In a swift move, the Los Angeles City Council unanimously approved an additional $2 million loan to preserve and repair 22 deteriorating buildings in the Skid Row area under a receivership. This measure is deemed necessary by two council members to meet the needs of tenants residing in these buildings.
The approval was granted with council members Heather Hutt, John Lee, Curren Price, and Monica Rodriguez absent from the Council meeting.
While some called for further discussion of the matter in the Budget, Finance, and Innovation Committee, as well as the Housing and Homelessness Committee, Councilman Bob Blumenfield, who chairs the budget committee, urged the council to approve the minimum amount of $2 million requested by the Housing Department and receiver to settle some outstanding debts.
Blumenfield expressed his discomfort with waiving the discussion but emphasized the importance of maintaining uninterrupted services, stating, “We’re then going to send the remainder of the requested loan to the committees, where we can vet it and have a better understanding of all the debts that are happening here.”
He further commended the receiver’s efforts in taking necessary actions to move forward with the repairs on these buildings.
Earlier this year, the Skid Row Housing Trust, a non-profit organization that previously managed the 29 buildings, announced its financial incapacity to maintain the properties. As a result, the City of Los Angeles stepped in and initiated a court-ordered receivership. Subsequently, seven of these buildings were removed from the receivership and transferred to the National Equity Fund, a housing non-profit, in June.
According to the City Attorney’s Office, a receivership is a legal process that allows a court-appointed person, known as a receiver, to take control of a property, address any issues, ensure compliance, and improve the quality of life for residents and the surrounding community.
Initially, Mark Adams, the president of the California Receivership Group, was appointed as the receiver by Judge Mitchell Beckloff. Adams was tasked with collaborating with the city to rehabilitate and maintain the buildings to prevent any vacant units.
However, Adams faced criticism a few months into his role for allegedly failing to make significant progress in rehabilitating the buildings and securing favorable credit rates. This criticism intensified when a firm hired by Adams sent eviction notices to numerous tenants behind on rent. Adams denied authorizing these notices and subsequently retracted them.
On June 27, City Attorney Hydee Feldstein Soto and Housing Department General Manager Ann Sewill sought the removal of Adams, which was approved by the Council in a unanimous vote. The court also ratified this decision. Concurrently, the Council authorized a $10 million loan to support the critical repairs and operations of the receivership.
Kevin Singer, CEO of Receivership Specialists, succeeded Adams as the receiver.
Sewill, in her report to the Council, stated that under Singer’s stewardship, all properties now have 24-hour security and janitorial services available on weekdays. Daily inspections are conducted to ensure security, cleanliness, and compliance with fire safety protocols.
Sewill emphasized that Singer’s highest priority is to address fire/life safety concerns and remove as many properties from the fire watch list. Currently, only 10 buildings remain on that list.
However, reports indicate that some properties under the receivership still suffer from severe disrepair, and tenants face numerous challenges, including rising crime rates, rampant drug abuse, and overall health issues.
Sewill’s report explained that the initial $10 million budget was allocated to cover the revenue-expense gap, as well as abatement and repair costs for a maximum of six months. However, actual expenses exceeded expectations, with approximately $3.6 million spent on security, insurance, utilities, and janitorial services, while operating costs averaged around $2.17 million per month.
The receivership is projected to run out of funds in early October, prompting the need for additional funding.
“We will return to Council in November with a request to authorize additional funding to cover the final amount owed to the former receiver pursuant to a court-ordered final accounting, and to identify necessary funds to cover the SRHT Receivership’s operations for the first quarter of 2024,” Sewill stated in her report.
The Housing Department also anticipates a significant reduction in monthly receivership costs as the renovations progress.
According to the report, “With the new Section 8 rent payment standards and the assistance of our partners at Housing Authority City of Los Angeles and the county, the gap between monthly income and expenses should be much smaller. When the buildings are fully redeveloped, income will be projected to adequately cover expenses.”
By the end of the year, the Housing Department expects only 12 of the oldest and most challenging properties to remain under the receivership.
Future Council committees will review the request for a $10 million grant for the receivership.
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
