership with other stakeholders in the supply chain, the POLB has been working for months to create a more efficient flow of goods through the port complex.

One of the principal causes of the congestion crisis was that truckers within the port complex were facing difficulties picking up and dropping off chassis, the trailer equipment used to haul containers. At the root of the issue was a change in ownership over the equipment. When ocean lines sold off the chassis to three local companies last year, the model for chassis use became more complicated. Truckers had to pick them up and drop them off at specific locations rather than interchangeably, causing delays. This began occurring dur-

ing peak season, as goods were shipped in advance of Christmas.

The Port of Long Beach partnered with the Port of Los Angeles and the three chassis companies to create a new model of chassis use, called a gray pool or gray fleet, which was officially launched on March 1. The model allows for more interchangeable use of the equipment. “We are happily satisfied that the new gray fleet of chassis seems to be functioning well,” Slangerup said. “The next big test of that is getting as much of that asset base ready for peak [shipping season] as possible. We’re really right now very focused on peak planning, because we simply don’t want a repeat of last year.”

The port also recently extended the use of a vacant plot of land on Pier S for temporary storage of containers and chassis to help facilitate a smoother flow of goods through the port. The extension, granted by the harbor commission in March, lasts through September.

Investing In The Future

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o enhance its competitiveness and prepare for a changing shipping industry, the Port of Long Beach currently has more than $4 billion in capital improvement projects underway.

The fact that ocean carriers are investing in bigger and bigger ships necessitates upgrading infrastructure to accommodate them, and the Port of Long Beach is doing just that with its Gerald Desmond Bridge Replacement Project and Middle Harbor Redevelopment Program.

“We anticipate in the next five years to see 18,000 TEU [twenty-foot equivalent unit] vessels calling to port here. And beyond that we have 21,000 TEU vessels on order by certain customers that we know are going to call at our port,” Slangerup said. “So the big ships are big and getting bigger.”

The Gerald Desmond Bridge, which

hovers over the entryway to the port’s inner channel, is being demolished and replaced with a higher cable-stayed bridge to allow for bigger ships to pass beneath it. The bridge will also be wider to accommodate more traffic on its deck.

Last year, Caltrans ordered a redesign of the original bridge plans to “beef up the structures of the bridge” for safety reasons, Slangerup said. The resulting year’s worth of extra engineering work resulted in millions of dollars in change orders. In about a month, port staff will request a project budget increase from the Long Beach Board of Harbor Commissioners to accommodate the change orders, Slangerup said.

The port is currently funding the added costs, but staff is working to identify alternative sources of funding. The current budget is about $1.3 billion.

Despite these issues, the bridge is on track for completion in 2018, Slangerup emphasized.

The $1.3 billion Middle Harbor Project is currently on schedule and on budget. The project involves combining two aging terminals for Long Beach Container Terminal (LBCT), a division of Orient Overseas Carrier Line, creating deeper water, and outfitting the new terminal with zero-emission technology and some of the largest cranes in the world to accommodate larger ships.

Work on the first phase of the project should be substantially completed by July, allowing LBCT to perform testing on the terminal before it goes live early next year, Slangerup said.

The port is also investing about $1 billion in creating more on-dock and neardock rail infrastructure. Currently, about 23 percent of cargo moves via on-dock rail, meaning it is moved straight from a ship onto rail. Near-dock rail infrastructure allows cargo to move from ship to rail over a very short distance, although not via di-

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rect transfer. The port’s current program to expand this infrastructure would allow 35 percent of cargo to be moved via on-dock rail, thereby eliminating truck trips and reducing air emissions, Slangerup explained.

In addition to these capital improvement projects, the port is moving forward with a project Slangerup has dubbed Energy Island. Although the concept is still preliminary, if eventually approved, the project would involve installing a variety of energy-generating mechanisms such as wind turbines, fuel cells and solar panels.

The idea is that the port would be able to function entirely on its own energy generation from sources resistant to cyber attacks, and might even be able to contribute surplus energy to Southern California Edison’s power grid.

The plan would both ensure security for the port and benefit the regional environment, Slangerup noted. He would also like to include a water treatment and desalination plant in the plans, which could provide an added benefit to the community.

“We are now in the stage of doing the detailed planning for a phased approach to Energy Island,” Slangerup said. “We have [taken] three trips now to Washington, D.C., and Sacramento, where we are getting our lawmakers involved,” he noted, adding that the port is also working to identify potential sources of funding. The port has already met with Southern California Edison, Southern California Gas, the city’s gas and oil department, South Coast Air Quality Management District and the U.S. Navy, all of which are part of what Slangerup views as the project’s key stakeholder group. ■

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Gene Seroka

Investing In World Class Infrastructure

(Continued From Page 1)

Pedro Bay ports have implemented a series of initiatives to get the cargo left over from congestion moving. Now, POLA terminals are still stacked high with containers filled with imports for U.S. consumers – but the line of ships at anchor has finally disappeared.

In an interview with the Business Journal at the POLA’s headquarters in San Pedro, Seroka said his No. 1 priority now is “returning our port back to a sense of normalcy so the people within the supply chain – our stakeholder groups as well as the cargo owners – can regain a sense of confidence in the services that we put forward here.” He intends to instill that confidence by creating a “sense of predictability within the supply chain and a reliability of the service that we offer.”

“We have worked pretty diligently on both sides of the port complex to really get the cargo moved through the ports and out to the cargo owners as swiftly as we can,” Seroka said.

In terms of container traffic, this March was the busiest March ever for the Port of Los Angeles, and the second busiest month in its history. That’s not because of an influx of new business; Seroka attributed the spike in traffic to the speed with which the dozens of container ships left over from the peak congestion period were unloaded and loaded.

“Both ports have really gotten the backlog down to a level now where we have a really good and clear line of sight as to how we need to get that cargo processed through our complex,” Seroka said.

Terminals at the POLA were still operating at more than 100 percent capacity as of mid-April. “We’ve got more cargo on the terminals than is normally planned for on a daily basis, but the output of cargo going through the gates is also at record numbers,” Seroka pointed out.

While both San Pedro Bay ports are now operating above and beyond a normal pace, for months they were bogged down with congestion and work slowdowns, causing some customers to grow impatient and reroute their shipments elsewhere. “We know through meetings directly with the cargo ownership community that a lot of folks have taken cargo and moved it via the East Coast or Gulf Coast,” Seroka said.

“We’re in talks right now to see how we can earn that cargo back.”

“There is no doubt that there is at least one-third of our cargo [that] is purely discretionary, and potentially even more,” Seroka said. “Which means we not only have to prove that we can get back to being the nation’s number one container port by volume, but prove that through our conveyance process.”

Seroka called the record-breaking movement of cargo through the port in March “a demonstration of how swiftly we can work

April 28-May 11, 2015

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“Over the past eight and a half months that I have been on the job, we have made a strong effort to ensure that we have very good relationships with the [ocean] liner companies and the terminal operators to get an understanding of what their business plans are down the line so we can be readily prepared for that.”

