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The town the Navy left behind
Long Beach reinvents itself as tourist, shipping port of call
By Andy Walton
LONG BEACH, California -- When the Cold War ended, America looked forward to a "peace dividend" -- money that would no longer be needed for defense spending and could be returned to the economy through tax cuts or a shift in government spending priorities.
But for some U.S. cities -- those built around military bases and defense industries -- the cuts in defense spending brought a downturn rather than a dividend. Long Beach, a city built around defense industries in a state that saw massive growth in the Cold War, was among the hardest hit.
Long Beach, 22 miles south of Los Angeles, was "devastated, destroyed, whatever word you want to use," said city spokesman Greg Davy. The city took one hit after another:
By the city's estimate, the years immediately following the end of the Cold War cost Long Beach 58,600 jobs in a city that now has about 200,000 jobs. That led to $1.7 billion a year in direct losses in wages and contracts to the city's economy, according to the city.
Including indirect losses -- restaurants, grocery stores, and other businesses also felt the pinch -- the city estimates that its economy lost $4 billion a year.
So Long Beach set out to remake itself as a cargo port and tourist attraction.
"With the downsizing of the defense industry as well as the closing of the naval complex, Long Beach was hit very hard by job losses here in the area," said Gordon Palmer, the manager of master planning for the Port of Long Beach, the city agency that operates 3,000 acres of port facilities.
"One of the few things that was a bright spot" was the growth of the city's cargo traffic, Palmer said. Long Beach officials say the city is the nation's busiest cargo port, a status that grew with the rise in trade across the Pacific even as defense spending waned.
Most of the naval station buildings that were standing in August are gone now, and demolition and cleanup, including asbestos removal, continues.
When the city finishes converting the naval station into a new port facility, it will have added 30 percent to the port's capacity for container shipping -- the transfer of large boxes of cargo between trucks, trains and ships.
Port in a storm
Though Cold War defense spending has left the area, Cold War politics has not. Long Beach planned to lease the new container port to the China Overseas Shipping Company (COSCO), a freight company owned by the Chinese government that had outgrown its existing facilities. But the plan sparked controversy and attracted congressional attention.
An amendment tacked onto the defense budget in September 1998 prohibited "any funding to be used to enter into or renew a contract with any company owned, or partially owned, by the People's Republic of China or the People's Liberation Army of the People's Republic of China" -- a move many thought was directed at Long Beach.
The end result is that the new container facility, when completed, will be used by other port tenants; COSCO will then use the areas those tenants vacate.
Next door to the naval station, the ship yard sits mostly vacant, leased to the city while the Navy finishes its environmental cleanup. Long Beach hopes to find tenants in the maritime trade; the city is now taking bids for ship repair operations at Dry Dock No. 1, which was designed to hold some of the Navy's biggest ships.
The "Navy Mole," a man-made peninsula that juts in front of the ship yard, is the home port of Sea Launch. The Boeing project has an intriguing plan: to launch satellites into orbit from a converted, self-propelled oil drilling rig. It is a model of post-Cold War joint ventures: a Russian launch platform, a Norwegian command ship, Ukrainian rockets and U.S. satellites. The first launch is planned for mid-March.
Laying out the welcome mat
Long Beach also looks to the sea as a tourist attraction. The former Cunard ocean liner Queen Mary, converted into a floating hotel, has spent almost 30 years in Long Beach's harbor. The ship, unlikely ever to sail again, is the city's most enduring tourist attraction and the centerpiece of the "Queensway Bay" project along the city's waterfront.
Other anchors are a renovated convention center and the Aquarium of the Pacific. The aquarium opened in June 1998 and already has seen its millionth visitor. "It's the attraction du jour," Davy says. Shoreline Village, near the aquarium, is a picturesque knot of shops and restaurants, and the city plans to add more retail developments by 2001.
Downtown, Pine Street is lined with sidewalk cafes and storefronts and does not look like a city in crisis; but almost all of those businesses have opened in the last four or five years, and "if you go two or three blocks in either direction [from Pine Street], there are still areas that are holdovers from hard economic times," Davy says.
By the Convention and Visitors Bureau's numbers, 5.5 million visitors came to Long Beach in 1998, spending more than $700 million. Davy says the city is "really banking heavily" on the tourist trade.
In less than a decade, the face of the city has changed forever -- for the better, its planners hope, saying that the city's revitalization is expected to bring 86,000 new jobs.
It has been argued that since the Cold War ended, the United States has been wondering what to do next. Long Beach was forced to ponder that question early. From World War II to the Cold War to trade wars, this port city has been a party to changes that it -- along with the nation -- is still trying to work out.