The sale of one of Los Angeles' largest homeless housing complexes was approved by a judge on Wednesday, the final step in averting a devastating loss of permanent housing on Skid Row.
“The trial was a tragic one,” said Los Angeles County Superior Court Judge Steven Gouvich. Purchased 17 buildings for $10 million The changes, paid for by Beverly Hills developer Leo Pustilnikov, were in the best interest of formerly homeless tenants and Los Angeles taxpayers, who have funded maintenance and repairs at the portfolio for 16 months.
“This is a product of collaboration, hard work and checks and balances,” Gouvitch said. “Time will tell if this will be a success story, but I'm optimistic.”
Gouvich on Wednesday approved the sale of an additional building, New Genesis, to KE Ventures, which is Washington DC-based apartment developersold for $2.1 million. Both transactions are expected to close next month. All 29 buildings formerly managed by the Skid Row Housing Trust, along with 11 other properties transferred to nonprofit landlords, have found new owners.
The trust was once considered a national model for renovating old single-room hotels and small apartments on Skid Row into supportive housing for homeless residents. But in February 2023, the nonprofit I could no longer pay my bills. The decision comes after years of leadership problems and financial difficulties. 2,000-unit portfolio in disarray Many of the residents are elderly, disabled or drug addicts, and they face problems such as faulty plumbing and heating, pest infestations, Other terrible situations.
Mayor Karen Bass, City Attorney Heidi Feldstein Soto and other city leaders said: Court-Ordered Bankruptcy Trustee It asked officials last year to take oversight of the portfolio and find a new owner, with officials saying at the time that unless urgent action was taken, more than 1,000 people were at risk of being forced onto the streets and a vital source of housing for the homeless being abandoned.
This process is costly and I encountered failureThe first receiver selected was Mark Adams. He resigned under pressure Just three months into the business, after struggling financially and financially, the city failed to adequately vet Adams, The Times reported. Political fundraiser for city attorney And there was a history of problems Other receivership procedures for low-income tenants — before recommending him for the role.
City Bankruptcy trustee seeks at least $37 millionHowever, part of that amount will be repaid once the sale, approved on Wednesday, closes.
Finding new owners has been difficult for the same reasons that the trust failed: Many of the buildings are dilapidated and in need of major repairs, and federal housing subsidies don't cover the increasing monthly costs of operating them. The tenant population has become increasingly difficult to fill, with rental practices prioritizing those with mental illness and addictions. Current trustee Kevin Singer said: He said in recent court documents He said some of the properties were so low in value that they could not be transferred.
Because of these issues, City leaders initially proposed taking over the most problematic buildings. They then hand them over to a nonprofit that will demolish them and build new homeless housing in their place.
But those plans fell apart in the spring when city and state funding dried up. The remaining portion of the building was contracted with the AIDS Healthcare Foundation. It broke in April Amid concerns Skid Row Charities' Performancedisputes over the provision of social services to tenants, and the foundation's claim that conditions in the building were worse than they thought.
Pustilnikov had been interested in the property for a long time. Then he emerged as a buyer.The developer is well known for his plans Take advantage of state laws It plans to build 3,500 new apartments in Beverly Hills, Redondo Beach and other affluent Southern California communities after a decade of trying to build a large downtown portfolio with two wealthy investors. It collapsed during the litigation.
Pustilnikov said he stepped in to prevent conditions on Skid Row from worsening and learned the intricacies of financing and managing affordable housing there. He is committed to preserving social services for tenants, a key demand of Bass and the city.
“I want to thank the City, County and State for their efforts to protect these vulnerable residents, and I look forward to continuing to work with the Mayor, City Council and County Board of Supervisors to make improvements to these distressed and neglected properties,” Mayor Pustilnikov said in a statement.
No formal objections were made to the sale, but after a 90-minute public hearing in which he questioned city attorneys and trustees, Govich said this was a major factor in approving the sale. He said he was confident the decision would avoid an outcome that would jeopardize the housing of vulnerable tenants, and that the city has enough regulatory power to ensure the new owner makes improvements to the property.
“Colloquially speaking, something is better than nothing,” the judge said, “but I think this is something good.”
Los Angeles Housing Authority Commissioner Anne Sewill said after the hearing that she was impressed with the care Pustilnikov has taken with the properties since he got involved in the deal. He has made an effort to visit tenants' homes across the portfolio, asked detailed questions about the building's operations and worked collaboratively with the city, she said.
“We have a clear vision of how to make these buildings financially and physically viable again,” Sewill said.
