October 14-27, 2014 Section A

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lbbusinessjournal.com

October 14-27, 2014

Going Green New Mandates Loom For Recycling ■ By SAMANTHA MEHLINGER Senior Writer ssembly Bill (AB) 1826, approved by Gov. Jerry Brown in September, expanded on existing solid waste recycling regulations and added new organic waste recycling requirements for businesses, including multifamily buildings with five or more units. The City of Long Beach already has organic and solid waste recycling programs in place that may help local

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Hilda Sanchez Elected Chair Of The DLBA Hilda Sanchez has been elected chair of Downtown Long Beach Associates (DLBA) Board of Directors. The DLBA is the nonprofit organization overseeing downtown’s business improvement district on behalf of tenants and commercial and residential property owners. Sanchez operates Minuteman Press, located at 137 W. 5th St., which she opened with her husband in 2002. She has been a member of the DLBA’s board since 2008. In a letter posted on the DLBA’s website, Sanchez said as chair she is going to focus on business recruitment and retention. “The East Village has become a true destination for shoppers, the energy on Pine Avenue is moving further north and the Promenade is a foodie delight, but there are still plenty of storefronts to be filled.

There is always room to improve our shopping and dining scene, and I look forward to directing our efforts toward this goal,” she wrote. To learn more about the DLBA, visit w w w. d o w n t o w n longbeach.org.

(Photograph by the Business Journal’s Thomas McConville)

High Tech L.A. Area’s Hidden, Hard-Wired Tech Ecosystem: 368,000 Jobs And $108 Billion In GDP ■ By MICHAEL GOUGIS Contributing Writer os Angeles isn’t all about L Hollywood, movie starlets and media moguls. The region is a hard-wired, high-tech network, and that segment of the region’s economy is the largest tech employer of any metro area in the nation, according to a new report.

The high technology sector is a major financial component of Southern California’s economic

Retail Sales

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Long Beach Women Sound Off On What Fostering A Sustainable City They Want When It Comes To Shopping Options ■ By SAMANTHA MEHLINGER Senior Writer very year, the City of Long Beach’s Office of Sustainability and its corresponding Sustainable City Commission with community representatives from each council district, create a set of priorities for sustainable efforts to support throughout the year. These priorities are outlined in the Sustainable City Commission Work Plan as well as in a corresponding plan for city staff in the sustainability department.

Priorities typically align with projects rolled over from previous years or projects being worked on in conjunction with other city depart-

E

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Presented By The Long Beach Business Journal • October 2014

FOCUS ON THE GOODS MOVEMENT INDUSTRY

■ By BRANDON FERGUSON Staff Writer ecent murmurings from city officials suggest Long Beach is losing out when it comes to generating sales tax revenue.

At the September 9 meeting of the city council, 5th District Councilmember Stacy Mungo said by some estimates the city is missing out to the tune of $18 million annually.

In recent discussions with the Business Journal, the city’s director of the new economic and property development department, Mike Conway, said that, in comparison to other Los Angeles County cities, Long Beach is falling behind when it comes to generating sales tax revenue.

Conway explained Long Beach plans to develop some of its former redevelopment agency

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FOCUS ON THE GOODS MOVEMENT INDUSTRY See Section A Pages 25-40

properties, adding that, while the city wants to adhere to the wishes of residents in developing the properties, it also wants to boost its flagging sales tax

revenue with the projects it chooses.

This got staffers at the Business Journal wondering about the (Please Continue To Page 8)

health, responsible for more than nine percent of the jobs in Los Angeles County, according to “High Tech in LA – Its Employment and Economic Contribution in 2013.”

The analysis, conducted by the Los Angeles County Economic Development Corp.’s Institute for Applied Economics, concluded that the high tech sector was responsible for more jobs than the entire manufacturing sector in Los Angeles, three times the number of jobs that the construction industry generates – and five times the number of jobs in the arts and entertainment sector.

Christine Cooper, vice president, Economic and Policy (Please Continue To Page 18)

BNSF Trial Date Set For Lawsuit Against Proposed Railway Project ■ By BRANDON FERGUSON Staff Writer hile at least one public W official has openly hinted at a potential settlement in

■ By BRANDON FERGUSON Staff Writer

of what voters need to know about these propositions before stepping into the ballot box.

his November, in addition T to selecting various public officials, voters will decide the

Will Prop 1 Provide Water For Drought-Stricken State, Or Leave Residents All Wet?

fate of six statewide Propositions.

Issues include a massive bond measure to fund water-related programs, increased regulation of the healthcare industry to Indian gaming compacts. Here’s a breakdown

Proposition 1, which is supported by Gov. Jerry Brown and the California Chamber of Commerce (CalChamber), would authorize the sale of $7.1 billion

the city’s lawsuit against Los Angeles and the BNSF railroad, for now Long Beach is rolling ahead with plans to litigate.

Assistant City Attorney Michael Mais recently told the Business Journal a trial date of November 16, 2015, has been set, at which time a judge will hear claims by several entities that BNSF and the City of Los Angeles violated the California Environmental Quality Act by approving a $500 million rail yard project in Wilmington.

BNSF plans to build the railyard near the Terminal Island Freeway between Sepulveda Boulevard and Pacific Coast Highway. Opponents of the proj-

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California Votes A Breakdown Of The State Ballot Propositions For November Election

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INSIDE THIS ISSUE 2 Long Beach Business Journal

October 14-27, 2014

4 Newswatch 4-Mayor Issues Recommendations For City Commissions 4-Long Beach City Hall News In Brief 8-Urban Land Institute’s Report On Waterfront 8-Jane Netherton Recognized By Marathon’s Run Racing 10-MemorialCare Foundation Acquires Imaging Centers 11-Dining, Entertainment Permitting For Downtown Revised

12 Going Green 12-Recycling Deadline Looms, continued from Page 1 14-Fostering A Sustainable City, continued from Page 1

16 Mobility 16-Pedestrian Planning Efforts Underway For Parts Of City

18 The Tech Sector 18-Hi-Tech Jobs Lead Nation, continued from Page 1 18-New App Schwag, Aims To Drive Customers To Your Site

20 Ballot Propositions 20-Propositions On November Ballot, continued from Page 1 20-Future Home Of LBCC’s Nursing Department

22 Perspective Realty Views Foreign Real Estate Investment On The Upswing

By Terry Ross Effective Leadership Google’s Eight Ways To Build A Better Boss By Mick Ukleja HealthWise Breast Care 101 – Mammograms And Prevention By Dr. Homayoon Sanati EarthTalk Palm Oil Production And Rainforest Destruction

Inserts The Goods Movement Industry and Celebrating The 20th Anniversary Of Community Hospital Long Beach

@LBBizJourn GET ALL THREE FOR FREE . . .

DIGITAL DIGIT TAL

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NEWSWATCH 4 Long Beach Business Journal

Mayor Garcia Announces Several More Commission Appointments

CBA Center For Student Success: Putting Student Success First Student success is the main focus for the College of Business Administration’s (CBA) Center for Student Success. The Center is both an advising and student resource center that provides comprehensive academic advising and academic support, and promotes personal

By Dr. Jennifer Ames Osborne, Director, and academic success to all College of Business business majors.

Administration’s The Center has a “team” Center for of advisors prepared to Student Success ensure continuity and consistency of academic information provided to undergraduates. Collaboration with faculty, staff, and students, as well as other advising units has allowed the center to build relationships on a collegial level putting student success first. The main goal of our Center is to ease transition, increase graduation rates, and focus on career preparedness. This year, the Center received the 2014 CSULB Outstanding Improvement in Student Success Award for outstanding improvement in Student Retention and Graduation Rates.

Through our Center, students receive services such as assistance with registration, use of campus resources, major and General Education graduation requirements, study abroad, program planning, walk-in quick question advising, course substitutions/equivalencies as well as Mandatory Freshmen and Transfer Advising workshops to help new students plan for academic success, as well as provide continued guidance through graduation. In addition, we provide prospective students the opportunity to learn about necessary preparation and admission criteria to become a CSULB business student through Transfer Admissions Workshops and Preview Days.

Our next outreach event is our CBA Open House, scheduled for Saturday, October 4, 2014.

The focus of the Open House is to welcome prospective students to CSULB and provide them with information on what CBA offers and an overview of our admission process. Students will learn about CBA programs and requirements from faculty, staff and current students.

Participants will learn about the type of professional development and internship opportunities available through the Student Center for Professional Development and a multitude of student organizations. Members of Associated Business Students Organization Council, as well as representatives of campus life and resources will be available to share how students can get involved in activities for career building and professional networking.

(The College of Business Administration at Cal State Long Beach is an AACSB accredited business school that provides undergraduates and MBAs with the knowledge and skills necessary to be successful in their careers and to propel the economic development of our region.) ■

■ By BRANDON FERGUSON Staff Writer Last Week Mayor Robert Garcia announced his recommendations for 13 commission appointments. If approved by the city council, the appointees will fill positions on five different governing bodies: The Long Beach Planning Commission, The Long Beach Transportation Company Board of Directors, The Airport Advisory Commission, The Marine Advisory Commission and the Long Beach Community Investment Company.

Individuals recommended by Garcia represent a wide range of backgrounds from environmental business leaders, to city planners. Two appointees have union backgrounds – Jane Templin is vice president of the International Brotherhood of Electrical Workers Local 11, and Gerald Avila is the health benefits officer for the International Longshore Workers’ Union Local 13. Templin is recommended for a position on the planning commission, and Avila, a position on the marine advisory commission.

“I’m proud to appoint a slate of exceptional community leaders who love Long Beach and have the experience to move our city and our commissions forward,” Garcia said in a statement. “Commissions are an important part of our democracy, and I’m thankful to these citizens for their willingness to serve.”

Of the 13 proposed appointments, four are recommended

-October 14-27, 2014 for the planning commission – these will go before the civil service committee for review before being considered by the city council. The rest, which are non-charter appointments, will go before the city council for approval on October 21.

The list of appointees by commission is as follows, along with the number of members and the commission’s purpose as listed on the city’s website: Planning Commission (7 members; advises the mayor and city council on all matters affecting development of the city’s general plan, zoning, and ordinances to guide the implementation of long range planning) – Mike Logrande, Andy Perez, Jane Templin, Erick Verduzco-Vega.

Long Beach Transportation Company Board of Directors (7 members; to operate a public transportation system in the City of Long Beach and surrounding areas; to purchase, acquire, lease, finance, maintain, expand, and supervise the system and all related matters) – April Economides, Sumire Gant, Nancy Pfeffer, Mary Zendejas.

Airport Advisory Commission (9 members; works closely with the community, aviation groups, businesses, pilot groups and airport staff in order that they may effectively advise the mayor and city council on policy matters regarding the Long Beach Airport development) – Jeff Anderson.

Marine Advisory Commission (9 members; advises city council in formulating policies, analyze special requests, conduct hearings of appeal, and study problem areas involved with the city’s beaches, marinas and waterways. ) – Gerald Avila, Peter Schnack.

Long Beach Community Investment Company (7 members; advises the mayor and city council on development and community investment) – Russ Doyle and Sabrina Sanders.

Long Beach City Hall News In Brief ■ By BRANDON FERGUSON Staff Writer

Jonathan Jaques Children’s Cancer Center (JJCCC) patients, families and supporters prepare to greet Long Beach firefighters, police officers and lifeguards with warm towels after the 28-mile long Catalina Swim Challenge. The relay race started at 9 p.m. on October 3 from the shores of Catalina Island. In all there were five teams, consisting of 33 swimmers and 15 paddlers. The racers took turns swimming 30-minute legs with paddlers and six boats in the water next to them to monitor for sharks. Funds raised from the relay benefit pediatric cancer research progams at JJCCC at Miller Children’s Hospital Long Beach.

(Photograph provided by Miller Children’s Hospital)

Special Council Meeting – Tonight (October 14) the council holds the second in a series of study sessions focused on plans to build a new civic center complex. The meeting includea presentations by the two companies bidding to design and build the proposed center: Long Beach CivicCore Alliance and Plenary-Edgemoor Civic Partners. The meeting is at 4 p.m. in city council chambers at city hall.

Marijuana Businesses – The planning commission considers on October 16 an item recommending the city council establish conditions and prohibitions on the establishment and operation medical marijuana businesses. If approved, a limit of two such businesses would be allowed in each of the city’s nine council districts. Marijuana businesses would not be allowed in residential zones. The planning commission meets at 5 p.m. in the city council chambers.

Technology Commission – Tonight, the city council con(Please Continue To Next Page)

Pictured are the members of the Long Beach Fire Department Recruit Academy 2014A Class. Front row from left are (last names only were provided to the Business Journal): Abbott, Nguyen, Corlett, Trgovac, Meng, Veyna, Lam, Metzbrown, Crawford, Metz, Montero, Chonka, Wu and Vasquez.

Back row from left are: Brown, Greer, Moss, Pena, Ortiz, Jackson, Eng, Daniel, Sweeney, Ferguson, Webb, Olmstead, Garcia and Lawson.

(Photograph provided by the City of Long Beach)

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NEWSWATCH October 14-27, 2014

siders an ordinance to establish a technology and innovation commission. The commission was first mentioned as part of Mayor Robert Garcia’s budget recommendations, which were announced in July.

According to the ordinance, the purpose of the commission is to advise the city council on new technology, assess new technology to assist the city in improving efficiency as well as support and assist in the strategic direction and implementation of information technology and communication.

Business Improvement Districts – Two items on tonight’s (October 14) regular city council agenda focus on two of the city’s business improvement districts. First, the

Long Beach Business Journal 5

council will decide whether or not to approve the Long Beach Tourism Business Improvement Area program (LBTBIAP) assessment for FY15. The city estimates the district, which benefits the city’s convention and visitors bureau (CVB), will generate $4,240,950. In its annual report, the LBTBIAP reported that during FY13/14 the CVB participated in 29 sales shows nationwide, conducted four sales missions in an effort to bring conventions to Long Beach and conducted five “familiarization trips.” The latter are aimed at familiarizing meeting planners from across the country with the Long Beach area in an effort to bring conventions to town.

EASBA Renewal – The city council will also consider approving the assessment for the East Anaheim Street Parking and Business Improvement Area for FY15.

District boundaries are: Junipero Avenue to the west, Pacific Coast Highway to the east, 11th Street to the south, 14th Street to the north. Estimated revenue for the fiscal year is approximately $140,000.

Tracking Commission Appointments – The council received a report from the mayor’s staff on a new system for tracking commission appointments and receiving commission applications. The new system was introduced at the council retreat held on August 16. The system was launched

last week and is viewable on the city’s website. The new system allows visitors to the website to view commission descriptions and vacancies, and easily apply for openings online.

Crossing Guards – On October 7, the Long Beach City Council voted 8-0 to request City Manager Patrick West to provide a report within 60 days on the status of the Pedestrian Safety Advisory Committee and an overview of the city’s school crossing guard program. Long Beach voters established the pedestrian safety advisory committee in 1978 to oversee the installation of adult crossing guards at hazardous (Please Continue To Page 6)

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NEWSWATCH 6 Long Beach Business Journal

Long Beach City Hall News In Brief (Continued From Page 5)

crossings. The committee is comprised of a representative from each council district a representative of the Long Beach Unified School District, the city’s traffic engineer a representative of non public schools in the Long Beach area and the president of the parent teacher association in Long Beach.

Fourth District Councilmember Patrick O’Donnell was absent for the vote.

Beach Path – At its October 7 meeting the city council voted 8-0 to authorize construction of 3.1-mile-long pedestrian path north of the existing bike path north along shoreline. The vote awarded the contract for the 11-foot-wide path to Powell Constructors Inc. of Fontana. The amount of the contract is not to exceed $6,347,655.

According to city documents, the path is to be constructed from a resin-based surface less rigid than concrete and better suited to walking and running. The project is expected to involve relocating portions of the existing bike path inland at a few locations and include new pedestrian and bicycle ramps at the Belmont Veterans Memorial Pier.

NAACP Park – By a vote of 8-0, the city council voted on October 7 to approve a recommendation to name the park located at 2300 Martin Luther King Jr. Ave. the National Association for the Advancement of Colored People (NAACP) Freedom Park. The agenda item was sponsored by

October 14-27, 2014 3rd District Councilmember Suzie Price, Councilmember O’Donnell and 7th District Councilmember Dee Andrews. The recommendation will now be considered by the City Council’s Housing and Neighborhoods Committee and the Long Beach Parks and Recreation Commission.

If approved, this will be the first park named in honor of the NAACP in the United States.

Memorial Park – The city council considers naming a public right of way park located on Walnut Avenue at 20th Street the Jenni Rivera Memorial Park. Rivera is a Latin Grammy nominated singer who was born in Long Beach. In 2010, she was named a spokeswoman for the national coalition against battered women and domestic violence.