Gene Seroka, Executive Director, Port of Los Angeles (Photograph by the Business Journal’s Evan Patrick Kelly)

and take a heavy volume of cargo and move it through the port complex.”

Another demonstration of the port’s ability to quickly move cargo came a few weeks ago, when three 13,000 TEU ships visited the port’s APM Terminal at once.

“That created more than 34,000 [cargo] moves – the highest move count of dense fashion in the United States to date,” Seroka emphasized. “We hope that demonstrates our sincerity to the cargo owner public and the other stakeholders that . . . we are the port of choice.”

Creating Supply Chain Efficiencies

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ver the past several months, the POLA has partnered with other trade stakeholders to implement new supply chain strategies. To address a shortage of chassis, the equipment truckers use to haul containers, the POLA worked with the Port of Long Beach and the three local chassis companies to make it easier for truckers to pick up and drop off chassis. The new model was tested in February and has been fully operational since March 1.

“The interoperable nature of the chassis pool allows for better inventory planning at these [pick up or drop off] locations to have the right amount of chassis at the proper time available upon discharge or loading of the vessels,” Seroka explained. “And we have seen,

based on the numbers, some very good progress in this area.”

Another way the port is facilitating the flow of goods is by creating a “peel-off ” program in which large shipments from high-volume customers are quickly moved to a “near-dock yard where they are sorted for destination to inland distribution centers,” according to a POLA statement. The port partnered with Pasha Stevedoring & Terminals, trucking firm Total Transportation Services Inc. and major retailers on this program. The peel-off initiative, which was announced in March, has had encouraging results and may be expanded, Seroka said.

The POLA is also experimenting with technology to help cargo move more quickly through the supply chain. The port recently partnered with Cargomatic, a Venice Beach company, to implement a GPS-based technology to quickly attract truckers to the harbor to pick up and deliver cargo to customers. The platform is similar to phone applications used to call taxis.

“The unique facet about this [Cargomatic] application is that once the delivery is completed, the trucker will be paid directly online . . . which will allow them to not only get more turns from the operational side but to have stricter controls over their finances,” Seroka said. “We have been testing this at China Shipping’s facility at West Basin Container Terminal and we hope to roll this out to other terminals in the near future.”

eyond returning the port to a sense of normalcy, Seroka is most focused on continuing to provide “world class infrastructure” for the port’s customers.

“Over the past eight and a half months that I have been on the job, we have made a strong effort to ensure that we have very good relationships with the [ocean] liner companies and the terminal operators to get an understanding of what their business plans are down the line so we can be readily prepared for that,” Seroka said.

“What we have today is ships calling our terminals that were designed two decades ago for vessels half the size that are coming here now,” Seroka said of the need for infrastructure investments.

“We are in the midst of our annual budgeting process for the city, as a proprietary department, and we put a keen focus on capital improvements that will carry us not only for the next fiscal year but for the next 10 years.”

Major improvement projects for four terminals within the POLA are planned to break ground over the next two years. Next year, the port is starting a five-year, $510 million improvement project for the TraPac Terminal, a subsidiary of Japan-based Mitsui O.S.K. Lines Ltd. That project includes extending wharves, creating deeper water at berths, building a new ondock rail facility, installing new cranes, upgrading backlands and more.

Similar capital improvement projects for terminals operated by Yusen Terminals Inc., Yang Ming and Everport are scheduled to begin in 2016. Those projects will cost $49 million, $122 million and $40 million, respectively.

The $383 million Transportation Improvements Program, which began this year, will ultimately “improve freeway access to port facilities, eliminate traffic movement conflicts, improve existing non-standard elements and accommodate existing and future traffic conditions for port and background traffic,” according to a POLA statement. The goal of the project, along with improving traffic, is to reduce truck traffic on roadways used heavily by the public.

The port is further focusing on the community through its recently approved $400 million 10-year Public Access Investment Plan, which includes an array of projects aimed at improving the public’s access to and enjoyment of the harbor waterfront. “We have already got projects outlined throughout the harbor area of Wilmington, Harbor City and San Pedro for immediate development and planning, many of which have already been put into the recommendations for the 2015-16 budget,” Seroka said. ■

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April 28-May 11, 2015

Rick Cameron is managing director of planning and environmental affairs for the Port of Long Beach.

(Photograph by the Business Journal’s Evan Patrick Kelly)

Port Of Long Beach: Celebrating A Decade Of Environmental Progress ■ By MICHAEL GOUGIS Contributing Writer ometimes change takes place so slowly that it’s hard to see progress.

It takes a decade from birth for an average male child to grow three feet in height. It takes more than a decade for an investment, at a seven percent compounded interest rate, to double. On a daily basis, the changes are all but invisible.

But after that decade, the child looks nothing like the infant, and the investment is literally twice the amount you started with. The changes, over time, are dramatic.

For the Port of Long Beach, it has been a decade since it adopted its Green Port policy. And the port is celebrating that anniversary with no small degree of satisfaction. Even with the bumps in the road and the challenges, the environmental impact of the port on the surrounding community, the air and the water has changed so significantly that it is almost hard to comprehend.

“We’ve really made a lot of progress,” Rick Cameron, managing director of planning and environmental affairs at the Port of Long Beach, told the Business Journal.

At the heart of the policy has been the Clean Air Action Plan. Developed with the Port of Los Angeles, the first area of attention was the fleet of trucks servicing the ports. Because semi-tractors are so expensive and so durable, they tend to remain in use for a very long time – think of how long locomotives stay on the rails.

But these older trucks were a major source of air pollution, and thus a great deal of effort was focused on reducing truck pollution.

“One of the centerpieces of the Green Port policy, and the priority at that time, was the Clean Air Action Plan,” Cameron said. “The reason that was a priority was because of the impacts of the diesel emissions associated with mobile sources – all

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of the activity at the port, the vessels, the trucks, the trains, the cargo handling equipment were all sources of a lot of emissions.

Diesel particulate matter has been identified by the state as a carcinogen. It had health effects. So that became a priority.

“From 2006, which was the initial adoption of the Clean Air Action Pla, one of the signature programs that came out of the plan was the award-winning Clean Trucks Program, where we were able to transform the port truck drayage fleet. That was about 15,000 to 16,000 trucks. We were able to, over a period of three years, change out those older trucks into 2007 or later model trucks that met EPA standards. That’s one of our success stories that I believe came out of the policy, the resolve of our board, and was focused on protecting those communities that were most impacted by that truck traffic. We’re very proud of that. It’s a focal point for us.”

Not all of the diesel pollution came from trucks. Ocean-going container ships can burn fuel in the middle of the Pacific that cause relatively little environmental impact. But at dock, those ships are a major source of pollution. The port has created a system to provide electrical power to ships at dock, allowing them to “cold-iron” (turn off their engines) and eliminate even more pollution.

