By Samantha Mehlinger, Editor- October 9, 2018

The business owners of Long Beach’s Westside Industrial Area are tired. They are tired of sounding negative. They are tired of repeating their same concerns year after year, only to see them remain unaddressed or compounded. They emphasize that they’d prefer to be positive. But, if they’re being honest . . . to do that they’d pretty much have to zip their lips.

This isn’t to say the businesses in the Westside aren’t doing well. By most accounts given to the Business Journal, they are – even despite housing cost increases, technology advancements and the age of the Internet all coming to bear. Businesses are hiring, and doing well.

But they feel mired in problems that never seem to be resolved in the Westside: crumbling infrastructure, litter, a pervasive homeless issue. On top of that, they face uncertainty as the area is on the cusp of change: marijuana growers and distributors are moving into the area, causing spikes in lease rates for warehousing. In a few years, a rail project planned by the Port of Long Beach stands to upend some businesses in its path and affect those surrounding it.

Overall, staff at the city and at the port are responsive, business owners said. But it still seems to them like no action is being taken to address their concerns.

The Westside industrial Area includes about 400 businesses west of the Long Beach Freeway to the L.A. city border, between Anaheim Street and north past Pacific Coast Highway (PCH), and the Magnolia Industrial Area (MIG) with about 300 businesses east of the freeway to Magnolia Avenue, between Anaheim and PCH. Many of the firms have been in the city more than five decades.

“There is a lot of negativity going on around this part of the city,” Daryl Phillips, owner of more than 100-year old Westside company Phillips Steel, told the Business Journal. He emphasized that he prefers to be positive. But since both the Long Beach Board of Harbor Commissioners and the Long Beach City Council voted to approve the port’s Pier B On Dock Rail Support Facility project last year – despite vocal and strong opposition from Westsiders – he said business owners have been disengaged.

“What I have seen is there seems to be a lack of interest from the Westsiders since the Pier B vote,” Phillips said. “You know, it was such a letdown and such a traumatic experience that we’re just reeling from it, knowing we have zero control.”

Stan Janocha, chief operations officer of Superior Electrical Advertising, made a similar observation. “It always seems like we’re the ugly stepchild. The city doesn’t pay much attention to us. It was obvious when they had the vote on the port,” he said.

Superior is located just feet away from the proposed rail expansion, south of Anaheim Street, and Janocha has concerns about the impacts of noise and blight both during and after construction. He and other Westsiders met with their councilperson, Lena Gonzalez, as well as port officials prior to the project’s approval to express these concerns.

“At the end, everybody, all the city councilpeople, voted for the port [project],” Janocha said. “So it just felt like a slap in the face. Especially after they come down and talk to us and tell us that they have not made up their mind and everything else. It’s my opinion that their minds were made up all along.”

Gonzalez told the Business Journal via e-mail that representatives from her office regularly attend meetings of West PAC, a business and property owners association in the Westside, to update constituents on city policies affecting the area and to connect them to city resources.

Janocha said he recently attended a community meeting about the Pier B project held by the port, where he spoke with Deputy Director Richard Cameron. “Rick Cameron was there, and I asked Rick if they are going to build a sound wall. And he said, ‘If you want a sound wall, we’ll build a sound wall.’ And he said, ‘How high do you want it?’” Janocha recounted. According to a port spokesperson, the port has yet to issue an RFP for the design of the project, which could incorporate buffer zones like the sound wall Janocha requested to lessen impacts to surrounding businesses.

“We will have to see how much it disrupts us,” Janocha said of the project. “We are investigating all avenues of what we can do. We have looked at options of moving to Nevada. But we’ll see what happens.” Superior is a 56-year-old company with more than 100 employees, and has major clients such as Disney, Starbucks, McDonald’s and dozens of other well-known brands.

Asked why he would relocate, Janocha said, “It is very tough to business in California. We have got a little bit of time. We’re going to see what happens.” Superior’s current location is beneficial due to its proximity to freeways, he noted. “We have a large number of crane trucks and other vehicles, so being close to the freeway is very beneficial to us. Other than that, the infrastructure here is kind of old. It should be improved,” he said.

Phillips said that city officials had assured Westsiders that roads south of Anaheim Street, which are considerably worn, would be repaved by the fall. “Well, here we are and nothing has been done,” he said. “The port is using them. And it is their trucks that are getting ruined, and their equipment is being subjected to poor roads and conditions just like ours. It’s just not right.”

However, some improvements are coming. According to Lee Peterson, media relations manager for the Port of Long Beach, repairs and repaving on streets south of Anaheim on the westside will begin this month. This area is port property, some of it leased to businesses. “It’s coming and it’s coming very soon,” Peterson assured. He added that the contractor would work with businesses to make sure their operations would not be disrupted. The project should take about 10 months, he estimated.

According to the Long Beach Public Works Department, a number of road repair and resurfacing projects have been completed in the Westside industrial area, including the stretches of Cota Avenue and Seabright Avenue in between Anaheim Street and Pacific Coast Highway, as well as a handful of others. Still, photographs taken by the Business Journal indicate that some roads are in such disrepair that they have caved in in places. In some cases, chunks of pavement have come up and are littering the roadway.

“My office has worked to preserve infrastructure through Measure A,” 1st District Councilmember Lena Gonzalez, who represents the Westside industrial area, stated in an e-mail to the Business Journal. “In the last two years, major improvements were administered to Seabright Avenue and Cota Avenue between West Anaheim Street and West Pacific Coast Highway, Gaylord Street between Hayes Avenue just past Judson Avenue, West 14th Street at Hayes Avenue, and Gale Avenue between West 15th St and West Gaylord Street, as well as West 16th Street and West 17th Street. My staff is out in the field weekly, to proactively report potholes, illegally dumped items, and other quality of life concerns on behalf of the business owners in the area.”

