RESOURCE - Port of San Diego

S A N
D I E G O
B A Y
Natural
Protecting the Region’s Greatest
Annual
SAN
D IEGO
UNI F IE D
P ORT
Resource
Rep or t
D i s t r i c t
2006
Working W aterfront steel strong
TA B LE
of contents
Chairman’s Message................................................... 2
President’s Report...................................................... 3
Maritime.................................................................... 4
Cruise......................................................................... 6
Real Estate................................................................. 8
Environmental......................................................... 10
Public Art................................................................. 12
Community.............................................................. 14
Employees................................................................ 15
Public Safety and Homeland Security..................... 16
Infrastructure Maintenance/ Development............ 17
Financial Statements................................................ 18
Financials................................................................. 25
Principal Administrators......................................... 48
*All plants featured on the pages of the annual report are native to the tidelands of San Diego Bay.
Chairman’s
Message
San Diego Bay is a treasure that has been
around for thousands of years. Residents and
visitors see it as a beautiful recreational haven
and a place where cruise ships stop. Others
see it as it was in its earlier days, a place where
people made their livelihood fishing or trading
goods along its shoreline.
Many still earn their living along the waterfront. The fishing boats
are still here, but new industry has been added. Large shipbuilding
and ship repair companies like General Dynamics/NASSCO and
Continental Maritime are located on the shoreline. Other bayfront
businesses are lumber companies, yacht brokers and automotive
services. It is the homeport for approximately 60 Navy ships and
homebase to 50 Naval commands.
One of the Port of San Diego’s many responsibilities is to promote
maritime trade and business on San Diego Bay. We are also
obligated to protect San Diego Bay and its resources. These two
roles may seem contradictory, but the Port has been successful
at both for several years. We have made great headway in our
environmental efforts this year. I am particularly proud that the
Port established an environmental fund for projects that will
help improve the health and condition of San Diego Bay and its
tidelands. The fund will be financed by an annual contribution of
one half of one percent of the Port’s projected gross revenues.
Another environmental first for the Port is the creation of an
Environmental Committee, which also occurred this fiscal year.
The Environmental Committee includes a balance of resource and
regulatory representatives from academia, environmental advocacy
groups, government agencies and Port tenants. The committee
will assist the Port with evaluating, prioritizing and implementing
programs to ensure environmental protection and improvement of
the Bay and tidelands.
Also this year, the Port embarked on an intensive plan to clean
up a challenging anchorage area. The area, called A-8, is located
just south of the Sweetwater Channel. It had become a site
where sunken and abandoned vessels and other debris posed
serious navigational and environmental hazards. The Port spent
approximately $500,000 retrieving and towing the dilapidated
vessels from the area. We will continue refining the A-8 cleanup
plan within the next several months.
The Port of San Diego is strengthening its role as an environmental
steward. The new environmental fund and Environmental
Committee are two key elements that will help us protect San
Diego Bay so that its natural beauty and resources will thrive and
continue to be enjoyed by residents and visitors for years to come.
Robert “Rocky” Spane
Chairman, Board of Port Commissioners
President’s
Report
Building upon our strong relationships
with our five member cities, area agencies,
community organizations and our tenants
is key to the Port of San Diego’s continuing
growth as we continue on our mission to
become a world-class port.
Through collaborative efforts, built upon
these relationships, plans for several highprofile projects and initiatives took shape or continued on the path
to fruition.
All of these initiatives require coordination, communication and
planning with our member cities and our stakeholders.
Last fall, Chula Vista Mayor Steve Padilla and Port Commissioner
Bill Hall climbed into land excavators and ceremoniously knocked
down the walls of a former BF Goodrich building to mark the
beginning of the Chula Vista bay front redevelopment. Throughout
the year, the partnership with Chula Vista strengthened as we
forged the details of the Chula Vista Bayfront Master Plan.
In San Diego, ground broke on the Hilton San Diego Convention
Center Hotel and the final Environmental Impact Report for the
Old Police Headquarters and Park Project received the go-ahead
from the Board of Port Commissioners. A Request for Proposals
was sent out for the Lane Field hotel project and some very exciting
plans began to take shape. The North Embarcadero Visionary
Plan, which will create a 100-foot wide esplanade along downtown
San Diego’s waterfront, also moved forward with the creation of a
new Joint Powers Agreement.
The Port has also coordinated with the City of National City
in determining appropriate land uses for tidelands property
in the area. In Imperial Beach, the Port finished a $1.8 million
improvement project on the Imperial Beach Pier and we continue
to work with the City of Coronado on infrastructure improvements
to tideland areas along its bayfront.
