The AIDS Healthcare Foundation has offered a top bid of $53 million to buy a portfolio of a dozen residential buildings on Skid Row.
The Hollywood-based nonprofit, the world’s largest charity for those with AIDS, emerged as the top bidder for the first dozen of 17 buildings owned by the Skid Row Housing Trust, the Los Angeles Times reported, citing an unidentified source.
The 17 buildings, mostly old single-room occupancy hotels, contain 1,200 rooms and were listed for sale after the trust hit financial headwinds a year ago. The organization is now in receivership.
The foundation has proposed paying $53 million for the first dozen of the buildings made available, the highest offer received, according to a person with knowledge of the bidding process who wasn’t authorized to discuss it. The foundation declined to comment.
A spokeswoman for Mayor Karen Bass said the foundation is the only organization that made “a financially feasible offer” for the trust portfolio. But other factors, she said, should be considered in the deal.
The state and the city are creditors on the trust buildings, but neither controls the sale, according to the Times.
Last spring, with the trust unable to pay its bills or care for its tenants, the city petitioned Los Angeles County Superior Court Judge Mitchell Beckloff for a receivership to manage the buildings and oversee repairs.
The judge will make the final determination on what happens to the properties.
Beckloff already has approved turning over 11 of the trust’s 29 properties, newer buildings that have tax credit investors, to other nonprofit providers with experience in homeless housing and social services, and one more is expected.
The receiver, Receivership Specialists, is marketing the remaining 17 for sale.
A decision about who will buy at least some of them is expected within weeks. The City Council discussed the receivership in a closed session hearing Friday.
Clara Karger, Bass’ press secretary, said whichever providers are selected to buy the properties should be able to meet the qualifications to offer services, while demonstrating they can revamp the buildings.
“The city will be closely scrutinizing any future buyers based on rigorous criteria established and provided,” Karger told the Times. “As of now, the receiver has informed us that AIDS Healthcare Foundation is the only organization that has come to the table with a financially feasible offer.”
The AIDS Healthcare Foundation, which makes more than $2 billion a year largely from its pharmacies, since 2017 has spent nearly $200 million on 16 properties in and around Skid Row, and poured an additional $30 million into renovations and repairs.
But a Times investigation last year found deplorable conditions in the buildings, while the foundation said it had lost more than $15 million over six years on operations.
In a letter to the receiver, state housing officials expressed concerns about the foundation’s track record in operating homeless housing.
The organization “would not be a suitable owner and operator considering widely known and well documented shortcomings in the foundation’s ability to provide safe and well-maintained buildings,” Jennifer Seeger, a deputy director with the Department of Housing and Community Development, wrote in the March 20 letter.
— Dana Bartholomew
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