“Call me boss”: How Carmel Partners became ensnared in the Jose Huizar corruption case

Los Angeles /
Jun.June 25, 2020 10:34 AM
Carmel Partners CEO Ron Zeff and Jose Huizar (Credit: Desiree Stone/Getty Images)
Carmel Partners CEO Ron Zeff and Councilman Jose Huizar (Credit: Desiree Stone/Getty Images)

When the FBI went public last year with its probe of Los Angeles City Council member Jose Huizar, the focus was Huizar’s illicit ties with real estate developers based in China.

But a 116-page affidavit made public yesterday after FBI agents arrested Huizar claims the former chair of the Planning Land Use and Management Committee may have also shook down Carmel Partners, a San Francisco-headquartered real estate investment firm.

Carmel Partners is linked to giving $125,000 to Huizar, and volunteering to provide opposition research on “two young female former Huizar staffers who had filed sexual harassment lawsuits against Huizar,” the affidavit reads.

The reveal is part of a federal racketeering charge brought against the once-powerful politician, who allegedly took $1.5 million in developer bribes to run a “criminal enterprise” with aims to jumpstart the political career of his wife; while also making developers pay for a stream of prostitutes, whom Huizar allegedly referred to as “dessert.”

The allegations’ scope startled even seasoned observers.

“There’s been plenty of corruption in L.A. development since the city’s beginning,” said Casey Maddren, president of United Neighborhoods Los Angeles. “But the previous cases I know of pale in comparison.”

“This is likely the largest corruption scandal in recent L.A. history,” said Jonathan Mehta Stein, executive director of California Common Cause.

The Carmel connection

The affidavit chronicles Huzar’s relations with four real estate developers, three of whom – Shenzhen Hazens Real Estate Group, Shenzhen New World Group, and Dae Yong Lee – were revealed in prior announcements by federal prosecutors.

The one previously unnamed developer would appear to be Carmel Partners, a multifamily focused development firm started by former Trammel Crow Company executive Ron Zeff in 1996.

Though Carmel has a handful of development projects in New York and D.C., it’s a much bigger player on the West Coast – in Southern California alone it’s developed or renovated about 20 multifamily buildings. It’s raised serious cash, too. In 2018 Carmel sold a California-centric multifamily portfolio containing nearly 4,000 units to Brookfield Property Partners for $1.9 billion. A year later, Zeff’s firm raised a $1.3 billion multifamily fund with investors hailing from Asia, Europe and the U.S.

Carmel currently has two apartment towers under development in west Los Angeles, and already owns a 33-story mixed use tower downtown, whose city approval Huizar also shepherded through.

Messages left Tuesday and Wednesday with Carmel Partners were not returned.

The affidavit does not name Carmel, but it refers to a 35-story mixed use tower planned in the downtown Arts District that the Planning Land Use and Management Committee approved on Oct. 14, 2018, overcoming an appeal from labor unions, and the full City Council passed on Oct. 31, 2018.

 
520 Mateo in the Arts District (Credit: Department of City Planning via Curbed)
520 Mateo in the Arts District (Credit: Department of City Planning via Curbed)

The project dates of passage and size match the description of a 520 S. Mateo St. development by CP V 520 Mateo LLC, a company traced to Carmel Partners, according to a review of California Secretary of State records.

An unnamed executive on the Mateo St. project that the affidavit repeatedly refers to but does not name began socializing with Huizar in 2015. One year later, Huizar helped the project clear an initial Planning Department review, even though its size substantially exceeded local zoning restrictions.

Afterwards, Huizar allegedly had a favor to ask in return – that the executive give $25,000 to a Political Action Committee geared toward electing his wife Richelle Huizar to City Council.

Huizar was purportedly determined that a relative replace him on the Council when he was termed out in November 2020, so as to continue his criminal enterprise. The executive agreed to the donation, and then made two additional $25,000 contributions to the Political Action Committee over the next two years, per the affidavit.

By 2018 the Mateo St. project was opposed by local unions for not conforming to downtown land use guidelines. Huizar allegedly told the project executive he could take care of the labor union opposition in return for another $50,000 toward his wife’s forthcoming campaign.

The executive allegedly agreed and then went one step further, telling Huizar he could finance opposition research against ex-staffers who sued the council member for sexual harassment.

Huizar accepted the offer, per the affidavit, and days after the opposition research was provided, the Planning Committee rejected the labor union appeal and unanimously passed the project.

The full City Council greenlighted the Mateo St. project two weeks later. The development executive allegedly exclaimed the approval was “truly amazing” given that the Arts District is a “wealthy opinionated hipster community.”

What lies ahead

Huizar’s lawyer Vicki Podberesky and city hall spokesperson Joella Hopkins did not return messages left Tuesday and Wednesday, and they have been mum amid Huizar-related U.S. Attorney announcements that began in March when federal agents arrested former City Council member Mitchell Englander.

Huizar was released from custody Tuesday afternoon after posting a $100,000 bond, and he is scheduled to be arraigned July 20. Huizar has not resigned as of press time.

The affidavit portrays Huizar as a figure confident in his power as real estate kingmaker, asking that he be called “boss,” and bragging that as Planning Committee chair his power over real estate exceeded Mayor Eric Garcetti. The council member also ran a district, “Undergoing a historic real estate development boom,” the prosecutor’s brief notes.

But if developers were beholden to Huizar, they are hardly described as passive actors. Carmel Partners, for example, allegedly orchestrated opposition research against sexual harassment accusers. And Shenzhen New World Group is accused of funneling Huizar $600,000 to settle a separate sexual harassment complaint.

Huizar allowed both developers to literally remake the L.A. skyline.

The 35-story Carmel Partners project would tower over a neighborhood filled with two-story storefronts and warehouses, while Shenzhen New World Group won approval of a 77-story tower on Figueroa Street, which would be the tallest building west of the Mississippi River.

Real estate stakeholders hope Huizar’s arrest will change the relationship between developers and city hall. But they’re not holding their breath.

“The Huizar case is so far out of bounds I’m sure most councilmembers will take the position it’s an anomaly,” Maddren said. “Even if there’s no outright bribery, the existing system where developers, lobbyists and elected officials work behind closed doors to make planning decisions will certainly stay in place. Most council members feel like the system is working fine.”


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