State Lands questions Los Angeles port TraPac MOU

State Lands questions Los Angeles port TraPac MOU The California State Lands Commission has warned that a recent agreement between Los Angeles port officials and environmental groups that cleared the way for a major port terminal development project may violate state rules on the governance of port lands.
   The letter signed by CSLC Executive Director Paul Thayer, reminded Los Angeles Port Director Geraldine Knatz that the port is legislatively granted in trust to the City of Los Angeles, and that while the city through the port officials serve as trustees, the state remains the trustor and the beneficiary for the people of the entire state.
   “The use of tidelands and its revenues for non-trust purposes is a violation of the port’s fiduciary duty to the trust and its beneficiaries,” Thayer warned.
   He made the distinction in the roles and responsibilities before bringing up several concerns his agency has regarding the port agreement with the environmental groups.
   The agreement grew out of a threatened lawsuit by a coalition of 17 environmental and social groups led by the National Resources Defense Council over the long-stalled TraPac terminal development project at the port. Earlier this year the port began to move forward on the project, which was first proposed nearly 10 years ago, by approving the required environmental impact report. However, before the City Council could approve the EIR, the coalition threatened to sue, claiming the port project did not go far enough to mitigate potential negative environmental impacts of the proposed terminal.
   The port and city eventually worked out a deal with the groups that would allow the EIR and the terminal project to move forward. In the memorandum of understanding with the groups signed in April, the port would contribute up to $50 million to a mitigation fund to be run by a third party non-profit to be set up by the port and the groups. The MOU also set aside a buffer zone between a portion of the port and the neighboring Wilmington community to be maintained in perpetuity by the port.
   In the letter to the ports, Thayer first called the circumstances surrounding the emergency Port of Los Angeles Harbor Board meeting hastily arranged to approve the MOU “highly unusual.” Thayer wrote he had hoped “port staff would have responded to our repeated offers to assist regarding the proposal to spend $50 million of trust revenues for community projects.”
   He also recounted that Los Angeles has been involved in several legal decisions that all found the port violated state laws regarding proper use of port-generated funds. One specific example he mentioned is the so-called Nexus lawsuit in the late 1990s that found that city officials had improperly drained away port funds to support city projects not within the port lands. The decision eventually required the city to pay back $60 million in port revenue.
   The letter specifically questions the “in perpetuity” stipulation of the buffer zone portion of the MOU, telling Knatz the port “does not have the authority or the power to permanently dedicate trust lands to a specific use, even if it may be a trust consistent use.” Thayer points out that the buffer zone concept does not cause a problem, only the “in perpetuity” idea. He proposes to work with the port to develop a different mechanism, such as a long-term lease, to reach the same objective with the buffer zone property.
   He also questioned:
   ' How the port came up with the funding for the community mitigation fund, writing the MOU “does not adequately describe the relationship between the funding amounts and the mitigation needs or nexus associated with port specific impacts.”
   ' Creation of a non-profit group to manage the mitigation fund, writing the CSLC “has serious concerns about the potential for the unlawful delegation of duties and powers by the port to a non-profit entity, which would be a breech of fiduciary duty.”
   ' A port decision under the MOU to allow the NRDC and other groups to “interject themselves into the review process of administrative drafts of future EIRs,” instead of merely commenting as any member of the public can do.
   Thayer does say the port’s efforts to minimize port-generated impacts on the surrounding communities are strongly supported by the CSLC, including the port's efforts to reach a “social justice impact nexus” through cooperation with the NRDC and other groups.
   If the TraPac terminal project moves forward, it would be one of the first major development projects at the port in the past five years. ' Keith Higginbotham