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Los Angeles City Hall as Slumlord

This is an update of the original online story.

Ted Soqui

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Tough cookies: Barbara Rowe, with neighbor Hilda Quintana, are targeting their rich landlord at the tattered Alexandria Hotel.

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Decrepit majesty: 100 years ago, the lavish building became the hot spot for studio chieftains.

BRUSHING OFF THE ALLEGATIONS of a bedraggled group of protesting tenants at an explosive Community Redevelopment Agency hearing last summer, two Los Angeles City Council members lobbied extensively — and unusually — to assure that the alleged slumlord of the Alexandria Hotel, Ruben Islas, received $8 million in taxpayer monies for another, similar downtown renovation project.

L.A. Weekly has learned that City Councilman Tony Cardenas and his colleague Jan Perry — with an assist from Assemblyman Fabian Núñez — sought Mayor Antonio Villaraigosa’s personal involvement last August to make an unguaranteed loan of public funds to Islas, a rich political insider.

The push came after Islas, his wife, his business partner, his employees and their family members gave Cardenas $10,100 in contributions in 2006 and 2007. In fact, city records show, just 27 days before the raucous CRA hearing in August, Islas and his wife gave Cardenas $2,000. And 10 days after Islas got final City Council approval for the subsidy, Cardenas received another $2,000 in total from Islas, his wife, his business partner Jules Arthur and Arthur’s wife.

Cardenas made his highly unusual appearance at the August 2007 CRA meeting, lavishing his political contributor with public praise — even as Islas’ tenants, sitting nearby, accused Islas of taking public money and misusing it to exacerbate a slum situation at the Alexandria Hotel.

Cardenas declared, “I have full confidence that [Islas] handles his properties ... as respectfully as possible.” He added: “I would challenge every single one of you to go to a project that he has in Los Angeles or somewhere else in the western United States, just show up, unannounced, and see what you see, and compare, in your mind, what you think ought to be going on in the real world and what they are doing as a corporation for these people.

“I’m here to be a character witness for this individual and his corporation,” Cardenas said.

The CRA board backed Cardenas, approving an $8 million subsidy for the so-called Rosslyn Lofts, an Islas-controlled renovation project downtown, nowhere near Cardenas’ own council district miles away in the San Fernando Valley.

But the odd drama is hardly over. Shortly after the August CRA meeting ended, one clearly worried CRA board member took Cardenas up on his suggestion to see Islas’ property-management skills — firsthand.

Board member John Perez, the well-connected first cousin of Villaraigosa who is expected to win an Eastside seat in the California Legislature in November, promptly visited the Alexandria Hotel. There, Perez saw the squalid conditions the current tenants had tried in vain to alert the board to. “The conditions were deplorable,” Perez tells the Weekly.

Tenants had no running water or drinking water in the midst of summer heat, and, without running water, toilets were backing up with raw sewage.

“People literally had human waste that had been there for three days,” Perez recalls.

Three other CRA board members who backed Cardenas and Perry —  attorney William H. Jackson, president of the Economic Alliance of the San Fernando Valley Bruce D. Ackerman and architect Alejandro Ortiz — did not go on the impromptu field trip.

Now, looking back on his vote, Perez says Islas was promising to renovate empty floors at the Rosslyn to provide 259 “affordable” rentals subsidized by the CRA. “Nobody else was stepping up,” says Perez.

Even so, e-mails obtained by the Weekly from litigants who are suing Islas and the CRA in federal court over conditions at the Alexandria dramatically illustrate how Cardenas, Perry and Núñez all began pressuring Villaraigosa to step in on Islas’ behalf just before the agency handed Islas the $8 million last August.

According to the e-mails, CRA chief executive officer Cecilia Estolano had opposed Islas’ surprise demand for an extra $4 million in subsidies — an unsecured loan of taxpayer monies that, the e-mails show, city bureaucrats believed would never be repaid. But that all changed, and quickly.

A deliciously juicy e-mail from top mayoral aide Cathy Finley to Deputy Mayor Bud Ovrom and other Villaraigosa insiders elucidates upon what appears to be blatant, closed-door scheming by Jan Perry and direct, private pressure on the mayor from Tony Cardenas and Fabian Núñez:

“[Councilwoman] Perry said that this is NOT set for the CRA board on Thursday, and she believes that the deal is in jeopardy. She thinks that the Mayor will need to call the CEO to ask her to sign it,” wrote Finley of the pressure Perry wanted the mayor to put on Estolano. Finley also advised: “[Perry] will not mention this at the press conference, due to too many people being around [the Weekly’s emphasis].”

