A lifeline for the 29 troubled buildings formerly operated by Skid Row House Trust got a vote of confidence June 26, when the Los Angeles City Council’s Budget, Finance & Innovation Committee voted unanimously to authorize a $10 million loan to support the buildings’ operations for the next four to six months.
The vote comes after a series of bad breaks which put operations at risk for the 29 hotels, mostly located in Downtown Los Angeles. Together, the buildings house up to 1,500 formerly homeless people.
The most dramatic event came with the collapse of the nonprofit Skid Row Housing Trust earlier this year due to budgetary shortfalls and soaring maintenance and security costs.
A receiver appointed several months ago to reorganize the former trust quickly fell into disfavor. Mark Adams of California Receivership Group was appointed to the post because he had experience running 300 public health and safety receiverships. It was also understood that Adams would bring his own lines of credit and funding resources.
During the June 26 meeting, City Attorney Hydee Feldstein Soto told the committee that Adams took out loans with interest rates of 15 percent, much more than the city had estimated. In May, Adams’ management company made a grave error by issuing eviction notices to 450 tenants, after the city made him promise that no one would be evicted. Plus there were complaints that Adams had not hired staff to secure and operate the distressed buildings and make improvements.
Adams also never gave the city attorney a clear idea of this company’s plans for the buildings.
“Instead of a report, what our office received was an email attaching scans of dozens of invoices which were not in comprehensible form and there was no report or summary and statement that would explain what it was,” Feldstein Soto said.
A new receiver, Kevin Singer of Receivership Specialists, has been nominated to replace Adams. Feldstein Soto and Ann Sewill of Los Angeles Housing Development told the committee they have more faith in Singer. Feldstein Soto alleged she had more time to conduct background checks on Singer who had helmed receiverships in San Francisco’s Tenderloin District. Sewill and Feldstein Soto were also impressed by detailed reports Singer submitted with his proposals to work with the former Skid Row Housing Trust buildings.
No City Council meeting has been scheduled for a vote on the $10 million loan. A representative for one of the budget committee members said a hearing had been scheduled in early July about Singer’s nomination.
The city’s handling of the receivership has been criticized by nonprofit AIDS Healthcare Foundation, which also runs about 1,400 units for formerly homeless people in Los Angeles.
“This is an emergency and the city has been fiddling around with receiverships,” said Miki Jackson, an AHF consultant. “The city takes forever to inspect units. Many units are in horrible conditions. Others are fixed, but are vacant because city inspectors don’t come in a timely fashion.”
AHF has expressed interest in working with the city to fix up or take over Skid Row Housing Trust’s former buildings.
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