Appeals Court to Old Spaghetti Factory Developer: You’re Out!

CITY AND CIM SLAPPED DOWN--A three-judge California Court of Appeal panel has ruled unanimously against the City of Los Angeles and CIM Group, one of the city’s biggest real estate developers, finding the city illegally allowed CIM to build a 22-story tower on Sunset Boulevard in Hollywood. 

The Court of Appeal affirmed the trial court’s ruling that ordered the city to void all permits it had illegally granted to CIM, including but not limited to demolition and building permits and certificates of occupancy, and ordering the city to prepare and process subsequent environmental reviews. 

The ruling is another setback for CIM’s efforts to dodge responsibility for its illegal demolition of the 1924 façade of the Old Spaghetti Factory, said Robert P. Silverstein, attorney for plaintiff La Mirada Avenue Neighborhood Association of Hollywood. The decision affirms trial court Judge James C. Chalfant’s Oct. 2014 ruling in favor of La Mirada’s complaint. 

As a condition of developing the property, CIM was required to preserve the unique, columned façade of the Old Spaghetti Factory building, part of Hollywood’s streetscape since the 1920’s, and incorporate it into the new project.  After getting all of its approvals, CIM then violated this core condition.  

“Part of what makes this case so troubling is that Mayor Eric Garcetti and current Hollywood Councilman Mitch O’Farrell never lifted a finger or raised a cry to stop CIM,” added Silverstein, noting it was Garcetti – as Hollywood’s previous councilman – who touted preservation of the historic façade as a key project benefit. 

“Garcetti and O’Farrell knew the developer’s midnight demolition of the façade on Feb. 21, 2012 was illegal, and they knew that all the subsequent construction was illegal,” said Silverstein. “But they did nothing.” 

“Beyond the loss of our history and waste of millions of taxpayer dollars, what is so infuriating about this case is the City Hall-Developer culture of rule breaking,” Silverstein said.   

The city allowed CIM to construct significantly less parking for the project than the code required and to save millions of dollars in construction costs because the developer claimed preserving the historic façade was a hardship that made underground excavation difficult. 

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As the Court of Appeal explained, the developer “justified the parking variances by relying in part on the requirement to retain the OSF façade.  It asserted that the retention of the façade prevented it from developing a subterranean parking structure under that area of the project, thereby limiting the quantity and size of parking spaces the project could accommodate.”  

CIM also received a whopping $9.6 million in taxpayer subsidies for the project in part because CIM agreed to save the façade.  It still has that money.  “It’s jaw-dropping how City Hall not only allows special interests to violate the law, but even rewards them with millions of dollars that should be going to police, fire and other public services,” Silverstein said. 

With La Mirada’s lawsuit only two weeks from trial, the city granted CIM temporary certificates of occupancy to lease units.  At its peak, only about 65 of the 305 units were leased. 

Later, CIM leased out an additional four floors of the building to an AirBnb operation run by Ginosi USA Corporation, for $160,000-a-month. “CIM doubly-victimized the original tenants by tricking them to move into the building in the first place and then by subjecting them to an AirBnb operation that generated complaints about prostitution, drug-dealing and other nuisances,” as the tenants testified before the city’s Board of Building & Safety Commissioners, said Silverstein.

“CIM tried to use the tenants as shields against the consequences of its own illegal actions,” said Silverstein.   

According to one tenant, only about 10 of the 305 units are still occupied by the original tenant group.  Court papers filed in May 2015 show that most of the original tenants left after securing a settlement from CIM, Silverstein explained.   

 

(John Schwada is a former investigative reporter for Fox 11 in Los Angeles, the LA Times and the late Herald Examiner. He is a contributor to CityWatch. He owns MediaFix Associates. )

 

-cw

 

CityWatch 

Vol 13 Issue 74 

Pub: Sep 11, 2015