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Heap of Trouble 

Downtown’s top landowner hauled away toxic buildings — without permits

Wednesday, Apr 5 2006
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WHEN IT COMES TO REAL ESTATE, some laws seem to bother Richard Meruelo, the land banker and prolific campaign contributor who dumped more than $190,000 into Antonio Villaraigosa’s race for mayor last year.

Meruelo’s ascent to the rank of downtown’s largest private landowner is legend, right down to the quaint tale about his mother’s dress shop where he attended the proverbial School of Hard Knocks. Stories about his lavish spending in the mayoral election are rivaled by his seemingly prescient decision to snatch up property at Taylor Yards along the L.A. River — one step ahead of the school district, which was planning to build a school there and has been forced to invoke eminent domain.

Less is known about what Meruelo did with the toxic debris he removed last year from an industrial site at 1060 N. Vignes St., a property he bought in September. Or what will become of his four acres wedged between the County jail, California Drop Forge Inc., and Best Way Recycling Center, just beneath the elevated tracks of the Metro Gold Line.

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Or why the Department of Building and Safety looked the other way for four months after discovering he tore down seven structures laced with asbestos, lead paint, PCB’s and mercury — without a permit. “That’s not a trivial project,” says Stephen Masek, a certified asbestos consultant from Mission Viejo who gave a report on the toxic substances found on the site to Meruelo’s property managers, L.A. Alameda Group, last July. “It’s hard to imagine a demolition that big being done without permits in this day and age. You’d be violating so many laws and regulations.”

Last Friday, Building and Safety spokesman Robert Steinbach said, “We’re not into penalties. I don’t care who tore down the buildings. We have no recourse against them. Best we can do is force the owner to file a permit now.” On Tuesday, however, Dave Keim, chief of code enforcement for Building and Safety, struck a punitive tone: “I just heard about this yesterday. We undoubtedly will be issuing a notice of violation to [Meruelo] and will initiate enforcement procedures.”

Keim said the crackdown could range from a “scorched earth” action, which prevents Meruelo from developing the property for five years, to a referral to the City Attorney’s Office, which could prosecute the violation as either a misdemeanor or an infraction. The maximum penalty for a misdemeanor is six months in jail per violation, he said.

Michael Bustamante, a spokesman for Meruelo, said his client handled the demolition and removal of toxic materials on an “in-house” basis. He would not specify whether Meruelo’s crew was licensed, nor would he say where the toxic materials were taken. “The metal was sold for scrap,” he said. Bustamante said Meruelo is focused on removing soil contamination from the site, which was in industrial use for more than 80 years, according to a remedial-action plan filed with the L.A. County Fire Department on February 9. “It’s finally getting the attention it deserves,” he said. “Once it’s cleaned up it could be used for affordable housing.”

The site has a long history in manufacturing. Noise from the neighboring dropforge can be deafening. The remedial plan shows Fulton Engine Works operated a foundry there before 1905. Permits on file with Building and Safety show new structures being added periodically from 1912 to 1971. Houston-based Hydril Company, a manufacturer of oil-drilling products, occupied the site from 1940 until 1987, according to the historical Sanborn Maps. Activities included metal heat-treating, fabrication, machining, welding and painting. Bustamante says Hydril leased the land to the city from 1987 to 1999. Sources familiar with the property — whose location county records identify as 1000 Alhambra Ave. — say that Hydril turned away would-be renters such as the Metropolitan Transportation Authority, a Korean church, various trucking companies and Sheriff Lee Baca and Volunteers of America, who wanted to build a homeless shelter.

L.A. developer Stephen Zimmerman of ZDI Inc. also showed interest in the property some five years ago. He declined to share his environmental testing with the L.A. Weekly. However, a remedial plan on file with the Fire Department’s Health and Hazardous Materials Division shows that Smith-Emery GeoServices was hired in November 2000 to do an environmental site assessment. The company found concrete vaults, drains, sludge tanks, test pits and signs of two underground fuel-storage tanks, which, according to city records, were removed in 1987. In 2002, another company, Stechman Geoscience Inc., found the soil contained copper, lead, heavy oil, degraded diesel fuel and benzene compounds. (The Fire Department has now asked Meruelo to test for groundwater contamination, according to AEI Consultants, who prepared the remedial plan.)

Meruelo paid $3.6 million for the property on September 19, 2005, according to county records. A former caretaker recalls asking him what he planned to do with it and he replied, “I’m going to tear down the buildings and sit on it.”

BY SEPTEMBER 30, JUST 11 DAYS after the deal was closed, the buildings came down — hauled off in a single heap, according to bystanders. “He was being a good neighbor by removing the buildings,” Bustamante says, noting vandalism and drug activity in the vacant warehouses. Building and Safety records state that in November, a nuisance-abatement inspector named John Cordin contacted a Meruelo representative and informed him of the requirement to obtain a demolition permit. Another call was placed in January, according to Keim, the chief of code enforcement. John Horrigan and John Durham of L.A. Alameda Group, Meruelo’s property managers, did not return calls for comment.

In addition to potential prosecution for failing to obtain demolition permits, Meruelo could be in trouble with state regulators. Reading from a report prepared on July 16 and provided to L.A. Alameda Group, consultant Stephen Masek says he found materials that require special handling: asbestos in vinyl tiles and the fireproofing of steel supports, lead paint on window frames and structural components, mercury in the thermostats, and PCB’s in old fluorescent-lighting tubes.

“There’s three ways to get in trouble,” Masek says, “direct exposure to toxic substances, being held liable for contamination on a property, or violating laws or regulations.” Demolition of any building site with more than 1 percent of asbestos requires a 10-day notification of the regional Air Quality Management District, according to Sam Atwood, a spokesman for the AQMD’s South Coast office. Fines begin at $25,000 per day, Atwood says. As of Wednesday, the regional air-quality district had not been notified by Meruelo.

The California Occupational Safety and Health Administration also requires notification; the Los Angeles office could not confirm having received any from Meruelo. “They wouldn’t send us a notification if they didn’t bother to get a building permit,” said a Cal-OSHA representative on Tuesday. Masek says the city Fire Department asbestos-removal unit also needs to be notified. That unit did not respond to the L.A. Weekly’s calls for comment.

Leo Orellana, office manager at Specialized Environmental Inc., says that his company bid on the job at 1060 N. Vignes St. The company has done work for L.A. Alameda Group, Orellana said. “You pull the building permits and then call AQMD. We didn’t get that job in L.A. though.”

Masek, who provided a copy of his report to Specialized, noted that, “Not only does the demolition and removal company need to be licensed, its employees and supervisors have to be trained and certified.” Toxic material must be taken to a specially lined waste facility, he said, not a typical municipal dump.

Lisa Sarno, the mayor’s former deputy chief of staff when he was a councilman, who also served as caretaker of Council District 14 before Councilman Jose Huizar was elected in November, says her office was not consulted. “Antonio liked to keep a close eye on property development in his district, and even during the transition we worked closely with Building and Safety, especially on demolitions. They were instructed to notify us if there was historical significance to the property, a possibility of affordable housing or controversy related to development plans.”

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