Inner-city firm cries foul after losing L.A. contract.

In the wake of the 1992 L.A. riots, Plastopan North America Inc. was a striking example of private-public urban renewal possibilities.

As part of an effort to create inner-city jobs, the company was awarded a contract to make as many as 480,000 two-wheeled trash containers for the city, at $32.90 per container.

Plastopan spent $8 million to open a factory in South Central Los Angeles and hired a crew of local residents.

Everybody won - inner-city residents got jobs, the city got trash containers and Plastopan got business.

But that contract expired this month and has not been renewed, leaving Plastopan scrambling for work and feeling betrayed.

"It was our expectation, perhaps naively, that the city would look favorably upon us and continue to prefer us as a local supplier," said Catherine Bump, a part owner and vice president of the company. "This was an assumption that we never questioned enough to get something in writing."

Without city work, Plastopan's work force has fallen to 15, from its peak of 45. Once its few private-sector contracts to make similar trash and recyclable containers are completed, the company may shut down its South Central operations.

City officials point out that Plastopan won its original contract solely because of a post-riot motion by then-City Councilman Zev Yaroslavsky granting a 10 percent bid preference to companies willing to manufacture the containers in the "area most impacted" by the riots.

"We gave them a start in Los Angeles with the understanding that they were to go and solicit other contracts and not rely on the city as a continual source of contracts," said Christopher Westhoff, assistant city attorney and general counsel to the Department of Public Works. "They were not able to get a sufficient base of contracts to continue and didn't do that."

Bump countered that Plastopan was so focused on meeting the city's demands for containers that it didn't make enough effort to drum up new business.

The City Council discussed another bid preference early this year on a contract to make nearly 700,000 blue containers into which L.A. households would toss their recyclables.

In the end, city officials determined that the benefits of creating such a bid preference were outweighed by the extra money it would cost the city, and the idea was dropped, Westhoff said.

Bump said Plastopan didn't bid for the blue-container contract because it didn't have same of the equipment needed to make them. But it pushed hard for a bid preference.

A $21 million portion of the contract for the blue containers went to Otto Industries Inc. of North Carolina, and a $5.3 million portion of the contract went to Vernon-based Rehrig Pacific Co.

Westhoff said it would have been impossible for the City Council to approve another "bid preference" this year like the one the City Council approved in 1992. The City Charter requires that all contracts go to parties with the "lowest, responsive, responsible bid," he said.

For some, the decision to drop such incentives for companies willing to create inner-city jobs reflects a lack of long-term commitment by the city to revitalize the "area most impacted."

"After the riot, there was talk about rebuilding and a little action; now there is no talk and no action," said John Bryant, founder and chief executive of the non-profit community redevelopment organization Operation Hope, which runs a number of for-profit banking centers. "(Plastopan) sounds like a clear example of a company that took a risk to set up in the riot area and then loses the city support it needs."

Rocky Delgadillo, deputy mayor for economic development, countered that the city money used to benefit one company through bid preferences might be put to better use in efforts that benefit more businesses.

"There is a whole laundry list of programs we're working on for that whole area," said Delgadillo. "In the area around Plastopan, the city (last week) approved $2.5 million for infrastructure improvements for things like roads and to guard against dumping in the area."