The Brief

As COVID-19 tore through California, Jennifer Hark Dietz had a decision to make. The state was making perhaps its biggest push ever to get people off the street, offering up billions of dollars for cities and organizations like hers to turn old motels into new homes.

It was risky. The Homekey program came with up-front cash and a promise to move fast and cut red tape. But it also meant taking on old buildings with little vetting, which had the potential to put a developer in a deep financial hole.

At first the gamble paid off. In just a few months, Hark Dietz’s nonprofit, People Assisting The Homeless, was housing people in the old 40-room Hollywood Orchid Suites in Los Angeles. She called it a “shining light” for what seemed possible with the radical new program.

But then came a pale pink Travelodge in the suburb of Gardena. The city of LA had already bought the motel for $9 million, and Hark Dietz said her team didn’t have a chance to vet or tour the site. They’d only seen online photos and basic inspection reports before they took it over in December 2020. A city consultant estimated that it would take about $50,000 to start moving people into the roadside motel.

“Of course,” she said, “we know now that’s not the case.”

More than five years and nearly $3 million later, the motel — which turned out to need all new windows, plumbing and electrical, among other issues — was still vacant earlier this year. There was plywood over some of the windows, and someone graffitied a ghost on one side.

The boom-or-bust results in Los Angeles underscore how little is known publicly about a generational project with a high price tag and even higher stakes. Some projects were huge successes. Others were total failures. Dozens remain stuck in limbo. CalMatters found there’s been little public accountability for any of it.

Launched by Gov. Gavin Newsom in the summer of 2020, Homekey awarded more than $3.8 billion to local governments to convert motels and other buildings into homeless housing, thrusting many local governments into a new role running multimillion-dollar real estate projects. Cities and counties could hire outside contractors to help or do the work themselves, skipping some of the usual building process for the sake of speed.

It was unlike anything the state had ever done, largely because it sprang from desperation. Homekey launched during peak COVID, five months before vaccines were available, and after cities had already moved thousands of unhoused people into motels through Project Roomkey, another Newsom program. But those rooms were temporary, and officials were scrambling to prevent a mass exodus back to the streets.

With Homekey, local officials across the state bought and gutted Motel 6s, Best Westerns and roadside inns. They got more creative as the program evolved: Tiny homes sprouted in Silicon Valley, and Santa Cruz retrofitted an old dentist’s office. In Southern California, housing took shape in a former Tri-Delt sorority house, an earthquake-stricken church and a hostel that once served as a refuge for Japanese Americans returning from World War II internment.

Live Oak Apartments in Ukiah on Feb. 26. Live Oak offers its residents access to common spaces, such as a community garden and meeting rooms for visitors.

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Manuel Orbegozo

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CalMatters

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“What we’re doing here today is multiples of what any state in American history has committed to address this crisis of homelessness,” Newsom said at a 2021 press conference announcing a major Homekey expansion.

The program came with little built-in oversight. Earlier this year, state lawmakers killed a bill to audit Homekey. No state agency has publicly analyzed the program in detail to find out what’s working and what’s not.

The challenge now: A new and more complex phase is already underway with up to $2 billion from the voter-approved Prop. 1 mental health bond. But no one has publicly accounted for how many of the program’s original projects stalled out and how many succeeded.

To find out what happened, CalMatters filed more than 100 public records requests with cities and counties that were awarded Homekey funds. We asked for key details on 250 projects announced through the end of 2024, covering all but a handful of projects for which less public data was available. Those state and local records — along with dozens of visits to Homekey sites, plus interviews with people who built and lived in them — create a first-of-its-kind window into how it all played out.

Among our findings:

• Homekey made producing housing simpler. But it came at a cost. Homekey provided billions of dollars in housing funding up front, allowing some developers to sidestep the usual webs of investors and lenders and finish much faster than normal. But fewer funders also means less oversight. With rushed vetting, some projects got bogged down in delays, blown budgets or worse. At least one Homekey developer was forced out of business by an unwieldy project. Another is facing fraud charges.

• When Homekey worked, those involved stress that it really worked. Nearly 13,500 people now live at Homekey sites, according to the state Housing Department. For small and rural communities, such as Glenn County, the program provided crucial cash for their first-ever homeless housing. Officials from Mendocino County to Ventura say they were able to stabilize people longer term by adding stronger ties to public services and extra investment in resources such as counseling.

