2nd Arts Center Builder Picking Up Where 1st Left Off : Lancaster: The original contractor for the $13-million project ran into financial problems and halted work when it was 85% done.

A new contractor is scheduled to begin work next week on Lancaster’s $13-million Performing Arts Center, the costliest public works project in the city’s history, two months after the previous builder suspended construction due to money problems.

W. D. Gott Construction of Upland undertook to finish the project, operating basically under the same terms contained in the city’s now-canceled contract with Cates Construction of Lancaster. Cates ran into financial problems and halted work on the project in mid-February, leaving it 85% complete, city officials said.

The ensuing delays forced the city to postpone the completion date of the 758-seat center from May 27 to about Sept. 1, city public works director Jeff Long said. But he said the center, after final work by the city, still should be ready for its first scheduled performances in October.

Under an agreement approved by the Lancaster City Council on Monday night, Gott will be hired by Transamerica Insurance Co., which held Cates’ performance bond on the project. The city will pay Transamerica $2.4 million in unspent funds from the city’s original $8-million contract with Cates.

Mike Gott, a Gott Construction vice president, said that work is expected to resume on the arts center early next week and that his company has hired a former Cates supervisor who is familiar with the project to oversee it. Long said it could be two to three weeks before work returns to a normal pace.

Originally, city officials had predicted that they could arrange for a contractor to resume work on the center within two weeks of the stoppage. But two weeks dragged into two months as negotiations between the city and Transamerica bogged down, and the city considered filing a lawsuit.

Finally, a deal was struck in negotiations late last week and Monday, Long said. The city reportedly reduced its demand to be paid for damages, finally agreeing to keep only $30,000 of the unspent contract funds. And the city agreed not to seek damages from Cates, Long said.

Although Gott has not done work for Lancaster before, Long said the company has a good reputation in the construction industry.

Mike Gott said the company has also agreed to take over Cates’ unfinished work building a Palmdale school and remodeling Patton State Hospital in San Bernardino.

Lancaster’s expected cost of nearly $13 million for the center--designed for music, drama, dance, lectures and community activities--includes the $8-million construction contract, as well as costs to acquire the site, develop related parking and other improvements.

The city’s costs also increased in March when heavy rains led to flooding in some areas of the then-inactive project. Long blamed drainage work by Cates, saying the city had to pump up to four inches of water out of some areas of the building.