Cecil Hotel to Stay Residential Under Terms of Settlement to Long-Running Lawsuits
Eric Richardson / blogdowntown
A taxi loads outside the Cecil Hotel at 640 S. Main.
DOWNTOWN LOS ANGELES — Three-and-a-half years of back-and-forth lawsuits could soon be coming to an end at the Historic Core's Cecil Hotel, where new ownership has struggled to shake the hostelry's residential history since the building changed hands in 2007.
A settlement conference note from Thursday says that a settlement has been reached that will end suits between two groups of hotel owners, the city's Housing Department and tenants represented by LACAN.
While exact terms of the settlement arrangements are not included, a report filed two weeks ago contains the broad terms of a deal that would maintain affordable housing in at least part of the hotel.
At the heart of the suits is a city ordinance passed in 2008 -- and previously instituted on an interim ordinance in 2006 -- requiring that residential hotels provide replacement housing units for any rooms converted from residential to transient use.
A group of buyers purchased the Cecil for $28.5 million in 2007, believing that they were in the clear to operate the historic building as a tourist hotel.
The city felt otherwise, and put the Cecil on a list of residential hotels covered by the ordinance. The ownership sued the city over that designation on May 5, 2008. As that suit was underway, they embarked on a renovation program at the Cecil, launching the boutique hostel Stay hotel inside soon afterward.
A group of tenants represented by LACAN filed a counter-claim in that suit, alleging that the Cecil's ownership had violated their rights in that renovation and attempted to drive them out of the building.
Meanwhile, one group of ownership sued another in early 2009, alleging that the group led by Colliers Seeley's Fred Cordova had misled them about the state of the property.
Under the settlement, the building itself will go back to the lender, forestalling a foreclosure. The owners will agree to residential hotel status and "to having an agreed upon number of residential units." One person familiar with the talks told blogdowntown that number could be roughly 300 units.
Settlement payments will be made in both the ownership suit and the LACAN counter-claims, though the report does not give either figure.
According to the report, all transactions related to the settlement need to close by December 31. Once the title to the structure has cleared, the lender would be free to seek a buyer.
Tony Hoover on November 11, 2011, at 04:15PM – #1
I think the city should be doing all it can to help end homelessness, and homeless advocates should be working with the city to accompish the task however the outcome of this disgusts me. If a buyer wanted to turn this into a tourist hotel then they should have had the right to do that. The Cecil was, after all, originally built as a tourist class hotel NOT an SRO.
The people of Los Angeles are being held hostage by many of these homeless advocates. I don't think I'm alone in feeling this way. This kind of action in NOT a solution to the problem.
dsinla on November 11, 2011, at 05:09PM – #2
Agree with you Tony
Mario Teran on November 11, 2011, at 09:25PM – #3
Keep voting democrat and this is what you get. Vote republican and the free market will dictate the situation.
Bert Green (@bgfa) on November 12, 2011, at 01:04AM – #4
Really, Mario? Republicans would solve homelessness? How would that work? Last time the Republicans (under Reagan) tried to apply free market principles to homelessness they threw hundreds of thousands of people out on the streets.
Jim F on November 12, 2011, at 11:39AM – #5
I think Mario was referring specifically to the Cecil Hotel situation. And he's right. Love it or hate it, Republicans defer more to free market solutions, whereas Democrats defer more to government programs. And in this particular instance, the city government has forced another free-market business entity out because of a seemingly ridiculous government decision. The Cecil (and the neighborhood) are being severely damaged by this stupid, stupid decision. But let's not talk partisian politics -- let's talk what's happening to Main St. because of stupid decision like this.
I lived in the PE Lofts for three years (loved them!), but I just recently moved out mainly because I was attacked by a deranged homeless man and knocked unconscious as I crossed the intersection at 6th and Main directly in front of PE Lofts. Middle of the day, broad daylight, Saturday.