“We’ve invested hundreds of millions of dollars in ship-to-shore power,” Cameron said. “We have provided all the infrastructure to allow container vessels to shut off all their vessel power. Today, more than 50 percent of the container vessels that come into our port are connecting and shutting off their engines. In 2017 and 2018, the percentage goes up to 70 percent, then 80 percent, of all vessels that call on our port.

That’s a huge success story.”

Port officials realized early on that the marketplace by itself wouldn’t bring about new technologies needed to help minimize the port’s environmental impact. The Tech-

nology Advancement Program has been a tool by which new technologies get a shot at being tested in real-world conditions.

“We have a lot of emerging technologies that haven’t been demonstrated or used in a marine environment or in the equipment that is used to support our activities in the port,” Cameron said. “We developed this program to allow these vendors, the manufacturers of these technologies, to come in and find partnerships – whether it is on the vessels, the equipment operators, or the trucking companies – and demonstrate utilizing their technologies in an active mode so we can test the actual use of it from the emissions side, as well as the cost-effectiveness side.”

One contemporary illustration of this idea is a test for new fuel cell/electric trucks, Cameron said. The program is helping to put a small fleet of the vehicles on the road for real-world testing, not just of the trucks, but the system needed to operate them.

“That’s important because it starts to (tell us) how it will operate in a duty cycle, what type of infrastructure is necessary outside of the vehicle itself,” Cameron explained.

“Is there a need for charging? Where are they going to get hydrogen or other fuel sources? We have to think about it from the technology and from demonstrating it in an operating sense so we can get a sense of the cost-effectiveness of it and the ability to commercialize it and deploy it.”

Some of the most dramatic changes to the port are invisible to the naked eye, unless you are under the surface of the water. The port’s Water Resources Action Plan was designed, again in collaboration with the Port of Los Angeles, to prevent contaminated runoff from entering the water, and to clean the polluted soil at the bottom of the harbor.

“The overall water quality in the ports meets all of the standards. Where we have had a problem is where we’ve had contaminated sediment and how that contam-

ination is released,” Cameron said.

“We’ve had a lot of success in cleaning up legacy contaminated sediments. As we dredge the channels (for bigger container ships), we’re re-using that material. It’s very much like recycling asphalt and concrete. It’s very sustainable.

“Once we take those legacy contaminants out of there, and we introduce best management practices for handling storm water, we’re making sure that we don’t reintroduce those contaminants. It’s all very connected. And what we’ve seen is progress of the abundance and the diversity of the species found in the harbor complex – and in their habitat. What we’re seeing is, over the past 10 years, we see the number grow. We’re starting to see different kinds of plants pop up. That’s really our metric. We feel as though we’ve been very successful.”

As for the future, look at the port’s Middle Harbor project.

“We’re looking for zero-emission or near-zero emission technologies,” Cameron said. “That is where we are headed. We’ve done a really good job at cleaning up diesel equipment over the past 10 years. We’ve also introduced alternative fuels, which gets us off diesel, which is very important.

"But where we need to be, as a port complex as well as for the region and the health of our community, is that we need to find the next generation of technologies that completely get us off combustion,” Cameron stressed. “We’ve been able to do that in small-scale demonstrations. Our goal in the future is to be able to expand that. Our Middle Harbor project is a good example of that. Within the fence line of Middle Harbor there are no diesel combustion sources. It is completely zero-emissions. That really is kind of a model as to where we need to be, from a business point of view and from our environmental emissions goals, and from a sustainability point of view of meeting our goals on all fronts.” ■

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Environment, Economics And The Future: The Port Of Los Angeles Looks Forward

Christopher Cannon is the director of environmental management for the Port of Los Angeles, and Lisa Wunder is marine environmental manager. (Photograph by the Business Journal’s Evan Patrick Kelly)

■ By MICAHEL GOUGIS Contributing Writer ith a decade of solid environmental progress in the books, Port of Los Angeles officials are looking forward to the expansion of activities in the future while still meeting the environmental needs of the local population – man, animal, flora and fauna.

“Just because we’ve (nearly) met the 2023 goals doesn’t mean that our job is done. We expect that the port is going to continue to grow in future years,” said Lisa Wunder, marine environmental manager for the Port of Los Angeles. “As it grows, that will mean additional throughput, and the associated emissions are going to grow. So even though we meet the 2023 numbers, it’s still an existing effort to continue compliance.”

With an increased focus on reducing the environmental impact of the port – which, together with the Port of Long Beach, is the busiest industrial harbor in North America – has come dramatic reductions in air pollution and related emissions, says Christopher Cannon, the port’s director of environmental management.

“We didn’t have as much as a focus on it as we do now,” Cannon said. “We’ve had a great deal of success in recent years in cleaning up the drayage truck fleet. When we started, the average drayage truck was 12 to 13 years old. They had huge emissions, especially in the area of diesel particulate matter. Once we started the program, we started working with the ARB [California Air Resources Board] again. All we really did was take their requirements that kicked in in 2014 and moved them up.

“By 2010, we had the majority – between 70 and 80 percent – of our fleet 2007 emissions-compliant,” Cannon continued. “And the result was over a 90 percent emissions reduction in particulate matter. That is dramatic. The trucks were a big part of it. We

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had trucks that were early 1980s and earlier than that. We phased in our Clean Truck requirements and focused on getting the oldest trucks off the road first. Each year, we had a new phased-in requirement.”

And with new, even tighter regulations for drayage trucks looming at the beginning of the next decade, truck operators are moving forward and purchasing trucks today that meet the standards for years into the future.

“The truck fleet keeps on getting cleaner,” Wunder said. “In the past month, we passed the mark where 30 percent of our trucks meet the 2010 standards, the newest engine standard available.”

gram. But that, along with our speed reduction program, really helped to reduce our ship emissions by a large, large amount.

And the speed reduction helped with diesel particulate reduction and NOx, too.”

The extent of the success is found in the numbers.

“Our emissions goals for 2014 and for 2023 – we’ve nearly met them,” Cannon said. “We’re at 80 percent reduction in diesel particulate matter, 57 percent reduction in NOx, a 90 percent reduction in SOx. We’ve had a lot of success, and we’re very proud.”

There are other ways to measure success when it comes to environmental recovery.

“We’ve had a lot of collaboration and support from our industry partners. They’ve really embraced our programs and a lot of them are, as you know, voluntary programs. They’ve really stepped up and begun to implement a lot of the programs to reduce emissions.”

Christopher Cannon, Director of Environmental Management, Port of Los Angeles

“Now that we’ve got people thinking about clean trucks, now they’re starting on their own buying newer and newer trucks,” Cannon added.

Big changes in the ocean-going vessels themselves and the way that they are powered, in motion and at dock, have resulted in equally dramatic reductions in emissions.

