All 29 buildings operated by the non-profit Skid Row Housing Trust were admitted after many of the buildings fell into serious disrepair and reports of drug use became common. variable.
The City of Los Angeles has asked the recipient, a neutral third party, to help manage and restore damaged properties.
At Friday’s hearing, LA Supreme Court Justice, Mitchell L. Beckloff, appointed Mark Adams, president of the California Receivership Group, as the recipient. Adams’ company specializes in the removal of abandoned and dilapidated properties by court order. website.
Judgment was made two days later Three people died of drug overdose in an apartment at the Skid Row Housing Trust building, 649 loft.
Joanne Cordero, the trust’s interim chief executive officer, said the ruling is the first step in providing much-needed assistance to workers as well as tenants.
“We have made it clear to stakeholders that additional resources are urgently needed and that action by the city will help bring those resources to the table,” she said. “We are cooperating fully with the recipient.”
The Times recently revealed Poor living conditions at the trust properties and a level of mismanagement and financial turmoil led to the downfall of an institution that had long served as a model for the homeless. about housing.
The breakdown of trust is caused in part by a Challenging financial model for the housing supply it sets out to save – single-room buildings it has purchased to preserve as low-income housing.
But budget shortfalls and skyrocketing maintenance costs to keep aging buildings habitable have taken a financial toll. Some of the people the nonprofit serves have substance abuse and other problems that can lead them to vandalize buildings and cause chaos for residents. Poor financial management and lack of stable leadership exacerbate trust problems.
Lawsuits filed last year on behalf of 67 tenants in two buildings — Hart and St. Mark’s — allegedly in uninhabitable conditions including pest infestation, damaged floors, electrical problems, broken windows and doors.
Residents of St. Mark alleges lack of security, violence by other tenants and intimidation by staff.
Hart’s residents allege that they frequently have to use buckets as toilets.
The Times found similar problems in other buildings where tenants say drug use and prostitution are a problem. They blamed lax security for easy access for intruders.
Earlier this year, Cordero said trust can no longer supports its residential buildings – many of which are operating at a loss – and have been looking for other financially stable institutions to take over them.
The city has moved to put buildings in reception because of concerns for the health and safety of tenants.
In a written statement, City Atty. Hydee Feldstein Soto described the trust’s 1,500 tenants as “amongst the most vulnerable in our City, in need of daily medical, security and support services.”
“I am incredibly proud of the legal professionals at every level in my office who have worked tirelessly to make this a reality and look forward to the new recipients starting work immediately. ,” she said.
Beckloff initially considered placing 26 of the buildings in admission pending evidence of substandard conditions in the remaining three.
He included all 29 properties after Alia Haddad, deputy city attorney, cited recent drug overdose deaths and worsening conditions for tenants of the building.
Haddad said at Friday’s hearing: “We’re seeing the train come off the cliff here. “My concern is that if we can’t put all the assets under takeover, we’re headed for the same outcome and … it would make a lot of sense to prevent the next disaster.”
The rescue plan is based on a rarely used provision in the state health and safety code that allows court-appointed recipients to borrow damaged properties to restore them.
Adams’ company advertises on its website that public funds are not needed because the law favors recipients over other creditors to collect revenue from revived assets.
But city officials say many of the trust’s buildings operate at a loss and have covenants that limit rent increases – and are therefore not worth borrowing. They say that some public funds will definitely be needed.
Adams said he received a $500,000 line of credit to pay for security and management at the properties and to begin repairs. In court, he told Beckloff that he should have asked for $1 million, at the expense of returning the buildings to their original shape.
“The number one thing missing here is money,” says Adams. “I wouldn’t be surprised if I went back to the $5 million claim confirmation hearing.”
At Friday’s hearing, attorneys for the fund expressed concern about the Pacific Premier Bank lawsuit. The bank alleges that the trust defaulted on a loan of more than $4 million and sought an injunction against transferring the trust’s assets and freezing the trust’s bank accounts.
Paul Malingagio, the attorney representing the bank, said in court that the injunction was filed without knowing that the city was looking for a health and safety receiver. He said the ban had been modified so it did not affect reception.
Times staff writers Benjamin Oreskes and Doug Smith contributed to this report.