The Port witnessed another successful year in maritime trade.
Revenue increased more than $11 million, from last year’s $23.7
million to this year’s $35.2 million. Part of that increase included
a transfer of real estate assets to maritime, but it is also due to an
increase in breakbulk cargo and imports of vehicles. Real Estate
revenue, the bulk of the Port’s income, totaled $82. 4 million, up
from last year’s total of $80.9 million.
The COMPASS Strategic Plan for fiscal years 2007-2011 was
approved this year. This plan provides the Port with a framework
for achieving its goals and conducting its day-to-day operations.
The Port’s first strategic plan was implemented in 2002, and has
provided the Port with greater organizational focus, discipline and
execution.
Another highlight of fiscal year 2005-2006 was the adoption of
the Capital Development Program for fiscal years 2008-2012. The
program is a flexible planning tool that the Port uses for projects
on the tidelands. The Capital Development Program will assist
us with implementing the projects and is structured to reflect
estimated, available capital funding over the five-year planning
period.
This annual report will summarize the accomplishments of the
past fiscal year. I hope it is informative and leaves you with a
clearer understanding of the Port’s vital mission.
Maritime
Ceanothus
Ceanothus
Maritimus
Bruce B. Hollingsworth
President and Chief Executive Officer
Maritime
A
trend in alternative energy projects is sweeping over the
western United States. Windmill farms are blossoming
in California, New Mexico and Iowa and the parts to
construct them are shipped to the Port of San Diego’s Tenth
Avenue Marine Terminal. This past fiscal year, the Port received
11 shipments of rotors and engines for windmills from Nagasaki,
Japan. Other windmill parts arrived from Bilbao, Spain and were
delivered to the Campo Indian Reservation in San Diego County
to create one of the largest-capacity wind turbines in the nation.
A new import for the Port is steel cable reel. The shipments
arrived from France and will be used by San Diego Gas & Electric
Company in a $210 million utility undergrounding project that
calls for 52 miles of steel cable.
The increase in vehicle imports
bumped tonnage up 16%.
The Port also received shipments of steel and concrete pipes that
are used in local construction projects. Additional steel imports
arrived from Asia and were used by General Dynamics NASSCO
in the construction of Navy vessels.
These new cargoes helped boost Port maritime revenue to $35.2
million, more than a million dollars over the Port’s budgeted goal.
Maritime Services Revenue
Cargo Tonnage
Five-year trend comparison (revenue in millions)
Five-year trend comparison (metric tons in millions)
3.5
40
35
Cleveland Sage
Salvia Clevelandii
35.2
30
23
20
16.4
2.0
23.7
19.3
2.9
2.6
2.1
1.0
0.5
5
3
1.5
10
0
3.0
2.5
25
15
3.5
2002
2003
2004
2005
2006
0.0
2002
2003
2004
2005
2006
Weekly melon shipments from Guatemala between December
2005 and May 2006 helped increase tonnage to 20 percent over the
amount received last fiscal year. Major leases secured with CP Kelco,
San Diego Cold Storage and Pla-Art International also bumped up
revenue and tonnage.
The increase in vehicle imports bumped tonnage up 16%. This was
due to new truck and sports utility vehicle business from General
Motors in Mexico and an increase in imports from Japan. A new lease
with Mazda will mean even further increases next fiscal year.
Type of Cargo
Total tonnage received during fiscal year 2005-2006: 3,535,073 (in metric tons)
Containers: 860,031
(includes produce and other perishables)
Vehicles: 463,610
Break bulk: 262,005
(includes bagged cement, bagged
fertilizer, lumber, pallet fruit,
newsprint, bagged sand and
miscellaneous steel products):
Liquid bulk: 137,979
(includes jet, bunker and diesel fuel)
Dry bulk: 1.8 million
(includes cement, fertilizer,
soda ash and sand)
P
arts to construct these windmills
were shipped to the Port of San Diego’s
Tenth Avenue Marine Terminal from
Bilbao, Spain. This photo was taken at
the Campo Indian Reservation in San
Diego County. The reservation has one
of the largest-capacity wind turbines in
the nation.
Cruise
T
he popularity of cruise vacations is growing and the Port
of San Diego’s cruise ship terminal is proof. On any given
day from September through May, one or two of these
picturesque ships are docked at San Diego’s downtown cruise
terminal. On occasion, three or even four ships are in port on the
same day. This past fiscal year, the Port received 219 cruise ship
calls carrying 619,199 passengers.
