Harbor Commission Votes to Sell Todd’s Assets for $6 Million

After a fruitless four-year search for a tenant for the former Todd Pacific Shipyard, the Harbor Commission voted Wednesday to sell the yard’s assets for scrap to B & B Contractors Inc. of Seattle.

The board unanimously approved the $6-million sale of the shipyard’s assets despite last-minute efforts by some city officials and a local shipyard to postpone the decision.

Those seeking a postponement asserted that the commission has not done enough to find another business willing to reopen the yard, but port officials defended their decision. Commission President Ronald Lushing said the port spent four years in exhaustive negotiations with prospective tenants but found none with sufficient financial backing.

“We were meeting with various groups as late as a few weeks ago to try and see if there was a way to open the shipyard,” Lushing said. “But it was our feeling that no financially viable company came forward in order to open such a facility.

Todd Pacific Shipyards Corp., which had operated the shipyard at 710 N. Front St. in San Pedro since 1970, filed for bankruptcy under Chapter 11 protection laws in 1987. The port took control of the 100-acre yard and its assets after signing a $2.5-million agreement with Todd in March, 1990.

John Stupakis, chief executive of Los Angeles Shipyard Corp., the would-be tenant, blasted the Harbor Commission for agreeing to sell the Todd inventory for scrap when his company is willing to reopen the facility as a shipyard.

“We have been in negotiations on and off but we have been working on this project for two years now,” Stupakis said. “They have been telling us all along that you have to meet certain financial criteria, but those criteria are very high. No operator will be able to meet them,” Stupakis said.

Port officials, who are considering alternative uses for the property ranging from container handling to car storage, maintain that L.A. Shipyard Corp. simply did not have the financial backing needed to lease the site.

In its latest offer, LASC asked the port to contribute $12 million upfront, while it would contribute $1 million, according to the Harbor Department. LASC also said it would assume a progressively larger share of the financial burden as the shipyard became financially viable, according to the port.

Stupakis, however, said his willingness to invest an additional $30 million in the facility over the next five years should have been enough to make a deal with the department. It wasn’t.

“It was really the feeling of the board that if the private sector could not find (start-up) financing for such a venture . . . it’s not really correct to use public funds,” Lushing said.

The Harbor Commission’s decision, however, might not be final.

Arguing that everything possible must be done to reopen the shipyard, Harbor Councilwoman Joan Milke Flores said she will ask the City Council to temporarily block the port’s action.

Flores said she will request on Friday that the council delay the sale of the shipyard’s assets for at least 30 days--enough time, she said, to conclude negotiations with prospective tenants.

Flores’ measure will be introduced under a rarely used City Charter section that allows the council to overrule decisions by independently run departments such as the port.

Both Flores and Councilman Joel Wachs had asked the Harbor Commission to delay its vote, but both requests were denied.

The $6-million sale to B & B Contractors was not only the best offer the Harbor Department received, Lushing said, but it also offered the commission the best way to stop spending port funds on the fallow shipyard.

In the past 29 months, port officials say they have spent about $1.6 million on the defunct shipyard, primarily to provide maintenance and 24-hour security for the site.