Affordable Senior Housing – The city council voted 8-0 to adopt a resolution approving the issuance of $13,000,000 worth of revenue bonds by the California Municipal Finance Authority (CMFA).

The bonds are being issued on behalf of the Volunteers of America, which provides nursing care for the elderly and operates convalescent centers nationwide.

Proceeds from the bonds will fund the acquisition and rehabilitation of a 75-unit multi-family senior rental housing facility located at 1451 Atlantic Ave. The project will remain affordable to low-income seniors for a period of 55 years. Though no city funds will be used to support financing of the project, the IRS requires the CMFA to seek approval from the city

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NEWSWATCH October 14-27, 2014 council in order to issue bonds benefiting city facilities. Councilmember O’Donnell was absent for the vote.

Health Plan – By a vote of 7-0 the city council approved renewal of contracts with Anthem Blue Cross and other organizations providing health care insurance, as well as dental and eye care insurance for city employees. The city’s projected cost for health care, dental, vision and life insurance for Fiscal Year 2015 (FY15) is estimated at $66.5 million.

Councilmembers O’Donnell and Andrews were absent.

Gulfstream – The city council considers tonight authorizing City Manager West to execute the seventh amendment to the lease agreement between the city and Gulfstream Aerospace Corporation.

Since 1987 the city has leased property located at 4150 Donald Douglas Dr. to Gulfstream, which operates the only Gulfstream Service Center on the western coast of the United States. The current lease expires on March 23, 2018.

However terms of the lease allow two five-year extension options. As part of the amended agreement, the city seeks to reclaim a 13,000-square-foot rectangular area outside the Gulfstream security fence to be used for future improvements to traffic lanes on Donald Douglas Drive.

According to city documents, Gulfstream is agreeing to the request.

Covered California – At tonight’s meeting, the city council considers authorizing City Manager West to enter

Long Beach Business Journal 7 into an agreement with the California Health Benefits Exchange to accept funding in the amount of $225,267. The money will be used to facilitate outreach, enrollment and retention into the health insurance programs offered through Covered California. If approved, the authorization allows for a one-year renewal and cash bonus contingent upon achieving enrollment goals.

Community Challenge – Tonight the city council considers requesting City Manager West to work with the administration of President Barack Obama to provide a report within 90 days on the program known as My Brother’s Keeper Community Challenge. The report focuses on matters related to youth jobs, internships, living wages and violence prevention for boys and men of color in Long Beach.

The My Brother’s Keeper Initiative was launched by President Obama in February 2014 to address opportunity gaps faced by boys and young men of color.

Parking Meter Revenue – At its October 16 meeting, the Belmont Shore Parking and Business Improvement Area Advisory Commission is considering an item to transfer $2,200.46 of collected parking meter revenue to the Bay Shore Library. The meeting begins at 9 a.m. and takes place at the Bay Shore Library 195 Bay Shore Ave. City Council Meeting Cancelled – The city council voted 8-0 to cancel the November 4 meeting in observance of election day in California. ■

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NEWSWATCH 8 Long Beach Business Journal

October 14-27, 2014

Urban Land Institute Releases Final Report On Waterfront Revitalization is to identify a way to move forward with the suggestions.

“I’ll be working with [the public realm committee to] prioritize the recommendations and identify an action plan. Kind of identify what we’re already doing, or what can we do now, what can we do within the short, mid term and long term,” Warner said.

According to Warner, the public realm committee will review the report’s recommendation for 60 days and develop an action plan. The plan will be presented to the DLBA Board of Directors at a public meeting in December. ■

■ By BRANDON FERGUSON Staff Writer Last week the Urban Land Institute (ULI) released its final report outlining suggestions for improved pedestrian connectivity between downtown and the waterfront area. Included in the morethan-20-page document were suggestions to deactivate traffic lanes along the Grand Prix route (when the event is not happening), as well as improved wayfinding and signage between downtown and the waterfront.

The waterfront report was commissioned by the Downtown Long Beach Associates (DLBA), which paid roughly $25,000 to the non-profit ULI to conduct a study of the area and make recommendations.

The ULI convened a technical assistance panel (TAP), which spent two days in July and August interviewing stakeholders and residents in the area. The TAP was comprised of a team of urban planners, hospitality industry consultants and architects.

Headed by Richard Bruckner, director of the Los Angeles County Department of Regional Planning, the TAP team issued preliminary findings at an August 1 presentation at the Aquarium of the Pacific.

Specific recommendations in the final report included an examination of the Grand Prix route, which runs along Shoreline Drive. The report suggested a “road diet” for the asphalt strip near Shoreline Village, essentially reducing the number of lanes in use on the street. The eastbound traffic lane on the southside of the Shoreline Drive median would be converted into angled parking spaces and open space for pedestrian activity.

According to the report, this recommendation was made in an effort to “improve the waterfront as a draw for tourists and as a welcoming place for the day-to-day uses of Long Beach’s residents.”

The report also included an examination of the underutilized lot located at the southeastern corner of Pine Avenue and Ocean Boulevard, which could be used as a “vital place for residents and visitors.” Until the parcel is ready for permanent development, the TAP panel recommended using the space for “pop-up” restaurants and farmers markets on weekends. Removal of the construction barrier along Pine Avenue was also recommended.

Multiple physical improvements were suggested along multiple north-south corridors in the downtown core (Alamitos Avenue, Pine Avenue), including signage and wayfinding to “create a seamless user experience for visitors and locals navigating the streets of the area by foot or transit.” The report mentioned, as an example, a program in North Carolina known as Walk Raleigh, which makes use of signage to notify pedestrians of direction and length of walk times to specific destinations.

Other suggestions included pedestrian routes through the performing arts center allowing access to the waterfront, anchoring the Linden Avenue arts district corridor with a café or bike shop and switching the Marina Green space in front of the Shoreline Yacht club with the parking lot to

Women Discuss Shopping Choices (Continued From Page 1)

A rendering of the proposed pop-up park on Pine Avenue between Ocean Boulevard and Seaside Way.

create a more inviting green corridor with scenic views facing the bay.

In order to implement some of the recommendations contained in the report, the TAP panel suggested involvement from city government and coordination among the mayor, city council and city manager.

“Examples of the tasks that may appropriately be considered at this level of management include comprehensively managing parking and open space, negotiating the Grand Prix agreement, moving forward with investments required to improve public open space along Marina Green Park and at Rainbow Lagoon Park, and financing operations and capital improvements in the study area,” the report read.

The Business Journal reached out to Debra Fixen who is the property manager at Shoreline Village to get her opinion on

the report’s recommendations. While she expressed support for a plan to provide more parking along the Grand Prix route, her concerns about potential pop-up restaurants at Pine and Ocean highlight the challenges of pursuing a unified vision among the area’s diverse stakeholders.

“We have a lot of restaurants available downtown, [at] the Pike, [and] here at Shoreline Village. So sometimes that business suffers if you have too many,” Fixen said. “Those [restaurants] are paying big-time rents, whereas somebody that was in a pop-up or food truck would have very little expense.”

Before planning for the area begins in earnest, the DLBA will first hand the report over to its public realm committee.

Sean Warner, placemaking manager for the DLBA, told the Business Journal the goal

kinds of projects and retail choices Long Beach residents would like to see in their town.

“We wanted to try to learn more about where residents spend their money in an attempt to understand where the city’s lost revenue is going,” said Business Journal Publisher George Economides.

“We thought, instead of an expensive city study – which is a typical public sector approach – why not simply ask residents to tell us what they want?,” he said.

“And let’s not worry about being politically correct. We’ve got plenty of lowcost, discount stores. We need higher end stores for those thousands and thousands of residents who are spending their money outside the city.”

This story is part of a series of articles the Business Journal is preparing in an attempt to find answers. For this issue, the Business Journal met with several (Please Continue To Top Of Next Page)

Jane Netherton Recognized By Marathon’s Run Racing

On September 30, the Long Beach International City Bank Marathon recognized Jane Netherton for her role in the race with a bench dedicated in her name in Rainbow Harbor. Netherton is the former president and CEO of International City Bank and is currently the bank’s chair emeritus. Fourteen years ago, the bank began sponsoring the marathon under Netherton’s leadership. “I believed in what the marathon stood for, and I could see its potential,” she recalled of her decision to sponsor the marathon. “It has benefited the city by the positive attention it brings. It brings people from all over,” she said. Bob Seagren, CEO of Run Racing, the organization that puts on the marathon, said Netherton played an integral role in growing the event, which grew in attendance from about 4,500 people to 22,000 since the bank’s first year sponsoring the event. “Jane has been our biggest champion.

We are very thankful for her support over the years,” Seagren said. Netherton has attended the marathon every year since International City Bank became its sponsor. (Photograph by the Business Journal’s Thomas McConville)

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NEWSWATCH October 14-27, 2014

Long Beach Business Journal 9

Assistance League of Long Beach volun- They moved all of their home shopping teers: Annette Kashiwabara, Pam Karam, there and now you can do everything in one Linda Drummond, JoAnn McDonald and shot. Pottery Barn Teen is there now, West Jane Jackson. These women range in age Elm, Williams Sonoma is opening up from their mid 40s to early 70s. The soon,” Karam said, referring to the western Business Journal also spoke with Joen wing of South Coast Plaza, attached to the Garnica who is in her 30s. A resident of main mall by a pedestrian overpass bridge.

Downtown Long Beach for 12 years, Describing the parking situation along Garnica owns an interior design business, 2nd Street in Belmont Shore as difficult, Garnica Interiors, located at 216 The Karam explained she will oftentimes Promenade North. bypass area stores she typically likes, such Why start with women? Studies have as Gap and Banana Republic. shown that more women shop in stores But parking issues aside, Long Beach while most men shop online. But men, too, may have other drawbacks in terms of its will be interviewed for this series. limited space. The women interviewed for The overwhelming message that came this article agreed that they wouldn’t want from speaking with the six women is that, to see their favorite stores scattered all over while they might shop regularly in Long town – a Nordstrom in Bixby Knolls and a Beach for groceries, it’s a different story Williams Sonoma in Belmont Shore. when it comes to shopping for clothes, “You need the anchor department store, gifts and home goods. The allure of shop- then you need to surround it with the Gaps, ping centers in Los Alamitos, as well as the J. Crews, throw in a Kate Spade, Coach, the Los Cerritos Center and particularly a Pottery Barn, Williams Sonoma and peoSouth Coast Plaza in Costa Mesa, exert a ple will go,” Karam said. powerful pull for women with discreGarnica, while echoing a lot of what tionary incomes who like to shop. was expressed by the other women, told “I am a shopper. It’s one of my favorite the Business Journal she appreciates some things to do. Even if I of the independent shops have no intention of buyin the East Village Arts “You need the anchor ing, I enjoy just looking District. around,” said Drummond.

“I shop the East Village department store, then “If you are talking for clothing, but I do feel you need to surround it there is a need and a place about clothes, there’s Nordstrom in Cerritos or for the national brands,” with the Gaps, the South Coast,” Drummond she said. added.

Garnica lamented the J. Crews, throw in a Kate Jackson, who despite recent loss of Nordstrom not being much of a shop- Spade, Coach, a Pottery Rack, located on The per said she still prefers Barn, Williams Sonoma Promenade North, which to head down the 405 picked up stakes and left freeway when she does town early this year. and people will go.” decide to shop.

“I used to like having “I usually go to South Long Beach Resident Pam Karam the Rack there. The indeCoast. And if I want a pendents have a certain nice day, I will go to Fashion Island. I love look that I think is great, but there are the stores there. I will go to Cerritos for always random little things that those shops Nordstrom,” Jackson said. may not have. So having an option like the Kashiwabara said with her full-time Rack in the downtown was certainly helpwork schedule she likes to shop where ful,” Garnica said.

Garnica added that she’ll make the trip it’s efficient, which means a lot of online purchasing. But when she visits brick up the 605 to go to the Cerritos Mall for and mortar stores, she often finds herself things like clothing and dress shoes. She visiting spots in Seal Beach or Los further explained that Long Beach has Alamitos. Her favorite clothing store is fewer options these days when it comes to Chico’s in Rossmoor. There used to be a purchasing home goods for her interior Chico’s location on 2nd Street in design clients.

“Unfortunately we’ve had a loss in Belmont Shore, but it closed a couple of retail,” Garnica said, adding that the nowyears ago, she noted. closed Z Gallerie on Pine Avenue was a fre“If it’s for a wedding gift or something like that, I go to Macy’s. If it’s for really quent destination. “Now I would say a lot nice dress-wear, then I will go to of my home décor goods are purchased at Nordstrom at South Coast Plaza,” she said. South Coast Plaza. They have a ton of When asked about what makes spots like home goods stores.”

Garnica expressed frustration at the slow South Coast Plaza so appealing, the answers ranged from the variety of stores progress of a retail center proposed at the to the offering of high-end goods – some- intersection of 2nd Street and Pacific Coast Highway. Developer Taki-Sun Inc. has thing Long Beach lacks.

“I think South Coast has all the high-end plans to build a retail center, known as The stores that kind of balance our bargain Shoppes at 2nd and PCH, where the aging shopping [in Long Beach] at Marshall’s SeaPort Marina Hotel currently stands. The developer is waiting for the city to conduct and Home Goods,” McDonald said.

Karam, who shops often with her 16- an environmental impact review before the year-old and 11-year-old daughters, echoed project can proceed – a bureaucratic this sentiment, explaining spots like South process that can be frustrating to busiCoast Plaza and Fashion Island in Newport nesses and consumers alike.

“Long Beach is one of the biggest cities Beach represent a one-stop option for all in California that doesn’t have a big preshigh-quality merchandise.

“You hit South Coast Plaza, or you hit ence of these national department stores,” now what they call South Coast Plaza West. Garnica said. “It’s pretty sad.” ■

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NEWSWATCH 10 Long Beach Business Journal

MemorialCare Medical Foundation Acquires Imaging Centers In Long Beach And Orange County ■ By SAMANTHA MEHLINGER Senior Writer In early October, the MemorialCare Medical Foundation, the physician group division of MemorialCare Health System, announced it had acquired eight freestanding imaging centers throughout Long Beach and Orange County to better service its growing patient base spanning from Torrance to San Clemente. The health care system now owns nine imaging centers in this area, three of which are within the City of Long Beach.

“It benefits us by really enhancing our components of health care delivery so we can reach a broader market and be more attractive to our patients with high quality and cost-effective options,” Dr. Mark Schafer, MemorialCare Medical Foundation CEO, said of acquiring the centers.

When the MemorialCare Medical Foundation obtained the remaining 49 percent stake in the company Wave Imaging LLC in the first week of October, it became the sole owner of Wave’s imaging centers in Long Beach, Huntington Beach, Newport Beach, Irvine and Laguna Niguel.

MemorialCare also recently acquired three imaging centers owned by Strategic Medical in Long Beach, Newport Beach and Laguna Hills. “We are interested in Strategic Medical because they have such a great reputation in the community for providing high-quality imaging,” Schafer told the Business Journal. “That company fits really well into our portfolio of imaging, particularly in Long Beach,” he added.

“In Long Beach we now have three imaging locations that are part of MemorialCare.

We have the Long Beach PET Imaging Center, which does PET [positron emission tomography] scans and CAT [computed axial tomography] scans. Then we have one of our original Wave sites, which is in the Long Beach traffic circle, which does MRI [magnetic resonance imaging],” Schafer said. CAT, PET and MRI scans are used to help diagnose internal ailments.

In addition to these centers, Long Beach Memorial Medical Center and Miller Children’s & Women’s Hospital Long Beach have outpatient radiology departments with imaging services. “Between those three locations we have got really great quality sites with broad coverage of the Long Beach area and really high-quality equipment,” Schafer said. “All three locations have state-of-the-art equipment, and cover all the different imaging modalities.”

One of the reasons for investing in freestanding, community-based imaging centers was to provide patients with more affordable imaging services, Schafer said.

“Imaging can be costly, and doing it in a freestanding location tends to be much more cost effective,” he said, explaining that imaging services in hospitals are often more expensive because hospitals charge more to cover overhead costs.

October 14-27, 2014 MemorialCare continues to invest in the Long Beach and Orange County areas due to the opportunity for growth, Schafer said.

“We continue to see more and more patients move from other delivery systems to the MemorialCare system, and we need to be able to accommodate the influx of new patients with physician offices, primary care doctors, imaging centers and surgery centers so our patients have options,” he explained. “In order to do that, we need to expand our delivery system.” ■

BNSF Lawsuit Update (Continued From Page 1)

ect, including the Long Beach Unified School District and the South Coast Air Quality Management District, say the project will lead to an increase in truck traffic and pollution affecting neighborhoods and schools on Long Beach’s westside.

