City administrators may ask the City Council this week to loan at least $1.5 million to the developer of the long-delayed Compton Lazben Hotel so work can resume on the stalled project.
Naftali Deutsch, a principal in several of the firms building the city-backed hotel and convention center, told officials that he cannot complete work because he is $3 million short. When Deutsch pleaded a similar hardship last spring, city officials loaned his firms $5.5 million that remains outstanding.
City Manager James Goins confirmed last week that he is considering recommending to council members that they accept Deutsch’s offer to come up with $1.5 million on his own if the city will loan him the other $1.5 million.
Since work began in 1986, the 10-story hotel project has been dogged by financial problems, labor disputes and work stoppages. The original completion date was May, 1988. But when problems arose, city officials adjusted the date to mid-December. But last November Deutsch stopped work after a labor dispute arose over whether the developer had paid workers the state-required prevailing wage.
City officials blame some of the delays on their own insistence that Deutsch upgrade some of the materials in the project, such as the landscaping and audio visual equipment.
But loaning Deutsch more money, Goins said, is only one of several alternatives that he is considering to get work going again on the $30-million project.
Other alternatives, Goins said, might include suing Deutsch and his various construction and development firms for breech of contract and hiring a new contractor to finish the project. Goins said his recommendation might come as early as Tuesday when the City Council meets.
Deutsch could not be reached for comment last week.
City financial and redevelopment officials acknowledge that they have been working for weeks to come up with a way to find $1.5 million in city funds to lend Deutsch. Charles Williams, a city redevelopment consultant who is coordinating work on the lending plan, said that proposals are being drafted and reviewed by city attorneys.
City Controller Timothy Brown also indicated that city staff has drafted one or more lending proposals. He said he does not want to give his approval to any lending plan until it is reviewed by the city’s outside counsel for redevelopment and bonding matters.
“I need to get some things qualified by the attorney,” Brown said.
City Councilman Maxcy Filer says he is opposed to lending Deutsch any more money. “Cut him off right now, right now,” said Filer. “He has breeched the contract and we should foreclose on everything that we have involved.”