• Those successes magnify the opportunities squandered. Projects involving about 3,000 homes — roughly 1 in 5 promised by the program — weren’t finished as of the end of last year. Another 2,000 units have people living in them on a temporary basis but haven’t been converted into permanent housing, the program’s main goal. In 10 instances involving 500 more units, the state publicized grants that later were canceled or that never materialized because local officials or developers backed out.

• A lack of transparency raises familiar questions about the program’s future. State officials stress that they have extended deadlines and improved vetting for the program’s latest bond-funded iteration, Homekey+. But they refused to publicly provide details about that vetting process. And as homeless services providers have long warned, there remains no guaranteed state funding to keep existing or planned Homekey projects going. 

Yes, many Homekey projects opened late or over budget. But, officials emphasize, they still opened.

Newsom said he considers the program a “phenomenal success.”

“We’re talking about hundreds and hundreds of projects all across the state of California that they’re trying to manage and organize and operate,” he said when CalMatters asked about it at a recent press conference. “And I imagine each one of them brings its own opportunities and own challenges as we move forward and implement at a scale we’ve never implemented in the state’s history.”

Taryn Sandulyak knows that better than most. The Bay Area developer thought Homekey might be her big break, but it ultimately put her out of business. She sees a fundamental mismatch at the heart of the program. It wanted high quality, high speed and low budgets.

“You can only have two of those,” Sandulyak said. “You really can’t ever have three. That’s the issue with Homekey, is they give you not quite enough money to do it, and they want you to do it really, really fast and really, really well.”

The chasm between Homekey successes and failures isn’t a simple, one-size-fits-all story. But it does provide an outline of what it will take to make good on California’s big effort to finally make a dent in its homelessness crisis.

‘Failing was not an option’

On the west side of Ventura, just as the surf town creeps up into the hills toward Ojai, sits what used to be one of the city’s worst nuisance properties: a nearly 100-year-old apartment building once known, in a nod to local drug slang, as the “Booyah Mansion.”

The city’s housing authority, Ventura Housing, cobbled together enough money in 2019 to buy the building. But it didn’t have enough cash to fix all 300-something code violations at the crime-ridden property — until Homekey came along.

“We had some scary stuff go on here,” said Karen Flock, Ventura Housing’s real estate development director. “This property failing was not an option.”

Now known as El Portal, the 29-unit apartment complex today serves as a lifeline for a mother with 9-year-old-twins, one severely autistic. It’s a refuge for a woman who lived for six years in a city-funded Tuff Shed. Another neighbor still keeps his shopping cart from the street in his apartment as a reminder of what he’s been through, and why he can never go back.

Cynthia Gomez, 60, at her home in El Portal apartments in Ventura on Feb. 26. Gomez, who was formerly homeless, now lives in a studio apartment.

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Julie Leopo-Bermudez

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for CalMatters

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Ventura and other cities and counties that were able to pull off Homekey projects relatively on time and on budget credit a variety of factors for their success. Some grantees provided services themselves rather than contracting them out, better integrating public resources. Others raised extra money for on-site social services or worked closely with first responders to head off concerns about crime and stabilize residents.

Jeffrey Lambert, CEO of Ventura Housing, said the crucial thing was realizing early that Homekey money alone isn’t nearly enough. Instead, the city combined it with other public and private funding, staffing and resources. Projects that failed or got stuck in limbo often fell apart after they ran out of money.

“Homekey works,” Lambert said, “because of all the stuff added on top of it.”

For housing researchers such as Ryan Finnigan, deputy director of research at UC Berkeley’s Terner Center for Housing Innovation, the real strength of Homekey was not the building minutiae. It was the attempt to challenge the state’s status quo of painstakingly slow housing development while people keep pouring onto the streets.

“If we’re not willing to try a new approach,” he said, “then we’re not going to learn as much about how we can be more creative, how we can work with more urgency than the current systems.”

As fraught and full of delays as the construction process can be, getting a project completed is often just the first hurdle for Homekey. Once a project opens its doors, it typically needs significant resources in addition to the state funding. Mendocino County credits much of its project’s success to extra services for residents, which aren’t paid for by the state grant, said Megan Van Sant, a senior program manager for the county who oversees the Homekey site.