 

A few hours later, Deputy Mayor Ovrom shot an e-mail to CEO Estolano at the redevelopment agency, asking, “Do you know why Jan [Perry], [Tony] Cardenas and Fabian [Núñez] are calling the mayor? Might they know enough about all of this to be asking that the CRA come up with the full $8 mil ...?” About two hours later, Ovrom wrote again: “...we have now received 3 calls (jan, fabian and tony). Someone else must have gotten to [Mayor Villaraigosa] first, because he did have some understanding of it.”

Perry declined to comment to the Weekly. Cardenas refused, through a spokesman, to discuss the issue, insisting that the Weekly first provide him with copies of the mayoral staff’s e-mails. A Núñez spokesman insisted Núñez sent only a “generic letter” backing housing at the Rosslyn. According to Gil Duran, a spokesman for the mayor, Villaraigosa did not speak to CRA chief Estolano about the project.

But Estolano did suddenly change her mind. When the commission heard Islas’ request four days later, at the boisterous August commission meeting, Estolano had signed off on the full $8 million.

The e-mails provided by litigants against the Alexandria provide a rare look at how City Council members privately pull strings for their contributors. The e-mails came to light amid a federal court case that went against Islas. In that case, United States District Court Judge Margaret M. Morrow on May 22 ordered Islas to provide such troubling essentials as “hot running water” — and to halt a torrent of evictions.

 

Islas’ attorneys admit that 100 residents have been evicted since August 2006 from the 344 occupied units at the decrepit but historic eight-story Alexandria, five blocks south of City Hall.

Barbara Rowe, one of the current residents, who are a mixture of the poor, seniors, the disabled and mentally ill, bohemians and artists, tells the Weekly, “They storm-trooped us. There were people here who were mentally unable to take care of themselves. Those were the ones they kicked out first.”

Judge Morrow, in her May ruling, showed little patience with the Community Redevelopment Agency’s behavior in the controversy, ordering its bureaucrats to launch a costly effort to track down and pay relocation fees to Islas’ evicted tenants — a slap at the bureaucrats that illustrates how ineptly City Hall dealt with Islas and his company, the Amerland Group, as bad conditions persisted at the Alexandria. (Islas did not return the Weekly’s calls.)

“Amerland came here and robbed the city,” Rowe says simply.

After the CRA board rewarded Islas the $8 million Rosslyn Lofts subsidy last summer, records show that different arms of the City Hall bureaucracy began documenting and acting upon Islas’ apparent mismanagement at the Alexandria and the Rosslyn:

In December 2007, the city’s housing department declared the Alexandria “uninhabitable” due to a lack of running water.

Two months ago, City Attorney Rocky Delgadillo’s office filed an extensive and 36-count criminal complaint against Islas and his affiliate companies, alleging extensive violations of fire-safety codes at the Alexandria and the Rosslyn.


SO WHY WERE TONY CARDENAS, JAN PERRY and Fabian Núñez so hot to see Islas get more of Los Angeles taxpayers’ money?

Cardenas, after all, sat at a crowded CRA meeting for more than four hours. His rare presence was seen as openly manipulative — a powerful Los Angeles City Council member involving himself at a level that one commissioner who spoke to the Weekly, and who declined to be identified, termed “unprecedented.”

An insider familiar with CRA operations, who is not on the commission, called Cardenas’ pressure “awful,” saying, “It’s really intimidating to [redevelopment agency] commissioners when city councilmen attend” — particularly since the 15 elected City Council members must give final approval to the mayor’s appointees to the commission. “[Cardenas] clearly knows what he’s doing.”

(For example, last December, Cardenas publicly slammed Joan Ling, one of two CRA board members who voted against funding for Islas’ Rosslyn Lofts. Although Cardenas, Perry, Dennis Zine and Bernard Parks voted not to give Ling another stint on the CRA board, other council members backed her, and her appointment was renewed.)

Madeline Janis, the only other CRA board member to oppose Islas, told the Los Angeles Times last September that the political pressure from City Hall to back Islas had been intense.