To help abate water runoff issues, stormwater drain installation is scheduled to begin on Judson Avenue, West 16th Street, Seabright Avenue and West Cowles in spring 2019.

Homelessness and overnight parking of campers and motorhomes are also concerns both in the Westside industrial area and in the MIG, which is a property and business improvement district.

“There is graffiti, there is homeless, there is trash dumping. Those are daily activities that we have to stay on all the time,” Bill Townsend, president of MIG, said. “It seems like the city gets on things pretty quick. We have weekly meetings with the MIG staff and the police and private security and the council office. Those are the issues we talk about every month.”

Mike Zupanovich, owner of Harbor Diesel & Equipment Inc. in the MIG area, said that he spends most days focused on cleaning up trash and trying to encourage homeless individuals sleeping on or near his property to leave. “All we focus on is security and cleanup in our neighborhood. It’s a joke,” he said. “Then law enforcement has their hands tied to a certain extent. And it’s just frustrating.” The firm opened in 1971.

Zupanovich said that tenants are afraid to call the police on individuals sleeping on their premises. “It just really disappointing for my employees. They are afraid to even go for a walk around the neighborhood,” he said.

He explained that landlords are often no help, as many are absentee. “There is no proactive code enforcement which we have tried to ask the city to do,” Zupanovich said. “Nobody is being held accountable to keep up their properties and stuff. I mean, there are those that do. But . . . it’s just not being policed.”

One issue the MIG was able to resolve was overnight parking of campers and motorhomes. But the issue has simply moved on down the road. “We worked really hard for a three-year period to get ‘No Parking 2 a.m. to 5 a.m.’ signs up so the motorhomes would get out of the area. Well, I go drive over to the Westside, they’re all over there now,” Zupanovich said.

Indeed, owners on the Westside said overnight camping by motorhomes is an issue. “I will say I don’t see it south of Anaheim Street, because I think the port polices that fairly well,” Phillips said. “But my neighbors on the north side of Anaheim street are bitterly complaining. And it appears as though we’re not getting support from the police department or city management.”

An ordinance banning oversized campers and motorhomes from parking overnight for more than three days at a time on residential streets went into effect in July, according to City Traffic Engineer Eric Widstrand. He speculated that it was possible owners of such vehicles who were parking in residential neighborhoods might have moved them to commercial zones like the Westside. However, he noted that his office has received no complaints about this occurring in the Westside areas. He welcomed anyone with concerns to call him directly.

Gonzalez said she and her staff are “actively exploring amendments to the oversized vehicle ordinance” with the public works department. “It was a heavy lift passing this citywide ordinance in residential areas and we are looking to expand the protections more broadly to our industrial area,” she wrote in an-email. “Until these are finalized, my office is working on a toolkit and resource guide to educate business owners about strategies and best practices to report campers and motorhomes and ensure that people living in those vehicles get the services they need as well. We will also see a decrease in this population as the City begins to roll out its ‘Safe Parking’ measures related to allowing people living in their vehicles to access specific lots to park overnight.”

Changing Times

As the Business Journal reported last year, the Westside industrial area and MIG are zoned for marijuana growing and manufacturing. In an effort to secure one of the limited numbers of licenses available for these activities, cannabis businesses snatched up properties in the area last year, driving up lease rates and sales prices, according to business owners in the area.

“The [property] owners want rents based on the demand from the marijuana growers or producers,” Phillips said. “Sellers want prices that are commensurate with what the pot industry is paying. And you can’t operate a legitimate business under those conditions.”

Janocha reflected, “The marijuana issue for sure is going to affect the Westside. We’re not sure whether it’s going to affect it for good or bad.”

Townsend, a principal of the real estate firm INCO Commercial, noted that marijuana businesses have caused real estate prices to increase in the MIG area. “Lease rates are up for the whole area. But there are owners that will take cannabis [businesses], and there are owners that won’t take cannabis on a lease and sale basis. Property values have gone up because the comps are higher,” he explained.

“We have had customers and friends that have had to close and/or relocate their businesses because they can’t afford the neighborhood anymore,” Phillips noted.

Brandon Carrillo, principal with the Long Beach office of Lee & Associates, estimated that cannabis-related businesses now take up about 15% of Westside real estate, but that the fervor among that industry to get into properties in the area has subsided.

“It’s kind of died down because I think the city has determined who is going to get permits and stuff,” Zupanovich observed.

Asked how his business was doing, Zupanovich replied, “We’re hanging in there. We’re old and so we just keep our nose to the grindstone and keep doing what we’re doing.” Referring to the high cost of real estate in the area, which has little property available either to buy or rent, he added, “I just feel sorry for anybody who is trying to start out in a normal type business.”

Superior Electrical Advertising is “as busy as we have ever been,” according to Janocha. “We are busier now than we have been in years and years. So we are lucky to have a lot of work,” he said. In the past year, he has added about 10 employees, he noted. “I think it’s mainly because the economy is doing well. People are building shopping centers and people are remodeling, so it has been pretty good for us.”

Phillips said his firm is also doing well. However, he is concerned about how the increasing cost of living in Long Beach is affecting his employees. On one hand, he said “We have employees that can’t afford to live in the City of Long Beach anymore.” On the other, “I have some employees who live in Long Beach who own their own homes in Long Beach, and they are ecstatic because they have exploded in value.”

Despite issues like trash dumping and an increased number of homeless individuals in the area, Townsend said businesses in the MIG are “doing fine.” He reflected, “It’s a good, active area. The business climate seems to be pretty successful right now. With the rail yard project there may be more stress from some businesses. We’ll see how that goes.”