When the cops arrived, they told me this was an ongoing problem because the city was cow-towing to the homeless population and FORCING property owners to keep their buildings "homeless friendly" instead of market friendly. And let's not kid ourselves -- although there are kind, gentle people living on skid row, the majority of skid row is dangerous.
And Bert, although Republicans may have thrown people out on the streets (to use your words), arcane government regulations and the STUPID Homeless Advocates are keeping them there. Why oh why do they force private business owners to keep their properties "low income"? These advocates have the city by the balls, and because of that, the homeless will remain whereas upper middle-class citizens like me will abandon a street that at one time had so much potential. These advocates have partnered with the city and demonstrated that they desire a city core full of homelessness rather than hard-working, gainfully employed citizens. We know when we're not wanted.
Bert Green (@bgfa) on November 13, 2011, at 10:23AM – #6
Jim, you are ignoring the facts of the Cecil situation. The buyers of the property knew the law when they got involved, but they tried to circumvent it via litigation. Any Republican would agree that free market activities are still subject to existing laws, like them or not.
In addition, the vast majority of the regulations governing low income housing are only applicable to properties and organizations that take government money. If you don't want to conform to these rules, than either stay out of the market for this type of housing or look for properties that do not have restrictions on them. There is no shortage of such properties throughout downtown. But they are more expensive to purchase. These guys wanted it both ways.
My personal preference is that the Cecil be allowed to fully convert to tourist hotel use, and I agree this would be better for the neighborhood. But the laws (and the history) being what they are, that is not likely. Unless, that is, the developer followed the law and provided off site housing for the displaced residents, which would have been the legal, moral, and the right thing to do.
It is also easy to forget that Skid Row was a deliberate creation of the city and county to keep undesirable people out of the other residential districts of Los Angeles. Decades of bad policy (by Republicans and Democrats alike), is not solved overnight or by demonizing the people who were its pawns.
Eric Richardson (@blogdowntown) on November 13, 2011, at 11:44AM – #7
Bert: Important to note, though, that the residential hotel ordinance isn't about whether you've taken money. The replacement requirements are based on whether you have accepted long-term tenants.
Bert Green (@bgfa) on November 13, 2011, at 11:57AM – #8
Eric: Correct. I did not say that particular law was dependent on taking money. I was referring to that law when I said they tried to circumvent it through litigation. Sorry if I was not clear.
Tony Hoover on November 13, 2011, at 01:37PM – #9
Regardless of all the complications in this situation is simply disgusting and shameful. The state is shameful for putting people on the street 40 years ago, the county/city is shameful for using downtown as a "trashcan" for the homeless for so many years, and so-many of the so-called "homeless advocates" (with a few exceptions) are shameful for profiting off this deplorable situation. The whole thing is a damn mess and now, like everything else, the People (with a capital P) are left to fight a shamefully flawed system to finally clean up the the mess left to us. what else really needs to be said?!
Simon Hartigan on November 15, 2011, at 08:35PM – #10
Los Angeles doesn't have a homeless problem, it has a homeless advocates problem. As mentioned by Tony, the Cecil was not built as SRO. If you want to look at what a city would look like if it was built on the concept of SRO, just look at some of the European Eastern Block residential complexes, or a US military residential complex. DTLA was not built by the homeless, homeless and the poor have ruined many beautiful buildings, some are fortunately being restored. If left to the homeless and the poor, a city will eventually fall apart with little to no capital improvements and then the homeless and the poor will be off to the next city to feed off of. The Cecil hotel does not belong to anyone, and certainly not the homeless or the poor. It belongs to DTLA and the free market. And for the record, republicans are a joke, they're nothing but religious freaks that wish they were libertarians. disclosure, I don't affiliate myself with any political party
downtown vibe on November 17, 2011, at 11:34AM – #11
I found this very insightful blog post.
Someone had blamed Reagan for homelessness...