“We’ve had a lot of collaboration and support from our industry partners,” Cannon said. “They’ve really embraced our programs and a lot of them are, as you know, voluntary programs. They’ve really stepped up and begun to implement a lot of the programs to reduce emissions.

“For example, low-sulfur fuel now is a requirement – and because of the low-sulfur fuel requirements, extending out now to 200 miles, we expect that we’ll make our SOx 2014 goals easily when we see those numbers. It started as a voluntarily pro-

One of them is visible to the naked eye.

Look down into the water in the port, and you see fish – a lot more fish than used to be seen in the facility.

Better practices have meant that, in layman’s terms, bad stuff doesn’t wind up in the water any more. Storm runoff, discharge from the docks and the vessels, all have been studied and analyzed, resulting in new ways to deal with the stuff that used to pollute the water.

“Because of the practices and programs that we have implemented, we are very proud to say that the water is clean,” Cannon said. “Here we have the largest port industrial complex in North America and one of the largest in the world. You’d think with all of this industrial activity you would have water that reflected that. In fact, the water is very clean. The marine vegetation is growing. We see fish swimming up the

channels, and dolphins – we are thrilled.

We monitor the water here, and we haven’t exceeded a (pollution) standard in a while.”

Electricy and efficiency will be watchwords for future environmental developments at the port. No matter how clean an internal combustion engine is made, it will still emit some pollutants. Better to focus on replacing those power sources with zero-emission sources – which, generally, means electric-powered devices. Plugging ships into shore electricity has eliminated a significant source of pollution. But that takes more electricity, and port officials have to make sure that the power is there when someone throws the switch.

“We realize that we can’t rest on our laurels,” Cannon said. “The city and the state have set greenhouse gas goals. We have to work with our industry partners to address those issues. We have to continue to reduce emissions, because as the port’s throughput increases, we’re going to have to keep emissions low. As a matter of fact, when you have more throughput, that means more emissions, so the actual emissions per TEU are going to have to continue to go down.

“We think our electricity use could triple,” Cannon continued. “If we’re going to triple our electrical energy use, we’re going to have to do some planning on electricity and power availability, resiliency, quality and cost-effectiveness – and of course sustainability.”

Efficiency isn’t just a good idea from a business point of view. It’s good from an environmental point of view as well.

“Improving efficiency is one of the most important goals from the environmental side and from the business side,” Cannon said.

“Getting goods to market quicker, getting ships unloaded faster, helps our customers, helps the marketplace and it also – by having goods moved in and out of the port faster – reduces emissions. Efficiency is an extraordinarily important goal for us.” ■

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April 28-May 11, 2015 hen you boil it down, international cooperation on commerce does a better job of making the world a better place for everyone than disengagement ever can, according to someone who has negotiated some of the most complex and influential trade agreements in history.

In an interview with the Business Journal in his high-rise downtown Los Angeles office, former U.S. Secretary of Commerce Mickey Kantor insisted that continued, extensive economic engagement with countries like China and Mexico creates benefits here and abroad.

“My view of that is you embrace other nations until they indicate to you that they do not want your affections,” said Kantor, this year’s recipient of the Stanley T. Olafson Award, presented by the Los Angeles Area Chamber of Commerce to an outstanding member of the world trade community.

“I’ve always said to people about trade rules and trade laws and regulations – would you have us do this global economy without any rules whatsoever? Is that what you want? That’s really the base question here. And of course that’s not what you want.

“What about the environment?

What about labor protection? What about corruption? What about things that we know we want to have some impact on? Trade is the best way to do that. Either we have rules or we have none at all. We don’t win in that kind of world. We don’t win.”

Much of Kantor’s focus nowadays, as a partner at the Los Angeles offices of the Chicago-based international law firm of Mayer Brown, is on trade with Asia and, in particular, China. Relations with that country are important not just to the U.S., but to the ports of Long Beach and Los Angeles, the economic engines of the region, he said.

“COSCO is the largest shipper in the port, in the twin ports of Long Beach and L.A., which I have to say I hope one day come together. Together they would save money, they would be more efficient and we could compete better . . .

“With the editorial over . . . China is critical to our future, as we are to China’s. It’s not a one-way street. It’s important in terms of investment, technology, education, all kinds of things where we’re frankly way ahead of China.

They need what we have. They have the population and the growth and the commitment. We have the background and the . . . largest economy in the world, one of the most educated populations in the world. China would like to exemplify what we are, and we ought to take them up on it.”

Still, relations between the two countries are not as solid as Kantor would like, he said.

“Our relationship with China is,” Kantor paused, looking for exactly the word he wanted to use, “spotty sometimes.

I worry about that. I think we’re not sure if China is going to be a future friend or a future foe. I am, let’s say, disappointed that we did not invite China into the Trans-Pacific Partnership – yet. We will. We should have earlier, in my view. What it’s done is cause a little bit of tension. China now has the Asian Infrastructure Bank they’ve put together and we’ve been excluded from that.

“That is not a pattern I want to see happen – we exclude China, they exclude us, we don’t cooperate or embrace each other, we’re not looking to work together. The economy is where you can really find common ground. On

SAN PEDRO BAY PORTS

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China, NAFTA And International Trade: A Conversation With Former U.S. Secretary Of Commerce Mickey Kantor ■ By MICHAEL GOUGIS Contributing Writer

strategic or political issues you can have differences. On the economy, we have common goals.”

Kantor said the best way to make sure that China remains a future friend is engagement – which does not mean endorsement or approval of everything the country does.

“It’s not a matter of blindly being in league with China.

It’s a matter of being smart. [China has] 1.2 billion, 1.3 billion people, the largest nation on the face of the earth and the second-largest economy in the world. Why wouldn’t we have a good, solid, professional eyes-wide-open relationship with them?

“You don’t need to endorse all their policies. We don’t agree with their policy of some control over the press or how they deal with certain religions and so on. But that doesn’t mean we can’t walk and chew gum at the same time. You can criticize and try to move China in a direction that you think is appropriate. You can work with them in the areas where you agree and you have common interests.”

Moving forward on trade has proven to be common ground for both countries, Kantor stressed.

“We have continued opening our ports to each other. We have opened ourselves to investment from China, as they have from us,” Kantor said. “There have been problems from time to time. Our Committee on Foreign Investment [in The United States] has been very tough on investments from China and security issues when they invest in the United States – as they should be. I think they’ve been a little bit too overboard, but that’s me. They’re trying to be careful.

Long Beach Business Journal 31 I used to sit on that committee, long ago when dinosaurs roamed the earth.”

China has taken its own steps toward becoming a member of the international business community, Kantor noted.

“Their regulations have become more liberal in terms of allowing investments in and allowing investments out. They’re trying to become a real international market. They know it’s important to them. They know that they can’t grow to the extent that they want to grow to unless they do,” Kantor said.