“What everyone is claiming is the city of L.A. and the real parties in interest in BNSF did not do an adequate job when they analyzed the project that they were proposing in terms of the California Environmental Quality Act,” Mais said. “Specifically, they did not do enough to mitigate the negative environmental impacts that they had identified would result from the project.”

In a complaint filed in Los Angeles Superior Court in June 2013, the City of Long Beach argued that by 2035 the project would result in 2 million truck trips at the project site annually – as many as 7,000 trips per day.

In August of 2013, the city consolidated its lawsuit with six other entities. In August of this year, the Business Journal reported Attorney General Kamala Harris joined the suit on the side of those opposing the project.

But though the case continues to move forward, statements made in September by Los Angeles Mayor Eric Garcetti to the LANG News Group editorial board suggest a resolution could be reached before the case goes to trial.

The Business Journal reached out to Mayor Robert Garcia to get his opinion on Garcetti’s statements and whether he thought a settlement was likely, but he declined to comment directly on the pending litigation.

In an e-mailed response, Garcia said that his main interest was in protecting the area most affected by the proposed project.

“I am interested first and foremost in protecting West Long Beach neighborhoods.

This project as presented is not acceptable to the city,” Garcia’s statement read.

Mais meanwhile acknowledged that most cases do get resolved before going to trail.

“The parties are working hard to see if there is some sort of common ground [so] that it can be resolved. Hopefully prior to even the briefing, we will be able to mediate a potential settlement,” Mais said.

Though he said he couldn’t speak about specific requests being made by the city as part of settlement discussions, Mais explained that Long Beach is looking for air quality and sound attenuation measures for residents who will be most impacted by passing trains and trucks. He added that a potential buffer zone created by a partial decommissioning of the Terminal Island Freeway and the addition of an open space area between Westside neighborhoods and the rail yard are also being considered. ■

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NEWSWATCH October 14-27, 2014

Downtown Task Force Revises Permitting Recommendations ■ By SAMANTHA MEHLINGER Senior Writer Following an October 6 meeting, the Downtown Dining & Entertainment District Task Force revised its recommendations for changing the entertainment permitting process for businesses within the district. The revisions are scheduled for release this week (the week of October 13), according to Rachael Tanner, a program specialist in the city manager’s office, and a public meeting is set for October 29.

In September of last year, the Long Beach City Council placed a moratorium on the issuance of entertainment permits to businesses with Type 48 ABC liquor licenses to allow a community task force to reevaluate the way entertainment permits are issued in the district. Businesses with Type 48 liquor licenses are bar and nightclub-type establishments that do not serve food. Type 47 liquor licenses apply to restaurants.

The task force of community stakeholders, made up of residents and business owners in Downtown Long Beach, released a set of recommendations in August and revised those recommendations in early October following input from local community and business groups. To give the task force enough time to complete its recommendations and conduct more community outreach, the city council recently extended the permitting moratorium for another six months.

One of the major shifts in the revised recommendations is that, rather than requiring businesses with Type 47 ABC liquor licenses and Type 48 licenses to apply for both an entertainment permit and a conditional use permit (CUP), only businesses with a Type 48 license engaging in nightclub type entertainment would need to apply for both, Tanner explained.

Entertainment permits are issued by the city’s business licensing bureau, while the planning department issues CUPs. “We are still going to require nightclubs to get a CUP, which is [already] required by the Downtown Plan. How we define nightclubs are establishments that have a full bar, are not restaurants and who have entertainment. We’re looking at basically a Type 48 ABC license, plus entertainment and operating at night,” Tanner said. The revised recommendation addresses concerns from community groups, such as the Long Beach Music Council, which protested the idea of restaurants having to apply for a CUP. Tanner emphasized businesses with Type 48 ABC licenses that only have entertainment a few times a year would be able to apply for a specific type of permit for limited entertainment, rather than having to go through the CUP process. “It allows you to have entertainment a certain number of times per year within days of each other,” she explained.

Long Beach Business Journal 11 While the original recommendations suggested a reduced $5,000 CUP fee for nightclub-type businesses in the district, after consulting with the city’s planning department, this suggestion was determined infeasible, Tanner said. In most cases, the CUP process for nightclub establishments throughout the city costs about $8,500. To maintain parity with the rest of the city, businesses within the Downtown Dining & Entertainment District are likely going to have to pay the same amount, she explained.

Restaurants with Type 47 licenses providing entertainment are only going to have to apply for entertainment permits, as is the current practice, but the task force is suggesting some changes to the permitting process. Under the revised recommendations, all businesses applying for entertain-

ment permits within the district are going to be required to complete a sound study performed by a licensed acoustical engineer to verify that their facilities do not exceed the mandated decibel levels when entertainment is ongoing, according to a draft of the revised recommendations.

Under the recommendations, businesses that already have the required permits and CUPs do not need to obtain new ones, but would need to perform sound studies to ensure they do not exceed the local noise ordinance, Tanner said.

In addition to these changes, the task force is recommending a 50-foot radius rule for judging whether noise emanating from an establishment is unreasonable. If noise from an establishment is inaudible from 50 feet on all sides of a building or is

relatively indistinguishable from ambient noise, the establishment would be considered in compliance with noise regulations, Tanner explained. Currently, if noise is inaudible from the middle of the street, an establishment is considered in compliance.

The task force is holding a public meeting on October 29 at 6:30 p.m. at the Small Business Development Center, 309 Pine Ave., to discuss its revised recommendations. The recommendations are going to be available through the city manager’s web page at www.longbeach.gov/citymanager/. Once the document is posted, residents have a chance to comment on it for about a week prior to the meeting, Tanner said. The task force hopes to have final recommendations approved by the city council by the end of the year, she noted. ■

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1_LBBJ_Oct14_SectionA_LBBJ MASTER LAYOUT 10/13/14 4:16 PM Page 12

GOING GREEN 12 Long Beach Business Journal

Recycling (Continued From Page 1)

small businesses reduce or negate the legislation’s impact on their operations.

Assembly Bill 341, which went into

October 14-27, 2014 effect July 2012, began requiring businesses (including public entities and multifamily units with five more dwellings) generating four or more cubic yards of solid waste – items such as glass bottles, aluminum cans, cardboard and other recycla-

ble solid materials – to arrange for recycling services. AB 1826 broadens this mandate for these entities by including those generating four or more cubic yards of solid waste as of January 2019, and two cubic yards of solid waste by January 2020.

Kerstin Kansteiner, owner of Berlin Bistro and Portfolio Coffeehouse, and Jim Kuhl, manager of Long Beach Environmental Services, load a bin in front of Berlin Bistro with used coffee grounds. The grounds are free for anyone to use for composting in gardens. (Photograph by the Business Journal’s Thomas McConville)

Also, beginning April 2016, businesses and multi-family buildings generating eight cubic yards or more of organic material per week must recycle that material.

For multi-family dwellings, this excludes food waste. By January 2017, the mandate includes entities generating four cubic yards or more of organic waste.

“Organics are what we think of as food waste, yard waste and debris, tree trimmings and those kinds of things,” Jim Kuhl, manager of the Long Beach Environmental Services Bureau, explained.

“Pretty much what ends up in your trash can is solid waste.”

The good news for small businesses such as coffee shops or small restaurants is they likely do not generate enough waste to be impacted by AB 1826 until 2019 or 2020, Kuhl noted. Implementing organic and solid waste recycling now through city programs might help these businesses reduce their waste production to the point that the bill might not impact them at all, he pointed out.

One such program was developed through the Long Beach Office of Sustainability in 2011. “Our office launched a kitchen scrap compost pilot pickup program in 2011 that started with just one restaurant pickup and has now grown to a handful of participating restaurants and coffee shops,” Tiffany Chen, sustainability analyst for the city, said.

Those businesses include Steamed Organic Vegetarian Cuisine, Portfolio Coffeehouse, Berlin Bistro, Ahimsa Vegan Café and The Flea Espresso Bar. “We pick up approximately 80 gallons by

1_LBBJ_Oct14_SectionA_LBBJ MASTER LAYOUT 10/12/14 6:11 PM Page 13

GOING GREEN October 14-27, 2014 volume once a week and drop off to an urban farm, the Growing Experience, in North Long Beach for soil amendment,” Chen said.

Small businesses are the ideal program participant, rather than large organic waste producers such as grocery stores, because they produce only a limited amount of organic waste, Kuhl explained. “There are limits on how much food waste you can take to a facility before you need a special permit,” he said. “Once you exceed a certain amount, that requires a solid waste facilities permit, which is a very expensive and difficult permit to get.” The city limits the amount of organic waste it picks up from businesses each week so the community gardens and farms where it delivers the waste won’t have to apply for these permits, he added.

The type of food waste typically accepted includes only raw fruits and vegetables, eggshells and coffee grounds, Kuhl said. This is because the material is used to enrich soil, and other types of food waste could be harmful to animals scavenging in those areas.

Kerstin Kansteiner owns Portfolio Coffeehouse and Berlin Bistro, both of which, as indicated earlier, participate in the program and are located on 4th Street – Portfolio on Retro Row and Berlin in the East Village Arts District. She is also head of the 4th Street Business Association.

“We have always been concerned about recycling and how to be a better shepherd for our environment. Coffee houses tend to have a clientele that are very conscious

Long Beach Business Journal 13 about this,” Kansteiner said. “We always have to be at the forefront. So we have always had our utensils being corn-based, and our to-go containers are compostable.

We are always looking for the next step.”

When Chen attended a 4th Street Business Association meeting earlier this year, she informed Kansteiner about the city’s organic waste pickup program for small businesses.

Six months ago, Kansteiner enrolled her businesses in the program.

“We are now in a position where we can actually cut our trash pickups here,” she said. “What we also like to see is the full circle. The waste gets picked up here and is brought to a farm. That farm is the very same farm we do vegetable pickups from.

So this is like food that comes back to us in a strange way,” she explained. “For staff and for customers, it is really exciting to hear it [the organic waste] is used within Long Beach, that there is a change being made and that it helps all of us.”

The city, through its contractors, also provides recycling to any business requesting those services. Kansteiner said the services are very useful at Berlin, which consumes “hundreds of gallons of milk every week” in addition to coffee tins.

Kuhl said feedback from the other businesses in the program has been positive.

“There is probably more demand for [the city’s organic waste pickup program] than we have the ability to service because we are limited on how much food waste we can take,” he said. The city is hoping to identify more locations to donate the organic waste

Kerstin Kansteiner, owner of Berlin Bistro and Portfolio Coffeehouse, and Katie Whitesell, chef at Berlin, deposit organic waste from the bistro’s kitchen into a container for recycling. Berlin Bistro and Portfolio participate in a program through the City of Long Beach’s Office of Sustainability in which the organic waste is picked up by the city and used in local urban gardens and farms as compost material.

(Photograph by the Business Journal’s Thomas McConville)

to as AB 1826 is implemented to accommodate increased demand for the program. The issue is that under the new bill, “we believe 30,000 to 40,000 tons of waste a year will be generated,” Kuhl said. “We think we need 40 to 50 acres to compost that much material. That is just not available.”

Still, Kuhl encouraged businesses to participate in the program and ask for recycling containers for their solid waste.

By diverting that waste from their trash bins, they may be able to avoid generating enough trash to have to comply with AB 1826. ■

1_LBBJ_Oct14_SectionA_LBBJ MASTER LAYOUT 10/12/14 6:11 PM Page 14

GOING GREEN 14 Long Beach Business Journal

A Sustainable City (Continued From Page 1)

ments, according to Long Beach Sustainability Coordinator Larry Rich and Sustainable City Commission Chair Daryl Supernaw.

This year, some larger projects the commission and staff hope to tackle include developing infrastructure for environmentally friendly automobile use, continuing to promote waste reduction through city programs, and restoring and developing natural resources in the new Willow Springs Park.

“If you look at this plan, it has the most breadth of any commission,” Supernaw told the Business Journal. “It is so broad that it is great to have staff who can provide in-depth knowledge,” he added.

Green Transportation While the city already has some charging infrastructure for electric vehicles in place in public parking lots, Rich said the office of sustainability and the Sustainable City Commission hope to identify ways to further develop and foster that infrastructure.

“The city had a round of electric vehicle charging station installations based on an RFP [request for proposals] we put out a couple of years ago, but it was specifically for city-owned parking lots and structures,” Rich said. Examples of city parking lots with these charging stations include those at the Long Beach Airport, the parking garage adjacent to city hall and garages near City Place Shopping Center, the Aquarium of the Pacific and the Queen Mary.

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October 14-27, 2014 These stations were installed at no cost to the city. “Our goal and model going in was saying, ‘Okay, charging station company, we’ll give you these spots but you need to build the infrastructure, create the utility connection, pay the bill to it and all of that at no cost to the city,’” Rich explained. “We were able to find a company that was willing to do that,” he said, adding the company was able to install the stations for free by charging users of the spaces.

Rich said his office and the commission now hope to implement more charging stations throughout the city. In order to do so without cost, they are investigating ways the city might work with developers or property owners to install the stations.

“The city would take a look at a program to encourage or streamline the charging station installations to get more of that infrastructure out there, which then makes people more comfortable to purchase electric vehicles,” he said.

Another green transportation program Rich and Supernaw said they hope to implement is car sharing. “In addition to the electric vehicle charging stations, we’re continuing to work on making our city’s rules conducive to a car-sharing company being able to come in,” Rich said. Companies like Zipcar position a fleet of vehicles in strategic locations in cities and universities where people may rent a car for limited time frames, such as to shop for groceries or go to work. The concept is particularly geared toward individuals without vehicles.

Implementing car-sharing programs is one way to encourage residents to live car-free.

The city has been investigating a newer model of this idea called free-floating car sharing, in which a company’s vehicles may be left anywhere rather than in a designated lot. Free-floating car-sharing companies and their customers are able to track the position of the cars using a phone application. “It allows you to pick it up near to where you are at that moment and then drop it off and leave it wherever it is you need it to go,” Rich said.

For the city to be comfortable implementing such a program, the state would first have to adopt changes to its vehicle code to ensure the practice is regulated, he added.

“This also illustrates the unique challenges of a city versus a single entity like Cal State Long Beach,” Supernaw noted.

The university has Zipcars available for student use, he explained, but implementing a citywide car-sharing program would be more complex.

Promoting Waste Reduction Now in its third year running, the city’s home delivery mulch program continues to be in high demand among residents, and the Sustainable City Commission has listed the program as a priority for continuation in this year’s work plan.

The program grew out of an original concept from the commission and office of sustainability to reuse the city’s tree trimmings as mulch on vacant city lots to suppress weeds, Rich explained. “The city’s vacant lots, like all those redevelopment [agency] lots, are typically covered with mulch, which helps reduce the city’s property maintenance cost because it suppresses weed growth,” he said.

The city then began offering residents access to the tree trimmings for mulch on their properties. “We have a pickup truck

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GOING GREEN October 14-27, 2014 which we hand load with pitchforks and then take the mulch to someone’s home and unload it into their driveway,” Rich said.

“We have delivered over 2,300 loads of mulch to residents. We do this two days a week on Tuesdays and Thursdays, with about eight deliveries per day.” The program is so popular that there is a nine-week waiting list for deliveries, he noted.

Supernaw pointed out residents who need mulch sooner than nine weeks are able to visit a self-service yard at 2702 California Ave., where they may pick up mulch themselves.

Without this program, the city’s tree trimmings would go to a green waste recycling facility but, because those facilities are overloaded, much of the waste would have eventually gone to a landfill, Rich explained. “We were able to find a local beneficial use and avoided that truck trip to the green waste facility, and then subsequently to the landfill,” he said.

Willow Springs Park When Wilmore City, eventually renamed Long Beach, was founded in 1882, the city’s first fresh water source was located between Spring and Willow Streets in what was called the Artesian Springs according to Rich. The area, once home to wetlands and a dense population of willow trees, lost much of its natural resources after the oil boom in the 1920s. Now, one of the city’s sustainable projects is to rehabilitate the wetlands and willows of the area, creating a park named for the land’s history – Willow Springs Park.

“The streets Spring and Willow got their

Long Beach Business Journal 15 Daryl Supernaw, left, chair of the Sustainable City Commission, and Larry Rich, sustainability coordinator for the City of Long Beach, visit a historic train station at a city storage yard off of San Francisco Avenue. The train station was built in 1907 in Downtown Long Beach and was moved to the storage yard in 1936. Supernaw and Rich hope to relocate the building to the new Willow Springs Park (at left) and restore it for community use. (Photograph by the Business Journal’s Thomas McConville)

names in acknowledgement of this stream that was lined with willow trees. We took that as inspiration for a restoration project to bring back water and willow trees on that site to make it a visitor destination,” Rich said. The idea is to restore the land and develop a wildlife habitat similar to El Dorado Nature Center, he added.