Currently the Port of San Diego has four seasonally homeported
cruise lines – Celebrity Cruises, Holland America Line, Royal
Caribbean and Carnival. In 2007, Carnival will begin the Port’s
first ever, year-round cruise service with four-and five-day cruises
on the 2,052-passenger vessel Elation. The four-day cruise will
call in Cabo San Lucas, Mexico and the five-day cruise will feature
stops in Cabo San Lucas and Ensenada, Mexico.
Each time a cruise ship comes to San Diego, it brings an economic
impact of $2 million to the region – on an annual basis that
translated to almost $300 million in economic benefits. Each
passenger is estimated to spend about $200 while visiting. The
jobs created from the cruise lines, companies servicing the vessels,
food suppliers and related entertainment and attractions account
for approximately $76.2 million in wage income.
To keep up with the growth of this dynamic industry, the Port plans
to improve cruise passenger facilities at the Cruise Ship Terminal
and at the nearby Broadway Pier. Ultimately, the Port will build a
new passenger cruise terminal, facilities, parking and an improved
ground transportation area for its expanding cruise line business
and passengers.
Cruise Ship Calls
Passenger Totals
Five-year trend comparison (actual numbers)
Five-year trend comparison (in thousands)
250
Atriplex Lentiformis
Quail Bush
200
201
219
600
174
150
700
619
500
518
400
100
122
110
406
300
200
276
245
50
100
0
0
2002
2003
2004
2005
2006
2002
2003
2004
2005
2006
There’s no place like this
ON earth
R e a l E s tat e
T
he Port of San Diego’s Real Estate division had more than
a handful of high-profile projects on the slate this fiscal
year, but that list was dominated by these four: the Old
Police Headquarters and Park Project, the Chula Vista Bayfront
Master Plan, the Lane Field Project and the Hilton San Diego
Convention Center Hotel.
A developer was selected to build a
1,500-room hotel and 400,000-square
foot-convention center that will be the
keystone for phase one of the Chula
Vista Bayfront Master Plan.
Beach Evening
Primrose Oenothera In February 2006, the Environmental Impact Report for the Old
Police Headquarters and Park Project was certified by the Board of
Cheiranthifolia
Port Commissioners. It was approved by the Coastal Commission in
August. The historic Old Police Headquarters, built in 1939, will be
restored and redeveloped to include entertainment venues, specialty
retail, restaurants, museum space and other ancillary support uses.
Construction is expected to begin by the end of next fiscal year.
Both the Port and the City of Chula Vista were hard at work on this
ambitious project that will develop about 550 acres of waterfront
in Chula Vista – considered the largest development project on the
West Coast. A developer was selected to build a 1,500-room hotel
and 400,000-square-foot convention center that will be the keystone
for phase one of the Chula Vista Bayfront Master Plan. The project
will occur in three phases over a 25-year period and include a mix of
parkland, open space, environmental buffers, civic and cultural uses,
retail, hotel, entertainment and recreational areas.
The Lane Field project, located directly across the street from the
harbor in the North Embarcadero area of San Diego made great
strides as the Port entered into an option agreement with the
selected developer. A 550-room hotel is proposed for the south
side and a 250-room hotel will be located on the north side. The
project also includes 35,000 square feet of retail space.
Real Estate Revenues
Five-year trend comparison (revenue millions)
80
60
71.7
71.4
2003
2004
80.9
82.4
2005
2006
61.7
40
20
0
2002
In January, the Port celebrated the groundbreaking of the 32story, 1,200-room Hilton San Diego Convention Center Hotel.
Located adjacent to the San Diego Convention Center, the hotel
will include retail space, banquet and meeting facilities, a health
club, a park and many other amenities. The approximately $348
million project will be completed in 2008.
Real Estate Revenue Sources
Total real estate revenue during fiscal year 2005-2006: $82,426,358
Other Charges:
$1,201,142
Car Rental Transaction
Fees: $4,170,436
Parking Revenue:
$8,447,325
Ground Rental:
$68,607,455
T
he San Diego Marriott Hotel &
Marina and the Manchester Grand
Hyatt as viewed from Embarcadero
Marina Park South in San Diego.
E n v i r o n m e n ta l
T
his year, the Port of San Diego took its commitment of
environmental stewardship one step further by creating an
environmental policy that was approved by the Board of
Port Commissioners in June 2006. With it came the development
of an environmental fund to help the Port go beyond mitigation
and beyond compliance to implement environmental projects. The
new fund will be financed by an annual contribution of one half of
one percent of the Port’s projected gross revenues. For fiscal year
2006/2007, that amount is estimated to be $600,000.
