Safe Harbor : The thriving Port of Los Angeles is a key shelter from the region’s economic storm. It’s so prosperous that the City Council wants to siphon off funds.

Call it the Scrap Exporter to the World. Los Angeles is a lot like Chicago was at the beginning of the century, regaled in Carl Sandburg’s classic poem as the “city of the big shoulders” and the “hog butcher for the world.” Both towns are brawny urban machines, “coarse and strong and cunning.”

America’s new Second City might be slumping into the economic doldrums, traumatized by spring rioting and spellbound by the daunting task of rebuilding itself. It’s true that local defense contractors are hemorrhaging jobs. Real estate values are quavering.

But if Sandburg were alive today, he’d be wandering around the scrap-exporting dockyards of the Port of Los Angeles, instead of the hog-butchering stockyards of Chicago, looking for this city’s plucky will to thrive.

Along the man-made channels off San Pedro Bay, the Southland’s engine of commerce hums with a strange brand of confidence. Cargo handlers take great pride in having exported about 2 million tons of scrap metal to East Asia last year and then bringing it home this year in the form of Japanese and Korean automobiles--more than 300,000 of them.

Just as Chicago was the rail hub for a country lurching westward to its economic frontier, Los Angeles has become the trade hub of a cross-border economy that extends up and down the coast to Canada and Latin America and stretches across the Pacific.

International trade funneled through the twin ports of L.A. and Long Beach has become a major prop to the regional economy, registering stout growth in employment last year while most other industries continued to contract.

The Port of Los Angeles reckons that it helps support 203,000 jobs in the five-county area--and, indirectly, 650,000 jobs nationwide.

The recent boom in trade with the Asia-Pacific region made this the busiest port to handle cargo containers in the country, followed closely by its rival on the Long Beach side of Terminal Island.

The Los Angeles port is so prosperous from fees it charges shipping companies that the City Council is poised to siphon off as much as $44 million of the port’s “discretionary reserves,” after a recent move by the budget-balancing state Legislature to curtail the fiscal autonomy of California’s major ports.

But the Port of Los Angeles has other plans for its nest egg: It wants to expand in a $2-billion, 30-year capital improvement scheme that would claim more land from the sea and consolidate an ambitious position--in Sandburg’s words--as freight handler to the nation.

That is, if the City Council’s budget crisis doesn’t hurt the port’s AA bond rating or otherwise undermine its ability to raise capital, as port officials fear. Even worse, they warn, bond holders could bring legal action if a city raid on the port’s reserves devalues their investments.

The port overcame a different kind of hurdle recently, when the California Coastal Commission approved its wetlands mitigation scheme, in which it would attempt to compensate nature for the damage caused by its landfill project in the harbor. Commissioners still must rule on a revised master plan early next year.

But even with a green light from the Coastal Commission, construction won’t begin until an appeals court in San Diego County rules on a lawsuit brought by the Sierra Club.

Chicago’s grand architects had few worries about watchdog agencies and environmentalists. But the destiny of a great city these days is shaped by complex forces. Money is tight. And not everybody is wild about the rather immodest ambitions of a port that likes to refer to itself lately as “Worldport L.A.”

“We’re opposed to expansion of the port for so many reasons,” said Goldie Otters, member of the community group Friends of San Pedro Bay. “It’s a hazardous project on an earthquake fault that would pollute the water and harm fish breeding.

“It’s ugly, too,” she added.

On the whole, the port is a no-nonsense, drab industrial site. But that doesn’t mean it isn’t alive.

Longshoremen have a bird’s-eye panorama of the otherwise prosaic business of unloading a ship, for which the best perch is atop one of the towering hammer-head cranes that line the wharves to hoist the box-car-size cargo containers.

Hovering about 85 feet in the air, Dale Helm operates his crane from a cramped cab that slides back and forth, dangling long cables to a beam that lifts 25-ton loads from the hold of the ship below and places them gently on truck chassis.

Helm is an expert at this hair-raising task. It takes him less than 90 seconds to move one container and return to latch on to the next.

“You’ve got to concentrate. There are a lot of guys down below to worry about,” said Helm, 66, who has worked on the waterfront for 27 years.

“I like the job a lot better now,” he said, manipulating the levers of his glass-bottomed cockpit. “We used to work like hell, throwing 112-pound sacks around all day, hauling hides and boxes of bananas.”

The Port of Los Angles unloaded 1.5 million container units of imported goods last year and exported nearly as many of the steel boxes filled with things Americans still make, such as iron and aluminum scrap, cotton, grain and auto parts. As of July, container volume continued to grow despite the recession.

