The Real Deal Los Angeles

What housing crisis? Council approves apartment-to-hotel conversion in Hollywood

Some say building’s owner gamed system by getting exemption to evict rent-controlled tenants based on plan for condos that were never built

July 01, 2016 01:00PM

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The building at 8150 North Cherokee Avenue in Hollywood and Councilman Gil Cedillo

The building at 8150 North Cherokee Avenue in Hollywood and Councilman Gil Cedillo

Much to the chagrin of housing advocates and evicted residents, the Los Angeles City Council approved on Wednesday a plan to convert a vacant Hollywood apartment building into a 24-key hotel.

Property owner David Lesser removed tenants from the building at 1850 North Cherokee Avenue about three years ago under the Ellis Act, which allows landlords to evict rent-controlled tenants if they plan to remove the units from the rental market entirely.

Under the act, landlords are typically required to pay tenant’s relocation fees, but that didn’t happen in this case. Half of the tenants had not received assistance because Lesser received a city exemption tied to the fact that he filed plans for condos. But he ditched that concept in favor of a boutique hotel, leading at least one council member to question whether he had gamed the system.

“I don’t want to say it’s a bait and switch, but … the final product is that the tenants aren’t receiving the remedies that were due them,” Coucilman Gil Cedillo said Tuesday, according to the L.A. Times. He also called it “a miscarriage of justice.”

Other council members said the condo exemption rule needed to be assessed or changed going forward, but that it shouldn’t affect the approval of the hotel.

Lesser and his representatives said he didn’t go through with the condo plan because of the economic downturn — not because of bad faith.

The project was also approved despite concerns raised about the lack of affordable housing in Los Angeles. The day before the council approved the project, one of its committees rejected an appeal by Sylvie Shain, a Hollywood resident evicted from a different hotel-conversion building. Shain, along with other housing advocates and evicted residents, said approval of Lesser’s hotel would set a dangerous precedent for removing affordable units during a time when Los Angeles is facing an affordability crisis.

But Lesser’s attorneys argued that California law doesn’t allow the city to consider purely economic and social effects when weighing the environmental impact of a project, and that he had followed city and state laws during and after the evictions.

Such exemptions are not unique to Los Angeles.

In New York, The Real Deal covered a speech by landlord attorney Michelle Maratto Itkowitz, titled “Tenant Buyouts — The Next Generation.” Like in Los Angeles, units in New York cannot be removed from rent control unless they are going off the market. Itkowitz told the crowd that the best way to evict rent-controlled tenants was to file plans to demolish a building — but not necessarily go through with it.

“Now let’s talk about about something that actually moves tenants out of the way if you have to get to that point,” said Itkowitz. “Demolition eviction, page 23,” she prompted, referencing a pamphlet that accompanied her speech.

“There’s nothing in there I can see that penalizes you for not demolishing the building,” she said. [LAT]  — Hannah Miet