To restore the wetlands and encourage willow trees to grow, the city needs a water source. Luckily, a major storm drain runs beneath the 42-acre park zone, Rich said.

“We are going to create wetlands that mainly will be seasonal wetlands by allowing the water to come out of the pipe and flood the low-lying areas, saturating the soils to create wetlands the way it was historically.”

Thanks to a $1 million allocation of one-

time revenues from the City of Long Beach, a $924,000 grant from the state’s strategic growth council, a $50,000 grant from the Southern California Association of Governments and a $15,000 grant from the Long Beach Naval Memorial Heritage Trust Fund, about $2 million has been amassed for the park. “The initial $2 million is going to be directed at 12 of the 48 acres to restore about a quarter of the land.

But then the remaining 36 acres still need additional funding down the line, which we will continue to pursue,” Rich said.

The fact that 42 acres of land in Long Beach has remained undeveloped for more than a century, with the exception of a few oil wells, “is pretty phenomenal,” Supernaw noted.

In addition to environmental restoration, the site is also a sustainable project because of a building to be adaptively reused there, Rich pointed out. Built in 1907 and originally located in Downtown Long Beach, a train station has sat in the city’s public service yard since 1936, when it was moved from downtown. The building served for some time as a materials testing laboratory, but Rich is working to restore the building and have it moved to Willow Springs Park to be used as a community resource. “This is where the conceptual idea that sustainability and historic preservation are natural partners. This is a tangible project we are doing that is historic preservation and adaptive reuse.” ■

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MOBILITY 16 Long Beach Business Journal

October 14-27, 2014

Pedestrian Planning Efforts Underway For Parts Of Long Beach ■ By SAMANTHA MEHLINGER Senior Wrtier In October 2013, the City of Long Beach adopted a new Mobility Element, a section of the General Plan devoted to the movement of people, goods and vehicles throughout the city. The document represented a shift in thinking from previous versions: while prior city planning documents placed priority on automobile traffic, the new Mobility Element focused on balancing the needs of pedestrians, bicyclists and vehicles through Long Beach.

The city is now building upon these principles through two new planning documents meant to improve pedestrian mobility, access, connectivity and safety along

the city’s transit corridor and in Central and West Long Beach.

With a $183,500 grant from the Los Angeles Metropolitan Authority (Metro), Long Beach Development Services (LBDS) recently began working on a companion document to the Mobility Element focused on improving pedestrian access along the length of the Metro Blue Line south of the 405 Freeway. LBDS staff is focusing on a radius of about four blocks along the whole length of the Blue Line to create better pedestrian access to the Metro (refer to map below).

The grant also allows the city to focus on the greater Downtown Long Beach area, spanning west to east from the Los Angeles River to the edge of the Alamitos Beach neighborhood, and north to south from

10th Street to the ocean. The Metro and downtown-centric areas to be addressed in the plan were previously identified in the Mobility Element as priority zones for implementing pedestrian-friendly projects.

While the Mobility Element identified many places in the city as pedestrian priority areas, LBDS’s Ira Brown explained the city is first focusing on downtown and the area around the Metro Blue Line simply because the funding was available to do so – the grant from Metro only applies to those areas.

“We are at the very beginning of an accelerated timeline,” Brown said, referring to his department’s process in preparing the document, dubbed the Downtown and Transit-Oriented Pedestrian Master Plan. During the past few months, LBDS

Section 1 of this map encompasses the area for which Long Beach Development Services is developing the Downtown and Transit-Oriented Pedestrian Master Plan, a planning document aimed at improving pedestrian access and connectivity to Metro Blue Line stations and within Downtown Long Beach.

The remaining numbered sections of the map are areas where the city’s health department and the local nonprofit group City Fabrick are examining ways to improve pedestrian safety and access. (Photograph provided by City Fabrick)

staff members have met with community constituents to get input on pedestrian needs within the grant area. “We have already conducted about eight stakeholder interviews,” Brown said. “Before we went to the public we wanted to have our consultants and staff dive into the details with residents so we have a better picture about where we are headed,” he explained.

Brown continued, “We interviewed older adults, trying to understand what their issues were. We chatted with some of our stakeholders in the downtown shoreline and found out what their particular needs are. We have chatted with some of the advocates for pedestrian circulation, [such as] people organizing walking events. We are going to continue doing small group discussions throughout this process.”

In mid-September LBDS held a public event called WalkForth, in which temporary pop-up installations were implemented along 4th Street between the Blue Line at Long Beach Boulevard and Alamitos Avenue to give the community an idea of some of the concepts that may be included in the Pedestrian Master Plan.

Installations included mid-block crossings, curb extensions, way-finding signs and landscaping. The event was also an opportunity for residents to provide feedback to the city.

“WalkForth was our first workshop where we tried to get input from everyday people – people walking on the street,” Brown said. “With the information we heard at the WalkForth event and from our focus groups, we are going to be working on some preliminary concepts about how we can improve the pedestrian environment and pedestrian circulation around our Metro stations and in our downtown,” he explained. “We will then fine-tune the list of projects we want to implement through this plan.”

Because the city is still in somewhat of an information-gathering phase with the development of this document, it might be too soon to guess what projects the document will suggest for improving pedestrian mobility, access and connectivity. But Brown said elements like those demonstrated at the WalkForth event – clearly defined way-finding signage, curb extensions and mid-block pedestrian crossings – might be included.

LBDS should have a final document ready for approval by the Long Beach Planning Commission in May or June, Brown estimated. The document would then go to the city council for approval.

As LBDS works on the Downtown and Transit-Oriented Pedestrian Master Plan, another pedestrian-related document is underway through a grant from the U.S. Department of Agriculture (USDA) to the Long Beach Department of Health and Human Services, with local non-profit City Fabrick as a sub-grantee. City Fabrick is an “urban design studio dedicated to improving the physical environment of Long Beach through design, planning, policy and engagement,” according to the organization’s website.

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MOBILITY October 14-27, 2014 About three months ago, the health department and City Fabrick began conducting research and community outreach to determine ways to improve pedestrian safety in Central and West Long Beach, according to City Fabrick Executive Director Brian Ulaszewski. “What we are trying to do is build upon what they [LBDS] are doing and expand their area.

It is certainly going to be a different product and a bit of a different process, but the goals are similar in trying to identify potential projects and policies to improve pedestrian safety and access,” Ulaszewski said. “The intention is to coordinate the effort,” he added.

Similar to the grant provided to LBDS, the grant awarded to City Fabrick and the city’s health department requires a focus on particular areas of Long Beach – in this case, parts of West Long Beach closest to the port as well as areas within Central Long Beach (refer to map).

“That has a lot to do with access to healthy foods and walkability and other sort of health indicators and healthy community initiatives,” Ulaszewski said of the focus areas. West Long Beach, for example, is located between the 710 Freeway and the Los Angeles River and is isolated from the rest of Long Beach. The area also has limited access to basic needs such as groceries. “There is a lot of interest in better connecting residents in West Long Beach to those in Central Long Beach because, between the L.A. River and the 710, it is pretty disconnected.”

Long Beach Business Journal 17 City Fabrick has developed a project area map identifying areas for pedestrian infrastructure improvements in relation to school campuses. “We are looking at safe routes to schools,” Ulaszewski said. “We actually did a walking workshop with students both from Hudson [Elementary] as well as Cabrillo High School. They told stories about walking Pacific Coast Highway over the 710 [freeway] and L.A. River. You look at what they have to walk along and it is pretty awful, and they do it every day,” he said. “One side doesn’t have a sidewalk and the sidewalk on the other side is like four feet wide and it has a lot of traffic. So what can we do to make that better and safer?” This is the sort of question he and his colleagues are examining.

“We are still in the beginning of the process, doing a lot of existing condition analysis both looking at accident reports over the past decade, traffic data, but also going out in the community and asking residents and stakeholders, ‘where do you see the issues,’” Ulaszewski said. “It is really valuable because they are the experts on their neighborhood and they are going to be able to tell us where the issues are.”

Once City Fabrick and the health department have gathered information to identify priority areas for pedestrian safety improvements, they are going to develop a planning document similar to the one LBDS is working on. “The intention is for it to be a policy document,” Ulaszewski said. “We are tying this very closely to the Mobility Element and bas-

ing it on a lot of existing policies.”

Proposed projects in the document may focus on improving lighting in areas that are particularly dark at night, or adding infrastructure to consider people with limited mobility. He said the goal is to finish the document within one year.

“We hope this is a fruitful example of different ways to collaborate between community partners and city government.

The health and human services department has been a good partner in developing and starting to look at policies through the lens of healthy communities and creating healthier communities,” Ulaszewski said. “It is hopefully just the

beginning of more active engagement on policy through that lens.”

Improving pedestrian mobility, access and safety has multiple benefits, Brown pointed out. “There is certainly an economic development component of walking,” Brown said. “If you have a walking community, your community is more likely to shop local than get in a car and drive to another city. So it [pedestrian planning] represents community revitalization,” he explained. When people are encouraged to walk or take public transit to their destinations, automobile traffic decreases, which also has positive environmental implications, he added. ■

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THE TECH SECTOR 18 Long Beach Business Journal

Hi-Tech Jobs Lead Nation (Continued From Page 1)

Analysis Group, Los Angeles County Economic Development Corp., said the results of the analysis were important in bringing attention to the often-hidden nature of the tech sector in the land of beaches and palm trees.

While other metro regions have deliberately invested in – and market – an economic ecosystem designed to attract and retain tech businesses and employment, the nature of Los Angeles’ economy has allowed a tech sector to evolve into the largest in the nation.

“The L.A. tech sector is really broad and diverse, across a range of industries that we have here, including those that have been here for decades, like aerospace, and new ones, like software publishing and computer products, online activity, that kind of thing,” Cooper says.

“It’s quite large. That was a significant finding. People think there are tech sectors in other regions but we happen to have a very large one here, accounting for more than 368,000 jobs.”

A recent report from UCLA’s Anderson Forecast concluded that, as the nation’s unemployment rate fell, California’s recovery in terms of employment would lag behind. But the Institute for Applied Economics analysis suggested that it’s not just the number of jobs, but the wages paid to those employees, that

October 14-27, 2014 determine economic health. And tech jobs pay well – really well.

“The wage premium that’s paid in the tech sector – it’s pretty important to realize that jobs in the tech sector on average earn 70 percent more that jobs on average in other industries. It is quite a gap. And that’s what this data is bearing out,” Cooper says.

Los Angeles County, in all honesty, kind of lucked out on the high tech front.

The industries that established themselves here and that occupied the economic landscape for decades helped create the basis for the high tech sector of today, Cooper says.

“First of all, there’s the legacy. The aerospace industry, the entertainment industry, these are industries that themselves generate high tech innovations and inventions and spin new industries out,” Cooper says.

“The combination of a high tech manufacturing base and the creativity side – this is also really creating new types of thinking about delivery of products. It’s a crossindustry type of relationship.”

And the traditional reasons that people want to live in Los Angeles County, combined with the global dispersion of different facets of the manufacturing process, mean that the intellectual segment of the high tech sector is attracted to Southern California. While lowerpaying jobs requiring less education may move elsewhere, Southern California still attracts the people who create the

businesses, products and production systems that generate those other jobs.

“Another factor is, really, quality of life.

People like to be here,” Cooper says. “We kind of joke about it, but if people like to be somewhere, they’ll stay somewhere. If you have a choice about where you want to live, and you can afford to live wherever you want around the world, this is still an attractive place to be.

“You have to remember these are industries that don’t have to be located here.

You can have your designer or your engineer working halfway around the world sending their files digitally. That’s one of the keys to having innovative, new-thinking people here. We shouldn’t minimize the quality of life issues.”

Other significant findings of the report: • The high tech industry in Los Angeles County employed 368,580 workers in 2013.

• The largest high tech segments are: aerospace products; wholesale activities related to high tech products; engineering services/research and development; consulting services; and computer software, design, services and online publishing.

• In the past 10 years, the high tech sector changed from production-based industries to service-oriented ones.

Employment in high tech services grew by 13.5 percent and high tech manufacturing employment fell more than 17 percent.

• The annual average wage paid to all

New App Schwag, Developed

By Two Local Entrepreneurs, Aims To Drive Customers To Your Site David Black (right), co-developer of the Schwag smartphone application, visits one of the application’s vendor users, Legends Sports Bar co-owner Eric Johnson.

Locals Jim Grubbs and William Ahmanson developed the application with Black. According to Grubbs, the phone application was created with local merchants in mind. “We want to benefit local small businesses,” Grubbs said. Although the user and geographical reach of the application have not yet warranted charging the businesses using it, Grubbs said the concept is to eventually have merchants pay to send ads through the application for a limited period of time.

Pricing would vary, depending on the time period a business owner chooses to run the ad and the geographical radius he or she wants it to apply to. “An example of pricing is an eight-hour ad sent within a one-mile radius for $5. Then, at three miles it is $7. At five miles it is $11. It is very inexpensive,” Grubbs said. “If Legends is slow on Tuesday at 11 a.m. and they want to bring in people for lunch, they can put an ad out saying ‘It is Taco Tuesday, so come on in,’” he explained. Users of the application receive notifications on their phone about deals in their area and are able to set the frequency of notifications, he said. Schwag does not require any information from users; unlike with most smartphone applications, no e-mail address or credit card information is required. The application is free to download through the Apple Store and Google Play. “We have 40 businesses that have signed up and downloaded the app,” Grubbs said, noting most of the businesses are on 2nd Street in Belmont Shore or in Seal Beach. California State University Long Beach’s athletics department and the university’s commercial division also use the application to send out ads. Grubbs said he, Black and Ahmanson hope to have 10,000 users of the locally based application by the end of the year. For more information about Schwag, visit http://www.schwagapp.com/. (Photograph by the Business Journal’s Thomas McConville)

employees in the high tech sector was $86,934, almost 68 percent higher than the average paid to workers in non-high tech industries, which was $51,778.

• The high tech sector paid almost 17 percent of all wages in the county – $32 billion – in 2013.

• An additional 187,570 jobs are supported by high tech industries through their purchase of goods and services from local businesses that are not within the high tech ecosystem.

• Another 207,480 jobs are supported by the high tech ecosystem through the household spending of employees in high tech industries and their supply chain.

• Overall activity produced $108.3 billion in value-added, which is the sector’s contribution to regional GDP. Definitions: For this study, definitions of “high tech industry” and “high tech occupation” are drawn from work done by Daniel E. Hecker with the Office of Occupational Statistics and Employment Projections at the U.S. Bureau of Labor Statistics. For this study, a high tech industry is one in which technology-oriented occupations account for a larger proportion of the industry’s overall employment than the average for all industries, and a high tech occupation is one in which a worker needs “in-depth knowledge of the theories and principles of science, engineering and mathematics underlying technology.” ■

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1_LBBJ_Oct14_SectionA_LBBJ MASTER LAYOUT 10/12/14 6:11 PM Page 20

BALLOT PROPOSITIONS 20 Long Beach Business Journal

November 4 Election (Continued From Page 1)

in general obligation bonds to fund waterrelated programs. The proposition would also redirect $425 million in unsold general obligation bonds for water-related uses.

Speaking to the Business Journal, Kevin Wattier, general manager of the Long Beach Water Department, expressed his support for the proposition, saying it would provide $725 million specifically for water recycling. Wattier explained that, for several years, government funding for water recycling has been tied to an integrated water management program, which he said was inefficient.

“We’re very pleased that recycling is being pulled back out as a stand-alone program. We think it’ll be more efficient to get money for recycling that way,” Wattier said.

The proposition would also provide money for conservation efforts.

“There’s some money in there for conservation, which is our number one priority.

Not just for us, but for all of California,” Wattier said.

Proposition 1 also provides $1.5 billion to fund projects aimed at restoring and protecting watersheds and other habitats statewide. Money would be used to purchase land for conservation purposes as well as to reduce the risk of wildfire and to support wildlife. Another large chunk of the funding, $2.7 billion, is slated for new water storage projects such as dams and projects to replenish groundwater.

However, this money could only be used to pay for costs related to “public benefits,” such as restoring habitats, flood reduction, improved water quality and recreation.

Government agencies, such as those that

October 14-27, 2014 actually sell the water from the storage project to customers, would be responsible for paying the remaining costs. The legislative analysts office projects that interest rates for the bonds sold would average a little more than 5 percent and would be paid over a 30-year period. This would result in costs to the taxpayers of an estimated $360 million annually for 40 years.

Opposition to the proposition comes from State Assemblymember Wesley Chesbro, who chairs the Committee on Natural Resources, as well as Conner Everts, executive director of the Southern California Watershed Alliance. Both signed the argument against the proposition in the state’s official voting guide, which says that dams are a high-cost response to the state’s water problems and provide little benefit.