At the former Best Western hotel now known as Live Oak Apartments, there’s a therapist on retainer for tenants, plus a dog trainer paid to work with problem pets. Both try to help residents resolve any issues that come up before they escalate into grounds for an eviction.

To provide those extras, the county runs the project itself, rather than contracting with an outside service provider as many Homekey projects do. Two county staffers work full-time inside the building, using their connections to do everything from enrolling residents in Medi-Cal to pairing them with mental health services.

All that is expensive.

“I think the state should continue to support these projects,” Van Sant said. “The state asked communities to do these projects, and they cost more to do well than what you can earn in rent.”

Resident Sherry Collins inside her room at Live Oak Apartments in Ukiah on Feb. 26. Photo by Manuel Orbegozo for CalMatters

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Manuel Orbegozo

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for CalMatters

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Sherry Collins, 66, moved into the project three years ago, at a time when she was terrified of what would come next. Her husband had died, her health was failing, she couldn’t work, and she couldn’t afford to keep living in her cabin in the tiny coastal city of Fort Bragg.

Now she feels like she’s home. Collins decorated the window of her room with little red and pink hearts and adopted a kitten with extra toes, whom she named Mr. Handsome. She continues to deal with health challenges after losing a leg to diabetes about a year ago. The building has only four units accessible for people with disabilities, making it a challenge to accommodate everyone, but one recently opened up for Collins, where she can more comfortably shower.

“They have been awesome to me,” Collins said. “They’re more like family.”

Never-ending projects

For Sandulyak, Homekey was too good to refuse.

Five years earlier she had co-founded Firm Foundation Community Housing, which helped Bay Area churches turn their parking lots and backyards into tiny homes for homeless residents.

Homekey was a once-in-a-lifetime opportunity to dramatically scale up that vision by using millions in state funds to house dozens of people in Vallejo. It would be the small nonprofit’s most ambitious project by far.

Sandulyak never suspected that by applying for Homekey, she had doomed her organization.

Firm Foundation was awarded $12 million in 2022 to build a 47-unit modular apartment building called the Broadway Project. Over the next four years, nearly everything that could go wrong did.

Some problems had nothing to do with Homekey. The general contractor went bankrupt, and the nonprofit tapped to operate the facility squabbled with the city, leaving the project in limbo for a year. The state wouldn’t let Firm Foundation pick a new partner to run the housing, which Sandulyak says further delayed the opening.

Other problems were directly related to Homekey. By design, the program forced cities to take a much more hands-on role with housing development than they were used to. Vallejo wasn’t prepared for that responsibility. It fumbled its attempt to get a key federal grant and failed to set up important safeguards that protect affordable housing projects from financial risks.

Soon, Sandulyak had $2 million in bills and no way to pay them. With construction three-quarters done, the project ran out of money. Firm Foundation was forced to stop work.

It became such a nightmare that the Vallejo City Council asked for an independent audit to find out what went wrong and why. The audit blamed both the city and Firm Foundation for allowing the project to run out of money before it was finished. Firm Foundation vastly underestimated the project’s cost, and the city bungled efforts to secure additional funds.

In some ways, the audit found, the very nature of Homekey helped set the project up for failure.

One big problem was the timeline. Homekey required projects to finish construction within one year of their award, and to move people in 90 days after that. To meet those deadlines, Firm Foundation created budgets before the architectural drawings were even done, contributing to serious cost underestimates, the audit found.

The audit also found a lack of oversight at the Broadway Project, which it said is typical of Homekey projects. Normally, a single affordable housing project uses funding from multiple sources, including the city, the county, the state, federal funds, tax credits, private banks and more. The more funders and investors, the more eyes watching and holding the developer accountable. With Homekey, the city applying for the grant typically takes on all those risks by itself, the audit found.

The official ribbon cutting at the grand opening of Broadway Village in Vallejo on March 5.

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Nathan Weyland

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for CalMatters

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On a recent Thursday morning, Sandulyak gathered with city officials and her construction partners in front of a crowd to celebrate what they, at times, had thought would be impossible: the Broadway Project was finally open. Behind them rose the terracotta-colored wall of the sleek, new, modular apartment building. A red ribbon waited in front of them.

On the count of three, Sandulyak helped Vallejo’s assistant city manager snip the ribbon. The crowd cheered.

The project ended up coming in two and a half years late and 70% over budget. Despite those setbacks, the audit found it still cost less per unit and was built more quickly than the region’s average affordable housing project.

