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2001 Public/Private Partnership Awards MAYOR BEVERLY O'NEILL, CITY OF LONG BEACH OUTSTANDING ACHIEVEMENT
AWARD EARTH TECH In anticipation of the Long Beach Naval Shipyard closure
in 1997, the City of Long Beach, as Local Redevelopment Authority, developed a
Base Reuse Plan to mitigate this severe economic blow. In 1994, the Long Beach Naval Station was
closed, along with the Naval Hospital and a Naval Family Housing Area. City job losses included 16,500 Navy
personnel, 7,600 civilians, and 3,500 sub-contract workers. Additional job losses due to downsizing at
McDonnell Douglas numbered over 50,000. The City was faced with dire economic
circumstances. The total annual impact
was estimated at $1.75 billion in economic losses. Facing up to the challenges,
the City planned and implemented a vigorous, intense effort to transform the
Long Beach economic base. A major part
of that effort involved acquiring the personal property and assets of the Naval
Shipyard to establish a national prototype Manufacturing Empowerment Zone (MEZ)
Program. This joint program, involving
the U.S. Department of Commerce, Bureau of Export Administration, and the Navy,
would redistribute shipyard machinery and equipment to local and regional small
to medium-sized businesses at fair prices to increase production capacity,
employment, and economic potential.
With 60% of regional businesses classified as “small business,” the MEZ
program could have a major impact on the local and regional economy. This innovative program was
a one-of-a-kind model conceived by the Department of Commerce. With the success of this program in Long
Beach, it is sure to be replicated in other areas of the nation. The program is sustainable in that it takes
advantage of the Federal investment in the Shipyard equipment, ensuring that it
is used productively in the workforce to create additional job opportunities
and spur economic development. The City of Long Beach
competitively selected Earth Tech to administer the MEZ Program. Earth Tech had relevant experience
redistributing assets from former Army Depots.
The City received an Economic Development Conveyance of the equipment in
November 1998. The Earth Tech / City of Long Beach partnership
in the administration of the MEZ program is a model example of public/private
teamwork. The Program exhibited
tremendous cost savings to all parties involved. The participating businesses were able to purchase equipment at a
price lower than they would pay on the open market. The Federal government
saved $34 million dollars that it would have incurred to dispose of the
equipment through alternative methods.
The City of Long Beach saved the cost of administering the program, as
it was a self-funding community service with Earth Tech being compensated from
the proceeds of the equipment sales.
Nearly $1.85 million of cost to inventory the 600,000 assets before they
could be sold was borne by Earth Tech.
Additionally, the City was able to fund programs and services to benefit
the homeless out of the proceeds. The MEZ program’s impact on
the city economy is enormous. The
measurable results indicate that 973 businesses registered for the
machinery/equipment sales program and 34% of those businesses actually
purchased equipment. To date, over 325
businesses have received machinery and equipment with a market value of over
$13 million. Participating business owners
estimate that the collective assets will create over 5,500 new jobs and increase
economic capacity by a whopping $416 million (annual business revenue). The Long Beach Naval Shipyard has now been
closed for over three years. This
action could have dealt a fatal economic blow to a city that was still
suffering from other losses. Instead,
with the help of the MEZ program, implemented by Earth Tech and the City of
Long Beach, residents are experiencing improved quality of life and economic
vitality. The City was able to redistribute the assets of the
shipyard in a productive manner that met Navy base reuse requirements, created
jobs and did not involve the use of City or taxpayer funds. This was especially important to a city that
had already been feeling the effects of the national economic downturn of the
early 1990s, followed by the disestablishment of a 75-year relationship with
the Navy. Local businesses were able to
acquire the equipment at a reasonable cost, enabling them to expand their
businesses and create new jobs.
Additionally, the City was able to donate furniture, fixtures, and other
non-production equipment to over 40 non-profit and civic organizations through
a comprehensive Community Outreach Program. Perhaps the impact of this
program can best be summarized by the participants. One businessman wrote, “Thank you for assisting our company not
only in creating new jobs, but also in helping us to be efficient and remain
competitive in the new economic world.”
And another stated, “This was truly a once in a lifetime opportunity.” |