!IJI!.::;-,2013 MICHAEL N. FEUER, City Attorney Janna B. Sidley, General Counsel. ORDER NO. \?s l\lfl

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1 ORDER NO. \?s l\lfl IT IS HEREBY ORDERED by the Board of Harbor Commissioners that PERMIT NO. 900 granted by the City of Los Angeles, acting by and through its Board of Harbor Commissioners, to If'NVL VEHICLE SERVICES AMERICAS, INC., is hereby approved and the Executive Director and the Secretary of the Board are hereby authorized and directed to execute and attest to the same on behalf of the City of Los Angeles upon this Order being approved by the City Council as described below. The Secretary shall certify to the adoption of this Order by the Board of Harbor Commissioners of the City of Los Angeles and shall cause a copy of the same to be presented to the City Council as provided in Section 606 of the Charter of the City of Los Angeles. If the Council shall approve this Order within 30 days after such Order shall have been presented to it, or if the Council shall fail to disapprove this Order within said 30 days, the Order shall be deemed approved and shall become effective upon such approval without publication. The Permit approved by this Order shall become effective immediately upon execution by the Executive Director and Board Secretary after such Council approval of the Order. I HEREBY CERTIFY that the foregoing Order was adopted by the Board of Harbor Commissioners of the City of Los Angeles at its meeting of DD\:e!m~ ::r\d\)\~. JULIE WICHMANN Board Secretary HUERTA APPROVED AS TO FORM!IJI!.::;-,2013 MICHAEL N. FEUER, City Attorney Janna B. Sidley, General Counsel By ~HE~A:I'::'THER M. McCLOSK eputy

2 TO Gary Lee Moore, Interim Executive TRANSMITTAL Director Harbor Department JAN FROM The Mayor DATE COUNCIL FILE NO. COUNCIL DISTRICT 15 PROPOSED SUCCESSOR PERMIT FOR PREFERENTIAL BERTH ASSIGNMENTNO WITH WALLENIUS WILHELMSEN LOGISTICS (WWL) VEHICLE SERVICES AMERICA, INC. Transmitted for further processing and Council consideration. See the City ministrative Officer report attach do' Ị (Ana Guerrero) MAS:ABN:l t CAO 649-d

3 REPORT FROM OFFICE OF THE CITY ADMINISTRATIVE OFFICER Date: January 23, 2014 CAO File No Council JJ- File No. Council District: 15 To: The Mayor.. From: Miguel A. Santana, City Administrative OffiC";;y t:.. Reference: Correspondence from the Harbor Department dated November 26,2013; referred by the Mayor for report on December 2, 2013 Subject: PROPOSED SUCCESSOR PERMIT FOR PREFERENTIAL BERTH ASSIGNMENT NO WITH WALLEN IUS WILHELMSEN LOGISTICS (WWL) VEHICLE SERVICES AMERICA, INC. SUMMARY The Harbor Department (Port) Board of Harbor Commissioners (Board) requests approval of Resolution No authorizing proposed successor Permit No. 900 with Wallen ius Wilhelmsen Logistic, Vehicle Services America, Inc. (WWL) for Preferential Berth Assignment (PBA) No The WWL Permit (Agreement) is for the non-exclusive PBA at the berths of the Port of Los Angeles (POLA) to lease and use acres of waterfront property to operate a vehicle import and export processing and logistics services terminal. The proposed Agreement is for a term often years, with one five-year renewal option. According to the Port, approval of the proposed Agreement No. 900 will supersede or take the place of the existing PBA The Port is requesting that the term of the proposed Agreement be retroactively approved from January 1,2012 to January 1,2022. The current Agreement for WWL had expiration date of October 31,2011. The Port granted WWL "holdover" status under the contract provisions until the proposed successor Agreement can be considered by the Board and Mayor and Council. A "holdover" status extends the Agreement beyond" the expiration date on a month-to-month basis under the same terms and conditions and authority by the Executive Director to increase compensation up to 150 percent during the holdover period. BACKGROUND WWL is the terminal operator and the supply chain management services company of ocean transportation, inland distribution, and terminal handling. The Port states that the current and previous owners ofwwl have leased Port property at pola Berths A since In 1985, the Mayor and Council approved Agreement No with Distribution and Auto Service Inc. (DAS) to lease Berths for 20 years (C.F ). PBA No granted DAS the preferential use of POLA land for an auto processing terminal at Berths In 2004, the PBA for DAS was extended to 25 years, with a new expiration date in October In January 2006, the DAS changed its name to WWL, as a result ofwwl's acquisition of DAS. WWL has used the PBA berths for vehicle processing and logistic services that include receiving, storing, warehousing, servicing,

