DOWNTOWN LAND BANKER Richard Meruelo might not have asked the Department of Building and Safety or regional air-quality officials for permission to demolish toxic buildings on a contaminated industrial site, but he just might have to pay for forgiveness.

The department has issued orders to comply with city laws, and set a hearing for Wednesday afternoon to determine whether the largest downtown landowner and prolific campaign contributor violated building laws. If so, he could be prevented from developing the property for five years, according to a Notice of Hearing for Demolition Without Permit, dated April 7.

The South Coast Air Quality Management District (AQMD) is also investigating, and has asked Meruelo for asbestos-waste shipment records and to explain why he failed to notify the district when he disposed of several structures containing toxic material at 1000 Alhambra Ave., also known as 1060 N. Vignes St., next to the L.A. County Jail, in the shadows of the elevated Metro Gold Line.

On Tuesday, Meruelo spokesman Michael Bustamante said his client is cooperating with the AQMD and Building and Safety investigations. He said a remedial plan to clean up contaminated soil on the property is on hold pending the outcomes. “This is nothing we’ve been involved in before,” Bustamante said. “We’re trying to answer questions.”

Bustamante said his client did the demolition “in-house,” and that it has spared the neighborhood the nuisance of vacant warehouses.

Meruelo, a son of Cuban immigrants with a rags-to-riches story, spent at least $190,000 to help elect Mayor Antonio Villaraigosa. He has spent tens of thousands of dollars on state elections — including the low-profile California Public Employees Retirement Board, which has loaned Meruelo more than $100 million for investment purposes.

AS TRAINS CREPT INTO UNION STATION under gray skies Tuesday, and the Metro Gold Line train made its way above Main Street, steam was pouring out of California Drop Forge, Meruelo’s neighbor at 1033 Alhambra Ave. The company has been producing die-forged metals here for 105 years. Plant manager Carl Carrier says he remembers the demolition of a metal warehouse and a brick building that used to belong to Hydril Company, a manufacturer of oil-drilling products that sold the property to Meruelo last September. Meruelo’s people “came in with a bulldozer and a backhoe,” Carrier says. Now it’s a fenced-in parking lot full of big rigs. “It was nothing fancy, no big contractors. Just knocking it down, throwing it in rollaways and hauling it away. Guys sweeping up, wearing facemasks, no protective gear. Seems like they thought they could save a buck.”

Employees at the neighboring L.A. Recycling Center also witnessed the demolition. William Duran, the manager, didn’t know there was a question about permits. “No wonder they were in such a hurry,” he says of the buildings’ removal, which, he recalls, involved at least 10 trucks. “It was a lot of old crap. I offered to buy the copper. The [contractor] said they had a buyer.” Duran, a Salvadoran, says the contractor had a Cuban accent. He says he saw officials in vehicles — sedans with L.A. city tags — watching the demolition. “I live in Culver City, and if you do something without permits they get in your face.”

Meruelo bought the property from Hydril on September 19, 2005, for $3.6 million. Robert Flick, an attorney for Hydril, says both parties were notified months earlier by Building and Safety that vacant structures, which had become havens for drug users and the homeless, and had to be cleaned up or torn down. The department issued a Notice to Abate Vacant Structures on December 2, 2004.

Before closing the sale, Meruelo hired certified asbestos consultant Stephen Masek to survey the property. Masek says he found asbestos, lead paint, mercury and PCBs and reported them to Meruelo’s property managers, L.A. Alameda Group, last July. Previous environmental reports found underground fuel-storage tanks, hydrocarbons, heavy metals and solvents in the soil.

Masek says he sent a copy of his report to Specialized Environmental Inc., a licensed demolition and asbestos-removal company bidding on the removal project. On Monday, Carlos Reyes, the manager of Specialized, said his company offered to take down the buildings for about $200,000, but before it received Masek’s report and could price the asbestos removal, it was told it was not getting the job.

THE L.A. WEEKLY EXPOSED the demolition on April 6. On April 7, Building and Safety issued its notice of hearing. The department has issued five orders, each carrying a possible fine of $1,000 or six months in jail.

Yet Building and Safety had known of the demolition for months, according to Dave Keim, chief of enforcement, who said his staff called Meruelo in November and January. However, when first contacted by the Weekly, Building and Safety spokesman Robert Steinbach said, “We’re not into penalties.” Several days later, Keim said he would take enforcement action.

On Wednesday, the department held a rare hearing and threatened to invoke what is known as a “scorched earth” action by preventing Meruelo from developing on the property for five years. An attorney for Meruelo argued that the city ordinance behind such action has only been used against owners who razed buildings with historical value. General Manager Andrew Adelman will determine what action the department will take after receiving a hearing examiner’s report and a 30-day public comment period.

In addition, the California Occupational Safety and Health Administration requires notification. But Dean Frier, a spokesman for Cal-OSHA, said that because his agency was just learning of the demolition, the statute of limitations of six months had run out. “There is not much we can do. It sounds like a matter for the City Attorney.” Jonathan Diamond, a spokesman for City Attorney Rocky Delgadillo, could not confirm a referral to that office.

Peter Mieras, AQMD’s chief prosecutor, declined to answer questions about the investigation: “All I can say is this matter is under the enforcement microscope.”

For expanded coverage of the hearing, see

LA Weekly