“We’re getting there. I’m impatient.

Everyone’s too impatient. We want it to happen tomorrow – it’s not. But when I look back . . . We negotiated the first trade agreement with China to join the World Trade Organization back in the 1990s, and they joined in 2000. It was a long, four- or five-year negotiation. We gave them a sevenpage, single-spaced typed document – in the end, they agreed to do everything on that piece of paper.”

China’s decision to join the World Trade Organization (WTO) was a major step forward, Kantor said.

“We have taken them to the WTO courts – and won! – when they have violated those agreements. It’s the only international organization where there are courts and sanctions, and people agree to them. It’s a really important thing. It creates a rule of law,” said Kantor, one of the key negotiators in the creation of the WTO. “There are a lot of international tribunals. This is the only one on the civil side with sanctions that stick. In 1993, when we in the Clinton Administration were trying to put the World Trade Organization together, it was a fight within the administration as to whether there should be sanctions attached. President Clinton and Vice President Gore were for them. But it was a big argument because it was so unusual to have them in an international treaty. And it’s worked. And it’s worked well.”

Kantor also was key in the negotiations that led to the creation of the North American Free Trade Agreement (NAFTA) involving the U.S., Canada and Mexico. Looking back, he calls the pact effective but in need of revision.

“We did well. Did we do perfectly? Absolutely not,” Kantor said. “I negotiated NAFTA. It’s time that we updated it. No trade agreement is perfect. Now NAFTA is 22 years old. I’d like to say I’m prescient, but I’m not, and no one around that table back then was prescient. We have more jobs, more investment, more growth, in all three countries as a result of NAFTA. But it’s not perfect. We need to get back to the table, and say, OK, folks, what do we need to improve? What hasn’t worked?

Kantor said that NAFTA’s environmental protections need to be stronger as do the protections for labor. “We didn’t understand what kinds of problems could arise,” Kantor said. “Those are the areas where we need to get back to. I think it’s important. Agriculture, particularly with Mexico, certain issues have arisen. There are a number of areas where we need to say, ‘look, we are neighbors, friends, why can’t we get back to the table?’

We’re not going to tear the whole agreement apart by doing it. We can only improve it. Twenty-two years is a long time in today’s world. Look at what’s happened since – there were no cell phones! There was no Internet! It didn’t exist when we [negotiated] NAFTA. And we don’t think we can improve it? Oh please – give me a break! Get at it, folks!” ■

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32 Long Beach Business Journal

SAN PEDRO BAY PORTS

April 28-May 11, 2015

James Callahan serves as chairman, president and CEO of Nautilus International Holding Corp., the parent company for Metro Ports, Metro Cruise, Metro Risk Management and Metro Shore. The corporation, which has a more than 90-year relationship with the Port of Long Beach as a terminal operator for a dry-bulk facility on Pier G, is moving its headquarters from Wilmington to Douglas Park in Long Beach by the end of the year. (Photograph by the Business Journal’s Evan Patrick Kelly)

Nautilus International/Metro Ports Has Deep Maritime Roots In Bulk Cargo, Port Services ■ By SEAN BELK Staff Writer t’s been a long time coming for Nautilus International Holding Corp. that today owns a string of port services subsidiaries while remaining in the business of stevedoring – loading and unloading cargo from vessels – as a terminal operator at the Port of Long Beach for 92 years.

The corporation, which is expanding and relocating its headquarters from Wilmington to Long Beach this year, has maritime roots that go back to 1852 as the California Stevedore and Ballast Co. in San Francisco, assisting with bulk shipments during the Gold Rush era.

Back in those days, there were no exports coming from California. Rocks were carted from a nearby hill and used as ballast to stabilize sailing ships that were empty on returning voyages, explained James Callahan, Nautilus International Holding Corp. president and CEO, in an interview with the Business Journal.

After the San Pedro Bay ports began developing nearly a century ago, the corporation established itself at the Port of Long Beach in 1923 with the Metropolitan Stevedoring Co., which was later rebranded as Metro Ports, one of four subsidiaries owned by Nautilus International.

While many businesses pursued the explosion of containerized trade on the West Coast, Metro Ports went in a different direction, capturing a niche market – bulk cargo – while eventually taking on other port services, such as risk management and cruise ship industry support.

I

Pictured is the rendering of the new 40,000-square-foot headquarters for Nautilus International Holding Corp. under construction at Douglas Park in Long Beach.

Today, the corporation handles a variety of bulk commodities and port services with 30 operations in 19 states around the country and an additional operation in Canada.

“We’re a niche stevedore,” Callahan said.

“We like to say, ‘if it doesn’t move in a container, that’s what we handle.’ Whether it’s dry bulk products, liquid bulk products or traditional break-bulk products, from steel to auto or whatever, anything that doesn’t go into a container, we handle it.”

Nautilus acquired companies and eventually rebranded them in 2008 as four main Metro subsidiaries, providing: stevedoring, terminal operations, logistics, risk management and cruise ship passenger services.

The subsidiaries are known as Metro Ports, Metro Cruise, Metro Shore and Metro Risk Management.

Most technological advancements have focused on containerization, but the primary goal for improving equipment and procedures in the bulk cargo industry has involved “safety and efficiency,” mainly because of the types of commodities, Callahan said.

“The advances have been in trying to find the greatest efficiencies and safety for moving the cargo no matter what it is,” he said. “It might be a windmill blade that’s half a football field in length or just a crate of liquid fertilizer. How do you most efficiently and safely transfer that commodity?”

Callahan added that different advanced equipment is needed based on whether the bulk commodity is transferred to a terminal, ship, train or truck.

Cleaning The Air

F

or more than 50 years, Metro Ports has operated a dry bulk terminal on Pier G in the Port of Long Beach, assisting exports of sulfur, petroleum coke, coal and other bulk commodities to foreign countries.

Last year, the Port renewed Metro’s lease for another 20 years for continued bulk cargo operations. For more than a decade, the company has made significant investments and changes toward becoming more environmentally friendly.

This year, the Port of Long Beach is celebrating its 10-year anniversary of its Green Port Policy, a comprehensive plan passed in 2005 that has distinguished the port as a leader in environmental stewardship through aggressive initiatives aimed at protecting the community from harmful impacts of port operations.

Metro Ports has been involved in a number of those initiatives. Even before the policy was put in place, the terminal operator made changes to its dry bulk facility, including putting all bulk commodities under covered storage and making sure conveyers are covered as well after new state regulations were put into effect in 2001.

“There’s been a lot of advancement,” Callahan said. “Everything is designed to minimize any impact on the environment.”

Callahan, who has been with the corporation for 35 years, said that moving to a zero-emissions status at the Port of Long Beach is a long-term vision of the port and the entire maritime community.

“I’ve seen a great evolution from the time I started, and we’re really at a wonderful point now where we have this commitment and vision by the port to take it to the next step,” he said. “It will be a process that doesn’t happen overnight.”

