Compton Told to Delay Contractor’s Payments

State labor officials Wednesday ordered the city of Compton to withhold $3.3 million in payments to the prime contractor on the city’s most prized redevelopment project, a 300-room luxury hotel.

The Department of Industrial Relations issued the order after an investigation confirmed that the contractor, Tucon Development, failed to pay prevailing wages to carpenters and other workers on the Compton Lazben Hotel project, according to Roger Miller, the department’s regional manager.

Compton city officials, who are financing the bulk of the project through redevelopment bonds, had hoped to open the $30-million hotel/convention center along the Artesia Freeway next month as their showplace.

Called ‘a Shocker’

City Manager James Goins called the state decision “a shocker.” Tucon executive Naftali Deutsch said he does not believe his firm violated prevailing wage laws.

Miller said the $3.3-million claim against Tucon covers both back-wages owed to workers and a penalty of about $300,000. He said work can proceed on the project, but the city must withhold the amount of the claim. If Tucon refuses to pay the claim, Miller said his agency will take court action.

Miller said he did not know how many workers are affected. However, a labor consultant who helped bring the case to the attention of authorities said he believes 250 workers were underpaid.

The investigation followed a decision by the state agency Oct. 31 that the hotel project qualified as a public works project. As such, the city was required to inform the contractor that prevailing wages must be paid, Miller said.

Comply With Laws

“The city tells us that their contracts stated the contractor must comply with all applicable laws,” Miller said. “That could be broad enough (to be construed that the developer was) notified to pay prevailing wages.”

Goins and Compton City Atty. Wesley Fenderson said that they do not believe the hotel contract should be considered a public works project. They said they hope to meet with state labor officials next week to argue the point.

Miller said his agency’s investigations found that some carpenters were being paid as little as $7 an hour when the prevailing wages call for an hourly rate of about $25. He said that the contractor was utilizing lower-paid apprentices without the necessary approval of the state Division of Apprenticeship Standards.

“I’m happy that the state is going to enforce the law,” said Gary Fields, vice president of the Labor Research Group Inc. of Oakland, who complained last July to the state about the wages. “I’m also happy that workers who are underpaid will receive the prevailing wage. This project should have been designed for local people to receive decent jobs at a decent wage.”

Times staff writer Roxana Kopetman contributed to this story.