City Sets New Financial Demands on Plans to Revive Todd Shipyards : Jobs: A requirement to post a $75,000 good-faith deposit could doom efforts by three start-up companies to reopen the San Pedro facility.

In a move that casts further doubt on the fate of San Pedro’s former Todd Shipyards, a key Los Angeles City Council Committee has endorsed reopening the site but insisted on the sort of financial conditions that have derailed several previous shipyard proposals.

The confusing action by the council’s Commerce, Energy and Natural Resources Committee comes on the eve of Tuesday’s scheduled council vote on what to do with the 110-acre site. At present, lawmakers are weighing whether to block the Harbor Commission’s planned sale of the yard’s assets--a move that would dash proposals to return the property to shipbuilding or repair.

At the urging of harbor-area Councilwoman Joan Milke Flores, the council has agreed to consider ordering a temporary delay in the sale of the assets, expected to bring some $5.8 million. More time is needed, Flores has argued, to exhaust the possibility of reopening the shipyard, which closed in 1989 and employed upward of 6,000 workers for decades.

But with a Wednesday deadline looming for action by the council, Flores’ plan ran into trouble on Friday when it came before the three-person committee she chairs.

Although supportive of reopening the site as a shipyard, Council President John Ferraro persuaded Flores and Councilwoman Ruth Galanter that the port cannot risk losing the $5.8-million sale if no viable shipyard operator comes forward.

Ferraro won committee approval to require that any prospective shipyard company post a $75,000 deposit to prove its financial wherewithal. In addition, the committee called for potential shipyard operators to be willing to pay up to $1 million in losses if delaying sale of the assets results in a lower price for the cranes and other equipment.

“I’d like to see a shipyard there again,” Ferraro said near the close of the committee hearing. “But the Harbor Department should not take the brunt of responsibility” for the potential loss of the assets’ sale.

“If they want to be in there,” Ferraro said of the prospective shipyard operators, “let them put up good-faith” money.

His move and the committee’s position, however, could spell doom for the shipyard proposals, according to representatives of the three start-up companies that have approached the port about leasing the former Todd site.

If the council holds a prospective shipyard operator liable for the final sale price of the assets, that “kills the deal,” said John Stupakis, chief executive officer of the Los Angeles Shipyard Corp., a group that includes some former Todd managers.

“No investor will assume the risk of a process that the Harbor Department controls,” Stupakis said.

Similar concern over the committee’s conditions were voiced by representatives of Los Angeles-Long Beach Shipyards--which includes scores of former Todd workers--and North American Shipyard.

Almost since the yard closed, port officials have said they were making every effort to find a new shipyard to operate the site. At the same time, prospective operators have complained that the port has thrown unreasonable financial obstacles in their path.

That conflict raged again Friday, when City Hall’s financial and legislative analysts echoed the port’s position that reopening the yard for shipbuilding will be an enormously costly endeavor that requires solid proof of a company’s financial strength.

But representatives of the three companies seeking the property countered that city officials must be willing to ease financial requirements in order to provide jobs, particularly in hard-hit industries like manufacturing.

“Everyone talks about jobs and the need for jobs, but when it comes down to it, it isn’t easy to achieve that without taking risks,” said former Los Angeles City Atty. Burt Pines, representing an investor in one shipyard company.