Metro Ports has already made significant efforts in “greening” its own equipment by switching out old diesel engines for modern ones while changing to alternative fuel sources, including liquid natural gas (LNG) and electric power, in order to “eliminate as many particulate matters as possible,” Callahan said.

For instance, the corporation acquired and

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2015

April 28-May 11, 2015

33

put into use one of the first ever ultra-low emission locomotives at its dry-bulk facility.

More recently, Pier G has served as a beta test site for developing innovative technology that enables bulk cargo vessels to reduce emissions from diesel engines at port.

The new technology, which was funded by the Port of Long Beach while Nautilus provided “intellectual capital,” is also cost effective for bulk cargo shippers.

Port sources have confirmed that converting ships to electric shore power, also known as cold ironing, can cost anywhere from $500,000 to $800,000. And, for bulk cargo handlers, which call sporadically at the port and sometimes only once a year, paying for such upfront costs would force them to look for business elsewhere, Callahan said.

However, the new technology, known as the Advanced Maritime Emissions Control System (AMECS), provides an alternative to cold ironing by reducing emissions from vessels at port without the hefty costs associated with modifying vessels.

Developed by Rancho Dominguez-based Advanced Cleanup Technologies, Inc. (ACTI), the new technology, which was first used on locomotives, involves operating a 100-foot robotic arm to attach a device to the smoke stack of a vessel, removing 90 to 99 percent of emissions, according to ACTI.

Committing To Long Beach

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n March, Nautilus International broke ground on a new 40,000-square-foot headquarters on 2.57 acres at Douglas Park north of the Long Beach Airport.

Callahan said the corporation is relocating from its current 30,000-square-foot building in Wilmington, where it has been located for 26 years, in order to expand and to show a commitment to Long Beach.

“The No. 1 impetus to move was to allow room for growth,” he said. “Beyond that, we wanted to position ourselves in Long Beach.”

According to a statement from Nautilus International, the new building is being constructed on the northeast corner of Worsham Avenue and Cover Street. The corporation expects to complete construction by December.

The new location will house approximately 80 personnel, with the capacity to add nearly 50 more employees. The building is expected to be Leadership in Energy and Environmental Design (LEED) certified, with eight electric vehicle charging stations and a carport structure utilizing solar panels.

Callahan called Long Beach a “very progressive” and “business friendly city” with potential for future growth.

“We like what we see developing in Douglas Park,” said the Long Beach native. “We like the tenants that are there, and we wanted to be a part of that program. We are in very close relationships with the Port of Long Beach . . . so we wanted to demonstrate our commitment to the Port and City of Long Beach by relocating to that location.”

Looking ahead, Nautilus International plans to expand the products it handles as well as its geographic area, as international trading partners develop further, Callahan said.

“We hope to continue to expand our international operations,” he said. “We’re just looking to safely and efficiently handle as many cargoes as we can.” ■

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34 Long Beach Business Journal

April 28-May 11, 2015

SAN PEDRO BAY PORTS

Randy Parsons, director of security services for the Port of Long Beach, oversees more than 80 security personnel, including harbor patrol officers. The 20-year veteran of the Federal Bureau of Investigation also directs the U.S. Homeland Security program, including 24-hour patrols, anti-terrorism programs and security coverage, for the 3,000-acre port complex.

(Photograph by the Business Journal’s Evan Patrick Kelly)

Port Security: Keeping The Ports Safe In An Intricate ‘Threatscape’ ■ By SEAN BELK Staff Writer eeping the nation’s largest port complex safe while making sure cargo moves smoothly through the harbor is no easy task. It takes a seamless collaboration of local, state and federal agencies to work with international trade partners to protect the public and the flow of commerce from potential threats.

Though the ports of Long Beach and Los Angeles may compete for business, when it comes to security measures, they work together as one “mega” seaport, sharing intelligence, data and technology. Millions of dollars a year are spent on efforts to combat terrorism, intercept counterfeit goods and prepare for natural disasters.

K

After all, with more than 40 percent of the nation’s cargo moving through the twin ports, what may seem like a small anomaly may turn out to have a devastating impact on port operations, threatening the United States economy and the nation’s safety.

Two leading port security professionals – Randy Parsons, director of security for the Port of Long Beach (POLB), and Michael Hillman, assistant chief of port police for the Port of Los Angeles (POLA) – spoke to the Business Journal to discuss some of the top challenges for port security and the latest measures taken to address them.

A major challenge for securing such avast port complex is making sure all agencies providing security, both public and private, are effectively communicat-

ing with terminal operators and shipping companies, Parsons said.

“We need to make a substantial effort that we all know the same thing at the same time and that we have accurate and timely reporting of what’s going on in the port,” he said. “That way, it really helps us in our decision making as to how and where we use our resources.”

In Long Beach, the port utilizes its own harbor patrol, which has authority to access all marine terminals, monitor ships on the water and check trucks and trains on land.

The harbor patrol is stationed at the Joint Command and Control Center (JCCC) at Pier F along with the POLB’s own security division. The POLB also partners with the Long Beach police and fire departments.

The POLA uses its own port police divi-

sion along with a security unit. In addition, the port partners with the Los Angeles Police Department, the L.A. County Sheriff’s Department and the L.A. Fire Department.

For intelligence gathering and during emergencies, both ports collaborate with each other while partnering with the California Highway Patrol, the U.S. Department of Homeland Security, the U.S. Coast Guard, the U.S. Customs and Border Protection, Marine Exchange and the Federal Bureau of Investigation (FBI).

In total, there are nearly 30 different allied agencies required to “work together as one” to keep the ports safe, said Hillman, who oversees a security component at the Los Angeles port police division.

“In my 47 years in law enforcement, I have never seen such a collaborative and

U.S. Customs: Stopping Counterfeits In Their Tracks 40 Percent Of Counterfeit Seizures In Nation Come From Local Ports ■ By SEAN BELK Staff Writer Once a cargo container is loaded on a ship in a foreign country and sent on its way to the United States, the U.S. Customs and Border Protection (CBP) springs into action. Teams begin scouring over required electronic data to decipher exactly where the shipment originated and if its contents are “legit.”

If there are any anomalies, such as a wrong address or an unknown importer, the CBP may target the container to be checked at one of its warehouses for counterfeit products after the cargo enters the harbor.

And, if the container is listed as “high risk,” then it may be X-rayed directly on the marine terminal to scan for weapons or bombs.

“We do an analysis of everything coming in and then we’ll select containers for examination so that, by the time the vessel is here, we’ve already given instructions to the terminal operators and to the ports,” Jaime Ruiz, a CBP spokesperson, told the Business Journal. “Those containers cannot exit the ports without being cleared by U.S. Customs.”

