The developers of a $130 million project designed to streamline the handling of cargo at the Port of Los Angeles announced Monday they have filed a damages claim against the port and select labor union leaders over the abrupt cancellation of the project.
According to the claim, Harbor Performance Enhancement Center was selected in 2015 to develop 80 acres on Terminal Island for a project designed to enhance the efficiency of cargo operations by reducing congestion at the port, and it signed a series of agreements with the port, engaged in years of negotiations and devoted millions of dollars to project planning and environmental processes.
HPEC had secured $130 million for the project and had public support from Gene Seroka, the executive director of the Port of Los Angeles, as well as investment from Australia’s Macquarie Group, one of the world’s largest infrastructure investment firms, according to the center.
But in May, Seroka wrote to Jonathan Rosenthal, the CEO of HPEC, that the port would terminate its agreement with company, deeming the project to be “infeasible” while noting that it had taken longer than the originally anticipated three years to finalize negotiations on the effort.
The damages claim, filed on Friday with the city, is typically a precursor to a lawsuit.
“The bottom line is that we’re in this for the long haul,” Rosenthal said in a statement. “Our project is an economic and environmental game-changer, creating tens of thousands of jobs for the region, and we want to see it built. It’s become abundantly clear that the port is intent on hiding something.”
Port of Los Angeles officials said they could not comment on the legal action, saying HPEC has its version of what happened and the port has its own. The officials said the HPEC project was only authorized to create a pilot program that didn’t come to fruition.
HPEC also claims that the International Longshore and Warehouse Union was never granted a labor agreement in its bid for the project, although the company indicates the port intended to grant exclusivity of jobs to those union workers, something HPEC said it could not agree to.
Calls to the ILWU were not immediately returned.
HPEC contends the cancellation of the project is the result of “backroom deals” between the port and the ILWU.
In June, HPEC filed suit in Los Angeles Superior Court seeking to reverse Seroka’s decision to scrub the project. According to HPEC, a judge in September rejected a city of Los Angeles request to dismiss the case.
HPEC is seeking to recover all costs it has spent on developing the project as well as any damages it suffered through the process.
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