"I respectfully disagree. My wife worked for the chief of the psychiatric department at the Brentwood VA in California during the early 80s. From the mid-70s to mid-80s there was a strong 'patients rights' movement generated by the mental health advocate community. Although there were many facets to this movement, one of the primary elements was a re-examination of the criteria for institutionalizing patients.
The point of contention revolved around interpretations of what it meant for a patient to be able to 'take care of himself.' Prior to this the interpretation was rather strict; if a patient could not earn an income and provide shelter and food for himself (and if there were no family members able to care for him), then he would normally be institutionalized.
Begining in the late 70s, the advocacy groups began to demand a lower standard. As long as a patient could merely wash and dress himself, and could perform the mechanical tasks of shovelling food into his mouth, then every effort was made to force the institutions to release them. My wife's boss spent many months both in court and testifying before the state assembly trying to stop this lowering of standards. Unsuccessfully.
Predictably, most of the newly discharged patients were unable to take care of themselves in any meaningful sense of the word, and became the homeless people on the street. It's no coincidence that the decline in California's mental health insitution population closely matched the sharp increase of homeless (in California, at least) during the same period. In fact, for about two years, my wife literally was on a first name basis with every homeless person we ran across in the Westwood/Santa Monica area. They were all former patients who had been 'sprung' from the VA by well meaning advocate groups who then simply walked away and left these guys hanging.
Reagan was not involved in this movement, nor was he a symptom or symbolic of it. Quite the contrary. The people who 'liberated' the inmates tended to be on the opposite end of the political spectum. In fact, it was the ACLU who provided legal representation to force the VA to release these patients."
Nancy Richardson (@nanorich) on November 17, 2011, at 12:12PM – #12
Next time link to where you got a post, so there is no misunderstanding you aren't the source.
http://blogs.denverpost.com/eletters/2011/01/17/where-is-the-focus-on-mental-health-issues/11774/
A trip down the Google can get documented facts, Downtown Vibe.....which is a lot better than somebody's undocumented blog post.
http://www.sociology.org/content/vol003.004/thomas.html
"Conventional wisdom suggests that the reduction of funding for social welfare policies during the 1980s is the result of a conservative backlash against the welfare state. With such a backlash, it should be expected that changes in the policies toward involuntary commitment of the mentally ill reflect a generally conservative approach to social policy more generally. In this case, however, the complex of social forces that lead to less restrictive guidelines for involuntary commitment are not the result of conservative politics per se, but rather a coalition of fiscal conservatives, law and order Republicans, relatives of mentally ill patients, and the practitioners working with those patients. Combined with a sharp rise in homelessness during the 1980s, Ronald Reagan pursued a policy toward the treatment of mental illness that satisfied special interest groups and the demands of the business community, but failed to address the issue: the treatment of mental illness"
Bert Green (@bgfa) on November 18, 2011, at 01:04AM – #13
The reason for the change in policy towards mentally ill people is only half of the story. There was an unusual alliance of civil libertarians and conservatives who joined to change that system, but it was the conservatives, who after the changes were instituted, fought bitterly the proposed replacement system, which was to be a series of community-based centers to assist these people to live in the very communities from which they came. That conservative backlash forced the services to become concentrated in places like Skid Row. The community centers, which would have been located in every city and neighborhood, were scrapped one by one due to local NIMBY activism, supported by conservative politicians.
So we ended up with Skid Row as the place of last resort.
Don Kirk on April 16, 2012, at 02:08PM – #14
I'm involved in politics at a couple of levels. Usually, when a property owner seeks to do what a zoning prohibits, they file for either a change in zoning, or a conditional use permit; AND they are usually approved. I've seen case after case though where a potential buyer will go to the Planning and Zoning officials and ask if they bought the place, if such a change will be possible. Time and again, they are told "yes", but after they buy the place, they are turned down for the change. Unless we know what the current owners of the Cecil did, we cannot say they should not have bought the place. I also work with homeless in my city, but at the same time, I believe that the Cecil's owners should have been allowed to return the hotel to being a Tourist Hotel.