The United States saw a slight drop in seizures of counterfeit products last year compared to 2013, but the number of fake goods coming into the country still re-

mains relatively high compared to nearly a decade ago, according to a recent report from the CBP. The CBP and the Homeland Security Investigations (HIS) of U.S. Immigration and Customs Enforcement (ICE) reports that in fiscal year 2014 there were 23,140 seizures of counterfeit products, about 5 percent less than the 24,361 seizures reported the prior year. However, the report also states that last year was the third busiest year for seizures since 2005.

The counterfeit seizures in 2014 had an estimated worth of $1.2 billion, representing the value of the goods had they been sold at the manufacturer’s suggested retail price, according to the CBP. Ruiz said the ports of Long Beach and Los Angeles see the most counterfeit goods in the United States, handling about 40 percent of all counterfeit seizures in the country.

Therefore, it’s safe to say that about $500 million worth of counterfeit products was seized at the twin ports last year. He noted that the CBP’s West Coast regional branch is located in Downtown Long Beach.

“It’s pretty concerning in terms of counterfeits,” Ruiz said. “Folks are still putting themselves at risk by buying fake, untested products.”

He noted that most counterfeit products continue to come from China (63 percent)

The Top 10 Counterfeit Commodities Seized In 2014 1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Wearing apparel/accessories Consumer electronics Pharmaceuticals/personal care Handbags/wallets Footwear Watches/jewelry Optical media Computers/accessories Labels/tags Toys

Source: U.S. Customs & Border Protection

and Hong Kong (25 percent). Canada, however, jumped to third place last year, with 1 percent of counterfeit goods coming from that country, indicating a new trend, Ruiz said.

Though buying fake designer shoes may seem harmless, money exchanged for counterfeit goods often goes to international crime networks that support terrorism and child labor rather than creating jobs and tax revenue in the United States, Ruiz said.

“To be clear, intellectual property theft is not a victimless crime,” Sarah Saldana, director of ICE, said in a statement. “The victims are American businesses, and the employees whose jobs are dependent on intellectual property-intensive industries.

Counterfeiting is a crime of global proportions. And, when property rights are violated, American jobs are lost, business profits are stolen and, ultimately, consumers are cheated.”

Ruiz said the CBP enforces hundreds of laws and uses industry standards at the ports to protect intellectual property rights of companies and the public’s safety. He noted that a national center for electronics standards is located in Long Beach.

Wearing apparel/accessories continues to be the top counterfeit commodity seized, according to the CBP. However, other products, such as consumer electronics and pharmaceuticals/personal care, listed as the second and third most fake products seized last year respectively, pose more of a danger to the public, Ruiz stressed.

Though many fake products are sold online, intellectual property theft doesn’t go unpunished, he said. The CBP reports that there were 683 arrests, 454 indictments and 461 convictions regarding crimes involving intellectual property right thefts.

Ruiz added that customs “duties” on imported goods is a major revenue generator for the United States federal government. He said the CBP collects about $30 billion a year from duties on imports with about $10 billion generated at the San Pedro Bay ports. ■

April 2

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2015

tor of see Port of es more rsonnel, trol offiteran of f Investihe U.S. rogram, patrols, ms and for the omplex.

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April 28-May 11, 2015 cooperative group as where I’m at now,” he said. “It’s phenomenal.”

A key priority is keeping abreast of different threats, Hillman said, adding that some of the more common incidents the ports have been looking out for include human trafficking, drug smuggling and active shooter situations.

He said the “threatscape” at the ports also includes natural disasters, such as earthquakes, hurricanes and storms that have the potential to damage port infrastructure and disrupt the flow of containers. The ports also deal with hazards, including fires, as well as criminal incidents that may take away resources from other areas, Hillman said.

In recent months, a big challenge has been dealing with port congestion caused by a labor dispute last year, Parsons said. Though port officials have confirmed that traffic is back to normal, the ports have had to adjust their security procedures to monitor the increased ship, rail and truck activity in dealing with the backlog of cargo, he said.

“We just have to be a little more vigilant of all those areas of the water, rail and trucks and keep a closer eye on how the transportation is moving,” Parsons said. “From a security perspective, we don’t particularly like it when things cluster together.”

Several hundred closed-circuit television (CCTV) cameras placed throughout the entire San Pedro Bay port complex enable both ports to monitor concentrations of vessels, trains and trucks, he said.

“We can use our systems to train on the areas that are the busiest,” Parsons said.

“Our communications centers keep watch on the cameras and they can direct either patrol boats on the water or landside patrol to any areas where we see problems starting to arise.”

Hillman said both ports are also concerned about the international “scheme of things” and if there are any “organized groups” that would want to disrupt commerce.

International threats are particularly concerning for the cruise ship industry, he said, adding that 432,000 passengers may be coming and going out of the Port of Los Angeles from cruise ships on a yearly basis, becoming a target for terrorism.

Since 9/11, law enforcement has been required to escort cruise ships in and out of the harbor, Hillman said. However, security measures at cruise ship terminals have been “considerably enhanced” in the last two years, he said.

“In order to be able to get in front of any potential threat, there is a very high profile

SAN PEDRO BAY PORTS

Long Beach Business Journal 35

Michael Hillman, a 42year veteran of the L.A. Police Department and former assistant sheriff for the Orange County Sheriff-Coroner Department, was hired in 2013 as assistant chief of the L.A. Port Police.

In partnership with the State of California Emergency Management Agency and the U.S. Department of Homeland Security, the Port of Los Angeles has developed the country’s first Maritime Law Enforcement Training Center (MLETC), located at 300 E. Water St. in Wilmington, to train state and local law enforcement personnel. MLETC training staff is comprised of members of the Los Angles Port Police, Los Angeles County Sheriff’s Department, Los Angeles Police Department and Long Beach Police Department. (Photograph by the Business Journal’s Evan Patrick Kelly)

presence that we maintain in and around the cruise ship industry,” Hillman said.

He said the ports are also enhancing capabilities to search for “radiological materials” on container ships. Recently, both ports collaborated with various local law enforcement agencies, including the FBI, to launch a new radiological scanning system, Hillman said.

The new technology, which has already been in place at ports on the East Coast, involves being able to scan ships out on the water for nuclear material, using highly sophisticated devices, he said. In the future, the ports hope to utilize advanced “aviation resources” to be able to scan ships before they even enter the harbor, Hillman said.

Another major concern for security is the potential for “cyber attacks,” he said, adding that both ports have dedicated major resources in recent years to protect online data and develop a “cyberhood watch program” in collaboration with the FBI. Through the program, the ports have been able to recruit various terminal operators and tenants to share information about any online intrusions. These cyber attacks, which may occur thousands of times per day, are then communicated to the ports to be mitigated by their information technology (IT) systems and shared with the FBI for further investigation, Hillman said.