The Committee will assist the Port in
evaluating and prioritizing the types of
environmental projects that receive funding.
Coreopsis
Maritima
Sea Dahlia
10
Board Chairman Robert “Rocky” Spane formed an Environmental
Committee, made up of representatives from various academic,
resource, regulatory and advocacy groups. The Committee
will assist the Port in evaluating and prioritizing the types of
environmental projects that receive funding. Several projects
are under consideration, in the categories of research, education,
conservation and natural resources. The group meets monthly and
all meetings are open to the public.
Educational outreach is another important responsibility of the
Port’s environmental department. For example, staff members
attend area business meetings to teach employees about pollution
prevention. Other educational endeavors are geared toward
students. This year, the Port worked with the Maritime Museum
of San Diego to provide environmental tours of San Diego Bay for
both students and the general public. Other activities included
working with the group Pro Peninsula to help protect the Eastern
Pacific green sea turtle, a species that resides in south San Diego
Bay. Pro Peninsula provides a unique educational experience for
area sixth graders to help monitor the turtles.
T h e b a y i s a l i v i n g t h i n g
a n d
c h a n g e s
with time
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Public Art
T
he tenth anniversary of the Port’s Public Art Program was
commemorated with a campaign that included monthly art
events, public art dedications and special exhibits. Each
project tied into the Port’s roles of serving as an environmental
steward of San Diego Bay and the tidelands, an economic engine
for the region and a provider of community services.
The Port’s Public Art Program is
responsible for over 100 artworks
along San Diego Bay, the Imperial
Beach oceanfront and at San Diego
International Airport.
Lemonade Berry
Rhus Integrifolia
12
Since 1996, the Port’s Public Art Program was responsible for over
100 artworks along San Diego Bay, the Imperial Beach oceanfront
and at San Diego International Airport. Other successes are the
transformation of the Imperial Beach waterfront with the iconic
surf-themed artwork by Malcolm Jones, the placement of the 37foot tall sculpture, “Coming Together” by the late Niki de Saint
Phalle at the San Diego Convention Center and the exhibition of a
sculpture by Mark di Suvero, a recipient of the prestigious Heinze
Award for Arts and Humanities. A “Greatest Generation” military
art walk was created on Tuna Harbor, adjacent to the USS Midway,
with five inspirational artworks that speak to the triumphs and
sacrifices of the World War II generation.
This year, the Port’s Public Art Program held the first of its annual
destination waterfront events – the Port of San Diego Sculpture
Show. A goal of the Public Art Program is to make the sculpture
show an annual destination event for the San Diego bay front.
The Port’s public art collection has received international
recognition for its creative projects and with several upcoming
installations, the collection will continue to provide the tidelands
with stimulating works of art.
C e l e br a t i n g P u b l i c
ARt
13
C o mm u n i t y
T
V
olunteers at the 16th Annual
Operation Clean Sweep event
display debris collected from
the shoreline of Pepper Park in
National City.
14
he Port of San Diego reaches out to the community through tours,
public open house events, public art dedications, special events and
community outreach meetings. In addition, the San Diego Port
Tenants Association funds the Port With No Borders Scholarship Program,
where college scholarships are awarded to eligible children of Port employees
or Port tenants. The Financial Assistance Program provides funding assistance
to groups for events or programs that benefit the community by promoting
commerce, navigation, fisheries and recreation in one or more of the Port’s five
member cities. The Port also has a Marketing Sponsorship and Fee for Service
Program that assists organizations financially and in return these organizations
help promote the Port.
This year, important partnerships with the
Working Waterfront Group and the Marine
Terminal Community Committee made progress
on several issues that affect communities and
businesses neighboring the Port’s marine terminals.
This year, important partnerships with the Working Waterfront Group and
the Marine Terminal Community Committee made progress on several
issues that affect communities and businesses neighboring the Port’s marine
terminals. The Working Waterfront Group is a coalition of maritime
dependent businesses, labor and environmental organizations administered
by the Port and the San Diego Port Tenants Association. The Marine
Terminal Community Committee helped the Port devise a new truck route
that will reduce the amount of truck traffic traveling through the Barrio Logan
neighborhood of San Diego. The Committee’s influence also assisted the
Port with securing $3.9 million in transportation grants for freeway access
programs for the Tenth Avenue and National City marine terminals.