At right, Firm Foundation Community Housing Executive Director Taryn Sandulyak at the grand opening of Broadway Village in Vallejo on March 5. Photo by Nathan Weyland for CalMatters But it cost Sandulyak everything. She laid off three of her four employees, and she plans to lay off the last one and dissolve her organization. The nonprofit is still on the hook for more than $1 million in unpaid bills related to the project.

Despite her pride in the finished building, Sandulyak wonders how much more housing her nonprofit could have built — if only she’d never applied for Homekey.

Still, 52 people now have somewhere to call home.

“I’m unshaken in my belief that that is worth it,” Sandulyak said.

One of those people is 62-year-old Terrence White, a former refinery worker who was forced into early retirement by an injury and can’t afford market-rate rent. Now, he pays $294 a month and finally has his own place.

“It feels wonderful,” he said.

The Homekey gold rush

During the frantic first two years of Homekey, when many experienced affordable housing developers were sitting out the untested new program, an LA company called Shangri-La Industries stepped in to help fill the void. It scored nearly $115 million in contracts to build 500 homes for homeless Californians in cities from Salinas to San Bernardino.

But a federal indictment and a separate civil lawsuit allege that millions in state funds instead went to fund a lavish lifestyle for the company’s chief financial officer.

Among the charges attributed in court records to Shangri-La’s former CFO, Cody Holmes: $46,000 in monthly rent for a Beverly Hills house with a pool. Designer gifts for a girlfriend, including a $127,000 diamond necklace and a $111,000 crocodile Birkin bag. A $5,000-a-month lease on a Ferrari Portofino. Another $53,000 for Coachella passes, and $44,000 for flights on private jets.

All this while many of the desperately needed motel rooms sat empty.

Homekey set a low bar for contractors to qualify: They had to have worked on at least two affordable housing projects that included at least one homeless tenant.

Shangri-La easily cleared that hurdle. But had any state or local officials done more digging, they might have seen warning signs.

Shangri-La’s construction business was sued twice for breach of contract in 2018 and 2019, court records show, after two firms alleged that it failed to pay them. The company was also a contractor on a troubled LA veteran housing project, where records first reported by KCRW show Shangri-La partners sold the property to themselves, increasing the project’s budget by $8 million.

With Homekey, federal prosecutors allege that Holmes “knowingly submitted fake bank records” to the state Housing Department to boost Shangri-La’s credentials — financial claims that state officials apparently failed to verify with the banks. Holmes has pleaded not guilty, and an attorney representing him declined to comment.

As the company took on the Homekey projects, property records show that entities connected to Shangri-La or its partners paid around $13 million for actress Milla Jovovich’s Beverly Hills mansion, adding to a portfolio that included a $7 million oceanfront home in Long Beach purchased two years earlier.

In a separate civil fraud case, state prosecutors allege in court records that Shangri-La went behind the state’s back and took out undisclosed loans on the Homekey buildings, giving up control of the sites and violating their contract with the state. That became a major problem when the company defaulted on the loans.

For several of the properties, no one had filed crucial paperwork to ensure that they remained affordable housing. After the buildings ended up in foreclosure, some were scooped up by companies with no commitment to homeless housing.

Homekey contracts tasked local officials with vetting projects and reviewing contractors’ organizational documents, budgets and other key details. But records show state officials also reviewed Shangri-La’s financials, and once they paid out the Homekey money, they failed to verify that paperwork was completed to restrict the buildings to affordable housing.

The state Housing Department and several local governments that hired Shangri-La for Homekey projects declined to comment, citing ongoing litigation.

Andy Meyers, the former CEO of Shangri-La, acknowledged in an interview that he had “a lack of control” over his company. He has sued Holmes for fraud. He also blamed the local and state officials.

“My CFO had a lot of wrongdoing,” he said. “But it was a confluence of events that caused each project to go bad.”

Meyers said officials’ failure to file the proper affordable housing restrictions, which were also required by his lender, triggered a financial disaster that led his company to default on some of the properties. On two projects that Shangri-La did open in San Bernardino and Salinas, he estimated that the company incurred around $11 million in unexpected costs.

“We have spent so much money following their guidelines and following their timetables,” he said, “and they never followed their guidelines or timetables.”

