by Jim Hight

Supporters of a $23 million project to widen and deepen Humboldt Bay's shipping channels predict a huge economic bonanza if the project goes ahead.

The dredging project will allow bigger ships to navigate the harbor and ease the constraints imposed on shipping by tides and weather. As a result, say supporters of the project, new industries will locate on the bay; sawmills will ship lumber from local docks instead of trucking it to other ports; business opportunities and property values will rise; and thousands of high-wage jobs will be created.

And almost half of the investment will be paid by the federal government.

The $12.5 million local share of the project's cost will be sought from property owners in a special Benefit Assessment District. Owners of some 40,000 properties will receive ballots early this month describing their specific assessments. Payable over 10 years, the amounts will range from $91 for a single-family home to more than $300,000 for some businesses.

Property owners can vote "yes" or "no" on the assessment district, with their votes weighted by the amount of their assessment. (A $3,000 assessee will have 10 times the voting weight of someone assessed $300). A simple majority of votes returned will decide the issue.

For the commercial property owners who face the stiffest assessments, the question may well come down to how much stock to put in the economic benefits predicted by the project's supporters.

A modernized port has been the goal of many citizens and public officials for at least a decade. They see it as the key to attracting export-oriented manufacturing employers that can replace the high-wage jobs which drained away from the North Coast as the timber industry downsized.

The improvements currently proposed -- and the assessment district designed to finance them -- have drawn support from many local business owners, chambers of commerce and even the Humboldt Taxpayers League.

"This is how we can create good, raw industrial jobs that will lift up the whole area," is how attorney Bill Bertain summed up the port enhancement strategy at a recent meeting of Citizens for Port Development.

"It is the future of the area," said Charles Ollivier, head of the longshoreman's union local and one of the five elected commissioners of the Humbolt Bay Harbor, Recreation and Conservation District. "It is the revival of the railroad, a boon to trucking and the creation of much needed jobs in this area."

But before anything resembling that attractive scenario can become a reality, a number of other major developments must first take place.

The channel deepening project must be followed by development of a new common carrier shipping terminal. "Phase one is deepening project, phase two is creation of a public marine terminal," said Dave Hull, harbor district chief executive officer.

Current docks are all privately owned -- most by timber companies -- and other lumber companies are reluctant to push their product across a competitor's dock because they have to disclose sensitive business details in the bills of lading. So companies that don't have their own docks send overseas-bound lumber by truck to common carrier docks in Coos Bay or Oakland rather than through Humboldt Bay.

Some port-development advocates hope for a container terminal to nibble business away from other west coast ports for importing and exporting manufactured goods. But most seem to expect only a bulk facility in the short term, capable of handling lumber, pulp, chips and logs -- the port's traditional cargo staples -- as well as steel, minerals, fertilizer, animal feed and other bulk-loaded cargoes.

Second, to handle much larger cargo volumes, the railroad and highways serving the port must be improved. The railroad between Eureka and Willits has been out of commission for nearly two months after the New Year's floods; and the rail spur out the Samoa Peninsula -- where the largest docks are, including Louisiana Pacific's northern dock, which may be the most likely site for a common carrier -- is in such bad shape that locomotives travel at little more than 2 m.p.h.

"Certainly at some point the port needs to be upgraded (but) the most important part of the infrastructure that needs to be upgraded is the railroad," said John Campbell, president of Pacific Lumber Co., which faces an assessment of more than $300,000.

Third, two or more major new industries will need to locate on Humboldt Bay.

"A classic example would be a clean mini-mill that brings in scrap metal and converts it to specialized steel," said Lawrence Mallon, an attorney and maritime specialist who is a consultant to the harbor district.

Another possible candidate, according to Mallon, is a hardwood mill that relies on raw material imports from Asia or Latin America. "We talked to a number of people in that business ... who have plants in Southern California or the Gulf of Mexico."

Mallon said the prediction that new industrial companies would relocate to an improved Humboldt Bay was based on interviews that were conducted with manufacturers "who were actually interested enough to have Humboldt on their short list ... who had actually sent somebody there."

Advocates of the Benefit Assessment District and the channel improvements believe all these elements will come together. They say the deepening and widening project is the critical first step, and the federal funding approved for Humboldt Bay -- which is contingent on the local share being raised through the assessments -- will go to another port if the project doesn't go ahead this year.

If the massive dredging project is done, they predict new industries and shippers will be drawn by the more accessible harbor, the relatively inexpensive waterfront land and the eager Humboldt County workers.

But some are skeptical. "The harbor district ... has said, 'We will build it and they will come,'" said one waterfront worker who wouldn't give his name. "But if the economic opportunity is there, the port will develop itself."

Fueling such skepticism are economic projections which may seem unrealistic to many.

Based on interviews the harbor district conducted with existing Humboldt Bay shippers and potential new industrial tenants, the district's economic consultant, Dr. John Quigley of University of California at Berkeley, estimated that in 2005, five million tons of cargo would flow through the harbor -- an increase of 200 to 300 percent over current levels.

From this starting point, he projected huge employment gains in port-related fields -- motor freight and water transport jobs will increase from 98 to 1,056, he projected. Even service industries will thrive with new port-related business: Insurance carriers and brokers doing port-related business, for example, will increase from 27 to 429.

"The general public may feel like it doesn't have good information to make a decision," said Kathy Moxon, director of the Institute for the North Coast, an economic development group. "I think there's some question in people's minds about whether the (industrial port) users are really out there."

Moxon also questions whether pinning economic hopes on one or two new industries is a wise strategy. "What happens when one decides to move out? If we had a commercial cargo port with one or two users, say Stockton wanted those people ... Would we have to give away everything to keep them here? That might be a big bill to pay off."

"On the other hand I think about residential property owners having to pay $91 over a 10-year term. That's not much to take a stab at making it happen."

Some supporters see vital arguments for the harbor-improvement assessment even if Quigley's figures turn out to be too optimistic.

"One of the major selling points that's being overlooked with all these lofty predictions is just the fact that we need this for the business we have now," said Andy Westfall of Westfall Stevedore, the company that handles most cargo loading and discharge in the bay.

Westfall echoes the reasoning of the U.S. Army Corps of Engineers, which originally recommended the channel improvements in 1989, after a long study.

With 35-foot channel depths, many ships can only navigate in Humboldt Bay partially loaded. So shippers and shipping companies lose time and money, and by deepening the inner channels to 38 feet, more than $2 million (1989 dollars) in shipping costs per year would be saved.

While three feet of depth may not seem like much, "It's like the guy who's hauling a piece of heavy equipment under an overpass," said Westfall. "Two inches too tall is too tall."