Emp l o y e e s
T
he Port of San Diego strives to provide the best services possible to
all of its customers. Customers include Port tenants, member cities,
other public agencies, and every resident of and visitor to San Diego
Bay and the tidelands. To provide the best services, the Port relies heavily on
its workforce of over 600 employees.
The goal of every world-class organization is to ensure that its staff is up-todate on the latest business and training techniques. The Port achieves this
by providing workshops and educational opportunities through the Port
Institute for Performance Excellence, an in-house department created to meet
both the Port’s business needs and the individual professional training and
development required for employees.
The goal of every world-class organization is to
ensure that its staff is up-to-date on the latest
business and training techniques.
The Port began a multi-year initiative in 2004 to measure and manage
organizational performance by using a balanced scorecard method coupled
with the Malcolm Baldrige Criteria for Performance Excellence. This system
continues today and provides a framework for the Port in strategic planning,
priority setting, budgeting and performance measurement. Focusing on all
levels of the organization, the balanced scorecard will allow the Port to measure
its progress toward achievement of its vision of fostering a world-class port
through excellence in public service.
E
nvironmental Services employees
Damon La Casella and Phillip Gibbons
collect water samples of San Diego
Bay near Tuna Harbor in San Diego.
15
Public safety
and Homeland Security
P
rotecting San Diego harbor is one of the Port of San Diego’s most
integral and challenging roles. With two marine cargo terminals and
a busy cruise ship terminal, the Port’s Harbor Police Department is
actively engaged in homeland security efforts.
T
Since the Program’s inception in 2001, the Port of San
Diego has received over $16 million in security grants.
The Harbor Police work together with the U.S. Navy, the U.S. Coast Guard
and the Transportation Security Administration, as well as other federal,
state and local law enforcement agencies to provide coordinated security. The
Harbor Police also provide policing for San Diego International Airport.
he San Diego Harbor Police
Dive Team perform a search and
recovery exercise off the coast of
Point Loma in San Diego Bay. The
Dive Team is an integral component
of the Port’s Homeland Security effort.
16
In September 2005, the Port received $6.5 million in security grant funding
from the Department of Homeland Security’s Port Security Grant Program;
the largest award received by the Port since the program began. Since the
Program’s inception in 2001, the Port has received over $16 million in security
grants. The money has been used to implement 25 critical security measures,
including the Port’s partnership in a nationally recognized multi-agency
command center, the Joint Harbor Operations Center ( JHOC). This hightech facility gives the Port, the US Coast Guard and the US Navy the ability to
share information and secure interoperable communications.
Other completed security projects and projects in process include perimeter
intrusion monitoring systems and enhanced physical security barriers at both
marine terminals and the cruise ship terminal, membership in the Regional
Communications System and the purchase of two high-speed port security
vessels and a Dive Team support vessel to assist the Harbor Police.
In fiscal year 2006, the Port hired a Homeland Security Program Manager
to oversee the homeland security projects. The Port continues to pursue
additional grant funding.
Infrastructure
Maintenance and Development
A
t the Port of San Diego, scenic waterfront parks allow space for
visitors to enjoy endless views. Boaters, fishermen and joggers can
take advantage of the public walkways, fishing piers and launch ramps.
Other areas of the tidelands are essential to Port operations – marine terminals,
roads, railways and buildings where goods are housed or transported.
This past fiscal year, the Board of Port
Commissioners adopted a five-year, fiscal year
2008-2012 Capital Development Program in the
amount of $111,856,000.
These are all part of the Port’s infrastructure and like anything, start to display
wear and tear with age. To help keep everything in top shape and in good
working order, the Port has capital development and major maintenance
programs with budgets for specific projects.
This past fiscal year, the Board of Port Commissioners adopted a five-year,
fiscal year 2008-2012 Capital Development Program in the amount of
$111,856,000. Projects range from large construction or redevelopment jobs
such as the demolition of old industrial buildings in the Chula Vista Bayfront
redevelopment area to smaller projects like installing more efficient lighting at
Port buildings.
Other major capital projects include improvements at the Cruise Ship Terminal,
site improvements for the new Hilton San Diego Convention Center Hotel and
deepening of the freighter berths at the Port’s Tenth Avenue Marine Terminal.
Large projects in the Major Maintenance Program included the Kellogg Beach
sand replacement project and the refurbishment of the Imperial Beach pier.
B
uilding 449 was one of 19
structures razed in the Port’s South
Campus Demolition Project. The
project will not only improve views
of San Diego Bay, but will free up
valuable land needed for the Chula
Vista Bayfront Master Plan project.
17