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HOUSING - For more than 15 years, Barbara Schultz, the director of housing justice at Legal Aid Foundation of Los Angeles, has been the trustee attorney of the Wiggins Settlement Agreement, a lawsuit settlement that aims to preserve existing affordable housing in Downtown L.A. But over the years, Schultz appears to have misused the power, and overstepped her authority, that comes with executing the Wiggins Settlement Agreement. Important questions must be answered by Schultz and L.A. City Hall leaders so the Wiggins Settlement Agreement stays true to its mission — and isn’t used as a weapon by Schultz to carry out a personal agenda.
First, here’s the background. The Wiggins Settlement Agreement is the result of a lawsuit that Schultz had filed against the Community Redevelopment Agency/Los Angeles (CRA/LA) and others. According to annual reports by the CRA/LA, the agreement’s “overarching goal” is to preserve existing affordable housing for low-income residents in Downtown L.A., which is critical to keep people housed and to prevent them from falling into homelessness. Since 2006, the CRA/LA has worked in conjunction with Schultz to implement the terms of the Wiggins Settlement Agreement.
But from the get-go, the CRA/LA may have handed over too much authority to Schultz. The CRA/LA was busy handling new, multi-million-dollar development projects all over L.A. CRA/LA staff may have decided to play extra nice with Schultz to keep her out of their hair so they could stay focused on major projects, giving Schultz a certain amount of latitude to make decisions about anything connected to the Wiggins Settlement Agreement. Schultz may have noticed CRA/LA’s appeasement approach and decided to run with it, pursuing a personal agenda that strayed from the agreement’s mission.
Through the settlement agreement, for example, Schultz forced the CRA/LA to create a “Job Training Trust Fund” and put a hefty $2.5 million into it. Who ended up grabbing the bulk of those millions? Legal Aid Foundation and Los Angeles Community Action Network (LACAN), a housing and homelessness advocacy organization where Schultz has been a longtime board member. (Several of Legal Aid Foundation’s board members are also associated with LACAN.)
Legal Aid Foundation hauled in a $707,000 grant from the trust fund — for a new headquarters in Downtown L.A. LACAN landed three grants totaling $1,089,808 — also for a new building. That’s a take of $1,796,808 for Legal Aid Foundation and LACAN — or 72 percent of the $2.5 million in the Job Training Trust Fund went to Legal Aid Foundation and LACAN to build new offices.
Then, in 2017, according to an annual report by the CRA/LA, Legal Aid Foundation and Schultz made a deal with Onni Group, a big-time developer. Onni owned the Havana Hotel in Downtown L.A., which was subject to the Wiggins Settlement Agreement. The developer wanted to renovate the hotel and no longer have it subjected to the rules and regulations of Wiggins. Onni got its wish — by agreeing to make four payments totaling $1 million to the Jerome Wiggins Memorial Justice Fund. Who administered the fund? Legal Aid Foundation. In addition, the deal resulted in the permanent loss of 36 affordable units at the Havana Hotel.
Recently, Schultz has taken an antagonistic approach towards AIDS Healthcare Foundation, a global HIV/AIDS medical-care nonprofit based in Los Angeles. In addition to serving more than 1.6 million patients in 45 counties, AHF has been urgently addressing L.A.’s homelessness crisis by purchasing old hotels, including the historic King Edward Hotel in Downtown L.A. (photo above), and converting them into affordable housing for lower-income and homeless residents.
In the past four years, AHF has spent more than $130 million in Los Angeles to produce and preserve more than 1,300 units of low-income and homeless housing. In addition, AHF recently broke ground for a new, 216-unit building in L.A.’s Skid Row to house low-income and homeless residents. Several of AHF’s buildings, which are managed by AHF’s housing provider division, Healthy Housing Foundation, are located in the area covered by the Wiggins Settlement Agreement.
But AHF is not a corporate developer like Onni, whose business model is to pump up profits. Instead, AHF is a nonprofit that’s addressing a humanitarian catastrophe by shelling out millions to produce and preserve affordable housing for lower-income and homeless residents. Yet Schultz has been dealing with AHF as if it’s a corporate developer.
First, Schultz said AHF couldn’t perform certain renovations at the Baltimore Hotel, one of AHF’s properties, because she believed they weren’t compliant with the Wiggins Settlement Agreement. AHF disputed that position, especially since the improvements — brand new kitchenettes for rooms that didn’t have them — wouldn’t result in the loss of affordable-housing units. The added amenity would have benefited tenants, but AHF couldn’t go through with the work because of Schultz’s push back.
Then Schultz started representing a former AHF employee, Karla Leiva. She founded a so-called tenant rights organization known as Stand for Housing Justice, which appears to be a front group to attack and shake down AHF.
Leiva was fired by AHF for falsifying a disability claim and violating the organization’s employee policies. Leiva appears to be carrying out a personal vendetta against AHF, and Schultz is empowering her. Schultz wants AHF to give Leiva access to the organization’s hotels so she can talk with tenants in an apparent money-making scheme to drum up phony complaints and then attempt to force AHF, which generates healthy revenues to help vulnerable people around the globe, into a lucrative payment settlement.
It’s a scenario that Schultz had carried out with LACAN. LACAN would go into residential hotels in Downtown L.A., Schultz would file a lawsuit, and LACAN eventually received money from a legal settlement. In 2006, for example, Shultz settled a lawsuit against a residential hotel owner that brought in a payment of $20,205 for LACAN.
Schultz has been operating this way — from taking $1,796,808 from the Job Training Trust Fund to build new headquarters for Legal Aid Foundation and LACAN to grabbing $1 million for the Jerome Wiggins Memorial Justice Fund administered by the Legal Aid Foundation to initiating an adversarial relationship with AHF — with little to no push back from city agencies.
To make matters worse, with the abolishment of redevelopment agencies through state legislation, it’s unclear which city agency in L.A. is now overseeing the Wiggins Settlement Agreement and Schultz — and reining her in when necessary.
Which raises the Top 5 Burning Questions that L.A. city officials and Barbara Schultz and Legal Aid Foundation must answer. The public has a right, and a need, to know if the Wiggins Settlement Agreement’s core mission — to preserve affordable housing — has been implemented appropriately and without the misuse of power. To wit:
- Which city agency, or agencies, in L.A. is overseeing the ongoing implementation of the Wiggins Settlement Agreement? That includes publishing annual reports about the progress of the Wiggins Settlement Agreement that the CRA/LA once wrote, which ensured transparency and kept the public and elected officials informed.
- What steps will L.A. city agencies take to ensure that Barbara Schultz and Legal Aid Foundation don’t overstep their authority on the implementation of the Wiggins Settlement Agreement?
- Have city agencies looked into the handling of the Jerome Wiggins Memorial Justice Fund, which received $1 million from Onni Group, a major developer in L.A.?
- Will Barbara Schultz and Legal Aid Foundation be transparent and provide details about the administration of the Jerome Wiggins Memorial Justice Fund? Including how much money is in the fund; exactly who receives money from the fund; and who else has made payments to that fund, how much were those payments, and how were those payments spent?
- Lastly, will L.A. officials carry out reforms for how the Wiggins Settlement Agreement is implemented so it’s not used as a weapon against nonprofits such as AHF?
L.A.’s homelessness crisis is, in fact, a humanitarian catastrophe. Personal agendas and vendettas should not get in the way of the urgent work that’s needed to save people’s lives.
(This column was provided by Housing is a Human Right, the housing advocacy division of AIDS Healthcare Foundation.)
