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CIM Group: Hollywood's Richest Slumlord

Two fed up YouTubians embarrass a City Hall insider into demolishing a shocking hovel

View more photos in Ted Soqui's "Inside a Filthy, Hazardous Hollywood Slum" slideshow.

It’s amazing what persistence, a YouTube video and some well-timed postings on a well-read blog can do these days for neighborhood activists tired of being ignored by City Hall and a very rich, very powerful North American real estate company. Meet Cindy DuHaime and Ziggy Kruse, two women who live in Hollywood, never give up and stick it to the man.

DuHaime and Kruse are tireless community activists — DuHaime as the block captain of the Garfield Neighborhood Watch on Garfield Avenue just north of Hollywood Boulevard, and Kruse as a member of the Hollywood Studio District Neighborhood Council board.

For more than a year, DuHaime has been locked in a battle with CIM group, a real estate investment firm worth more than $1 billion with headquarters in Los Angeles; it owns the Hollywood & Highland shopping center — but also owns derelict, Third World slum–style properties on the northwest corner of Hollywood Boulevard and Western Avenue, including an empty motel known as the Bon-Air and a small apartment building, both of which look bombed-out.

DuHaime lives on a lot behind these filthy, hazardous, broken-down structures that appear to have been struck by a hurricane. She’s been trying to get CIM to board up and secure the properties, and then to finally demolish them.

CIM does not lack the money to handle such a small expenditure, with properties in several major cities. It was co-founded by Richard Ressler, a former cigarette-company executive, Ivy League–educated lawyer and investment banker, and two Israeli-Americans, Shaul Kuba and Avi Shemesh, who struck up a friendship with Ressler years ago when chatting with him about his lawn.

CIM developed much of the Third Street Promenade and is now a major landlord in Hollywood, owning more than 1.7 million square feet there. It now owns the long-disappointing Hollywood & Highland shopping center, which houses the Kodak Theatre. Despite endless assurances by City Councilman Eric Garcetti and his predecessor, Jackie Goldberg, the development has soaked up vast sums of public money and enjoys a key location at a crossroads for global tourism, yet has never delivered as promised to taxpayers.

At Hollywood and Western, by contrast, homeless kids and prostitutes regularly crawl into the abandoned motel slum to camp inside. But Hollywood’s politicians have repeatedly looked the other way, and recently rewarded CIM with key help in securing a public loan of $30 million to bring Cirque du Soleil to Hollywood & Highland, several blocks away. Pushed by Garcetti, the unanimous vote of the Los Angeles City Council to hand CIM such riches has enraged many.

Meanwhile, “We have to live with this,” says DuHaime, standing outside the Bon-Air Motel.

After pleading with CIM Vice President John Given, the Department of Building and Safety and Councilman Tom LaBonge (the slum buildings are in LaBonge’s half of Hollywood, while Garcetti’s district office is about 400 feet away), DuHaime called Ziggy Kruse, whom she met at a public meeting about Hollywood redevelopment.

“After I contacted her,” DuHaime says, “everything took off. She wouldn’t stop talking about it.”

Yet Kruse didn’t get much of a response from either the city or the landowner. “You’re going to hear from the city and CIM that they’ve been ‘working with the community,’ ” says Kruse, standing with DuHaime near the Bon-Air Motel, “but it’s just not the case.”

LaBonge, for example, tells L.A. Weekly he’s been “anxious to see those buildings demolished,” but then he claims the national “economic tsunami” somehow made it difficult for CIM to handle the tear-down — an extremely tough excuse for Hollywood residents to buy.

Then there’s City Council President Garcetti, whose desk in his Hollywood district office at Western Avenue and Hollywood Boulevard looks directly down on the ravaged Bon-Air Motel. But according to his spokeswoman, Julie Wong, Garcetti decided to stay out of the controversy since the buildings are actually in LaBonge’s district.

It is this very mindset — passing the buck — that Kruse and DuHaime are fighting. They dramatically ramped up their tactics against City Hall after August 4, when Garcetti and the City Council earned themselves less-than-glowing headlines by approving a federal Housing and Urban Development (HUD) loan application that, in the midst of desperate times for small businesses in Los Angeles, will hand the giant CIM about $30 million in public money to retrofit the Kodak Theatre at Hollywood & Highland — for a new Cirque du Soleil production.

The deal came under intense criticism from bloggers, city residents and the Los Angeles Times, which wrote in an editorial that “city leaders are unable to support their optimistic claims about the CIM loan with anything but the flimsiest of evidence.”

