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Compton Extends Loan Deadline for Hotel Developers : Construction: The council rejects an effort to have the businessmen declared in default for missing repayment date.

June 28, 1990|MICHELE FUETSCH | TIMES STAFF WRITER

COMPTON — The City Council on Tuesday night extended the deadline another year for $6.8 million in construction loans that the developers of the Compton Lazben Hotel owe the city.

The council majority rejected an effort by two council members to have the developers declared in default on the loans for missing a May 31 deadline. Council members Patricia A. Moore and Maxcy D. Filer urged that the city take possession of the hotel.

Instead, Mayor Walter Tucker and council members Bernice Woods and Jane Robbins adopted a resolution extending the deadline to May 31, 1991, for the developers, Naftali Deutsch and his four sons.

"The hotel," Woods said, "is one of the best things that has happened to this city in a long time."

The hotel and convention center, located alongside the 91 Freeway, were considered key factors in plans for Compton's economic revitalization. But the project has been plagued by construction delays, during which the city and developers argued over money and construction specifications.

The hotel opened last fall but has failed to generate much business, and some of the floors remain unfinished, Moore said.

As they have done in the past, Moore and Filer called on the council to foreclose on the project rather than make any more accommodations to the developers. In the past, the city has come up with additional funds and agreed to other loan and construction extensions when the developers insisted that they did not have enough money to finish the hotel.

Moore accused the developers of ignoring the construction and loan contracts, pointing out they have not made interest payments on the loans in a year.

"If I had a car that was that far behind, the bank would take it," Moore said. "If I had a house that was that far behind, the bank would take it. Yet, we want to stay in a relationship with this developer."

Filer said: "I don't think this developer has kept one promise with regard to the hotel and the (development agreement)."

Filer also said he was concerned that the city's ability to take possession of the hotel could be hampered by Naftali Deutsch's declaration of personal bankruptcy.

Benjamin Deutsch recently acknowledged that his father is involved in bankruptcy proceedings. However, the younger Deutsch, who acts as the family spokesman, said his father is merely a consultant who has no control or financial interest in any of several family firms that have been involved in the development, construction and management of the hotel.

Naftali Deutsch, who signed many of the original development agreements with the city, attended the council meeting with Benjamin Deutsch. They declined to comment after the vote.

While voting to extend the deadline, the council majority also added a provision that allows the city to demand immediate repayment of the loans and more than $400,000 in interest in the next 30 days. A majority of the five council members would have to approve such a move, however.

City Manager Howard Caldwell said after the meeting that over the next 30 days the city and the developers will be negotiating such issues as unpaid interest and completion of hotel construction. In addition to the unfinished floors, a tennis court also remains to be built, for example.

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