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Overview: How Does the Port Make Its Money?

Above: The Port manages the working waterfront in San Diego Bay, where long-shore workers offload cargo for the region at the Tenth Avenue Marine Terminal.

HOW DOES THE PORT MAKE ITS MONEY?

The Port of San Diego’s budget is $151 million. About $86 million of its operating revenue comes from real estate waterfront leases each year. The real estate division’s purpose is to promote development. It is in charge of negotiating and managing leases as well as conducting rent reviews. Most of the port’s remaining revenue – about $40 million – comes from Marine Operations. This division manages the Tenth Avenue, National City and Cruise Ship terminals.

QUESTIONS ABOUT MARITIME HEALTH

For most of its 46 year history, the Port's marine operations has lost money totaling tens of millions of dollars. Port officials say maritime has made money for the past three years. But critics say that profit is the result of an accounting maneuver. Since 2004, the port has transferred millions of dollars in real estate revenue into maritime. Port Chief Financial Officer Jeff McEntee defends the transfers. He says the leases are for businesses connected to maritime.

Audio

Aired 7/10/09

"They’re located right along the waterfront and if there’s any business that one could define as maritime related they all have to do with shipyards, yacht repair facilities. Dependent on the water use."

“They’re located right along the waterfront and if there’s any business that one could define as maritime related they all have to do with shipyards, yacht repair facilities. Dependent on the water use,” says McEntee.

But San Diego City Councilman Carl DeMaio believes the transfers are suspect.

Audio

Aired 7/10/09

"It’s Enron-like accounting. It’s doctoring your financials to present a pretty picture when in fact it’s to mask the fact that taxpayers are losing millions of dollars on certain port properties, for example the Tenth Avenue terminal."

Transcript

“It’s Enron-like accounting. It’s doctoring your financials to present a pretty picture when in fact it’s to mask the fact that taxpayers are losing millions of dollars on certain port properties, for example the Tenth Avenue terminal,” says DeMaio.

WHAT’S AT STAKE IN THE DEBATE OVER MARITIME OPERATIONS AND REUSING TENTH AVENUE MARINE TERMINAL?

Audio

Aired 7/9/09

“You need maritime trade. We can’t rely upon the ports of LA and Long Beach to be our global gateway in terms of vessel trade. It’s not the way to go. We need to carry more of the burden ourselves. It’s maritime trade. It’s ships which pollute. It’s the old smokestacks debate versus geranium debate in San Diego. They want clean industry. They don’t want the kinds of things that built New York, built Los Angeles, built San Francisco and even Chicago, which is maritime trade. I’ve talked to some downtown movers and shakers that would love to see the Tenth Avenue Terminal go out of business and turn it over to tourists and well-heeled developers.”

UCSD Political Science Professor Steve Erie says, “You need maritime trade. We can’t rely upon the ports of LA and Long Beach to be our global gateway in terms of vessel trade. It’s not the way to go. We need to carry more of the burden ourselves. It’s maritime trade. It’s ships which pollute. It’s the old smokestacks debate versus geranium debate in San Diego. They want clean industry. They don’t want the kinds of things that built New York, built Los Angeles, built San Francisco and even Chicago, which is maritime trade. I’ve talked to some downtown movers and shakers that would love to see the Tenth Avenue Terminal go out of business and turn it over to tourists and well-heeled developers,” he says.

Former Port Commissioner Peter Q. Davis says, “If you don’t make a profit, uses are discontinued. I think Los Angeles and Long Beach have great maritime. They grow their terminals in a year more than we’ve grown in our history. It really benefits us to try and accent the positive which is the tourist business and eliminate the maritime which is a negative which I’m sure it’s having a very negative impact on the barrio and other places where those transportation trucks are lining up and traveling through the neighborhoods and the streets because we just don’t have the proper commercial access to our terminals that Long Beach and Los Angeles have. A lot of people have talked about taking the best of National City and the best of the Tenth Avenue terminal and putting it in National City. National City could probably benefit from having that kind of a commercial engine down there.”

Audio

Aired 7/9/09

“Over my dead body. Yeah, that’s really nice. Let’s pretty up San Diego. Let’s make it all look nice and let’s put all the maritime in National City. So that National City will take all the impacts and all the tourism, all the hotels and we’ll only have that stuff in San Diego. That is just a larger gentrification than what we’ve already had. What we’ve had in the past has been an insult. That would be way beyond that.”

National City Mayor Ron Morrison says, “Over my dead body. Yeah, that’s really nice. Let’s pretty up San Diego. Let’s make it all look nice and let’s put all the maritime in National City. So that National City will take all the impacts and all the tourism, all the hotels and we’ll only have that stuff in San Diego. That is just a larger gentrification than what we’ve already had. What we’ve had in the past has been an insult. That would be way beyond that.”

WHERE IS THIS DEBATE HEADED?

It’s likely headed nowhere at the port. In 2004, port commissioners passed a resolution prohibiting discussion on using Tenth Avenue Marine Terminal for other purposes. Commissioner Cushman called such discussions as “reckless, unnecessary, disruptive and a discredit” to the port.

TENSION BETWEEN CITIES AND THE PORT

Of the five port cities, San Diego generates the lion’s share of real estate revenue for the port from waterfront leases. But it gets the least money of any of the cities from the port to pay for things like police and fire services. National City officials complain it has no public access to its waterfront because of the port’s marine terminal and reluctance to encourage development of parks, hotels and other sources of property, sales and tourism taxes for the city. Chula Vista’s Mayor Cheryl Cox also wants more development on her city’s waterfront.

WHAT IS THE AVERAGE SALARY OF A LONGSHOREMAN?

They make anywhere from $100,000 to $200,000 a year depending upon skill level.

WHAT PRODUCTS ARE SHIPPED TO THE TENTH AVENUE MARINE TERMINAL?

Windmills, bananas, forest products, steel, sand, cement, transformers, generators, fertilizer and newsprint to name a few. The Tenth Avenue Marine Terminal is also one of 15 strategic ports in the United States used by the military to load and unload cargo.

WHAT PRODUCTS ARE SHIPPED TO THE NATIONAL CITY MARINE TERMINAL?

Cars and lumber.