Kruse and DuHaime jumped in. “People heard that CIM got the loan for the theater,” says DuHaime, “but they don’t know that CIM is also a slumlord. This [repair of local slum buildings] is where HUD money should go.”

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  • Sherry_Taheri_Tennant 06/23/2011 10:22:00 PM

    I have created a website about a slumlord that I have dealt with in the hopes of creating a change. Sherry Taheri, who owns property in Sherman Oaks at 4936 Hazeltine Ave has been on the lists for both the housing dept and the health department for quite some time. But somehow she has managed to avoid discipline that goes beyond what would amount to a slap on the wrist. I have decided to take the power into my own hands and inform the public about this neglecting and abusive person who has used her power as a landlord to rip people off and push them around. Please check out my site, below. And if you have had any negative dealings with sherry, please post them up so future tenants won't be in a position that so many others were. Thanks. http://www.slumlordmillionaire.webs.com/

  • Marilyn Rouba 10/17/2010 8:10:00 AM

    Ali Hatam owns a building called Blix Street Apartments at 10901 Blix Street in North Hollywood that had a mountain of problems. Code Enforcement shut them down in the beginning of 2009 and their incredibly dumb apartment manager, Debbie Guffey, who lives in Unit 4, went nuts as she goes nuts on all tenants. Ali has actually let this wench manage a total of four apartment buildings and oversees all his buildings under his 4 foot tall son, Saeed, who is a partner at Franklin Management. I don't know how the focus of the article got off on the Hatam's but whoever has commented here is correct. Take everyone's advice and steer clear of anything that Debbie C. Guffey of Toluca Lake works at and any property managed and owned by Franklin Management and the Hatam family.

  • Mark 10/02/2010 10:21:00 AM

    Agreed. Ali and Zahra Hatam of the Ali Hatam Family Trust own and manager, through their son Saeed, the seediest of complexes in LA. They don't respond to anything until major complaints with government agencies are filed against them. If you see anything being rented by Franklin Management, Saeed classless company, run the other direction and warn others to do the same. Their buildings are nightmares.

  • Ali Hatam is a slumlord 10/01/2010 12:56:00 PM

    Well believe us - the scums are out there renting out apartment properties as well. A big offender in the San Fernando Valley is a man named Ali Hatam, who makes a habit of buying properties in disrepair and then putting very little back into them and quite in fact tries to make a profit off of tenants in the form of price gouging on extra parking spaces, fixtures inside apartments including screens for the windows, overcharges tenants for unsubmetered water, neglects buildings in severe need of repiping, neglects mold growing into carpets, etc. The list goes on and on and on. He also likes to buy buildings on 1031 exchanges so he can be sheltered from taxes. This guy needs to be thoroughly examined by the IRS and thown in jail. And his son's management company, Franklin Management, is equally as guilty. These S.O.B.'s have go so far as to accept credit cards, debit cards, cash, etc. for rent. The following accurately describes Mr. Hatam and Franklin Management to a "T". This page is dedicated to the worst among us; the unscrupulous landlords who milk a property without concern for tenants, neighborhoods or their own long term interests. The roof leaks: "Humm, I thought I fixed that." The toilet leaks : "Put a towel around it." The front steps are broken: "Use the back door." There are no screens for the windows: "Maybe you can buy something at K-Mart." Can I have my security deposit back: "Oh sure, I'll be in touch." There are three ways to benefit financially by investing in rental housing: Cash Flow, Appreciation and Tax Shelter. Most good and scrupulous investors try to maximize their return on investment by taking advantage of all three possible benefits. They do it with financial and tax planning, careful purchase of each property, good property management while they own it, then professional marketing when they decide to sell. However, there are short sighted fools who rape neighborhoods and steal money from a property by chasing cash flow with no thought to the long term ramifications. As a sad result, slumlords destroy buildings, neighborhoods and seriously impact the lives and hopes of poor tenants and their children. They also miss a chance to make a decent profit while building long-term financial security by investing intelligently in rental housing. Typically, a slumlord looks for an opportunity to buy a structurally and aesthetically challenged property for little or no down-payment. That kind of deal is all to often available from someone who bought something that was fairly decent, but then "milked" and mismanaged the property until they can no longer stand to deal with the maintenance problems and the kind of problem tenants you get in a problem building. A slumlord is happy to take over any junk property they can get cheap, with little or nothing down. Why not, they don't ever intend to finish paying for it anyway. Their whole goal is to put the least amount of money possible in a property and take the most they can out of it - for as long as they can. A slumlord is not usually concerned about tax benefits, because they try to collect as much of the rent in unreported cash as they can. They are not concerned about appreciation because they intend to abandon the property when it has been finally milked dry. When a tenant moves out and leaves a mess, a mainstream landlord cries, cleans, repairs and repaints. Then they try to do a better job screening their next tenant. A slumlord just lowers the rent on a trashed property until some poor soul will take it as is. Then it's the same scenario with the next tenant, and the downward spiral continues until the cash dries up from the last desperate tenant willing or forced to live in squalor. It doesn't take many derelict buildings to take down a neighborhood. A bad neighborhood leads to more slumlords and more abandoned buildings. The cancer continues to spread and always will unless and until someone stops it. Government will. They pass new expensive and burdensome laws. They level old neighborhoods and build public housing, that evolves into ghettos, eventually worse than what was there. Or we can help. We in the business of providing decent, safe and affordable housing at a profit, must educate the short sighted fools who chase a quick-buck while sacrificing a better long-term return. If they won't learn, we must ostracize them, and help government to weed them out. However we must be forever vigilant because government is always inclined to take over the entire garden instead of just digging out a couple of bad seeds.