4 CAOFile No. PAGE handling, distributing, and assembling vehicles for import, export and the installation of accessories. The facility included such auto companies as Nissan, Nissan Diesel and Infiniti. SUCCESSOR PERMIT NO. 900 WITH WWL The Port states that the WWL facility currently processes more than 150,000 vehicles annually and is expected to process approximately 220,000 vehicles annually in the future, subject to market demand and other planned capital improvement projects (CIP) to the terminal. According to the Port, the terminal has five berths, a storage capacity for 8,000 vehicles and a rail yard for loading and unloading vehicles. Future Port CIP projects, including the Berth 200 Rail Yard Project and wharf structure maintenance, will improve the facility's infrastructure and operational efficiencies. WWL has agreed to and is responsible to pay for a portion of the total improvement costs. WWL is expected to pay the POLA a minimum annual guarantee (MAG) compensation of approximately $7,250,000 per year or $604, 167 per month, with projected annual adjustments based on Consumer Price Index (CPI) rates. Approval of the MAG will increase compensation from approximately $6,580,602 to $7,250,000, an increase of$669,398 per year. The Port states that WWL will pay the MAG if the total wharfage charges (for use of the terminals) do not exceed the MAG. According to the Port, the MAG is subject to adjustments based on annual CPls, market rates (every fifth year of the contract), and increases to the Tariff rates. Pursuant to the Agreement, the Port and. WWL have agreed to calculate the average number of vehicles that are loaded and unloaded at the berths on a per-acre basis. According to the Port, ifwwl does not meet the agreed upon goals, the POLA can exercise the option to reduce the acreage in use by WWL every five years. The Port states that WWL will be obligated to pay the difference in compensation due from the proposed Permit No. 900 and the amount owed from the current Permit under PBA WWL has agreed to pay the agreed upon difference in 12 equal installments within the first year after execution of the proposed Agreement. In addition, WWL will be required to deposit approximately $1.2 million, or more if necessary, with the POLA to cover any delinquent expenses related to rent or performance goals under this Agreement. The proposed Agreement has been approved by the City Attorney as to form and is in compliance. with City requirements and ordinances. The Port Director of Environmental Management has determined that the proposed Agreement with WWL will extend the use of existing Port property and has been previously evaluated for environmental significance. Therefore the propose Agreement is exemptfrom the requirements of the California Environmental Quality Act (CEM) under Article II, Section 2(i) of the Los Angeles CEQA Guidelines. RECOMMENDATION That the Mayor approve the Harbor Department (Port) Board of Harbor Commissioners' request for approval of Resolution No , authorizing proposed successor Permit No. 900 with Wallenius Wilhelmsen Logistic, Vehicle Services America, Inc. (WWL), to supersede the current Preferential Berth Assignment (PBA) No ; and authorize the term of the Agreement retroactively from January 1, 2012 to January 1, 2022, with a renewal option period from January 1, 2022 to January 1, 2027, and return the document to the Port for further processing, including Council consideration.

5 CAO File No. PAGE FISCAL.lMPACT STATEMENT Approval of the Harbor Department (Port) proposed successor Permit No. 900 with Wallen ius Wilhelmsen Logistic, Vehicle Services America, Inc. (WWL) is expected to pay a minimum annual guarantee (MAG) compensation of approximately $7,250,000 per year or $604,167 per month, with projected annual adjustments based on Consumer Price Index rates. Approval of the MAG will increase compensation from approximately $6,580,602 to $7,250,000, an increase of $669,398 per year. The proposed Agreement will not impact the City General Fund. TIME LIMIT FOR COUNCIL ACTION Pursuant to Charter Section 606, "Process for Granting Franchises, Permits, Licenses and Entering Into Leases," unless Council takes action disapproving a contract that is longer than five years within 30 days after submission to Council, the contract will be deemed approved. MAS:ABN: