In another blow to this city’s downtown redevelopment effort, officials have declared that the contractor on its $4.1-million multipurpose transit center is in default for failing to complete the project.
Dalton Construction Co., of Compton and Las Vegas, was supposed to have finished the center, a block north of City Hall and next to the new Los Angeles-Long Beach Light Rail line, last September.
But officials say the job is only 60% complete and that Dalton is experiencing such financial difficulties that the city has started issuing joint, two-party checks to the firm and its subcontractors so that some of the work will continue.
Dalton and its owner, Evan Williams, have been active in the Compton area for several years and have periodically given sizeable campaign donations to incumbent Mayor Walter R. Tucker and two incumbent City Council members, Robert Adams and Floyd James. All three are running for reelection April 18.
Tucker called the Dalton default “very regretable,” but refused to comment further on what had caused the construction delays or why the city had waited six months past the completion deadline to issue the notice.
When asked if Dalton or Williams had contributed to his campaign this year, Tucker replied: “If he does you’ll see it in the report like everybody else.” Under state law, campaign financing reports must be filed in the Compton City Clerk’s office next week.
Williams Not Reached
Williams could not be reached for comment.
The Dalton default notice is the third in recent months to be issued on contracts negotiated by the city Redevelopment Agency. Two car dealers the agency helped establish in the Compton Auto Plaza have closed their doors, defaulting on hundreds of thousands of dollars in city loans.
Work on another redevelopment project, a $30-million hotel and convention center alongside the Artesia Freeway, has been stalled since November. The council, however, rejected a motion at its meeting Tuesday to declare the hotel developer in default.
Work on the transit center, a renovated building on Willowbrook Avenue that was once a Boys Market, began in 1987 and was supposed to take only a year. It is designed to serve as a transit hub for Southern California Rapid Transit District buses that will ferry passengers to and from the Compton light rail stop.
The nearly 32,000-square-foot center is supposed to house ticket booths, public lockers, waiting areas, as well as fast-food restaurants and other commercial ventures. Surrounding the center will be an 87,000-square-foot parking lot. One completed portion of the building already houses the Compton office of the U.S. Census Bureau.
Cynthia Coleman, acting director of the city’s Redevelopment Agency, confirmed that the city began issuing two-party checks to Dalton and the firm’s various subcontractors “three or four months ago.” She said Dalton officials did not object.
The default notice, issued March 15, gives Dalton until April 6 to get its finances in shape to field a full work crew, Coleman told the City Council on Tuesday.
Official Has Confidence
“We have all the confidence in the world that he is going to finish the job,” she said after the meeting. “But we need also to protect our interests.”
However, both Coleman and City Manager James Goins said city officials have been in touch with the insurance company that sold Dalton a performance bond for the full amount of the job. If Dalton cannot finish the project, they said, the insurance company will pay to have the work completed.
According to Coleman, the city has paid Dalton about $2.5 million of the $4.1 million allocated for the project.
Neither Coleman nor Goins would respond to questions about why the city waited so long to declare Dalton in default. Nor did they answer questions about whether the Redevelopment Agency had from the beginning of the project properly monitored Dalton’s progress.
The default notice came to light during the Tuesday council meeting, when Councilman Maxcy D. Filer demanded to know the status of several redevelopment projects. Redevelopment officials then conceded that Dalton was in default and that the two out-of-business car dealers in the auto mall had also been sent default notices.
Winners Pontiac defaulted on a $1.9-million city loan. However, the dealership’s owner is trying to work out an agreement with city officials to give them title to his land in the auto mall, which is valued at more than the outstanding loan.
Brett Mitchell Chevrolet, which was closed by the state in December for tax and license irregularities, defaulted on a $175,000 city loan. Mitchell also owes the city at least $12,000 for rent on the dealership property, which the city owns.
Filer insisted that the council also declare the hotel developer, Naftali Deutsch and his construction and development firms, in default because the hotel is not completed. But the council refused on a 1-4 vote, with only Filer in favor.
The hotel was to open in December but work stopped in November and Deutsch has told the city he needs $3 million to finish the project.
Deutsch is proposing that the city lend him half of that amount. When he ran into financial difficulty last spring, the city loaned him $5.5 million.