OAKLAND -- There have been two big surprises this past year at the Port of Oakland.
The first was a strip club scandal that ensnared former Executive Director Omar Benjamin. The second was that the leader of the much larger and more successful Port of Long Beach came onboard to replace him.
The bar has been set low for Chris Lytle, but the stakes could not be higher for the Bay Area's economy.
Oakland's port is an economic force, directly responsible for nearly 22,000 jobs throughout Northern California. However, it has struggled to compete with bigger and better-equipped rivals up and down the West Coast -- and its future is hardly assured.
Lytle, who signed a three-year contract that guarantees him a $325,000 base salary this year, said he was drawn to the challenge of turning around the port. "Some of the problems that Oakland has had over the years, I think I can make a big difference," he said. "And that's essentially why I made the move."
Many of the port's biggest wounds have been self-inflicted.
Past infrastructure projects that now appear misguided have saddled the port with a debilitating $1.3 billion debt. Unwilling to issue more bonds, the port is holding off indefinitely on a rail and warehousing project that would make it more competitive and generate thousands of jobs.
Infighting among truckers, longshoremen and terminal operators contributed to shutdowns this summer that forced shippers to reroute cargo and threaten to take their business elsewhere.
The port, like San Francisco's before it, is shrinking. After completing the sale of 64 acres earlier this year for a major housing development, the port now must decide what to do with a soon-to-be-shuttered shipping terminal. City leaders are eyeing the land as a stadium site for the Oakland A's.
Given the port's flagging reputation, industry leaders were relieved to learn that Lytle was taking over, said John McLaurin, executive director of the Pacific Merchant Shipping Association, which represents terminal operators and shipping companies.
"Oakland faces a number of challenges, but I think that in Chris (Lytle) they have somebody who provides some light at the end of the tunnel," he said. "His hiring was critically important."
Lytle is a shipping industry lifer. At 67, he has worked more than four decades in maritime, doing everything from driving a truck while attending the University of the Puget Sound to managing terminal operations for major shipping companies to running the nation's second-busiest port.
During his nearly two years at the helm in Long Beach, Lytle inked long-term deals with two shipping giants, but he didn't always see eye-to-eye with Mayor Bob Foster, who vetoed plans for a new port building he has referred to as a "Taj Mahal."
So far, Lytle has made a good first impression on Oakland's contentious waterfront. His first weeks on the job, in July, coincided with a major cargo backlog at a recently consolidated shipping terminal that led frustrated truckers to shut down most of the port in protest.
Lytle broke bread with truckers at a nearby taco truck and won kudos from all sides unaccustomed to personal visits from top management. "Every time he has said he was going to do something, he's done it," said Mike Villeggiante, a longshoremen's union leader.
When the truckers protested, Lytle said he got a stack of emails from angry shippers, and J.C. Penney Co., a major account, told him it was rerouting cargo to Southern California ports.
"If you have labor fighting with truckers and truckers fighting with terminal management, it becomes an endless cycle," he said. "One of my big pushes is to get all these groups to work together. If everyone isn't pulling in the same direction, it's just not going to be successful."
Oakland has played second fiddle for years to Southern California ports that have better rail connections and serve a larger population base.
When the economy started booming in the 1990s, the port decided to invest hundreds of millions in boosting its capacity to receive and ship cargo. It was a gamble that has not paid off.
The economy tanked twice, and shippers began sending cargo to multiple ports. Cargo traffic in Oakland hasn't grown nearly as much as anticipated, and today the port operates at just over 50 percent capacity.
According to the port's own consultants, the key to reaching capacity is improving rail connections. But the port's debt load has forced it to shelve a $700 million project to improve rail access at several terminals from its half of the former Oakland Army Base.
"We need to get some grant money as opposed to going more into debt," Lytle said. So far, the port hasn't secured any funds for the project.
Lytle notes that the port does have some strategic advantages it can market to shippers. Work has begun on a $500 million project -- primarily financed through state grants and private capital -- to build a rail yard for the port as well as warehouses on the city's half of the former Army base.
The facilities can further establish the port as an export leader and also boost imports, Lytle said. Meanwhile, he plans to use his industry contacts to improve rail service and lure major shippers.
"One thing I am adamant about here is that you have to have a customer focus," he said. "The sense is there has not been a customer focus in Oakland."
Lytle doesn't just have to rebuild the port's reputation in the maritime industry; he has to rebuild the public's trust. His predecessor retired late last year after it was revealed that he helped run up a $4,537 tab at a Houston strip club that was billed to the port.
"That chapter is closed; we have to look forward," said Lytle, who added that the port's stringent new reimbursement policies shouldn't hurt its efforts at attracting customers. "It's very tight in a good way."
Lytle worked in Oakland for a shipping company in the 1990s and said that his wife, a UC Berkeley graduate, was eager to return with their three school-age sons. Although he will be 70 when his contract expires, Lytle said he has no interest in retiring and is energized by his new job. Oakland's port likely won't ever be as big as the one he led in Long Beach, he said, but it also won't wither into a waterfront real-estate entity like the port in San Francisco.
"We're not going to let that happen," he said. "We're going to grow the business. There is a lot of upside capacity here."
Contact Matthew Artz at 510-208-6435.
NAME: J. Christopher Lytle
FAMILY: Wife; three sons, ages 11 to 17
EDUCATION: Master's in Business Administration from the University of Puget Sound; bachelor's degree from Central Washington University
PRIOR JOB: Executive director of Port of Long Beach
Rising Cost for Port Director
$325,000: Base salary for Chris Lytle, who also is eligible for a targeted 20 percent performance bonus.
$257,508: Amount paid to former Director Omar Benjamin in 2011.