Monterey County Supervisor Chris Lopez rallied support for a Homekey project in his hometown of King City. He thought Shangri-La made sense for four projects in the county, since it had already opened one Homekey site in Salinas.

But it didn’t take long for constituents to start asking why rooms were sitting empty behind chain-link fences.

“The longer it went on without seeing any movement, the flag started to get raised,” Lopez said. “I was starting to hear less and less communication and more sort of finger pointing.”

Local officials like Lopez had to start from scratch, raising millions more dollars to revive the projects as encampments swelled. It took 10 different deals totaling $16 million to open the King City project in March, three years behind schedule.

The full trail of Shangri-La’s deceit stretches from the state’s agricultural heartland to the edge of the Southern California desert. A $27 million Thousand Oaks hotel project sits abandoned today, robbing a region of 77 homes while it had a decade-long housing waitlist. Another $16 million project scrapped in Salinas would have provided 58 homes. Officials still plan to salvage 200 homes in other parts of Monterey County. The only two Shangri-La projects that stayed open during the legal battle, two motels in Southern California, were full of people who were plunged into messy foreclosure disputes.

The Quality Inn & Suites building, a former Shangri-La project, stands vacant in Thousand Oaks on Feb. 26.

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Julie Leopo-Bermudez

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for CalMatters

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Carrie Harmon, San Bernardino County’s director of community development and housing, said in an email that “the county entered into this effort in good faith, relying on representations that later proved to be inaccurate.”

Even some of those whose Homekey projects went well say they’re not surprised that things went sideways. In Mendocino County, Van Sant said the state’s oversight was limited to quarterly progress reports. Once the money was spent, the state stopped asking for any information at all.

“They gave us a bunch of money, made us do some paperwork, and then they’re out of here,” Van Sant said.

For Colleen Robinson, public officials’ failure to see the red flags with Shangri-La was life-changing.

Robinson, now 62, survived years on the street after losing her job and fleeing a bad relationship. The All Star Lodge in downtown San Bernardino was her chance to start over. Shangri-La did manage to renovate and open that project in late 2022.

Two years later, the bank foreclosed. Because no one had put the affordable housing restriction on the property, the new owner told Robinson and other tenants that it was going to quadruple the rent. She said the new owner neglected the building; weeds and stray cats reclaimed the parking lot, police sirens blared, and neighbors died with little explanation.

“This would give hell a run for its money,” Robinson said.

Harmon said the county was still trying to buy the building and figure something out, but Robinson didn’t wait around to see how the saga ended. On a Thursday in February, she packed up and boarded a Greyhound bus for Iowa, where one of her children lives.

Homeless veterans still waiting

An unfinished motel conversion in the Encino neighborhood of Los Angeles on Jan. 27. The project is expected to finish more than a year after the original deadline, city records show.

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Lauren Hepler

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for CalMatters

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Some Homekey projects still haven’t opened.

Santa Cruz County has three badly delayed Homekey projects, one of which will be more than four years late when it is slated to finally be finished at the end of next year. For that project, the county obtained more than $6 million to convert rustic vacation cabins under a grove of redwood trees into housing for homeless veterans. The state initially set a completion deadline of 2023, but the project ran out of money before it crossed the finish line, forcing construction to stop.

There were many reasons why, but one stands out: underestimating the cost, said Robert Ratner, director of Santa Cruz County’s Housing for Health division.

The developers had never undertaken a project this large, and that inexperience contributed to the budgeting error, Ratner said. But so did the design of Homekey, which capped what the state was willing to pay per unit at about half what it takes to build affordable housing in some parts of California.

The idea was that projects would be cheaper because they were converting existing buildings, while also cutting out extra layers of bureaucracy that add time and expense. That led developers to low-ball budgets, which came back to bite them when the savings weren’t as great as anticipated, Ratner said.

Once the budgeting error was made, neither the state nor the county caught it, Ratner said. The county assumed that the state would scrutinize all Homekey applications and throw out any that didn’t seem viable, Ratner said. But it appears that in reality, the state was relying on the counties to do that vetting.

Santa Cruz County had little experience analyzing whether a construction project was adequately budgeted. Typically, the county relies on other funders, such as construction lenders and tax credit investors, to do that job. But those investors weren’t present here.

When asked whether he and his colleagues had done their due diligence to make sure the projects were realistic, Ratner was straightforward.

“I would say no,” Ratner said. “I can’t say yes with a straight face at this juncture.”

