Council Restores $450,000 Grant to San Pedro Cannery

Reversing a decision that had sparked local controversy, the Los Angeles City Council this week voted to reserve a $450,000 state grant for a San Pedro cannery rather than use it to bolster the city’s post-riot rebuilding effort.

The 13-0 decision, taken without discussion Tuesday, came two weeks after Harbor area Councilwoman Joan Milke Flores and the Fishermen’s Cooperative of San Pedro decried an attempt by Mayor Tom Bradley’s office to redirect the grant, originally intended for the co-op’s cannery.

“We are really pleased,” said Tom Creehan, general manager of the Fishermen’s Cooperative. “It is a significant recognition on the part of Los Angeles that the money is pledged to the (fishing) industry, which has been in a depression.”

Last month, Bradley’s Office of Business and Economic Development won council approval of its plan to transfer the state grant to the city’s post-riot relief efforts. The action was taken after the office concluded that the co-op’s ongoing financial problems made it ineligible to receive the grant.

But Flores and the fishermen challenged the transfer, insisting that the council was never told that the $450,000 was being taken from the co-op’s United Food Processors cannery. Rather, they said, Bradley’s economic development office identified the money only by an account number that offered no explanation of the source of the funds.

After they challenged the action, Flores and the co-op won approval from a City Council committee to reserve the grant for the cannery, which closed on May 15, forcing the layoff of about 200 workers.

Since the cannery closed, ongoing financial problems of the co-op and the local fishing industry led United Food Processors to file for protection from creditors under federal bankruptcy laws. Now, with the co-op attempting to reorganize the cannery’s finances, the $450,000 grant could breathe new life into the cannery project and allow the rehiring of its former workers.

Under the plan approved Tuesday by the council, the grant monies will be reserved for the cannery project but will not be released to the United Food Processors until the city is assured of the company’s financial viability.

Although that approach does not guarantee that the co-op will receive the funds, it does increase the chances that the cannery will reopen. Creehan said the co-op is considering options that include selling the cannery to another operator or running it in a joint venture with a partner.

Creehan said at least four unnamed parties have expressed an interest in forming a partnership or acquiring its facility--proposals, he added, that would conceivably allow the cannery to reopen within several weeks.

Creehan said co-op officials may try to reopen the cannery earlier with a skeleton crew to begin shipping its stored inventory of mackerel and other so-called wet fish. At present, he said, the cannery has $3 million in orders.

While the co-op moves to get its financial house in order, the Los Angeles Harbor Department, which owns the land leased by the cannery, is also taking steps to find an operator for the facility. While that search continues, port officials have recommended that none of the grant money be released to United Food Processors until its bankruptcy proceedings are complete.