  • Sam 08/29/2010 11:19:00 AM

    CIM group are not people to people, they are arrogant and disrespectful to tenants. All they ever wanted is your DENERO, it does not matter on what situation you are in.

  • Anonymous 09/12/2009 2:31:00 AM

    CIM isn't the only known Slumlord - there is the duo Amy Rubenstein & her felon husband Milan Puscovic aka Milan Rubenstein who run Milan Properties. They use various LLCs though to collect rent from their various building. They lure investers to invest those monies as well and most likely hide the profits through various LLCs. The other issue is the crimes committed to all tenants. Their buildings are infested with roaches, termites, and code violations range into high numbers. The City has mostly turned a blind eye from their crimes. They had a fence which was electronic that shut on people causing hospitalizations, kept people in the dark (they just wouldn't put up the lights around the building to keep people safe), pretended they didn't receive checks from people they didn't like like persons who called the Housing Authority or people on Section 8. They would buy buildings up and then run them to the ground. They wouldn't place management on the premises and slave labored one person pretending by putting a sign up in front of building that her unit was the managers and not taking it down when requested. They perjurized people therefor robbing them of rent money not owed to them while still demanding and using various LLCs to collect rents. The duo has a 3rd party involved that is Ronald Rubenstein of Ric LLC. They use his company to evict people who complain or ask for their rights. They also assaulted people and hired 2 workers to terrorize tenants they didn't like. The police also refused to take action giving leeway to these very wealthy slumlords who just haven't answered to justice yet that is. By refraining from disclosing the truth about their buildings they lured people into illegal leases and only after people moved in did they notice that roaches were crawling into their baby's beds and in the kitchen cabs, that termites were climbing out of the sink areas allover the kitchen floors, and that they wouldn't have the parking space as promised on the lease. If anyone tried to go to court the owners would make up things such as "they did property damage". Those buildings already had code violations and damages prior to anyone moving in. Then there is the other matter of the duo using fraudulent business addresses to answer to court cases. On the one hand they have an estate home where they don't answer to court cases and have a big fence to watch for service processors and on the other hand they list their businesses online through the DRE and Secretary of State as a different address in which if one tries to serve a lawsuit they are told that they don't do business there. Only checks or rent are accepted. The list is endless as to the crimes, code violations Milan Properties is responsible for. They recently shut down through the illegal use of court a tenant right's blog whereas they set up a blog where renters in Milan Properties buildings could vent and state their problems. The imbecile judge supported the Rubenstein culprits though and shut her down. Her site was a rich resource of information from the SEC crimes committed by one of their members to the fact that Milan Puscovic himself is an x felon who uses his wife's last name to hide his real name. There was videos available of the Milan Properties code violations and the judge apparently didn't like the public knowing how many crimes the Milan's had committed. The public has a right to know so they can know who not to rent from or who not to invest with don't they? Here is a petition available to the public to Stop Slumlords from Committing crimes: http://www.thepetitionsite.com/1/stop-slumlords-from-perpetrating-crimes-to-victims

  • Neighborhood Council 09/08/2009 9:16:00 AM

    Great Job dealing with CIMS and the city council people. CIMS is also doing the same thing at their San Vicente site. The grass and dry dirt is out of control. There have been stories about the dirt blowing on the homes. It appears that CIMS never follow through with their plans. The city councilman Herb Wesson takes back stage when it comes to the CIMS Group. We are still meeting with this group to see what their plans are going to be. But I will remember a lesson from you, to remain on top of the issue and NEVER QUIT.