Other projects just never happened.

A $14 million Homekey award was supposed to help breathe new life into the Hotel Travelers, a rundown, century-old building in Oakland’s Chinatown, as housing for people returning from incarceration. But once the developer got a look at the building, that plan fell apart. An inspection revealed such severe issues with the building’s construction that the developer determined it would be “morally untenable” to proceed. Oakland returned the grant.

In total, CalMatters found at least 10 cases where a Homekey award was announced, only for the grantee to later withdraw their application, return or redirect the money, or have the state claw it back. Some instances had more public explanation than others.

City officials in Fresno voted down their own project. Long Beach was unable to come up with a suitable location for $2 million worth of brand-new tiny homes left sitting in storage. Projects in Marin and Mariposa counties evaporated when real estate deals fell through, and the state rescinded its grant for a project in Salinas after a nonprofit partner pulled out.

Newsom's legacy and a financial cliff

Despite the vastly different outcomes at Homekey projects around the state, there’s no plan for a comprehensive audit to see what worked and what didn’t — a decision that raises the question of whether the state has done enough to grapple with Homekey as it forges ahead with the new version of the program, Homekey+.

Earlier this year, lawmakers nixed a public accounting proposed by Assemblymember Leticia Castillo, a Republican from Corona.

“While the program has expanded housing options, critical questions remain about its long-term impact and cost-effectiveness,” a summary of Assembly Bill 505 said. “It is unclear how many Homekey-funded units remain occupied after one year, how many individuals successfully transition to stable, long-term housing, and whether Homekey’s cost per unit is competitive.”

The bill was never publicly debated. It died in January.

The state did do one audit of multiple homeless services programs in 2024. It didn’t get into Homekey delays or what actually happened to people living in the buildings, but it analyzed the costs of eight projects. Based on that small sample, the auditor concluded that Homekey was “likely” cost-effective, with an average cost of $144,000 per unit, compared to the hundreds of thousands of dollars more it can cost for new construction in California.

The challenge is that when Homekey plans fell short of ambitions at job sites around the state, the consequences were often murky. In extreme cases, where cities acknowledged that projects failed to materialize, the state has clawed back grants. But usually, the main penalty for blown deadlines or other missteps is that the state may hold it against a local government or developer the next time it applies for funding — a dynamic that provides no public transparency.

Gary Wish stands outside El Portal apartments in Ventura on Feb. 26, 2026. Photo by Julie Leopo-Bermudez for CalMatters What happens next will be left up to a new state housing agency set to be launched this summer, the California Housing and Homelessness Agency. That effort is expected to include a new development committee to “provide centralized, coordinated guidance to state housing policy and funding decisions.”

For now, the state’s Housing Department maintains that it “monitors each project closely” if issues arise or deadline extensions are granted. Even with widespread delays, the agency maintains that “Homekey has helped build more and faster.”

The state said it is learning as it gives out the new Homekey+ funding. After seeing so many projects miss the one-year deadline, the state doubled the timeline for new construction to two years. Homekey+ projects that serve veterans now can propose bigger budgets for new builds, potentially addressing the issue of under-budgeted projects running out of money.

Officials also said they’re scrutinizing applications more closely now, including looking carefully at whether applicants are budgeting enough funds for their proposed projects, said California Health and Human Services Secretary Kim Johnson.

“We are improving our own vetting process, if you will,” she said during a recent news conference, “to ensure these projects are successful in delivering.”

The state’s housing department maintains that Homekey accomplished a major feat: building thousands of units despite a global pandemic, labor shortages, supply chain issues and other challenges.

“It is tremendously rewarding to see so many vulnerable Californians housed so quickly, and to have voters expand the successful Homekey model to house and support veterans and others facing behavioral health challenges,” Assistant Deputy Director Cari Scott said in a statement.

As the state’s housing policies shift, there’s one big question left for people like Van Sant in Mendocino: Will there be enough money to keep Homekey projects running?

Most of the projects have a pay-as-you-go model, versus standard 10- or 15-year affordable housing financing — a calculation that leaves a financial cliff looming for thousands of Homekey homes.

“If [Homekey] is going to be a long-term, permanent, successful program,” Van Sant said, “I think the state’s going to have to find a way to find some ongoing funding for it.”

Data reporters Erica Yee and Kate Li contributed to this story.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.

