Efforts to Open New Shipyard at Todd Site Put in Jeopardy : Development: Harbor Department notifies 2 firms vying to open plant to succeed bankrupt firm that it will consider other proposals for property.

Los Angeles port officials this week notified two new companies vying to open a shipyard on the site of the former Todd Shipyards that the Harbor Department will consider other uses for the 112-acre site along San Pedro’s waterfront.

The notification to both Los Angeles Shipyards Corp. and Los Angeles/Long Beach Shipyards Inc. did not surprise or anger officials of either company. They said the port’s announcement still allows them room to negotiate a lease to reopen the property for shipbuilding or repair.

But the action frustrated a local leader of the shipyard workers’ union, who said port officials should be doing more to reopen the yard and provide employment for former Todd workers. He said the port could offer financing packages or other assistance for potential shipyards.

“I believe they have an obligation, as a city entity, to help the unemployed and those who are living dangerously close to poverty, and that is what we have with a lot of the shipyard workers,” said Bill Trejo, executive secretary of the Industrial Union of Marine and Shipbuilding Workers of America, Local 9. The union represented the 2,000 shipbuilders who were laid off two years ago when Todd Shipyards declared bankruptcy and the yard closed.

Although port officials have left the financing of shipyard proposals to individual companies, Trejo said the prospect of reopening the shipyard requires the port to be more flexible, both in its negotiations with potential operators and in its demand that companies have contracts for shipbuilding or repair at the site before a lease is approved.

“That is not reality,” Trejo said. “I don’t see customer contracts coming into effect until you have a business and a place for business and a work force in place . . . and that doesn’t happen overnight.”

Trejo’s comments reflected the frustration of many former Todd workers--as many as 6,000 were employed there in the mid-1980s--who are backing a proposal to reopen the yard for ship repairs. That proposal has been made by Los Angeles/Long Beach Shipyards, a recently formed company headed by retired Rear Adm. Stuart Platt and backed by about $250,000 invested by 100 former Todd workers.

Its chief competitor for the site is Los Angeles Shipyards Corp., a company that includes some former managers at Todd. Early this year, it was in exclusive negotiations with the port about leasing the property for shipbuilding. Those exclusive negotiations ended in February, when Los Angeles Shipyards declined to make a non-refundable $250,000 deposit with the port as proof of its financial wherewithal.

Since then, port officials, including harbor commissioners, have been saying they would wait until the end of August--the two-year anniversary of Todd’s closure--for a shipbuilding or repair company to come forward with a viable plan for the site. Despite some pressure within the Harbor Department to open the property to other potential uses like a container terminal, port officials made good on that pledge.

But in a letter Tuesday to both Los Angeles Shipyards and Los Angeles/Long Beach Shipyard, port Executive Director Ezunial Burts said the department can no longer delay considering other proposals for the property.

“While we wish you continued success in obtaining the levels of investor funding and customer contracts required to make the project operationally and financially feasible,” Burts wrote, “the port also has the responsibility to begin its process of evaluating potential alternative uses for the area without further delay.”

Port officials would not discuss other proposals for the property.

Additionally, Burts told the companies, the port needs to develop an environmental cleanup plan for the property. Port officials have estimated the cleanup will cost at least $5 million. That figure would be for clearing soil of heavy metals and other contaminants. It would not include the cost of freeing the site of ground-water contamination or other possible health hazards, such as asbestos in buildings.

The cleanup is particularly important for Los Angeles Shipyard, which unlike its competitor hopes to win a lease for the entire property. Los Angeles/Long Beach Shipyard is eyeing only the newer, northern half of the property.

Notwithstanding the port’s search for other potential tenants on the site, Burts assured officials of both ship companies that the Harbor Department will continue to consider their proposals.