In competition against other West Coast ports, Los Angeles leads in terms of the value of international trade it handles--$57 billion in 1990, or twice as much as Seattle. The Port of Long Beach is not far behind and edges out Los Angeles in total tonnage because of its oil and coal traffic.

The Port of Los Angeles’ success is at least partly the result of an aggressive sales program that has taken senior port officials and local dignitaries abroad on frequent--sometimes controversial--marketing trips. The port has 13 overseas representative offices and a conspicuous travel budget that dwarfs most other major West Coast ports’.

“We’re simply out-hustling our competitors in marketing,” said Ezunial (E. Z.) Burts, executive director of the port for the last eight years.

Burts is a big-shouldered man who might serve as a kind of physical metaphor for the brawn of the waterfront. A former collegiate track star, he stands 6 feet, 4 inches tall and speaks in a confident baritone about the future of the port.

“This industry can help to pull Southern California out of its recession,” he said to the Pacific Rim Development Forum, a group of local business executives, at a recent meeting in Beverly Hills.

Port expansion will be essential, Burts said, outlining the plan to claim an additional 580 acres of landfill in the harbor by the year 2020.

“We’ve benefited from the surge of growth in the Pacific Rim and we think there’s another surge on the way,” said Burts, a former executive assistant to Mayor Tom Bradley. “We want to be ready for it.”

To pursue that goal, the port--which doubles as the city’s quasi-autonomous Harbor Department--has a capital improvement program that invests more than $100 million a year in upgrading, modernizing and expanding port facilities. Pier 300, a new polder attached to Terminal Island, is already filled and is being prepared for development.

Pier 400, the proposed new landfill area, is what’s under review by the Coastal Commission. At its meeting in Monterey on Oct. 14, the commission approved a compromise plan to build the pier in phases, pegged to implementation of the controversial wetlands mitigation project in Carlsbad.

But the expansion project is likely to remain bogged down in litigation for at least another year. An appeals court in San Diego County is considering the Sierra Club’s claim that the port’s mitigation plan fails to satisfy coastal regulations. The legal challenge claims that the project ignores the question of damage in the harbor, focusing instead on the Dasquitos Lagoon, a long-neglected body of salt water in Carlsbad, not far from the swank La Costa Spa.

“They want to create a deep sub-tidal marine habitat out of a shallow shorebird habitat, destroying a perfectly good lagoon in an experiment that nobody knows will work,” said Joan Jackson of Carlsbad, who chairs the Sierra Club’s coastal committee. “We think that’s pretty damn foolish.”

Ironically, the harbor waters being protected by the Coastal Commission are essentially man-made. Yet fish and birds have flourished here since the breakwater was built and the harbor was first dredged around the turn of the century. The calm waters provide a breeding ground for halibut and a sanctuary for the least tern and the California brown pelican.

“You’ve got an industrial complex designed for commerce, but it also provides a unique marine ecosystem,” said Larry Simon, program analyst for the Coastal Commission.

Federal funds play a significant role, with the Army Corps of Engineers serving as the Port of Los Angeles’ partner in the 2020 Program. The Port of Long Beach found federal regulations so laborious that it withdrew from the program, which originally mapped out expansion of both ends of Terminal Island.

It’s not clear how the new revenue-sharing formula, imposed by the state Legislature last month, will affect capital investment for the Port of Los Angeles. The formula allows cities to tap as much as 25% of the net operating assets of their ports, not to exceed the amount of local property tax revenues lost to the state. For Long Beach, that’s only $5 million. But Los Angeles could take as much as $44 million to offset its $120-million city budget shortfall.

James Preusch, the L.A. port’s chief financial officer, said some capital improvement projects would have to be abandoned. But the law is only in effect for two years, he added, and probably won’t have a long-term impact on growth plans.

“While it will be painful and somewhat disruptive, I’m convinced the port is strong enough to survive this,” Preusch said.

But it’s getting difficult to foretell the future of the harbor in San Pedro Bay or the role of Los Angeles as the West Coast’s commercial center and gateway to the Pacific.

Will hard times eventually catch up with the Port of Los Angeles, diminishing the city of big freeway shoulders, scrap exporter to Asia?

“We’ll be the last part of industry to feel the effects of this recession,” said Mark Milburn, a superintendent for Metropolitan Stevedore Co., which manages Berth 233 for Evergreen Corp., a giant shipping company based in Taiwan.

“Bad news may still be coming, but we haven’t seen any major loss of jobs yet,” Milburn said over a hamburger lunch at a San Pedro tavern. “People are continuing to buy the stuff in the containers we’re moving.”