Federal prosecutors will pursue fewer charges in their second attempt to convict a man accused of starting the deadly 2025 wildfire that became the most destructive in Los Angeles’ history.

A jury deadlocked in June over whether to convict Jonathan Rinderknecht of intentionally sparking the fire that killed 12 people as it incinerated much of the Pacific Palisades and other neighborhoods in Malibu. Ten out of 12 jurors wanted to acquit him on all three felony charges, leading the judge to declare a mistrial. Federal prosecutors vowed to try again, and a second trial is set to start in the fall.

In a new indictment filed Thursday, prosecutors reduced their case against Rinderknecht to two charges and narrowed their scope.

Prosecutors allege that Rinderknecht used a barbecue lighter on Jan. 1, 2025, to spark a fire that burned undetected deep in root systems before flaring back up Jan. 7 to become the Palisades fire, which destroyed more than 6,800 buildings.

All three charges in the first trial blamed Rinderknecht for setting both the Jan. 1 fire and the Palisades Fire. In the new indictment, only one charge references both fires. The other only focuses on the destruction caused by the first fire.

Rinderknecht’s attorney and a spokesperson for the U.S. attorney’s office declined to comment on the new indictment. U.S. District Judge Anne Hwang is holding a status conference for an arraignment on Wednesday.

Throughout the first trial, prosecutors argued that Rinderknecht was the only person in the area when the Jan. 1 fire began and presented a digital trail seeking to show he was motivated by a desire to take revenge on society over rampant economic inequality. They also presented hours of recorded interviews with Rinderknecht in which he offered inconsistent recollections about his movements that night.

Rinderknecht’s attorneys argued that prosecutors lacked direct evidence showing that he started the fire and that they failed to consider fireworks as a potential cause of the first fire.

Saturday marks one year since former Orange County Supervisor Andrew Do started his prison term, after pleading guilty to taking bribes to award tax dollars to people who diverted $7.9 million that was supposed to feed needy seniors during the pandemic.

About $4 million has been recovered so far as a result of the criminal probe, which was prompted by an LAist investigation.

What’s happened since Do went to federal lockup? How much money has been recouped for taxpayers? And will he and his family pay back the bribe money? Here’s what we know.

How much longer will Andrew Do be in prison? 

Do was sentenced to five years in federal prison, which he has been serving at United States Penitentiary, Tucson since Aug. 15 of last year.

His original release date was set for four and a quarter years later, in November 2029. Federal prisoners serve 85% of their sentence if they maintain good behavior, under a nationwide law.

In the year since he started his sentence, Do’s prison term has been shortened by an additional five months, with a new release date of mid-June 2029, according to the federal prison system’s website. Federal law allows many prisoners to further reduce their prison time by completing various classes, trainings and programs.

A spokesperson for the prison system declined to answer specific questions about Do’s time at the facility, saying, “We cannot comment on the conditions of confinement of any individual.”

How much money has been recovered?

The amount of taxpayer money recovered so far is a bit less than half of the $7.9 million Do admitted was diverted from tax dollars he awarded to a newly formed group that was supposed to feed needy seniors during the pandemic.

The county alleges even more — at least $13.4 million — was lost due to the scheme, and that much of it was “plundered” into multiple home purchases in Tustin and elsewhere by various alleged co-conspirators.

Of the $3.7 million recovered and returned to the county, the vast majority was from the main nonprofit and business accused of bribing Do. County supervisors are deferring to Do’s successor, Supervisor Janet Nguyen, to recommend how to spend the money.

More than a decade ago, Nguyen was Do’s mentor and boss when she was supervisor the first time and Do was her chief of staff. She helped him win election to her supervisor seat, before the two had a bitter falling out by 2016. The animosity grew so intense that in 2018 the county Republican Party’s then-chair emailed Do, a fellow Republican, to tell him to immediately stop publicly attacking Nguyen, another Republican, as she ran for reelection to the state Senate.

So far, Nguyen’s gotten approval from her fellow county supervisors to allocate $500,000 of the recovered funds to compensate residents affected by multiday evacuations over a Garden Grove chemical tank that was at risk of exploding. Nguyen has said she wants the chemical tank company to reimburse the county for it.

The county is trying to get back more of the stolen tax dollars from the scheme through an ongoing civil lawsuit against Do, his youngest daughter Rhiannon Do and others alleged to have been involved. The trial is set for late 2027.