“All the most productive and cost-effective dam sites in California have already been developed. Proposition 1’s new dam projects increase California’s total water supply by as little as 1 percent, while costing $9 billion to build,” the argument read.

The rebuttal, signed by Governor Brown, maintains that Proposition 1 is a fiscally prudent response to the state’s current water crisis.

Proposition 2 Seeks To Strengthen The State’s Rainy Day Reserve By some estimates, California faces more than $300 billion in unfunded liabilities: police, fire and teachers’ pensions as well as retiree health care costs.

Proposition 2 requires the state to annually transfer 1.5 percent of its general fund money to the Budget Stabilization Account (BSA) and spend a minimum amount each year to pay down the state’s massive debt.

In years when revenues from capital gains taxes are higher than average, some of those revenues will be required to pay down debt as well. According to the legislative analyst’s office (LAO), if Proposition 2 is passed, annual payments toward the state’s debt obligations would range from $800 million in lean years to $2 billion or more in years with higher capital gains revenue. A cap of 10 percent of the general fund will be set for the BSA, and any remainder will be put toward infrastructure projects throughout the state.

Though the state has had a BSA since 2004, under current rules, the governor can choose to put no money in the fund – the state has suspended transfer of funds to the BSA every year since 2007. Under the new rules, the governor could put in less than the minimum required only after declaring a budget emergency and getting the support of the legislature. The proposition also establishes a state reserve fund for K-12 schools.

Money would be put toward the state’s school fund in years when revenues from capital gains taxes are higher than average.

Supporters of the proposition include Governor Brown and CalChamber. In a statement, the Chamber argued the proposition could guard against future tax increases.

“Proposition 2 forces the state to save money and requires politicians to live within their means and protects against unnecessary tax increases. In good times, money will be placed in a constitutionally protected reserve and used to pay down debt,” the statement read.

Opposing the proposition is the group Educate our State, a parent-led organization that advocates for high-quality educa-

tion. The group takes particular exception to a portion of the proposition that reduces the maximum amount of money schools can keep in reserve. Depending on the size of the school, this amount allowed under the proposition could range from three to 10 percent of its annual budget.

“For districts across California, local reserves have been all that’s protected children from state-inflicted borrowing costs or program cuts,” the argument against Proposition 2 read.

The minimum amount that schools are required to keep in reserve under existing law would remain unchanged.

Speaking directly to the Business Journal, Educate Our State Director Katherine Welch said Governor Brown should re-work the proposition and reintroduce it next year.

“He can come back to the voters in 2016 with a rainy day fund that doesn’t make kids pay for it. We have the largest class rooms in the nation, we have the lowest funded schools and our kids aren’t getting what they need,” Welch said.

The Business Journal reached out to Long Beach Unified School District for its take on the proposition. In an e-mailed response, LBUSD spokesperson Chris Eftychiou said the district hasn’t taken a formal stance on the proposition but added that the dialogue created by the proposition is good.

According to the statement, Long Beach Unified supports reliable stable funding for schools, though it didn’t mention whether this proposition went far enough to provide that funding. The statement also referred to the recent passage of Proposition 30, which raised taxes in 2012 to pay for schools.

(Please Continue To Top Of Next Page)

Renovation Begins On Future Home Of Long Beach City College Nursing Department On October 2, the leadership of Long Beach City College (LBCC) was joined by students from the college’s nursing program at a ceremony to celebrate the start of renovations on Building C at the Liberal Arts campus, the future home of the nursing department. The 45-year-old building is being converted into a hospital training facility with medical simulation equipment and laboratories, computers and audiovisual equipment, new faculty offices and conference rooms, and new landscaping and signage. The architect is BCA Architects, with Construct One as the general contractor. The Cordoba Corporation is overseeing the project. The budget for the 23,000-square-foot facility’s renovation is $11.65 million. The renovations are funded by Measure E, a $176 million bond issue passed in 2002, and a second Measure E bond totaling $440 million, which passed in 2008. “The renovation of Building C shows that LBCC is committed to providing the best community college education in the state,” LBCC Superintendent-President Eloy Ortiz Oakley said in a statement. “We are aware that, in order for our students to be successful in their careers, we need to keep up with today’s technology in the medical field,” he stated. Jeffrey Kellogg, president of the Long Beach Community College District Board of Trustees, added in a statement, “The Building C upgrade will allow Long Beach City College to meet the needs of our students as the demands of our economy and society change, as well as provide our faculty members modern space for teaching.” Pictured from left at the ceremony are: Dr. Thomas Clark, former LBCC trustee; Dr. Virginia Baxter, Area 5 trustee; Kellogg, who represents Area 1; Sunny Zia, Area 3 trustee; Oakley; Doug Otto, vice president of the board of trustees representing Area 4; and Ann-Marie Gabel, LBCC vice president of administrative services.

Pictured above are nursing students.

(Photograph by the Business Journal’s Thomas McConville)

1_LBBJ_Oct14_SectionA_LBBJ MASTER LAYOUT 10/12/14 6:11 PM Page 21

BALLOT PROPOSITIONS October 14-27, 2014 “We recognize however, that Prop. 30 funding is not a permanent fix, so it’s important to consider ways of creating a stable source of education funding over the long haul,” the statement read.

Supporters argue that Proposition 2 protects schools by stabilizing California’s budget.

Proposition 45 And The Rejection Of Unfair Insurance Premiums If passed, Proposition 45 authorizes the head of the California Department of Insurance (CDI) to approve or reject insurance rates proposed by individual and small group health insurance providers. Opponents of the proposition argue it gives too much power to one individual – the state’s insurance commissioner. Others argue that, without this proposition, small businesses, individuals and families are at the mercy of medical corporations when it comes to buying affordable health insurance.

Under current law, the CDI is one of two state agencies responsible for reviewing the rates and products offered by health insurance companies and HMOs. Though the CDI can judge an insurance company’s pricing to be unfair, the department doesn’t have the authority to reject rates.

Opponents of the proposition include the Kaiser Foundation Health Plan, Wellpoint Inc. and Blue Shield of California. The three healthcare companies are part of a political action committee that, according to records available on the Cal Access website, has raised more than $35 million to oppose the proposition. CalChamber has also taken a position against Proposition 45, suggesting it could lead to a degradation of care.

“Some have argued [Prop 45] could undermine efforts by California’s health exchange, Covered California, to make sure health coverage offered to individuals and small businesses is a good value, not just inexpensive,” the Chamber argued.

Since the passage of the Affordable Care Act, insurance companies have been unable to charge higher rates based on a person having a preexisting condition.

Insurers can however charge higher rates based on the zip code a person lives in – a practice known as geographic rating.

According to Janice Rocco, deputy commissioner for the CDI, the state is broken up into 19 different regions where different health care premium prices can be charged.

She said the rationale for allowing this practice is that health care costs differ from region to region across the state. Insurers are allowed to set varying premiums in specific regions based on claims experience in prior years – a practice many consumers living in costlier regions would argue is unfair. But Rocco explained that, even if insurance agencies are unfairly charging from region to region, there is no state agency that can currently stop the practice.

“If the claims experience doesn’t justify the premium increase the insurer is proposing, no one has the authority to reject excessive rate increases in California,” Rocco said.

This could potentially change if Proposition 45 is passed.

Speaking to the Business Journal, State Insurance Commissioner Dave Jones expressed his support for the proposition.

“Proposition 45 gives the insurance

Long Beach Business Journal 21 commissioner the authority to regulate health insurance and HMO rates. And that would include looking at geographic rating,” Jones said.

Further explaining that 35 other states currently authorize their insurance commissioners to reject excessive rates, Jones added that Prop 45 is good for small businesses.

“Without it, health insurers and HMOs will be able to continue to inflict doubledigit rate increases on small businesses,” he said. “Small businesses are among the most vulnerable of those in the [health] market because they have absolutely no bargaining power.”

As further evidence of that, the Business Journal has been notified that its group medical plan – paid in full for employees by the company through Anthem Blue Cross – is increasing 29.3 percent on December 1.

“For a small business such as ours, that is a heavy hit,” Publisher George Economides said. “We’re examining alternatives.”

Proposition 46 Focuses Attention On Doctors, Prescribers In addition to requiring random drug testing of doctors, Proposition 46 requires doctors to register and refer to a database known as the Controlled Substance Utilization Review and Evaluation System (CURES), before prescribing certain drugs. The bill is sponsored by Bob Pack, whose two children were killed in 2003 near their Bay Area home by a driver who had been abusing prescription drugs.

CURES tracks the prescription history of patients in an attempt to curb “doctor shopping” and stem the abuse of drugs such as Vicodin, OxyContin and Aderrall. Though doctors are already required to register with the system by 2016, they are not currently required to check the system prior to prescribing drugs.

Proposition 46 also raises the cap on non-economic damages in medical malpractice cases – a cap that was set at $250,000 in 1975. Under the proposition, the cap is raised to $1.1 million and allows annual adjustments for inflation.

The proposition is supported by The Consumer Watchdog campaign, a coalition of consumer advocates, attorneys and nurses as well as Yes on Proposition 46, a coalition of consumer attorneys and patients. The Cal Access database shows the groups have raised more than $5.7 million supporting the proposition since January. Supporting arguments state that, in addition to saving lives by reducing prescription drug abuse and exposing impaired doctors, victims of malpractice can receive compensation in line with the rise in inflation.

Meanwhile, according to the Cal Access database, the committee opposing the measure, which is comprised of patients, providers and health care insurers, raised more than $56 million between January and September 30 of this year.

CalChamber also opposes Proposition 46, arguing on its website that California currently benefits from some of the lowest malpractice costs in the country. It maintains the proposition would quadruple malpractice settlements against doctors, “which will cost consumers and taxpayers hundreds of millions of dollars every year in higher health care costs, and cause many

doctors and other medical care professionals to quit their practice or move to other states with lower medical malpractice insurance premiums.”

In an e-mailed statement to the Business Journal, California Medical Association President Dr. Richard Thorp said the proposition would result in higher costs to businesses, employees and patients.

“Under Prop. 46, employers could be forced to pass along higher costs to employees, reduce or eliminate coverage or reduce pay and other benefits. It’s a flawed measure that’s costly for businesses and their employees. It also raises individual health care costs and puts patients at risk of losing their trusted physicians,” the statement read.

Prop 47 Reduces Penalties For Non-Violent Offenses Proposition 47 reduces penalties for certain non-violent offenses such as drug possession, shoplifting and check forgery.

Violent offenders accused of these crimes, would still be eligible for harsher penalties.

Money saved by the state on incarceration costs would be spent to support truancy prevention, mental health and substance abuse treatment and victim services.

Though the legislative analyst’s office estimates thousands of inmates could be released from prisons, initial savings to penal institutions would be offset by the increase in parole services for the first few years following the change.

Supporters include the Women’s Foundation of California and San Francisco

District Attorney George Gascon.

Opponents include the California State Sheriff’s Association and the California Coalition Against Sexual Assault.

Proposition 48, Compacts Would Lead To New Indian Casino Proposition 48 ratifies tribal gaming compacts between California and the North Fork Rancheria of Mono Indians and the Wiyot Tribe, and allows construction of a new casino in Madera county. The land to be used for the casino is 305 acres purchased by the North Fork tribe in 2005, located about 38 miles from the tribe’s reservation.

If passed, this proposition requires the tribe to make a one-time payment between $16 million and $35 million to local governments in Madera County to address costs related to the operation of the new casino.

The compact would prohibit the Wiyot tribe, located near the Humboldt Bay region, from building a proposed casino near the Humboldt Bay National Wildlife Refuge. As part of the agreement, the North Fork tribe would pay the Wiyot up to 3.5 percent of its annual slot machine net revenue.

Annual payments of $10 million from the North Fork tribe to the state and to local governments in the Madera County area are also required. Governor Brown supports the proposition, as does the president of the State Building and Construction Trades Council of California. Opponents include the group Stand up For California, which seeks to limit the expansion of Indian casinos. ■

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PERSPECTIVE 22 Long Beach Business Journal

October 14-27, 2014

Google’s Eight Ways To Build A Better Boss Vol. XXVII No. 20 October 14-28, 2014 EDITOR & PUBLISHER George Economides SALES & MARKETING EXECUTIVE Heather Dann SALES & MARKETING ASSISTANT Cori Lambert DISTRIBUTION Conrad Riley EDITORIAL DEPARTMENT SENIOR WRITER Samantha Mehlinger STAFF WRITER Brandon Ferguson CONTRIBUTING WRITER Michael Gougis PHOTOJOURNALIST Thomas McConville 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 midJanuary) – 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. South Coast Publishing also produces Destinations and the Employee Times magazines.

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.

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oogle is not known as being a management guru organization.

After all, they create things – technical stuff like search engines and productivity tools like Gmail. They started out with a philosophy of just leaving people alone.

■ EFFECTIVE Let the engineers create LEADERSHIP their wonders. In fact 20

By Mick Ukleja percent of their work is “free time” in which those creative geniuses have come up with quite a sampling of products. If they hit a snag or get bogged down, then they can approach one of Google’s managers who possess a deep technical expertise.

So why would Google go soft and talk about good bosses and challenged bosses? Well, for one thing, they now have a houseful of Millennials (Gen Y), who value a deeper and more frequent connection with their managers. We know that organizations with a high degree of connection produce employees who are more engaged, and thus more productive in their jobs. They are also less likely to leave their jobs to go to a competitor with a better environment (which Millennials have been known to do).

In research conducted by my colleagues and myself,1 we also discovered that Millennials work well on teams. This results in more shared information, better processes for doing good work and, as a result, better products.

Good managers produce more connection, which turns a dog-eat-dog environment into a dog-sled team pulling together and creating synergy.

Google had a code for a research project: Project Oxygen. It was driven by their People Operations, which is Googlespeak for human

G

EarthTalk

resources. Rather than their usual mission of inventing the next search algorithm or clever app, their mission was to build a better boss. It was a two-year study that gathered 10,000 observations of managers across more than 100 variables, numerous performance reviews and feedback surveys. They coded and synthesized the results and came up with eight behaviors that described the best bosses. It’s been called the Eight Habits of Highly Effective Google Managers.

For all Google’s technical research there is a simplicity to these rules. Managers do not need a personality transplant to apply these.

They make sense on the surface.

Check out this list and rate yourself.

1. Be a good coach.

• Provide specific, constructive feedback, balancing the negative and the positive.

• Have regular one-on-ones, presenting solutions to problems tailored to your employees’ specific strengths.

2. Empower your team and don’t micromanage.

• Balance giving freedom to your employees, while still being available for advice.

• Make stretch assignments to help the team tackle big problems.

3. Express interest in team members’ success and personal well being.

• Get to know your employees as people, with lives outside of work.

• Make new members of your team feel welcome and help ease their transition.

4. Don’t be a sissy: Be productive and results-oriented.

• Focus on what the employees want the team to achieve and how they can help achieve it.

• Help the team to prioritize work and use seniority to remove roadblocks.

5. Be a good communicator and listen to your team.

• Communication is two-way: you both listen and share information.

• Hold all-hands meetings and be straightforward about the messages and goals of the team. Help the team connect the dots.

• Encourage open dialogue and listen to the issues and concerns of your employees.

6. Help your employees with career development.

7. Have a clear vision and strategy for the team.

• Even in the midst of turmoil, keep the team focused on goals and strategy.

• Involve the team in setting and evolving the team’s vision and making progress towards it.

8. Have key technical skills so you can help advise the team.

• Roll up your sleeves and conduct work side by side with the team when needed.

• Understand the specific challenges of the work.

Pretty simple to understand, yet sometimes it’s the simple things that make the biggest difference. If you want your people to be happy and productive, make sure you have time for them; be consistent; involve them in the process; don’t assume they understand the goal; and be fair.

Most managers communicate. The good ones connect.

1Chip Espinoza, Mick Ukleja and Craig Rusch, Managing The Millennials: Discover The Core Competencies For Managing Today’s Workforce (Wiley & Sons, 2010).

(Mick Ukleja has co-authored several books including Managing the Millennials. He helps organizations create environments in which all generations can thrive. He is a keynote speaker and president of LeadershipTraq, a leadership consulting firm. His clients have included Fortune 500 corporations and nonprofit organizations. Check his weekly blog at www.leadershiptraq.com.)

Palm Oil Production And Rainforest Destruction

Dear EarthTalk: How is it that some food purveyors are contributing to the destruction of tropical rainforests by ditching unhealthy “trans fats?”

