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Compton Council Balks at Foreclosing on Firm

May 21, 1987|WILLIAM NOTTINGHAM | Times Staff Writer

COMPTON — Five firms that have received millions of dollars in redevelopment aid--and given thousands of dollars in City Council campaign contributions--have fallen more than $264,000 behind in repaying their public debts.

But after Councilman Maxcy D. Filer raised the issue this week, a council majority rebuffed his request that they foreclose on the worst offender, the AFCOM housing development firm, and send stern warning letters to the others "letting them know that they are in arrears."

"They are delinquent and they know they are delinquent," Filer argued. "They are really several months delinquent."

However, Mayor Walter R. Tucker joined Councilmen Robert L. Adams and Floyd A. James in agreeing that the city's normal procedure for handling delinquent payments, involving a series of written notices that end with a letter threatening suit by the city attorney, should be allowed to run its course.

"To blatantly move on it at this time I feel would be improper," James said, adding that city administrators should also be given time to prepare a formal report outlining the late payments.

According to a May 8 accounting by the city controller, the city is overdue in receiving payments from the firms in outright loans, subsidized leases or other redevelopment incentives, as follows:

$28,000 from Beauchamp Distributing Co., which received city redevelopment subsidies to build its beer distribution warehouse on Santa Fe Avenue. In 1985, the firm gave at least $3,100 in contributions to Tucker, James and Adams, records show.

$6,000 from Brett Mitchell Chevrolet, a dealership in the city-subsidized Alameda Auto Plaza. The firm has given at least $7,000 in contributions to Tucker, James and Adams over the past two years.

$49,314 from Harry C. Clark Buick, another dealership in the Alameda Auto Plaza. Through that firm and another held by owner John Fonteno, the three council members have received contributions of at least $2,250.

- $174,910 from AFCOM, the balance of a nearly $1-million loan given in 1984 to spur construction of the SunnyCove town house development. Since 1985, AFCOM and its president, William Dawson, have combined to be the largest campaign contributor in the city, giving at least $30,049 to Tucker, James and Adams as well as annual Christmas gift baskets of fruit to them and Councilwoman Jane D. Robbins. AFCOM has never made a contribution to Filer's campaigns.

Dawson said in an interview Wednesday that "the full unpaid balance will be repaid within the next 45 days" because he already has houses in escrow that will generate the money. "Please quote me as saying that Councilman Maxcy Filer knows that," Dawson said.

$6,000 from Tucon Development Co., which is building the city-subsidized $30-million Alameda Plaza Hotel. Tucon and its president, Naftali Deutch, have contributed at least $2,400 to Adams over the past two years, records show.

"I don't quite understand what we're waiting on," said Filer who has never received any campaign contributions from the firms. "I think it's our duty to let them know. We've had this (delinquent accounts report) since May 8. I don't see why we can't send a letter."

Hard Times for Vendors

Tucker agreed that the council should "start taking care of business" when any vendor fails to meet the term of a city contract. But he said, "I don't think we want to send out anything . . . that would be out of order" when such payment demands are usually left for the city attorney to make. Tucker said the five firms shouldn't be singled out when economic times have made it difficult for many other city vendors to keep up with their payments.

"We've got people behind on everything in the city," James agreed.

The vote to send letters of warning to the five firms ended with Filer and Robbins in favor but Tucker, Adams and James opposed.

When Filer suggested that a foreclosure process start against AFCOM because it is "seriously delinquent," Robbins also voted against the proposal and the rest of the council rose to the developer's defense.

Homes Hard to Sell

"They (AFCOM) have desperately tried" to pay off the nearly $1-million loan, James said, but have been hampered by rising mortgage interest rates that have made houses difficult to sell. "I don't know what we would accomplish by starting a foreclosure procedure. . . . We can't be that hard-nosed."

Filer noted that AFCOM has been given several payment extensions and even had the city reduce the interest it has charged. As recently as last January, Filer continued, AFCOM came to the council seeking more time to pay off the loan.

But James countered that AFCOM has continued to reduce its city debt and "has paid off over half of what they owed us" as of January.

Tucker agreed with James: "I don't think we should sit up here and knock somebody who has done so much good" in building the first new city housing in nearly 40 years. "I'm sure we'll get our money."

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