By Hillel Aron
By Joseph Tsidulko
By Patrick Range McDonald
By David Futch
By Hillel Aron
By Dennis Romero
By Jill Stewart
By Dennis Romero
The case of Horwitz v. City of Los Angeles and Mehr Beglari is a spectacular mess that has been transferred to Orange County because the lawsuit was filed by two Los Angeles judges. It is merely the latest, most flagrant example of how city leaders have enabled the culture exposed by Chick’s audit — and placed the city in a legal bind.
In 2001, the building department approved developer Mehr Beglari’s plans to add 6,500 square feet to a 2,000-square-foot home at 909 Greentree Road, in the Rustic Canyon neighborhood of Pacific Palisades. After the court rejected the addition for being built too close to the street, Beglari bought a house at 921 Greentree Road and built a canopy in an effort to adjust the prevailing setback requirement on the block. Again, the court rejected the project. Despite persistent court orders to revoke unlawful building and certificate of occupancy permits and a looming court date for contempt charges against Adelman, the City Attorney’s Office has dug in its heels and repeatedly defended the approval of Beglari’s plans.
Last Thursday, after the department grudgingly revoked Beglari’s permit and certificate of occupancy at 909 Greentree Road, Orange County Judge David Velasquez denied the city’s motion to reconsider contempt charges against Adelman for refusing to comply with a court order. His arraignment is scheduled for July 27. If he is found in contempt, he could face up to five days in jail or a $1,000 fine. The city also asked Velasquez how it should comply with orders to enforce its own building codes, which require that Beglari either move out or tear down the illegal addition. “What does the city normally do after vacating a permit?” Velasquez asked. “Surely it must happen all the time in L.A., with thousands of converted garages. How does the city enforce its own laws?”
Beglari’s opponents, Los Angeles judges David Horwitz and Diane Wheatley, and real estate lawyer John Rosenfeld, say the city doesn’t enforce its own laws. Rather, it works closely with developers to help them find a way around the laws. “This is a case about a persistent refusal by the [building department] to enforce the zoning laws, including a refusal to follow binding decisions by this court,” reads a motion filed by the plaintiffs. The department replied that it made “an honest mistake” in granting Beglari revised building permits, prompting the opponents to state, “Instead of rectifying the ‘mistake,’ [the department] engaged in a series of delays while Beglari continued to build as fast as possible.” After Velasquez shot down a final attempt by the department to come up with a theory to support granting Beglari a permit, a court of appeals labeled the theory “pure nonsense,” according to court documents. “The time for obfuscation and delay was over,” the opponents state.
Yet Deputy City Attorney Colleen Courtney, Beglari’s attorney Mark Baker and Adelman’s attorney Rene Gascou went before Judge Velasquez last week and stalled. Gascou asked that Adelman be excused from his own arraignment, pointing to media attention and the threat of “irreparable harm” to his reputation. Courtney asked the judge, “If we issue orders to comply and the owner fails to follow them, then what? These are unusual circumstances. There are a whole host of variables. The city is not sure which way to go.” To which Velasquez replied, “I’m not sure what to tell you. Except to enforce the law.”
A previously unexamined issue that has the City Attorney’s Office and Beglari’s lawyer on edge raises further questions about what the city is doing out on a limb with Beglari in the first place. The issue surfaced last week, when Courtney urged the judge to consider the effect on Beglari’s lenders, if the city is forced to take action against Beglari’s property. Baker strenuously objected to the suggestion that lenders should be notified of the contempt hearing, and asked Beglari’s opponents to refrain from contacting the banks that loaned Beglari money.
Public records show that Beglari took out two loans on the property at 909 Greentree totaling $3 million — but under the property’s previous address, 864 Brooktree Road, which he had legally changed. Then, when he built a canopy on his house at 921 Greentree in an attempt to lower the prevailing setback requirement on the block, he took out another $3 million loan with Countrywide Home Loans, under the name Westside Manor LLC. Then he demolished the house and the canopy at 921 Greentree.
The rub is: Court records show that when Beglari applied for the loans with Washington Mutual, his building permits at 909 Greentree were before the court of appeals, after the trial court had ruled them illegal. A standard borrower’s affidavit from Washington Mutual asks borrowers to attest that there is no civil action pending on the property being used to secure the loan. Besides the financial risk should he now be required to tear down his addition, the bank might have something to say about Beglari’s loan application. The City Attorney’s Office wants full disclosure, so as to not get caught up in a potential case of misrepresentation. Thus, Beglari is heavily leveraged on a doomed venture, which he couldn’t have undertaken without the city’s help. Washington Mutual spokesman Tim McGarry confirmed the disclosure terms but would not comment on details of Beglari’s loan application.