– Billy S., Salem, Oregon

ost public health advocates applaud efforts by processed food producers, restaurants and fast food chains to get rid of so-called “trans fats” – partially hydrogenated oils added to foods to improve texture and extend shelf life but which can aggravate heart disease. In 2013 the U.S. Food & Drug Administration (FDA) proposed eliminating trans fats altogether, but it is unclear if and when such a change will take effect. In anticipation, many big trans fat buyers have switched to palm oil, much of which comes from former tropical rainforest lands cleared for agricultural production across Southeast Asia.

“The concern is that a lot of companies will switch to palm oil in order to reduce trans fats without thinking more broadly about the health and environmental implications of that,” says Bill Barclay, policy and research director at the nonprofit Rainforest Action Network (RAN).

Palm oil may be a good substitute for trans fats in that it stays solid at room temperature and is therefore useful as a food additive in things like snack bars. But it isn’t much healthier: A 2009 study by the federal Agricultural Research Service found that palm oil “would not be a good substitute for trans fats by the food industry” because consuming either type of fat results in similar spikes in artery-clogging

LDL (“bad”) cholesterol and a protein (apolipoprotein B) that distributes it throughout the bloodstream.

M

Orangutan: Roger Smith; Clearcut: Greenpeace

Meanwhile, the explosion in palm oil use over the past few decades for biofuels and as a food ingredient and additive has wreaked havoc on tropical rainforest ecosystems across Southeast Asia.

Environmental leaders are concerned that even more demand for palm oil could push some endangered species – including orangutans, Sumatran tigers and pygmy elephants – over the brink.

“They’re losing critical habitat that threatens their survival and that’s largely driven by palm oil expansion,” says RAN’s Barclay.

Higher carbon emissions are another down side. According to the Union of Concerned Scientists (UCS), the tropical peat soils that predominate in Southeast Asia rainforests store huge amounts of carbon. Clearing and draining these fields to create palm oil plantations releases this carbon into the atmosphere.

Green groups continue to work with palm oil producers and the governments that regulate them to promote more sustainable production and processing and toughen standards for conversion of land to agricultural use, but progress has been slow.

A recent commitment by five of the world’s largest producers and traders of palm oil to stop clearing “critical forest areas” for one year during a study is a step in the right direction, but there’s no telling whether other producers will step up their own expansion efforts to fill the void, let alone what kind of ramped up production will happen when the study is complete.

And while food scientists are working on other alternatives to trans fats that could be greener and healthier, none are as a cheap-to-produce and easy-toprocess as palm oil, at least for applications requiring a food product to sit on store shelves at room temperature. The best thing we as consumers can do to keep our arteries and our consciences clear is to dial back our consumption of foods that include palm oil or any other trans fat alternatives. Indeed, there’s never been a better time to put down those packaged baked goods and processed snacks altogether.

Contacts: FDA, www.fda.gov/Food/ucm292278. htm; RAN, www.ran.org; UCS, www.ucsusa.org.

(EarthTalk® is written and edited by Roddy Scheer and Doug Moss and is a registered trademark of E – The Environmental Magazine, www.emagazine.com. Send questions to: earthtalk@emagazine.com.)

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PERSPECTIVE October 14-27, 2014

Long Beach Business Journal 23

Foreign Real Estate Investment On The Upswing key element that has been largely overlooked in the United States commercial real estate sector is the increasing involvement of foreign buyers and their confidence in the future of real prop■ REALTY VIEWS erty holdings in this

By Terry Ross country.

The mind-set of the foreign investor is vastly different than the typical U.S. buyer, especially when it comes to expectations. Foreign investors begin with different return goals from those of domestic real estate investment trusts, institutional owners and pension funds. Since the main goal is to invest in a perceived safe-haven market where their money will be protected, foreign investors have lower return expectations and will accept much longer holding periods to achieve a profit.

Making a current return is sometimes a secondary goal.

Many deep-pocketed foreign investors are strategically pulling capital out of their home countries and placing funds in U.S. real estate. New York has become the most popular U.S. market for foreign real estate buyers, where 20 to 30 percent of all commercial purchases are made by foreigners.

A

While the U.S. real estate market has stabilized, some financial indicators have pointed to substantial credit and real estate bubbles in the Asian markets, for example.

The puncture of these bubbles could well lead to some sort of financial crisis in China or with regional neighbors such as Australia and Singapore – and this concern is yet another reason we are now seeing an increase in both direct and indirect foreign investment in the U.S. While London continues to be the top destination for out-of-country real estate investors, the fact that the other four of the top five are in the United States (New York #2, San Francisco #3, Houston #4 and Los Angeles #5) speaks to the reputation of our real estate assets.

The survey of members of the Association of Foreign Investors in Real Estate points out that the U.S. is the “stable and secure” country for real estate investment “by a wide margin.” The U.S. is also the top market when it comes to capital appreciation and for future real estate purchases.

“Our members’ increasing interest in cities beyond the powerhouses of New York, Washington and San Francisco points to the recognition of additional investment opportunities for foreign investors,” James E. Fetgatter, the associa-

tion’s CEO, said. He also noted that Houston’s high ranking shows that investors are starting to look beyond New York and San Francisco for deals.

The countries of origin for this foreign capital may be a surprise to many. Canada is the top foreign buyer of U.S. real estate with Norway an unexpected second. The top category for foreign investment property in 2013 was industrial properties, followed by office, retail and multi-family homes. In 2012, multi-family homes ranked first.

The real amount of foreign real estate investment, however, is a little elusive when you consider the fact that data companies such as Real Capital Analytics look primarily at deed transfers to determine transfers to foreign investors and therefore typically miss the substantial investments by foreigners who partner with domestic operators. There are a number of benefits for partnerships like this, including safe and stable returns in a strong U.S. market, the ability to leverage the expertise of a local partner who knows how to navigate extremely competitive U.S. markets such as the New York City real estate market, and often the opportunity to mitigate transfer taxes and higher property taxes that would likely result if the foreign investor had acquired a controlling inter-

est in a property.

Despite the fact that 2013 saw a record for foreign direct investment in U.S. commercial real estate, it is most likely that the actual amount of foreign capital pouring into U. S. real estate is vastly underreported. It makes sense that foreign investors are increasingly taking on domestic partners, and unwinding the facts of these transactions is sometimes hard to do.

For U.S. operators, partnering with a foreign investor offers greater access to capital, and the ability to move quickly in a market where timing is often the deciding factor in closing a deal. However, as more capital chases a constrained supply of commercial properties, cap rates are driven down and prices up. Eventually local markets feel the impact, as primary markets become saturated and secondary markets attract investor interest.

With a stabilizing U.S. market and seemingly more uncertainty around the world, it wouldn’t be surprising to see more records broken as 2014 comes to a close, and more foreign money finds its way to our shores.

(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.)

Breast Care 101 – Mammograms And Prevention t’s that time of year again.

Time to make another mammogram appointment.

You may feel like dragging your feet because it seems like too much of an inconvenience, but mammograms are ■ HEALTHWISE essential in the

By Homayoon fight against breast Sanati, M.D. cancer.

Annual screening mammograms reduce the number of deaths from breast cancer among women over the age of 40. In fact, it is recommended that baseline mammograms be done between the ages of 35 to 40, based on family history.

What is a mammogram?

A mammogram is an x-ray picture of the breast. There are two different types of mammographic exams: • Screening mammograms are for women who have no symptoms.

• Diagnostic mammograms are used to evaluate a particular symptom such as a palpable lump, nipple discharge, or focal pain. Follow up exams for a prior finding also are in this category.

Who needs a mammogram?

We recommend that women between the ages of 35 and 40 have a baseline mammogram. Once you turn 40, yearly mammograms are suggested. Depending on your family history, your physician may recommend a baseline mammogram at an earlier age.

Who performs my mammogram?

I

Certified, specialty trained mammography technologists perform each exam.

What happens to my mammogram after I leave?

Since we only use digital mammography, your images are digitized to a computer and stored in our system. They can be put on a CD or film, if you or your physician requests them.

Who looks at my mammogram?

Mammograms are read by fellowshiptrained breast radiologists on high-definition screens. All of the radiologists are fellowship-trained subspecialists in breast imaging with more than 50 combined years of experience in their field.

What happens if something is found on my mammogram?

If something is found on your mammogram you will receive a phone call from a Breast Center nurse, asking you to return for additional imaging. You also will receive a letter indicating that additional imaging is required. Women often fret while they are awaiting results, but be assured that the team will let you know quite quickly if something is found.

What happens if there is no abnormality on my mammogram?

You will receive a letter explaining your results and recommending to schedule another mammogram when due.

Can I only come at the same time every year?

Most women come for their screening mammogram at the same time each year because it is easier to remember year-toyear. If you notice something during a selfbreast exam, we encourage you to go to your primary care physician for a clinical

breast exam right away. Your physician will be able to determine if you need to be seen here for a diagnostic exam. A lump or focal problem in your breast, no matter how small, is not something to ignore.

How do I do a self-exam at home?

There is no right or wrong way to check your breasts, as long as you examine the entire area of your breast tissue – including from your collarbone down, and under your armpits and nipples – well enough to notice any changes. The best time to perform a breast self-exam is after your menstrual cycle ends each month, when your breasts are least likely to be swollen and tender. If you no longer have your menstrual cycle, choose a day that’s easy to remember for your self-exam.

Breast cancer does not discriminate.

Some women are genetically predisposed to the disease, while others have no risk factors other than being female. It is important to understand that the great majority of women who are diagnosed with breast cancer have no risk factors and no family history of the disease.

By performing monthly self-exams and getting regular clinical breast exams and mammograms, you can increase the likelihood that if breast cancer is diagnosed, it is found early and is curable. Know your body and listen to it. Seek care if you think you are at risk or might have breast cancer.

Own your health and schedule your yearly mammogram.

(Homayoon Sanati, M.D., is the medical director for the MemorialCare Breast Center at Long Beach Memorial.)

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Presented By The Long Beach Business Journal • October 2014

FOCUS ON THE GOODS MOVEMENT INDUSTRY

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Education And Training Core To Goods Movement Industry

■ By TOM O’BRIEN

his special section of the Long Beach Business Journal reflects the importance of goods movement to our local community, and highlights some of the key challenges confronting the industry. As the article by Dr. Genevieve Giuliano suggests, the industry responds to those challenges with the support of a strong research community. It’s not surprising that Southern California is home to a collection of world-class, freight-focused researchers who help to shed light on why the supply chain behaves the way it does and how key stakeholders might be able to do things better.

A robust goods movement industry also depends on well-educated and trained professionals at all levels to keep the goods flowing. The industry can do on-the-job training, but it depends upon those of us in colleges and universities to make that job easier. That means turning out graduates with strong foundational skills in writing and math, as well as those with more specialized skills that directly feed into careers along the supply chain.

I’m proud to say that California State University, Long Beach has been recognized for its efforts in developing the next generation of freight and logistics professionals. In September, CSULB’s Center for International Trade and Transportation (CITT) was named the Federal Highway Administration’s (FHWA) Southwest Regional Surface Transportation Workforce Development Center of Excellence. It’s a long title with a big mission: to serve as a clearinghouse for information on education and training models for the wide range of transportation sectors and for all points on the educational spectrum. That means from kindergarten through retraining for advanced professionals. Oh yes, and all of that for an eight-state region: California, Arizona, Nevada, New Mexico, Utah, Colorado, Oklahoma and Texas. It’s not a small task. But it’s an important one. And four other centers will be doing the same thing in other parts of the country.

There is good work being done across our region, but up to now there hasn’t been a go-to entity responsible for bringing together the best efforts of federal, state, regional and local departments of transportation and education, schools and industry, and other public and private stakeholders involved in transportation planning, operations and education. We’ll serve as a resource with broad-based knowledge of transportation workforce issues including effective training programs, lesson plans, and funding strategies. We will also help pilot innovative training and education programs in partnership with schools and industry and help facilitate their adoption throughout the Southwest and, by extension, the entire country.

We’re not doing it alone. We have a team that includes our METRANS partners at the University of Southern California. We also have partners

T

at Texas A&M University’s Transportation InstiGOODS tute (TTI) and have brought on board experts with MOVEMENT knowledge of cutting-edge approaches to developing 3 new learning tools, analyzing labor markets and understanding the needs of today’s market for transportation-related education, whether in engineering or logistics or one of the many other disciplines needed for mobility.

The timing is critical because the challenges are great – but so are the opportunities. At a recent forum in Washington, D.C., where the five regional centers were announced, the U.S. departments of transportation and education presented preliminary findings on a study of future transportation workforce needs. The analysis, conducted by Jobs for the Future and the Transportation Learning Center, identified occupational “hot spots” and assessed both the educational and work experiences needed for someone to be deemed competent to work in any of six different transportation sectors, including trucking and the maritime industry.

The study revealed a transportation workforce of over 4 million people in this country. This is a conservative estimate since the data excluded fields like warehousing that depend greatly upon transportation. It identified challenges in increasing the numbers of African Americans and Hispanics in transportation occupations and, at the same time, filling the ranks of the soon-to-be-retired in the transit and maritime industries.

And, despite the very real concerns about our state’s economy, the study’s authors project that California will have one of the highest rates of growth in transportation employment (18 percent) through 2020.

States with key trade gateways and intermodal centers generally do well on the list. These include Louisiana and Texas. The biggest growth is expected to occur in North Dakota where the transport sector serves in large part a booming energy industry.

Another recent study, this one prepared by the American Association of State Highway Transportation Officials (AASHTO), looked at the state of the workforce in state transportation departments. Across the board, officials in states of varying size and location expressed concerns about their ability to recruit employees from an applicant pool without the right set of skills, retain workers who increasingly move between jobs more often than previous generations and adequately train workers, particularly to move into upper management. This latter phenomenon was discussed at the forum as the “buddy-to-boss” problem.

There is no one solution to all of these challenges. The transportation industry will solve some of the workforce needs on its own. It always has. Goods movement in particular has relied upon a lot of on-the-job training to get employees ready for a constantly changing set of conditions. In an often fragmented supply chain, there has also been a lot of mistrust of training from “the outside.”

But that’s changing as employers of all kinds find a need for workers with strong foundational and analytical skills that need to be taught early in a student’s educational career. That’s why CITT recognizes the need to begin advertising transportation as a serious career pathway when children are fascinated by trucks, trains and ships and then identify opportunities for them to turn that interest into knowledge. Then it’s our job to work with the employers to determine what skills are needed and to make sure the programs we offer fit the bill.

It’s not an easy job, but it’s a vital one. And it is my hope that the new resources we can bring to the table as a result of our recognition by the FHWA will help us demonstrate to the rest of the country the tremendous leadership, capacity and innovation in the goods movement industry here at home.

(Dr. Thomas O’Brien is the interim 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.) ■

InsIde ThIs Issue

12 Real And Perceived union Actions Can

3 education And Training Core

Cause Ripples In The Movement Of Goods

To Goods Movement Industry

4 Changing strategies Of Chassis Management And Resolving The ‘Ripple effect’

8 energy And Goods: efficiency And export Potential 10 Warehousing: The Pivot Point Of The supply Chain

14 MeTRAns Looks For Most efficient Ways To distribute, Warehouse And Move Goods Prepared By The Long Beach Business Journal 2599 e. 28th street, suite 212, signal hill, CA 90755 562/988-1222 • www.lbbusinessjournal.com reproduction in whole or in part is prohibited without written permission from the publisher

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GOODS MOVEMENT

4

Changing Strategies Of Chassis Management And Resolving The ‘Ripple Effect’

■ By SAMANTHA MEHLINGER Senior Writer

shortage of a basic piece of trucking equipment is causing major congestion issues at the San Pedro Bay Ports, impacting all entities involved in the logistics and goods movement industries. That piece of equipment is called the chassis, the frame and wheels upon which a container sits on a truck.

The chassis crisis emerged when ocean carriers began divesting themselves of their chassis a year and a half ago, selling or turning over their leased chassis to intermodal equipment providers, according to John Cushing, president of PierPass, a nonprofit aimed at reducing congestion and improving air quality in the ports of Long Beach and Los Angeles. There are three competing intermodal equipment providers in the area controlling the majority of chassis used throughout the ports: DCLI, Inc., Flexi-Van and TRAC Intermodal.

“They thought it was just going to be too big of a challenge operationally and financially to manage these chassis,” Alex Cherin, executive director of the Harbor Trucking Association, explained.

“The challenge has been that, in this transition, the chassis providers have not put enough chassis out into the marketplace to meet demands,” Cushing said. “Many trucks are coming down to the terminal to pick up a container and they don’t have a chassis, or there is not one available down at the terminal from these intermodal equipment providers.”

If truckers have to wait to load a container until they are able to secure a chassis, a backup occurs at the terminal as laborers have to shift the container to make room for more cargo being unloaded from the next ship coming in. Then the container has to be retrieved when the chassis is finally available. This causes wait times for truckers lining up at terminals to pick up their cargo. And all of this backup means that whoever owns the cargo in the container is left hanging, unable to control when they receive their shipment.

