City of Monterey Park may have to pay $16 million to the developer of  the Atlantic-Times Square project because the state has ruled that a city promise made the shopping center a "public works" project.

The California Department of Industrial Relations issued  an opinion that declared the Atlantic Times Square a "public works" project. The City attempted to separate itself from all financing of the project so that the developer, Ronnie Lam of Kam Sang Company, could avoid paying prevailing wages and save millions in the cost to build the $50 million shopping center. It is located at Atlantic and Hellman Avenues, next to the San Bernardino Freeway.

The deal called on the city to guarantee developer Ronnie Lam $16 million if they got an adverse decision from the department of Industrial Relations. That guarantee was enough to make it a public works project, the state has ruled.

Lam is not off the hook. He has to come up with enough money to pay prevailing wages to those who worked on the building.

The deal was cooked up because Lam told the city in 2007 that the project would not be profitable if he had to pay prevailing wages. The 2007 contract, which was approved unanimusly by the city council, was an attempt to remove all public assistance from the project. Public works projects are required to pay "prevailing wages" equal to union wages.

Lam has 30 days in which to appeal the ruling of the Industrial Relations Board.

Ironicly, the first major tenant - 24-Hour Fitnes center - opened its doors Saturday (June 19) to huge crowds. The next major tenant will be the AMC move theater with 14 screens.