Port of Los Angeles officials appear to have turned their boat around on a proposal to reopen a shipyard at the historic Southwest Marine facility.

Last week, Councilwoman Janice Hahn brokered a deal between port officials and Gambol Industries that will give the company a year to develop a business plan to restore the shipyard that closed in 2005.

The 38-acre site is located within the heart of the port and doesn’t have many uses, so officials had planned to dump contaminated soil generated from a critical channel-deepening project.The project is intended to allow the port to accommodate massive new cargo ships that can’t currently dock at the port.

But Gambol, a boat repair and manufacturer that operates in the neighboring Long Beach port, has been eyeing the site to house its growing business, said John Bridwell, the company’s vice president.

Port officials had repeatedly dismissed the proposal and voted to proceed with the channel-deepening project. But then Hahn got involved and convinced her City Council colleagues to instruct the port to conduct a feasibility study on the shipyard.

Gambol, meanwhile, had filed an appeal with the council against the dredging project. It also threatened to file a lawsuit against the port questioning the adequacy of an environmental impact report on the dredging.

Port Director Geraldine Knatz said the port was glad to avoid any litigation from Gambol, but prior to the Council’s direction was on a strict schedule to pursue the dredging project.

“A shipyard is always something we would have taken a look at, but it was just that we are under pressure to keep the dredging on schedule and couldn’t put it in jeopardy,” Knatz said. “Now we’ll have the time to better explore this proposal and still keep our other projects on time.”

With the negotiation agreement in place, Gambol has already dropped its appeal and met with port officials last week.

“Now we feel like we’re all at the table having a fair chance at bringing back shipbuilding in a bigger way to Los Angeles,” said Gambol President Bob Stein.