Harridge sued a second time over $1B Crossroads of the World project

Tenants group sues with assistance from AIDS Healthcare Foundation

Dec.December 16, 2019 03:00 PM
Harridge CEO David Schwartzman faces his second lawsuit over Crossroads Project (Credit: iStock)
Harridge CEO David Schwartzman faces his second lawsuit over Crossroads Project (Credit: iStock)

Harridge Development Group is going to court a second time over its massive Crossroads of the World development in Hollywood, this time with a local tenant group that alleges the developer illegally coerced renters out of their apartments.

The L.A. Tenants Union and three individual tenants filed a lawsuit in Los Angeles County Superior Court on Friday, with claims that the Beverly Grove-based developer has violated a condition of the city approving its mixed-use project, which is that tenants have a right to return to the new development without an accompanying rent hike.

The project, which was approved by the city in January, includes 905 new apartments and condos in three high-rise buildings, 308 hotel rooms, and 190,000 square feet of rental space in buildings. The development spans 1.4 million square feet, and it is estimated to cost $1 billion.

The lawsuit, which was first reported on by the L.A. Times, claims that Harridge did not properly inform 40 tenants who currently live at the development space of their right to return, instead engaging in illegal “cash for keys” buyout offers, and also forcing renters to waive their right to return.

The Tenants Union is seeking an injunction to protect approximately 50 tenants who have not yet left the Crossroads location, a declaration that Harridge is violating the city’s rent stabilization ordinance, and punitive damages.

The L.A. Tenants Union filed their lawsuit one month after Superior Court Judge Robert Draper dismissed a complaint by the Hollywood-based AIDS Healthcare Foundation over the Crossroads Project.

Draper assailed AIDS Healthcare Foundation for filing numerous lawsuits against developers of questionable merit. “California courts have made final decisions in two previous cases, both involving AHF and the city, and both not in AHF’s favor,” Draper wrote. “AHF is attempting to circumvent these previous decisions by repeatedly filing similar cases based on different legal theories.”

AIDS Healthcare Foundation has since appealed Draper’s ruling, and they are also helping finance the L.A. Tenants Union lawsuit.

The lawsuits are substantially different, contends Susan Hunter, a caseworker at the L.A. Tenants Union. “The AHF lawsuit was in regards to fair housing and gentrification,” Hunter said. “The LATU lawsuit is specifically around a condition of approval for the project that requires that tenants be allowed to return once the construction is finished.”

Harridge provided a statement Friday that they have “provided every single notice required by the law” to tenants, adding that the project is creating 103 rent-capped units of affordable housing.

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