“We are attacked thousands of times a day . . . from a variety of different countries and sources from all over the world, but we have the infrastructure and the firewall to be able to mitigate that,” he said. “Both the ports of Long Beach and Los Angeles are working very, very collaboratively with the FBI.”

Last year, the Port of Long Beach began implementing its Virtual Port program, which enables the port to integrate about 50 different public data sets, such as weather, tides and shipping schedules, into a “one-stop” online source, generating a complete operational floor plan of activity in and around the port complex.

Parsons said the Virtual Port program, which was developed with the help of numerous local, state and federal law enforcement and public safety agencies, continues to evolve as more data sources are added.

The program assists with “incident management, business continuity and resiliency.”

A main goal for port security, Parsons added, is to “identify patterns and trends of activity or behaviors that seem out of the ordinary.”

Being at the forefront of technological advancements enables the ports to allocate most funding toward operating and maintaining systems that are already in place, he said. However, Parsons added that, “technical assets can never replace personnel.”

The ports dedicate funding for security equipment and personnel through their operating budgets while also receiving federal grants through the Port Security Grant Program and the Urban Areas Security Initiative, both administered by Federal Emergency Management Agency (FEMA).

“It’s a balance of what kind of people and what kind of equipment we need, to stay ahead of the game in the port environment,” Parsons said. “We take that balancing act very seriously.” ■

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World Trade Week Events Calendar May 2015 Calendar Information Provided by the Los Angeles Area Chamber Of Commerce www.lachamber.com May 1 Southern California Welcome Luncheon with Prime Minister Shinzo Abe Noon – Millennium Biltmore Hotel 506 S. Grand Ave., Los Angeles Contact: jas-socal.org or 310.965.9050 Japan-U.S. Economic Forum 1-3 p.m. – Millennium Baltimore Hotel 506 S Grand Ave., Los Angeles Contact: lagexpt@jetro.go.jp or 213.624.8855 www.jetro.go.jp May 2 U.S.–Myanmar Exchange & Gala Dinner 5:30-10 p.m. – Hilton Los Angeles 555 Universal Hollywood Dr., Universal City Contact: anaing@netmaa.org usmmexchange.com May 5 89th Annual World Trade Week Kickoff Breakfast 7:15-10:30 a.m. – Beverly Hilton Hotel 9876 Whilshire Blvd., Beverly Hills Contact: Jgonzalez@lachamber.com www.worldtradeweek.com 2015 Los Angeles Trade Numbers Exclusive Insights & Trends 10:30-11:30 a.m. – Beverly Hilton Hotel Executive Meeting Center 9876 Whilshire Blvd., Beverly Hills Contact: tpanzardi@worldcityweb.com www.ustradenumbers.com May 6-7 USDOC Export Regulations Seminar Radisson Hotel Newport Beach 4545 MacArthur Blvd., Newport Beach Contact: Tatyana.Aguirre@trade.gov www.export.gov/irvine May 7 Global Trends & Economic Forecast 10:30 a.m.-1:30 p.m.

DoubleTree by Hilton Torrance 2133 Hawthorne Blvd., Torrance Phone: (310)540-5858 torrancechamber.com Recurrent Product Code Review Processing Update and Requirements Affirmation of Compliance Overview 8 a.m.-4 p.m.

El Camino College Business Training Ctr. 13430 Hawthorne Blvd., Hawthorne Contact: la.cbffa@verizon.net www.lacbffa.org

May 13 Diplomacy Begins Here Summit 8:30 a.m.-6 p.m.

Loyola Marymount University 1 Loyola Marymount University Dr. Los Angeles Contact: jelliott@ivcla.org or 213.388.1428 www.ivcla.org Shenzhen – Los Angeles Innovative and Entrepreneurial Environment Conference 5:30 p.m., Hotel Irvine, Salon B 17900 Jamboree Rd., Irvine Contact: sunnygao@shenzhenoffice.org 213.628.9888 • www.shenzhenoffice.org May 14 USA – Global Synergy Consul Generals Dinner 5:30-9 p.m.

City Club Los Angeles 555 S. Flower, 51st Floor, Los Angeles Phone: 213.620.9662 Orange County World Trade Week Breakfast & Forum 8 a.m.-Noon Hilton Irvine. 18800 MacArthur Blvd, Irvine Contact: acrouch@irvinechamber.com www.irvinechamber.com Air Cargo Day: 4th Annual Trade Show & Conference 11 a.m.-2 p.m.

Proud Bird Restaurant 11022 Aviation Blvd., Los Angeles Contact: amygrat@itepinc.org or 818.421.4843 www.laaca.us May 15 The 89th Annual World Trade Week & International Trade Delegates Luncheon and Trade Fair 8:30 a.m.-1:30 p.m., Hilton Long Beach 701 W. Ocean Blvd., Long Beach foreigntradeassociation.com May 16 Waves n’ Wheels/ Free Harbor Boat Tours 10 a.m.-3 p.m.

Location 1: Banning’s Landing 100 E. Water St., Wilmington Location 2: Downtown Harbor 600 Sampson Way, Berth 84, San Pedro www.portoflosangeles.org

May 16-17 International Conference on Cyber Security Pine Room Commons (CSUSB) 5500 University Pkwy, San Bernardino Contact: iccs@iaasse.org iccs2015.iaasse.org May 19 What you Need to Know to Comply with FDA Requirements 8:30-11 a.m., Holiday Inn Torrance 19800 S. Vermont Ave., Torrance Contact: info@foreigntradeassociation.com www.fda.gov May 19-23 21st Annual Inland Empire World Trade Conference Marriott Hotel 3400 Market St. Riverside Contact: www.ciedec.com May 20 Introducing the ASEAN Economic Community 8 a.m.-3 p.m., Crowne Plaza Los Angeles Harbor Hotel 601 S. Palos Verdes St., San Pedro Contact: jcoronel@portla.org www.asean.org May 21 What You Must Know to Protect Your Intellectual Property in China 8 a.m.-4:15 p.m.

UC Irvine School of Law, EDU 1111 401 East Peltason Dr. Irvine Contact: Jason.Sproule@trade.gov or 949.660.7105 cs.decsocal.org/ipchina.html May 27 Global Market Opportunities Workshop 8-11:30 a.m., The Grammy Museum 800 W. Olympic Blvd. #245, Los Angeles Contact: joel.perler@polb.com May 28 18th Annual International Business Luncheon 10:30 a.m.-1:30 p.m.

Sacramento Convention Center 1400 J St., Sacramento Contact: www.norcalwtc.org

Thank You Advertisers The following companies and public sector entities made the 2015 Focus On International Trade possible: • California State University, Long Beach • Crowley • Eastern Car Liners (Americas) • FuturePorts • Long Beach Container Terminal • Moffatt & Nichol • Pacific Crane Maintenance Company • Pasha Stevedoring & Terminals • Port of Long Beach • Port of Los Angeles • Ports America • TruckingWebCam.com – Long Beach Business Journal

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