“It has a ripple effect throughout the entire operation,” Port of Long Beach Chief Executive Jon Slangerup told the Business Journal. Now that the port is regularly receiving large container ships carrying 10,000 twenty-foot equivalent units of cargo or more, it is key to have the infrastructure in place to handle that cargo – and without enough chassis, that has not been the case.

“You need everything working well to manage the velocity and the throughput,” Slangerup said. “You have to have the rail system working well, the trucking operations working well and you have to have the beneficial cargo owners (companies importing or exporting goods) prepared to receive the freight. It is a very integrated system with little or limited oversight. My view is that, while it works okay in non-crunch times, when the crunch happens it can come apart pretty quickly.”

“At this stage of the game, at this moment in time, chassis really are the number one problem in the center of this congestion issue,” Slangerup said. “We are highly sensitized to the pain everybody is feeling in this process. The shipping companies are struggling because we are about three to five days behind as an operation in terms of what we normally do in throughput.”

“The congestion results in delays,” Cherin said. “Typically, your large cargo owners like a Target or a Wal-Mart have a certain number of containers every night that they need to move from the terminals to their distribution centers. In the last year, they’ve been getting only a fraction of those because of congestion. And again, the chassis are one component of the congestion.”

Noel Hacegaba, chief operating officer for the Port of Long

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GOODS MOVEMENT

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Photograph by the Business Journal’s Thomas McConville

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Beach, acknowledged the chassis-related congestion has financial consequences. “It is just as important to get the cargo from the port to the warehouse as it is to get it from the warehouse to the final point of destination.

Speed to market and getting the goods across the cash register – that’s the way you make money.”

Cushing said part of the reason there aren’t enough chassis available is that they are not being repaired in a timely manner after use, which is the responsibility of the intermodal equipment providers.

Bill Shea, president and CEO of DCLI, told the Business Journal that his company “is currently repairing chassis seven days a week, at considerable expense, to reduce the out-of-service percent of chassis.” He added that the availability of mechanics has been “a limiting factor for all three leasing companies.”

Also at issue is how the chassis are managed. With three separate companies controlling most of the chassis around the port complex, they each require their chassis to be returned to specific locations.

So when a trucker unloads cargo at a terminal, the trucker has to take the chassis back to a different location. This is what is known as a “split move” in the trucking industry.

“All of our core stakeholders – the terminal operators, the shipping companies, the trucking companies, the beneficial cargo owners – all of them have directly and frequently expressed their frustration about what’s happening,” Slangerup said.

A Silver – Or Gray – Lining Stakeholder groups in the goods movement industry, including the Port of Long Beach, Port of Los Angeles, PierPass, the Harbor Trucking Association and the intermodal equipment providers themselves have been working together for about a year to try to identify a better strategy of chassis management to alleviate congestion at the ports. “I think we will have it solved next year,” Slangerup said.

“Our job is to facilitate discussions among stakeholders and try to find the common ground between them and encourage, and in some cases initiate, efforts to implement solutions,” Slangerup stated. “We put together a chassis operations group more than a year ago in anticipation of the shift where the major ocean carriers divested their ownership in chassis and these new asset management companies picked up those chassis with the intent of conducting commercial business,” he explained. The chassis operations group is made up of stakeholders including both ports, railroads, trucking companies, ocean carriers, terminal operators, beneficial cargo owners and workers.

“We were simply trying to be as proactive as we could in forming a group to assess how those individual [chassis] pools would satisfy demand,” Slangerup said of forming the group. “Obviously you can see it did result in dialogue between the chassis pool owners, but

Photograph by Tim Rue

the actions have taken longer than what anybody anticipated and has resulted in this near-term crunch.”

Both the Long Beach Board of Harbor Commissions and the Los Angeles Board of Harbor Commissioners have formed port efficiency subcommittees to address congestion issues at the ports. Long Beach Harbor Commission Vice President Rich Dines and Commission Secretary Lori Ann Farrell head up Long Beach’s committee, while Los Angeles Harbor Commission Vice President David Arian oversees the Los Angeles committee.

In early October, Slangerup created a congestion relief team, focused on the chassis management issue, as a subset of the Long Beach port efficiency committee.

Dialogue among the three main chassis providers, spearheaded by DCLI’s Shea, may soon result in a near-term solution, Slangerup said.

DCLI, along with Flexi-Van and TRAC, initiated a joint solution to apply a management system that would allow them to bill each other and ultimately bill the customer for the chassis as they are used on a unit basis.”

He called this an “interoperable agreement.”

Shea told the Business Journal that DCLI, TRAC and Flexi-Van began “injecting approximately 6,000 [new] chassis into the Southern California in August.” He estimated about 3,000 new chassis would be delivered in October and November. In the mean time, DCLI has created hotlines and daily e-mail blasts to inform motor carriers about chassis availability and their locations to help alleviate congestion. DCLI and Flexi-Van have also been in daily communication about “sharing surplus assets at common facilities,” Shea said.

In the long-term, what Slangerup and many others believe is needed is a chassis management strategy called a gray chassis pool.

In a gray pool, “chassis are really neutral in terms of where you pick them up, where you return them and how you use them,” Cherin explained. “They would be managed centrally by one entity and have more of a uniform operation,” he added, noting that it appears a gray chassis pool strategy is likely to be implemented in Long Beach and Los Angeles some time in the future.

“Clearly the long-term solution is a gray chassis fleet or a pool of chassis managed in an interoperable manner where the trucker wouldn’t have to worry about returning a chassis back to its origin but could return it to any terminal,” Slangerup said. “The efficiency of that process . . . would be dramatically improved over what it is today. The work that DCLI, FlexiVan and TRAC are putting together under Bill Shea’s leadership actually has a chance of satisfying that.”

According to Shea, DCLI and Flexi-Van plan to implement a new chassis pool management model in early 2015 which would make about 90 percent of chassis in the area part of a gray pool, “creating interoperability for motor carriers and terminal operators.” He called the model the “Pool of Pools,” which he said would hopefully be ready to go on January 1, 2015. ■

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GOODS MOVEMENT

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Energy And Goods: Efficiency And Export Potential ■ By MICHAEL GOUGIS Contributing Writer

lean-air regulations, the savings of automation and the energy explosion across North America are combining to transform the way goods are moved through the ports of Long Beach and Los Angeles, and even hold the potential for reshaping the ports themselves, experts say.

Zero-emissions equipment, automated machinery, increasing efficiency and interests in alternative fuel sources all are driven by the potential for an improved bottom line. Simply put, all other things being equal, using less energy saves any business operation money.

“North America is undergoing a major shift. The significant changes in the [energy] production system in North America are causing impressive adjustments in the system that we haven’t seen in my lifetime.

We are in a period of major change,” says Don Paul, executive director of the University of Southern California Energy Institute and the William M. Keck Chair in Energy Resources.

As the local ports are adjacent to residential areas and are in a geographic region that struggles with air quality, regulations and market forces have pushed goods-handling operations toward zero-emissions equipment. Cranes and cargo haulers are not only now fully electric but in some cases are fully automated. And the fact is that the ports will become more and more reliant on electricity in the future.

“What we’re going to see is a continuing reliance on the grid to provide power to the port,” says Carter Atkins, an environmental specialist at the Port of Los Angeles.

While port officials started the push to electricity, requiring ships at berth to plug in to onshore electrical power sources rather than continuing to run their diesel engines, rising diesel prices are helping move the goods movement industry in that direction.

“Initially . . . the goal was to make it cost-neutral between burning diesel fuel and using electrical power,” Atkins says.

“Due to the Air Resources Board fuel regulations, as well as being in an emissions-controlled area, we see the price of diesel fuel continue to rise. It looks like the numbers are showing that using electricity is cheaper than burning diesel fuel, particularly the low-sulfur diesel fuel that ships have to use within 24 nautical miles of the ports.”

Not to overstate the obvious, but there are two ways to ensure that electricity prices remain competitive and the power supply remains adequate to the demand: Use less and create more. The ports are looking in both directions. The replacement of the lighting at the facilities with low-energy LED units promises a reduction in electricity use of up to 50 percent. And the installation of solar power generating arrays atop port buildings, parking lot covers and otherwise unusable real estate can help generate renewable power.

Another energy-related change in the goods movement industry has to do with the dramatic expansion of oil and natural gas production in North America. In Canada, Mexico and the United States, oil and gas production has ramped up so much that, not only are supplies plentiful, prices are low. This reshapes the goods movement infrastructure in many ways.

“There’s a huge shift going on throughout North America,” says Ron Heffron, vice president at Moffatt & Nichol, an international engineering firm headquartered in Long Beach. “We’re not bringing in as much crude as we used to. Instead, the crude is coming by pipeline and some by rail from some of our domestic sources that are producing at a record pace. The Bakken shale formation in North Dakota, the Eagle Ford shale in Texas. That’s changing the dynamics of the industry dramatically. It’s negating the need for bringing in oil from faraway places like Saudi Arabia into the West Coast.

C

Zero-emissions equipment on the docks at the Middle Harbor project under construction at the Port of Long Be pay environmental dividends all the way down through the system, from cleaner air to cleaner water. Such eq powered by renewable solar, also can help companies clean up their bottom lines. Above: These battery-powe tainer movers are automated and follow sensors embedded in the pavement. Efficient movement of container and full, is critical to economic as well as environmental sustainability. Top: Inside this building, battery-powere emissions cargo moving equipment will have their battery packs swapped out within three minutes, or less tim takes to refill a large piece of diesel-fueled equipment. When the project is completed, operations at Middle will be among the most energy efficient in the world. (Photographs by the Business Journal’s Thomas McConv

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ction at the Port of Long Beach will to cleaner water. Such equipment, Above: These battery-powered conent movement of containers, empty his building, battery-powered, zeron three minutes, or less time than it eted, operations at Middle Harbor Journal’s Thomas McConville)

Instead, there are a number of companies lookGOODS ing at building crude-by-rail terminals. So they’re MOVEMENT bringing in crude that will feed local refineries. It by9 passes the marine facilities in the port and adds this new rail component.”

One manifestation of that change is in the way cargo ships are fueled. You can’t use batteries to get an 18,000 TEU cargo carrier across an ocean – at least, not yet. So the ships require liquid fuel. Traditional diesel is dirty. Low-sulfur diesel is more expensive, but it can simply be poured into the existing ships and it will work.

Liquid natural gas is cheap and clean, but it requires retrofitting a ship to use the new fuel. It’s all a balancing act, with the bottom line as the fulcrum, and it is changing the vessels used to move goods.

“Now there’s a big push to lower the cost of operating vessels while cleaning up the air, and LNG fits that bill,” Heffron says. “But it requires new infrastructure. It’s a slow change. It’s happening initially with coastal trades that are short sea shipping-type arrangements. So, for serving places like Puerto Rico, there are LNG bunkering [fueling] stations in places like Jacksonville. Then you’ve got places like Puget Sound looking at LNG bunkering for tote vessels serving Alaska – it’s that sort of trade. Matson is building LNG-powered vessels that are really dual-fuel vessels to serve the Hawaii trade.

There are very few transoceanic monster container ships that are going in this direction at the moment. So the market right now and in the near term is going to be for shorter-distance vessels.”

“It’s still an unknown,” Paul says. “Certainly the introduction of ultra-low-sulfur diesel addresses a lot of the emissions issues and does not require a change in the hardware of the vessel. How much it changes will play out over an extended period of time. It takes a long time to convert a fleet. Equipment lasts a long time, and ships in particular last a long time.”

However, with the production of oil and LNG skyrocketing, pressure is building to change the laws preventing the export of U.S.-produced oil. If it changes, expect to see changes in the ports, especially the ones associated with refineries.

“Interestingly enough, we’re seeing the conversion of LNG facilities that were designed and under construction 10 years ago for imports, in anticipation of a shortfall in natural gas production. They are now being reconfigured for export,” Paul says. “We are in a period of major change. But these things tend to be focused on whatever companions are taking place in the refining system. So ports associated with refineries are going to see some of this change.”

“The challenge is that LNG is very, very cold,” Heffron says.

“You have to use cryogenic hoses. LNG is a gas that’s been cooled to minus 260 degrees. You have to keep it at that temperature.

There are plenty of challenges. Keeping the fuel cool and also you have an issue of boil-off, so you can’t store it for long periods of time like you can with traditional fuel. You’ll have a boil-off situation and you’ll lose a lot of volume.”

“The other issue is with siting,” he says. “The proximity issues become important. There are lots of entities, including a working group within the International Association of Ports and Harbors, that are looking at how you resolve the safety issues of working a vessel in a port while that vessel is being bunkered (fueled) from the other side. If there’s an incident, it has the potential to be very disruptive to the port.”

From fueling ships to moving containers to lighting stores, energy efficiency through the entire production, distribution and retail chain has become a major area of interest, says Christopher Tang, a UCLA Distinguished Professor and Edward W. Carter Chair in Business Administration and visiting professor at U.C. Berkeley’s Haas Business School.

“Companies are aware that they have to factor energy costs into the consideration, which they did not have to do as much in the past,” Tang says. “Companies, like Walmart, have embarked on studies. Walmart, in particular, is deeply involved in studies on energy consumption along the supply chain. They are working closely with their vendors and in their retail stores to cut down on energy consumption. So, for example, many of the stores are using low-emissions light bulbs, they reduce their lighting, and they use more energy-efficient refrigeration to help them reduce energy costs. They are also conducting audits of their vendors to encourage them to reduce energy costs as well.

“With their vendors, with their shippers, and also with their [rail networks], they are reconsidering the way they produce goods and the way that they transport materials.” ■

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Warehousing: The Pivot Point Of The Supply Chain ■ By MICHAEL GOUGIS Contributing Writer

hile looking at the mind-warping variety of goods in even the smallest retail outlet at a fashion mall, it’s hard to envision the state in which those products arrive in Southern California. But imagine opening a shipping container and finding nothing but a single style of a particular blue running shoe – and what appears to be about a gajillion of them – and being tasked with accurately sorting, tagging, repackaging and shipping them to stores across the nation.

Categorizing the raw material, preparing it for presentation to the consumer on the retail floor and repacking it for the final leg of the journey takes place in the network of warehouses that serve as the points of entry for goods entering the United States through the ports of Long Beach and Los Angeles – the busiest port complex in the nation.

“Warehousing is a critical component of the supply chain. It’s actually a pivotal point because that’s typically where goods are coming in in a more raw state and leaving in a more finished state,” says Lance Ryan, senior vice president, marketing and leasing for the Carson-based Watson Land Company.

“Usually, in terms of import product that’s coming in from overseas manufacturers, they are going to have an entry port, and the West Coast has a high volume of imports, so we’re typically seeing that at our warehouses here in Carson, Long Beach, Rancho Dominguez.

That’s going to be the point of origin initially for those goods. The warehouses here act like a point of entry, just past the port by a few miles. That’s where the product is initially re-manipulated, packaged for final consumption and sent out.”

As manufacturing and retail processes evolve and become more efficient, warehouse functions are transforming as well. Locations, land complex designs and the buildings themselves are constantly evaluated and re-evaluated in terms of the shifting political environments and the ever-changing economic needs of retailers, both traditional physical location operations and online sales outlets.

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The changes in retail from a location-based purchase operation to Internet-based sales have changed the actual warehouse facility, says Tom O’Brien, the acting executive director at the Center for International Trade and Transportation at California State University, Long Beach.

The building might be a center for breaking down bulk goods or serve as a “fulfillment center” with an automated distribution system for filling orders, although on the coast, just a few thousand yards from the ports, the former is more likely than the latter.

“It has been driven by changes in retail, a shift to what many are calling omni-channel distribution,” O’Brien says. “You’re not just serving retail establishments, traditional retail establishments, but retail plus home delivery, plus locker service like Amazon.com. There are retail models where you’ve got pick-up-in-store goods that have been ordered online.

“All of these different channels are changing the footprint of warehouses because they need to be more flexible. The newer warehouses are 30 to 40 feet high instead of 26 feet high. They’ve got a bigger footprint, they’ve got wider aisles, and they’re located much closer in to urban areas so they can serve as fulfillment centers and not just [perform] warehouse and storage [functions].”

The shifting nature of the warehouse and the economic system by which goods are retailed has led companies to re-evaluate location, balancing specific needs with distribution costs and tax landscapes. The latter has proven to be a tricky topic: Minnesota attempted to tax warehousing operations, only to rescind the tax earlier this year. “States are playing catchup, trying to figure out how to regulate these new types of businesses without driving them away,” O’Brien says.

It is the varying tax landscape that has led Amazon to locate fulfillment (order-filling) centers east of California, but has left other large retailers comfortable with large operations in the state, says Christopher Tang, a UCLA distinguished professor and Edward W. Carter Chair in Business Administration, visiting professor at U.C. Berkeley’s Haas Business School and the author of several books on retailing, supply chain management and operations.