 

It ranged, Janis alleged in that article, from the “direct, like having two council members sitting there the entire time,” to the indirect, “like hearing back that the developer was really angry and was going [sic] have retribution against any CRA/LA board member who didn’t support him.”

In the same article, Cardenas accused Janis of lying, saying, “I don’t know Madeline very well, but anyone who comes up with such a concoction of a scenario is confused and making things up.”

But Cardenas seems to be the one with the tainted spin. Not long ago, Janis publicly apologized to the Alexandria’s tenants for the conditions in which they were forced to live.

For his part, Cardenas insists he had been “approached” by Amerland “to do business in my district,” so he had visited Amerland housing near San Diego and found excellent conditions. (And it was in San Diego that Amerland threw a fund-raiser for Cardenas in November 2006.)

But Cardenas’ chief of staff, Jose Cornejo, tells the Weekly that Islas “is not working on any projects” in Cardenas’ Valley district. Cornejo casts aside the notion that contributions from Islas bought Cardenas’ support.

“If you can’t do this job, fund-raising, and then vote against somebody the next day — you shouldn’t be in this job,” insists Cornejo. “[Contributors] have no, absolutely no bearing, on what we do. That’s the simple truth.”


YET THERE’S ANOTHER TRUTH as well: that Cardenas and Perry, with an assist from legislator Núñez, provided Islas a level of effort, aimed at winning him public funds, that few noninsiders can typically expect to receive.

Before the CRA board’s vote on the Rosslyn Lofts, the agency’s loan committee tried to stop one-half of Islas’ requested package — a $4 million loan riddled with problems.

In one e-mail obtained by L.A. Weekly, the CRA’s chief operating officer, Glenn Wasserman, skewered Islas’ package of funding, saying that $4 million of it was “misleading in that the second loan is referred to as a ‘short-term loan’ when the details reveal that it is unlikely at best that this loan will be repaid in three years or at all.” (Commenting to the Weekly, Islas’ partner Jules Arthur promised that the loan would be repaid.)

Yet Wasserman slammed that use of public money as “an unsecured $4 million ‘grant’ with no expectation of repayment.” And, in an e-mail dated August 13, 2007, obtained by litigants in the court case against Islas and the CRA, Estolano, the agency’s CEO, backed Wasserman in opposing that financing for Islas.

That’s when Perry, Cardenas and Núñez called Villaraigosa’s office to talk to him about the Islas controversy. Then, after CEO Estolano reversed her course and backed the full $8 million, Cardenas openly thanked her. “Cecilia,” he said during the packed CRA meeting last August, “you and I have worked together for quite a few years.... And I’m glad to see that what is on the table today is an $8 million proposal for this board to allow this project to go through.” (Estolano declined to discuss whether Cardenas had pressured her on the funding, citing ongoing litigation involving the Alexandria and the Rosslyn project.)

William Jackson, who chairs the redevelopment agency’s commission, defends the commission’s decision, saying that even before Islas took over the Alexandria, the place was riddled with problems and problem tenants. “One of the things I remember is how miserable people were,” Jackson says.

 

Louis Rafti, an attorney for Legal Aid Foundation of Los Angeles, who represented the tenants in the federal lawsuit, concedes, “Of course, we want to get rid of that” — referring to drug dealing and other problems at the Alexandria. But he argues that most residents are simply destitute, and that the Alexandria is their roof of last resort.

“At least you had a place to live. You’re not getting thrown out on the street,” Rafti says. But instead, they were “disenfranchised by someone who said they were there to give them affordable housing, received money to provide affordable housing, then pulled the rug out from under them.”

Amerland officials strongly dispute this characterization, with Islas’ partner Jules Arthur telling the Weekly, “There was always hot water. It was inconsistent. We bought a building that was 100 years old [and] that had numerous deficiencies.” The Alexandria, he says, is “vastly superior than it was before.”

But Rowe, the Alexandria tenant, says many of her poor evicted neighbors ended up living on rough downtown streets — ironically, in Councilwoman Perry’s run-down district. Rowe says Perry “didn’t do anything to solve that part — people who had to sleep on the street.”

 

As of last week, city leaders were still dissembling over the slum conditions found by the court.

Asked if the federal judge’s order that Islas provide hot running water at the Alexandria had shaken Perry’s faith in him, a spokeswoman e-mailed Weekly the dubious claim that, to Perry’s knowledge, “there is no federal order from a judge regarding the Alexandria Hotel.”

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