  • Joey B. 09/08/2009 8:23:00 AM

    what a wonderful ending to a very, very scary movie ... well, okay: REALITY! it is hard to believe that the community has to reach out to not only each other, but also the media in order to get the big shots' reaction! - garcetti and labonge are known to be "camera hogs" and i wouldn't be surprised if this is going to end either on tv or even the big screen. remember the hollywood / vine story? i believe that kruse was involved in that one, too .... in other words she has battled and prevailed over city hall at least twice now. my advice to anybody in development is to watch out for her and her friends ... activism isn't dead, it is just being used carefully ... one battle at a time. way to go duhaime and kruse ... just glad you both are on the side of the "little" guy ... Joey B.

  • Susan 09/06/2009 7:10:00 AM

    I just went through the slides and the yellow multi-unit building looks historical but is probably way beyond any hope of restoration. I saw this building along Western. The front doesn't do it justice. Also saw this building in the YouTube video which shows the side and rear. Much more interesting. Slides 5,10,12,14,17,18 show interior and exterior - lath and plaster (much of the plaster falling off), large moldings, curved ceilings, and built-in cabinets. It would have been nice to see this building 'back in the day' and restore it at the time when it was restorable.

  • Josh Fong 09/06/2009 6:27:00 AM

    This article also has a slide show accompanying it: http://www.laweekly.com/slideshow/view/28411249/7 Slide 6 shows a market. I wouldn't want to be inside that market if there was an earthquake. It is simply amazing that two Councilmen and Building and Safety can look the other way. Hollywood and Western is a common access point to Griffith Park and as mentioned in the article, Hollywood and Western is across the street from and "in the face" of Eric Garcetti's Field Office. It is probably one of the busiest intersections in LA and not to mention a true transit corridor. Its a shame that a critical crossroad (and entry showcase to several important communities) is left to "fester" as Mr. McDonald points out. Why is the City rewarding CIM with $30 million of Federal funds after their behavior at Hollywood and Western? As Ms. Kruse says in her first video: "We're still waiting"

  • Sal Garcia 09/05/2009 8:09:00 PM

    "PASSING THE BUCK" That's what I am talking about--politicians, neighborhood councils, city departments, none of them act to protect us. Thank you to LA's new Superheroes Kruse and DuHaime. It took two women a couple of weeks to accomplish what your local rep, your city government, and corporate honchos couldn't do in two years because the latter don't care about us. They just care about photo ops and passing the buck unless its for campaign donations, then they'll just suck up the buck for themselves.

  • MickeyD 09/05/2009 11:32:00 AM

    i remember the name of Richard Ressler from a newscast..I think it was Peter jennings talking about his association with a russian cigarette deal: I found this: MOSCOW � It seemed a business marriage made in heaven: pair the New York-based maker of Chesterfields and Larks with a Moscow cigarette plant. The payoff: a fat government contract to sell 5 billion smokes a year to nicotine-starved Russians, plus a chance to make millions of dollars from real estate.

  • MickeyD 09/05/2009 2:25:00 AM

    I know that property very well. I got this feeling that this neighborhood was going backwards, and it is getting very scarey. Especially with the MTA station there, it is so easy for someone to commit a crime and then run down the stairs to flee by subway. CIM...You should and I hope...that you are angry and totally ashamed of yourselves..but...do you have any feelings? Money has a way of making people lose their perspective. I have an idea for the property ..now that they are finally cleaning it up....put up a twenty foot fence, and create a circus!! The animals will be easy to find...they are at the city hall! Mr. Garcetti can certainly be the leader of the pack ! Amd Mayor Tony will be able to keep the lawn watered there!

  • MickeyD 09/05/2009 2:25:00 AM

    I know that property very well. I got this feeling that this neighborhood was going backwards, and it is getting very scarey. Especially with the MTA station there, it is so easy for someone to commit a crime and then run down the stairs to flee by subway. CIM...You should and I hope...that you are angry and totally ashamed of yourselves..but...do you have any feelings? Money has a way of making people lose their perspective. I have an idea for the property ..now that they are finally cleaning it up....put up a twenty foot fence, and create a circus!! The animals will be easy to find...they are at the city hall! Mr. Garcetti can certainly be the leader of the pack ! Amd Mayor Tony will be able to keep the lawn watered there!

