The government agency that controls San Diego’s industrial waterfront is seeking to be a better neighbor to people who live just east of its marine terminals and shipyards.
Tuesday, the Board of Port Commissioners for the San Diego Unified Port District voted unanimously to double its annual contribution to what’s known as the Maritime Industrial Impact Fund and expand the fund’s purpose to include electrification projects.
The action means that the port will contribute 4 percent of its gross maritime industrial revenue — or an estimated $1.55 million in fiscal year 2025 — to combat industrial impacts in tidelands-adjacent residential communities such as National City and Barrio Logan.
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The increase takes effect immediately and should grow the fund by $10.4 million over the next six years, according to a forecast prepared for the board meeting.
“I’m excited about it. And I’m also excited about the fact that we have a lot of synergy around the electrification work,” said Commissioner Sid Voorakkara, who made the motion to increase the funding contribution to 4 percent. Staff recommended an increase to 3 percent. “I think that it’s great for our portside communities. And it’s also, I think, (a change) that is really embraced fully by our tenants as well.”
Formed by the state in 1962, the port’s jurisdiction spans 34 miles of tidelands, and includes land and water in five member cities: San Diego, National City, Chula Vista, Imperial Beach and Coronado. The agency is a self-funded, non-taxing entity that makes most of its money as a landlord overseeing prime, waterfront real estate.
The port’s maritime business is also a major contributor to the district’s balance sheet.
The port operates the Tenth Avenue Marine Terminal and National City Marine Terminal. The 96-acre Tenth Avenue terminal, just south of downtown, is home to Dole Fresh Fruit and is the company’s primary West Coast port of entry. The 135-acre National City terminal, operated by Pasha Automotive Services, is the main port of entry for 14 different auto manufacturers, according to the port.
In total, the port expects to collect $38.7 million in revenue from marine terminal operations and from rent charged to industrial waterfront tenants in the upcoming fiscal year, according to the agency’s forecast.
Created in 2010, the Maritime Industrial Impact Fund, or MIIF, seeks to offset the adverse effects associated with the import and export of cargo — ranging from bananas and cars to windmill blades — from the marine terminals, as well as address impacts from the many shipbuilding and repair facilities that dominate the bayfront in the South Bay.
The fund, which currently has a balance of $1.1 million, acknowledges that some neighboring communities are subject to a disproportionate level of adverse issues given their proximity to the industrial facilities, the board policy states. As such, member cities can apply to use MIIF funds for projects off tidelands that have a direct link to the port’s maritime operations. Funds can be used to improve air quality, lessen visual impacts or noise, and reduce truck traffic through neighboring towns.
The port initially added $500,000 to the fund, but in 2017 agreed to contribute one-half of a percent of maritime industrial revenue annually to the fund. The contribution was later boosted to 1 percent. And, in June 2023, the board authorized an increase to 2 percent of annual maritime industrial revenue.
To date, the port has spent $2.6 million on 11 different projects, according to information presented to board members. The agency, for instance, paid $488,165 for air filters for Perkins K-8 School in Barrio Logan, contributed $400,000 to National City’s free, zero-emission shuttle program and allocated $900,000 for a portion of the Bayshore Bikeway in National City.
Tuesday’s board approval ups the agency’s contribution to the fund to 4 percent. Commissioners also approved new language to the policy to clarify that funds can be used for electrification projects, including electric trucks and electric infrastructure.
“Unfortunately, despite all the progress and investments the port is making, including the forthcoming zero-emission truck stop in National City, the port is behind in the implementation of the (Maritime Clean Air Strategy) target to electrify 40 percent of trucks serving the port by 2026 and 100 percent of trucks by 2030,” said Kyle Heiskala, who is the policy co-director with the Environmental Health Coalition and pressed commissioners to make the 4 percent contribution.
“This is not a moment that calls for incremental progress,” Heiskala said. “This massive undertaking of offsetting industrial impacts and electrification of the port’s pollution sources, both on tidelands and off, demands massive investments to match.”
The most recent action appears to be part of a larger effort to thwart state intervention and repair a fractured relationship with a member city.
As currently proposed, state Assemblymember David Alvarez’s port reform bill, AB 2783, includes language that would require the agency to create two separate funds and set aside 1 percent of gross operating revenue to address maritime impacts and 1 percent of rent revenue to convert industrial land into parks and open space.
The agency has said the funds proposed by Alvarez would constitute an illegal use of district revenue and would threaten its long-term viability. As a compromise, commissioners agreed at an April special board meeting to support bill language that would make the existing Maritime Industrial Impact Fund a requirement of state law.
“We feel that codifying the MIIF and expanding the uses not only demonstrates our long-term commitment to offset our impacts, but also affords us some additional revenues to reduce emissions, especially in regard to trucks and cargo handling equipment, without running into ... legal barriers,” Job Nelson, the port’s vice president of strategy and policy, said at the April special meeting.
Alvarez recently told the Union-Tribune that he is open to amending the bill to codify the MIIF in place of the other proposed funds. The bill is still working its way through the Assembly and Senate.
The port’s decision to boost contributions to the MIIF also comes a week after National City City Council members voted in a split decision to boot their representative, Commissioner Sandy Naranjo, from the agency’s board.
At the National City meeting, council members said they needed a new representative who could more successfully advocate for the city’s priorities: clean air, money from bayfront operations and public access to the water. Naranjo’s relationship with her fellow port commissioners soured beyond repair after they censured her for alleged misconduct, with the divide often visible during public board meetings.
The board voted 5-0 in favor of doubling the annual contribution to the Maritime Industrial Impact Fund. Commissioner Ann Moore was absent and one board seat is vacant until National City appoints a new commissioner.
