Port digs in to swing biggest land purchase in decades, plans growth of cargo facilities.

Port of Long Beach officials hope this will be the year they will be able to swing a deal to buy 300 acres of prized waterfront land owned by Union Pacific Railroad Co.

The property would represent the port's biggest single land purchase in decades, at a price tag of an estimated $100 million to $200 million. Port officials are entering their third year negotiating with the big railroad's oil and gas subsidiary, Union Pacific Resources, the actual landowner. Both sides have declined to name offering or asking prices or provide specific details on what's holding up a deal.

If the property is bought, the port would likely build a terminal there for container-cargo loading to serve large ocean-going cargo ships, said port officials.

The land is key to the port, said Harbor Commission President Joel Friedland, "because it's a vital part of the port's geography, and it's on a major channel." The parcel fronts the Cerritos Channel, an inland waterway linked to the ocean -- and to big ships -- by the larger East Basin Channel.

The port's land-buying program, funded with $132 million this year, is part of grand plan begun this decade to expand by 50 percent by the year 2020. The blueprint, developed since the late 1960s in cooperation with adjoining Port of Los Angeles and the U.S. Army Corps of Engineers, includes rail and highway improvements, dredging, landfilling and environmental cleanup.

Gaining title to the Union Pacific property is a cornerstone of expansion plans. It represents half of the approximately 600 acres of port-area land held by private landowners.

Gaining title to all private land in the port area is a goal of the city's Board of Harbor Commissioners. That five-member panel directs the city Harbor Department in acting as landlord and rulemaker for the 2,800 acres governed by the department. (The port already owns the remaining 2,200 acres.)

The addition of a new cargo terminal would likely hike job opportunities for customs brokers, lawyers and others who do international-trade business in the Southland. Expansion has its drawbacks too, as certain neighborhood activists reject the fallout from big-time shipping, like additional truck traffic and air pollution.

The Union Pacific property, if it becomes the port's eighth cargo terminal, could boost container traffic by some 20 percent, estimated commission President Friedland. But the bird is not in hand.

"Railroads don't move fast," noted Friedland, who pointed to several issues complicating the talks, which have been conducted behind closed doors in the port's normal fashion. Port Executive Director Steven R. Dillenbeck is chief negotiator, and executives from the railroad's Fort Worth, Texas offices sit on the table's other side.

First, Union Pacific pumps oil from the site. Port officials have offered to allow the railroad to retain mineral rights and keep pumping after the sale, said Friedland.

That would involve relocating the well-heads to a corner of the property, possibly, in a move with some precedent in the port. Oil is already extracted from land leased by other port tenants, including the California Unified Terminals cargo terminal and the Toyota automobile dock.

Secondly, there is potentially hazardous waste on the site, thanks to many decades of drilling and occasional spilling.

"We don't know to what extent the dirt is contaminated," said Friedland. An environmental assessment directed by the Harbor Department is under way.

Finally, there is the question of price. As landlords, port officials value their land at $12 a square foot for purposes of computing a "fair" rent to charge tenants. That tallies to a $157 million price.

But Director of Properties Richard Steinke downplayed the significance of $12 to the Union Pacific deal. "That may not be applicable to a large land mass," he said.

Land has recently sold for between $12 to $16 a square foot, Steinke said. The largest land acquisition in 1991 was also with Union Pacific -- 28 acres across the Cerritos Channel on Terminal Island. That sold for $12.43 a square foot.

Union Pacific's 300 acres are important to a growing port, said Friedland, and especially appealing "because it's land that doesn't require landfill, or permits for landfill."

Building out into the ocean required permits from the Army Corps of Engineers, the California Coastal Commission and other government agencies for the recent 147-acre Pier J expansion. The expense mounted to $150 million for dumping 2.3 million tons of rock, plus dredged dirt -- all to create another home for cargo terminals.

Other land is also targeted or under purchase negotiation. Steinke said top priorities include land on the Seventh Street Peninsula, just east of the Hanjin Container Terminal. A handful of landowners there operate ship repair yards, oil-storage facilities and other businesses.

Also land is sought in the North Harbor, just south of Anaheim Street and west of the Los Angeles River. There, warehouses, a sign company and several small businesses are asked to sell.

The port rarely uses eminent-domain legal action to force a sale. Friedland insisted even if Union Pacific cannot be coaxed into a deal that the port likes, he still would not recommend seizing the land through such a court action.

"It's not a consideration," he said.