Port Scuttles Talks With New Company Over Shipyard : Harbor: Officials say the firm missed a deadline for proving its financial standing. But the head of a prospective investors group angrily accuses the department of bargaining in bad faith.

After weeks of negotiations, Los Angeles port officials said Thursday that they have broken off exclusive talks with a fledgling business venture that has proposed reopening the old Todd Shipyards site in San Pedro.

The decision, port officials said, followed the failure of the venture, Los Angeles Shipyards Co., to meet long-established deadlines for proving that it has the necessary finances. Most recently, they said, the company missed a Wednesday deadline for posting a $250,000 non-refundable deposit toward its $20-million proposal for a shipyard employing hundreds, and perhaps thousands, of workers.

But even as port officials left open the possibility of resuming talks with the company or others interested in the Todd site, company officials and the head of a prospective investors group angrily accused the harbor department of bargaining in bad faith. The port, they said, had unreasonably demanded the deposit two days before a proposed lease agreement was to be presented to the company, and showed little sincere interest in reopening the 110-acre Todd site for shipbuilding and repair.

“We have the deposit money. We have contracts to build ships. We were going to employ maybe 3,000 people. And they break off negotiations,” said LAS President John Stupakis. “Why? Because we believe they have a hidden agenda.”

That agenda, Stupakis and other company officials said, is to convert the sprawling shipyard into a huge container terminal that port officials have long acknowledged would be simpler and more profitable for the department.

But in a news conference to announce the end of talks with the company, the port’s Executive Director Ezunial Burts and Harbor Commission President Ronald Lushing flatly denied that the harbor department is considering anything but a shipyard for the site. And they voiced disappointment that weeks of negotiations with LAS had failed to produce an agreement.

“We need and want a shipbuilding and ship repair operation” at the site, Burts said, describing such a facility as important to the port’s mix of tenants and the local job market, hard hit by Todd’s closure in August, 1989. At its peak, the 80-year-old shipyard employed 6,000 workers in the mid-1980s.

“We have bent over backwards and negotiated in absolute faith to try and put together a deal” to reopen the shipyard, Burts said. “And the reason has not been because it is a lucrative deal for the port, not because it is the highest and best use of this property, but because the mix of activities and the jobs involved are high priorities for us,” he said.

Toward that end, Burts added, the port agreed last November to 90 days of exclusive negotiations with LAS even though a previous fledging venture, North American Shipyards, was unable to prove early last year that it could reopen the yard.

But several weeks before the port’s March 1 deadline for an agreement with LAS, Burts said, the company failed to meet specific demands for evidence that it, unlike North American, could launch a new shipyard. Indeed, he said, the $250,000 deposit was half the amount originally sought by the port and critical to assurances that the company was viable.

Other port officials, including Senior Assistant City Atty. Winston Tyler, said the demand for a non-refundable deposit was not only previously required of other prospective port tenants but particularly important in negotiating with a new company like LAS.

“You don’t take millions of dollars in city assets and lock them away for someone who’s new, someone who doesn’t have any financial wherewithal,” Tyler said.

But Roy Allenstein, a Los Angeles attorney and businessman leading a potential group of LAS investors, insisted that the company can quickly prove it has the financing--if the port will give it more time.

“We asked for an eight-day extension on the deadline to at least have a chance to review the proposed lease. And they refused even that,” Allenstein said.

“I don’t believe they’ve been negotiating in good faith nor with the intent of opening a shipyard. I think they are going through the motions to pretend they are negotiating in good faith.”

The investors group, he said, was still willing to pursue the project but not if it means posting a deposit before examining a proposed lease for the property.

Meanwhile, port officials scheduled a special meeting Monday morning of the Harbor Commission at the request of LAS officials who contend that the halt in talks must be approved by the entire commission, not just the two-member committee of Lushing and fellow commissioner Robert Rados Sr.

And while the future of the LAS proposal was unclear, another fledging company waiting in the wings to negotiate with the port moved Thursday to finalize its proposal for a lease at the former Todd site. That company, under the banner of Los Angeles-Long Beach Shipyards, has previously staked its plans on a ship repair yard that would take up about half the Todd property. The company had described the LAS proposal for a new shipbuilding business as too risky.