  • Charlie Baker 09/04/2009 8:50:00 AM

    Tom La Bonge must be having a senior moment to blame the delay on the National Economic crisis--implying that CIM is in the poor house. Why would La Bonge vote to give CIM a special 30 million dollar HUD loan after using that excuse? Where was La Bonge for the last year or so. He is really out of it and should be replaced with someone younger and with all of their faculties intact -- Time for a change in District 4. And how can Garcetti pass the buck to La Bonge? What kind of leader is Garcetti? He should give up his throne if he can't pick up the phone and either give a courtesy call to La Bonge's office or just have his staff take care of it. After all he is the City Council President. He also could have easily called CIM and told them to take care of it. He just handed them 30 million dollars so they should take his call. That $30 million should have been designated for housing and urban renewal and instead of giving it to a brand new multi-million dollar facility in some skewed attempt at 1980's style trickle-down economics. Finally there's Adelman in Building and Safety and the LAUSD's School Police. This City needs a major overhaul starting with a Federal Investigation of the HUD loan to CIM and the City Council's culpability in the processing of that loan. You should throw La Bonge and Garcetti into a locked room with Adelman. But then again, that might not be punishment for them.

  • J.R. Durruthy 09/04/2009 2:01:00 AM

    I seen how bad this Hollywood property mentioned looks like, and in this renowned neighborhood, its a crying shame. Thank goodness for the authors being able to distribute this well documented and done video on places like YouTube so that others around the state, country and world can see how you battle with a socially irresponsible wealthy developer in this day and age of web 2.0 and the social media phenomena J.R. Durruthy

  • Miki Jackson 09/03/2009 11:45:00 PM

    another good Weekly story that you will never see in the Zell-A Times. Ihave been following the "loan" to CIM and posted this myself: Is it true what City Hall Insiders are saying about the $30 million dollar Kodak Theater face lift? (much more ambitious that the bit of nip tuck wags are speculating about for our 50+ Peter Pan Mayor -) Is it true that the infusion of cash really has less to do with Canadian acrobats ...and more with US greenbacks? The story being passed around is that the owners could not (would not?) make the mortgage payments and, not able to stand yet another Hollywood Highlands meltdown, the City Council provided a flotation device in the form of a very large taxpayer backed check. Is it true? Time will tell,and so will we. It seems every little chicken at that project comes home to roost. Fair warning, look out for low flying chicks. Oh, right, our Playboy Mayor has that down to a science.

  • Aaron Epstein 09/03/2009 9:00:00 PM

    Thoughout the years I've continually heard apathy & resignation whenever situations arose where the folks with connections could rule over the small fry. Stories like this showing how a very few people with determination and focus succeed is heartwarming. Congrats to the participants as well as to reporter Pat R. McDonald.

  • Ray 09/03/2009 8:23:00 PM

    Thank you for communicating this very serious issue to a wider audience. It is journalism like this that keeps politicians awake at night. The stories are legion about Councilman Garcetti�s proclivity to pass the buck. Usually the pat responses are: �I can�t do anything about it�or �It�s not within my jurisdiction�. Just witness the Echo Park boat fiasco and the development at Echo Park Ave. and Morton. Again, thank you for exposing these politicians who are doing CIM�s bidding and not those folks who voted for them.

  • Sue Basko 09/03/2009 12:57:00 PM

    Congratulations to Ziggy and Cindy and Andre. This ridiculous mess is finally being cleaned, thanks to you three. I believe that CIM kept this mess in order to try to force other nearby properties to sell their buildings to CIM, and cheaply and/or to qualify for rehabilitation money. It does not appear to have worked. Los Angeles has a terrible track record at making property owners keep their properties in repair. This seems to be due to an extremely weak building code and even weaker and more lackadaisical enforcement, as well as splintering and duplication of services in the City and County. There should be ONE number that you call and ONE office handling absolutely any and all complaints about any property, inside or out. As it is, they all tell you they do not deal with it, whatever it is. I am kind of amazed that HUD is giving loans to build a moving stage for Cirque. I thought HUD provided money for low-income housing. Silly me.

 

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