L.A.’S DEPARTMENT OF BUILDING AND SAFETY held a rare hearing Wednesday to determine whether to penalize downtown land banker Richard Meruelo for demolishing industrial buildings without a permit. For the fourth time in 15 years, since the city enacted a “scorched earth” law, the department threatened to take an action that would prevent Meruelo from developing property he owns at 1000 Alhambra Ave., also known as 1060 N. Vignes St., for five years.

The department had asked a previous owner to abate prostitution, drug dealing, vagrancy and graffiti in the area. It was aware that Meruelo demolished buildings without a permit. Yet several months passed and no action appeared imminent until Wednesday, when suddenly it seemed as if Building and Safety was ready to come down on Meruelo — downtown’s largest property owner and a major political contributor — like a ton of bricks.

The property, leased by the city until 1999 and left vacant thereafter, is near Main Street. Bordered by the L.A. County Jail, railroad tracks and a drop forge, it’s just a couple of blocks north of Union Station. Calling the demolition without permission “an aberration, an accident,” Meruelo’s attorney, Timothy Neufeld, blamed the previous owner for not taking action sooner. He said his client cleaned up the site and is “deeply sorry” for not obtaining a permit. He pointed to several other properties where Meruelo has bought unwanted land and cleaned it up after getting an official okay. He said Meruelo’s company has hired a general counsel and is working to ensure thorough compliance with city laws.

No enforcement action will be taken for at least a month. Building and Safety general manager Andrew Adelman will make a decision after reviewing the hearing examiner’s report and a 30-day public-comment period.

After the hearing, Dave Keim, chief of enforcement, said, “I think I heard him say [Meruelo] is sorry, but I didn’t hear him give a reason why he didn’t bother to get a permit.” In response to Meruelo’s lawyer’s pledge of future good conduct, Keim cited a small fleet of big rigs parked on the property — also without permits. “I’ll find that persuasive when I see those trucks moved.”

Alan Wendell, a principal inspector with Building and Safety, demonstrated a “considerable permit history” at the property dating back to the 1920s. Wendell showed hearing examiner Ken Gill photographs, some dated July, 2005, of a two-story office building, two metal warehouses, a lean-to building, some sheds made of metal, wood and concrete, and a concrete-block power building — tens of thousands of square feet of dilapidated structures that had become a haven for crime. Meruelo bought the property on September 19, 2005, from Hydril Company for $3.6 million. Photographs taken by building inspector John Cordon last November show a backhoe, a truck, piles of debris and little else except a worker with a broom.

Wendell produced a customer-service request from November 16, 2004, citing nuisances created by the open, vacant buildings. On December 2, 2004, the department issued a notice to abate these nuisances or tear down the buildings. Hydril attorney Robert Flick says because the parties went into escrow around that time, the notice applied to Meruelo as well. According to Keim, the department’s abatement notice, and follow-up notices, were recorded with the sale of the property.

Over the next several months, inspectors from Building and Safety noted that the buildings were still standing, albeit with some measures taken to prevent access. But on November 3, 2005, a little more than a month after Meruelo acquired the property, inspectors noted that the buildings were gone and no permits had been filed. “The owners should have employed a licensed demolition contractor and applied for the required demolition pre-inspection,” reads a statement by inspector William Grimes, according to Building and Safety documents. “Please handle this as a top priority.” The document also contains a handwritten note referring to a “demo contractor” named “Raul,” who answered a call to the number listed but hung up when asked if he was a licensed demolition contractor.

“We agree that the buildings were there and that there were no permits when my client took them down,” said Neufeld, addressing the hearing officer. “But my client acquired the property with the knowledge that for the past five years, the previous owner did nothing to contain rave parties, prostitution, drug dealing and homeless people living in there. No one wanted to touch that property. My client came in with open eyes, intending to build affordable housing or something to improve the neighborhood.”

NEUFELD POINTED TO OTHER BLIGHTED urban properties that Meruelo has turned around, including the Southern Pacific Warehouse Building, at Seventh and Alameda streets, now the home of American Apparel, which employs 3,000 workers. He vowed to supplement his appeal with police records to highlight the “human tragedy” his client prevented by tearing down the buildings. He said Meruelo has filed a lawsuit to get a trucking company to remove its big rigs from the property.

Then, Neufeld took aim at the “scorched earth” ordinance by looking at the history of the city law. The law dates back to the late 1980s and, until now, has only been invoked three times, Neufeld said, detailing several historic buildings that were torn down, sometimes in defiance of city officials. An owner who tore down the last Victorian on Bunker Hill, which was built in 1887, only had to wait two years before being able to develop the property, he said. “This case is different. The city wanted these buildings to come down. To penalize my client is to penalize the neighbors and the city by preventing taxable revenue — it would deprive the neighborhood of the opportunity to flower and grow.”

Keim was not impressed. “I’m the chief of enforcement. We wouldn’t have held this hearing if we did not feel we have a good case. The ordinance is simple. It doesn’t say anything about historical buildings.”

Asked why the department took so long to take action, Keim replied, “The inspector should have taken it up the chain of command. He neglected to do that.”


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