“There are multiple facets to this issue. Sometimes the warehouses are close to the producer to ease the storage of the produced goods. And sometimes the warehouses are closer to the customers, because that reduces the last-mile transportation costs,” Tang says. “It is a trade-off over that.

“The online stores, in particular companies like Amazon, have to factor the state taxes into the consideration. That is why for a long time Amazon has not had a warehouse in California – they did not want to pay a state tax in California. That’s why they are in Reno; that’s why they are in Arizona.

Then they factor the tax issues into energy and operating costs, everything.

“That is for the online stores. For the brick-and-mortar stores, that is much less of an issue, because they have to pay the state tax whenever they sell the product.”

Pictured here is the warehouse for C.H. Robinson LA Gateway Management Center at Watson Land Company’s Dominguez Technology Center in Carson. On adjacent page, top, a truck is loaded at the Cal Cartage facility in Wilmington, and at right is the Costco store in Lakewood. (Photographs by the Business Journal’s Thomas McConville)

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So warehousing location becomes a function of a complex series of calculations, all aimed at maximizing the bottom line, Tang says.

“So now they are doing research work to try to decide where to locate the warehouse and what kind of transportation mode they should use to lower the total cost. The total costs include the energy costs as well as transportation costs as well as the duties – especially when you are dealing with imports. So they have to look at the total costs of operations.

“You look at a company like Coca-Cola: they have to decide where to have their bottling plants, where they should have their warehouse, where they should have their distribution centers, where they should have it shipped to the retailer. They also have spent a great deal of time automating the system.”

External economic forces also have helped reshape the location and function of the warehouse facility – the building and its environs – as the ports look to maximize the speed at which cargo is processed and moved out of the terminals (thus lowering costs for the shippers and retailers), while minimizing the impact of increasing cargo traffic on the municipal infrastructure.

“Of the product that comes in, roughly 40 percent is going to be consumed locally,” says Ryan. “By that, we mean the West Coast. The remainder of that is what’s called discretionary freight, and that’s going to be land-bridged. That means it’s going to be moved from the warehouse via truck or intermodal, and that’s going to be destined for Chicago or the East Coast. So that’s typically what’s happening. It’s really a national gateway to the Pacific.”

As a point of entry, the process that takes place in the warehouses adjacent to the ports is what Ryan calls “value-add” – moving the product closer to the condition in which it will actually be sold to the customer.

“Value-add work is often where cartons are opened up and parts of the product are taken out and re-packaged. And they’re re-packaged in a format that’s specific for a retailer. You may have boxes of same-color shoes, and those are separated out by size and then segregated to go out to specific stores,” Ryan says. “As another example, you’ll see that with apparel goods. They’ll arrive in a carton, and they’ll be taken out, they may be steam-pressed, they may have tags added on, that are specific to retailers for price and sizing, and so on. They have garment bags put over them and they are sent out.

“With the sophistication of business logistics, a lot of the activities that may have occurred at the retailer in the past . . . now occur at the thirdparty logistics provider level. And those third-party logistics providers are hired by the retailers to handle the product or the freight, to package it appropriately and deliver it to the retail store.”

These processes mean warehouses are planned and built differently now, Ryan says.

“Definitely there are two things that customers GOODS are looking for now in terms of functionality – MOVEMENT more dock door positions and secure truck yard 11 areas. Going back several years, when [security passes] were implemented at the ports, there was an increase in off-peak-hours moving of goods out of the ports – which is a good thing. It makes them more efficient, and it puts trucks over the road at night when there is less traffic and less conflict with other transportation modes.

“As a result of that, though, there are loaded containers coming in at all hours,” Ryan continues. “Often those are off-hours, and they need somewhere to put them. They’re not going to work the freight, perhaps, until the morning when the next shift arrives. So they need a secure location for them.”

A warehouse is a busy place. A 24-hour warehouse operation is a busy place around the clock. The best neighbor for a 24-hour warehouse operation is – another warehouse.

“The other piece that we’ve seen is a strong demand for masterplanned industrial centers,” Ryan says. “The reason we’re seeing that is that these operators have had to move to more of a 24/7 model as a result of moving to bringing in containers during off-peak hours. So they need to be in an area which is compatible to their use, where their surrounding users are doing the same thing and they’re not conflicting with other uses.” ■

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Real And Perceived Union Actions Can Cause Ripples In The Movement Of Goods

■ By BRANDON FERGUSON Staff Writer

hile labor unions wield significant leverage in negotiating for higher wages and benefits and have the power to disrupt international trade with strikes, their effect on the economy can, at times, be overstated – depending on whom you ask.

On October 9, the National Retail Federation (NRF) sent a letter to the president of the International Longshore and Warehouse Union (ILWU) and the chairman of the Pacific Maritime Association (PMA). Both have been engaged in secretive negotiations over a new labor contract for nearly 20,000 longshore workers employed at 29 West Coast ports. Though the previous six-year contract expired on July 1, ILWU workers remain on the job.

In the letter, signed by NRF President Matt Shay, the federation argued that the prolonged discussions are leading to congestion at the port, which is having an adverse impact on the flow of goods in advance of the holiday season. Shay urged both sides to quickly come to an agreement.

“Finalizing a new labor contract is an absolutely critical component to working through the backlog of shipping containers now piling up at West Coast ports,” the letter read.

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Speaking to the Business Journal, NRF’s Jonathan Gold, vice president of supply chain and customs policy, said the lack of a contract has led to the hiring of unskilled workers at the ports as well as uncertainty over who’s responsible for the maintenance of the chassis that trucks use to haul goods.

On the issue of chassis, Gold explained that since shipping lines recently began selling their inventory of chassis to private interests not involved in the contract talks, confusion has reigned over who is responsible for chassis repair. Sources tell the Business Journal that ILWU negotiators are pushing for full responsibility over chassis repair and maintenance.

“From what we understand, it’s taking longer than it normally does so you have a lot of chassis that are being laid up and not moving,” Gold said.

Port of Long Beach spokesperson Lee Peterson declined to comment on the ongoing contract negotiations but said that congestion at the port is likely stemming from chassis shortage issues unrelated to contract negotiations [Refer to article on chassis management, Page 4]. He added that port officials are eager to see a resolution.

“As always, we’re looking forward to a resolution and meanwhile the ports are open and cargo is moving,” Peterson said.

A spokesperson for the PMA said he, too, couldn’t comment on the contract negotiations, and directed the Business Journal to a series of joint press releases issued by the PMA and ILWU. The most recent one, issued in late August, stated that the groups had reached a tentative agreement on the issue of health benefits.

The Business Journal also reached out to ILWU spokesperson Craig Merrilees who, though he declined to comment on the negotiations, dismissed the NRF letter as “silly” and referred to the group as anti-union.

“You know, it’s Target and Walmart,” he said.

When asked about the media blackout surrounding negotiations, Merrilees explained it allows negotiators to focus on the task at hand.

“The negotiators have decided to focus on getting the job done at the negotiating table instead of feeding the media circus that sometimes surrounds negotiations,” Merrilees said. “It’ll be done when it’s done. They’re working as hard as they can to get it done.”

Jock O’Connell, an international trade advisor with Beacon Economics, explained that he too doesn’t think the NRF’s letter holds water. He further added that much of the port’s current problems have less to do

Photograph by the Business Journal’s Thomas McConville

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with uncertainties surrounding organized labor and more to do with the issue of chassis ownership.

“I can appreciate the National Retail Federation being anxious that something untoward will happen, but it seems nobody else I’ve talked to has expressed any anxiety that there’s going to be some sort of disruption at the ports stemming from a breakdown in negotiations,” O’Connell said.

He explained that the NRF’s fears stem from the fact that ILWU laborers are essential links in a supply chain – a chain that includes tugboat pilots, terminal operators, distribution centers and truck drivers. Each, O’Connell said, has significant power to disrupt trade.

This summer, more than one hundred truck drivers who ship goods from the ports of Los Angeles and Long Beach launched a five-day strike, briefly halting the flow of cargo through the ports. The drivers, who aren’t union employees, work for three companies: Pac 9, Green Fleet Systems and Total Transportation Services (TTSI). They argue that they are improperly classified as contract workers, which they say allows trucking companies to pay unfair wages.

Alex Cherin, a spokesman for the trucking companies, said the strikes were just an attempt by outside groups, specifically the Teamsters Union, to organize the truckers.

In July, Los Angeles Mayor Eric Garcetti ordered a “cooling down” period, promising an investigation into potential labor law violations. The truckers returned to work and, for now, quiet prevails. But it’s uncertain when strikes could resume.

“It’s pretty quiet right now, but this is an issue that’s been going on for 20 years,” Cherin said. “Ever since the deregulation of the trucking industry in the 1980s, various labor groups have tried to come in and organize independent contractors and various companies. I’m sure that it will be an issue again going forward.”

Barb Maynard, a spokesperson for the Teamsters Union, said truckers continue to be dissatisfied with the situation, adding that workers have been illegally fired in the wake of the summer strikes.

“We are still technically in that cool-down period, although the companies are consistently violating the terms of that cooling off period. The drivers are really assessing the situation and assessing what they want to do, and talking amongst themselves to make a decision,” Maynard said.

Maynard explained that truckers are awaiting a ruling by the National

Labor Relations Board on whether or not two drivGOODS ers, who were reportedly fired by Green Fleet SysMOVEMENT tems before this summer’s strikes for participating in 13 union activities, will be reinstated. She added that more than 30 drivers have been fired by TTSI since the cooldown period was ordered in retaliation for filing wage claims against the company.

Cherin, however maintained, that no one was fired by TTSI. “[TTSI] transitioned from an asset-heavy company to an assetlight company and as a result of that had to rewrite their independent contractor agreements. Some drivers chose to re-up with the company and sign those new agreements. Some chose not to.

Nobody was fired,” Cherin said.

While breakdowns in contract negotiations and picket lines have the potential to cause economic ripples throughout the distribution chain, the way a company responds to these threats, whether perceived or real, can also have effects. O’Connell cited a move by large retailers last spring to boost imports for the fall season in anticipation of a potential breakdown in ILWU contract talks.

“We began in the spring to see unprecedentedly large surges of goods coming into the U.S.,” O’Connell said. “Largely in anticipation of disruption.”

This move has likely cost retailers money, O’Connell said, because companies would have to spend extra money warehousing holiday items such as Halloween costumes and Christmas decorations. Stores that decided to put these items out early would have to clear shelf space for the out-of-season items. O’Connell said it was the companies that bet on a strike not happening that probably came out ahead.

“They didn’t burden themselves with the additional warehousing and all the financial charges that go with hanging onto merchandise, that you’re not going to make any money from for another two or three months,” O’Connell said.

With the peak shipping season now over, O’Connell said he thinks it unlikely there will be any serious disruption in the movement of goods this holiday season.

“Certainly nothing that’s going to keep Santa from making his appointed rounds in December,” O’Connell joked. ■

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GOODS MOVEMENT 14

METRANS Looks For Most Efficient Ways To Distribute, Warehouse And Move Goods

■ By GENEVIEVE GIULIANO

he importance of international trade to the Long Beach community makes it critical to keep industry at the forefront of innovation. In order to retain competitiveness in the constantly changing world of trade, local businesses must not only constantly operate “better, faster, cheaper,” but also respond to community desires for a cleaner environment. Achieving these dual objectives requires continuous innovation.

Universities have two main jobs: educating the next generation workforce and developing innovations in technology, policy and practices that provide solutions for current and future problems through basic and applied research. The METRANS Transportation Center specializes in freight research, and addresses many of the topics discussed in this special section. METRANS is a partnership of USC and CSULB, and was established in 1998. Its mission is to solve metropolitan transportation problems through research, education and outreach. This article highlights some of METRANS’ research.

Distribution and warehousing: Not only are warehousing and distribution practices changing, the location of warehousing and distribution activity is also changing. Technology developments – automation and information technology – have made large-scale operations cheaper and more efficient, generating demand for space in low land-price areas of the region. Many observers question whether the efficiencies realized within the supply chain are offset by longer truck trips, since these facilities are more distant from population and employment centers. Longer truck trips translate to more road congestion and pollution. However, in a region like Los Angeles, it is also possible that these relocations do not generate longer truck trips, because so much warehouse and distribution center (W/DC) activity is export-oriented. METRANS researchers are examining trends in W/DC locations in four California metropolitan areas to determine whether W/DC location trends are consistent across metro areas and, if so, what the net impact on truck travel is. It is important to understand the full effects of these location changes so that congestion and pollution problems can be effectively addressed.

Energy and goods movement: Energy – in the form of declining real prices of fuel over several decades – has been one of the major facilitators of globalization and complex international supply chains. Efforts to reduce greenhouse gas (GHG) emissions and uncertainties regarding price and availability of alternative fuels will surely affect Southern California and international trade more generally. California’s AB 32 brings the transport sector into cap and trade in 2015, and coastal areas subject to low sulfur fuel requirements are growing.

The San Pedro Bay ports have been at the forefront of efforts to reduce particulate emissions and in doing so have also improved energy efficiency. METRANS researchers have studied many of the policies implemented by the ports, including PierPass, appointment systems, the Vessel Speed Reduction program, the Clean Air Action Plan and, most recently, some of the

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technology experiments conducted under the Technology Improvement Program. This research not only provides an independent assessment of what works and what doesn’t, but helps us to understand how to build the collaboration necessary for effective programs and how to most effectively achieve air pollution and energy goals.

A more efficient goods movement system: METRANS sees efficiency improvements as the most effective short-term strategy for reducing energy consumption and GHG emissions. Efficiency improvements reduce costs and increase competitiveness. Researchers are developing scheduling models to better utilize the capacity on Southern California’s rail system. With better scheduling, more and longer trains can be accommodated, and conflicts between freight and passenger trains can be reduced. With faster service, more freight traffic may be carried by rail. Researchers have developed models to reduce drayage truck travel by repositioning empty containers and chassis.

These models show that substantial efficiency gains are possible.

METRANS analyzed the potential gains from load consolidation in the California flower industry. Research showed that load consolidation could improve competitiveness in the national flower market, and as a result industry representatives obtained a federal grant to build a consolidation center. Providing such information is an incentive for the industry to collaborate to realize these efficiencies. However, there are often many obstacles that prevent these efficiencies from being exploited. Our research not only develops technical solutions but also addresses how changes in chassis or empty container management could actually be implemented.

Not all efficiency improvements come from within industry; the public sector has a role to play as well. METRANS researchers are examining how better traffic management could improve truck flows. For example, in areas where there is substantial truck traffic, would it be more efficient to favor trucks at traffic signals? Trucks use most of their fuel accelerating and slowing down; traveling at a constant speed would reduce both emissions and fuel consumption. Another example is better real-time traffic information. Researchers are working on methods to predict the impacts of accidents on traffic in near real time so that travelers would know the length of the backup and its anticipated duration, allowing them to avoid these delays.

Looking to the future: Universities play a special role: they conduct long-term research, research that takes years or decades before there is a product. Long-term research is a tough sell, because the payoff time is long and the risks of failure are high. However, long-term research is the basis for innovation; without it, today’s technology developments would not exist.

METRANS is also engaged in long-term research. Automated vehicle technology is developing rapidly. METRANS is exploring the concept of truck platoons: several trucks traveling as a “train,” guided by vehicle-to-vehicle communications systems. There are many questions: how such communications would work, how accelerating and slowing down would work, how far apart the trucks should be, how to manage entry and exit from the platoon, and how such platoons would affect highway performance. It will take many years to answer these questions and make automation a reality.

METRANS is also examining the concept of integrated corridor management: how might we manage all modes (cars, trucks, public transit) across all facilities (freeways, streets, rail transit lines) to optimize flow for the entire corridor? Integrated corridor management (ICM) requires coordination of ramp metering, traffic signals and transit service operations in real time. It also requires being able to predict how travelers will respond to changes in signals or ramp meters or transit fares. Researchers use complex mathematical models to determine how ICM might work, and then test their results in simulation studies. Eventually this research will lead to better performance of our transportation system.

Universities play a critical role in supporting the innovation process.

METRANS researchers are working to promote a more efficient and sustainable freight system in Southern California, both today and in the coming decades.

(Genevieve Giuliano is the Ferraro Chair in Effective Local Government and rofessor and senior associate dean of Research and Technology at the Price School of Public Policy at University of Southern California (USC), and the director of the METRANS Transportation Center. Dr. Giuliano's current research includes analysis of growth and development of employment centers, examination of how ports and supply chains respond to environmental regulation, and development of planning and management applications using real-time transportation systems data. She was recently appointed to the National Freight Advisory Committee.) ■

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