What’s happened to Andrew Do’s alleged co-conspirators? 

Federal prosecutors have an ongoing criminal case against two of Andrew Do’s alleged co-conspirators: Peter Pham — who led the nonprofit Viet America Society that handled most of the meal money — and Thanh Huong Nguyen, who led the nonprofit Hand to Hand Relief Organization that also handled meal money directed by the former supervisor.

Federal authorities say Peter Pham remains a fugitive, after flying to Taipei in December 2024, a few months after authorities executed a search warrant at his home.

Following several postponements, Nguyen’s trial is scheduled to start in February.

If she’s convicted, federal prosecutors plan to seek restitution payments, according to Ciaran McEvoy, the U.S. Attorney’s Office spokesperson.

What about Andrew Do’s family?

During the first part of Andrew Do’s scheme, his wife, Cheri Pham was the supervising judge over Orange County’s largest criminal courts, before being promoted to the number-two judge position at the county Superior Court.

As assistant presiding judge, she was on track to become the presiding judge, but in mid-2024 decided not to run amid the controversy swirling around her husband. She now oversees divorce and domestic violence cases in Orange County’s family court, where she started her judicial career. She has not been charged with any wrongdoing.

The Orange County District Attorney’s Office hired Rhiannon Do as an intern in early 2024 after LAist reported that her father routed millions in unaccounted-for dollars to an organization she was listed as helping lead. The internship ended about three months later. Six months later, the DA’s office and federal prosecutors agreed to a diversion agreement that avoided charges against Rhiannon Do, in exchange for her admitting to mortgage fraud and giving up her ownership of the Tustin home that was purchased as a bribe to her father.

Last year, Rhiannon Do graduated from law school and passed the bar exam that’s required to become an attorney in California. She is not currently listed as an attorney on the state bar’s website. To become an attorney, people must also pass a moral character review that looks, among other things, at any past fraud accusations and cases involving the applicant. That review is confidential.

Ilene Do, Andrew Do’s oldest daughter, previously worked as a customer engagement coordinator at Moulton Niguel Water District and left sometime before late 2024, the water district previously told LAist.

Kate Corrigan, an attorney for Cheri Pham, said she and Cheri Pham do not have any comment. Andrew Do, Rhiannon Do and Ilene Do did not respond to requests for comment from LAist through their attorneys.

Other problems found with Andrew Do’s direction of tax dollars? 

In the wake of the Andrew Do scandal, his former colleagues on the county Board of Supervisors commissioned a series of forensic audit reports by an outside firm into the broader picture of county contract spending during the pandemic.

The first phase, released this March, found Andrew Do and his top aide had a longstanding pattern of misspending public money far beyond the focus of the criminal case that landed the former supervisor in prison.

The audit found Andrew Do and his chief of staff at the time, Chris Wangsaporn, undermined procedures meant to prevent abuse of county money, while using their influence to steer taxpayer contracts to friends, family and businesses — often with little information about the services being provided. Those contractors would then donate to his election campaigns “shortly after,” auditors found.

Among its many findings, the first report found Andrew Do routed hundreds of thousands more dollars than previously reported to companies affiliated with Peter Pham.

The audit’s second phase, released this week, identified more questionable spending directed by Andrew Do, including a $500,000 grant to the company of Frank Jao, a major real estate developer in Little Saigon. That taxpayer contract never required the company, Bridgecreek Realty Investment Corp., to provide supporting documentation for how the money was spent — such as invoices or receipts, according to the audit. In the end, there is no documentation for how more than half of the taxpayer funds were used, it says.

The audit also details numerous times that top county officials did not act after they were alerted to potential irregularities regarding millions in county funds awarded to Viet America Society, the nonprofit connected to Rhiannon Do. The audit details an occasion in which Clayton Chau, the former county healthcare director who asked that money be routed to Rhiannon Do’s clinic at the nonprofit, reprimanded a subordinate for raising concerns.

Chau is now chief medical officer at National Healthcare & Housing Advisors, which operates three healthcare campuses in California.

Two more phases of the audit are underway.

Susan Egan is a trailblazer in the Disney world.

She’s best known as the voice of Megara in "Hercules" and the original Belle in the Broadway version of "Beauty and the Beast."

This weekend, Egan is being honored at the D23: The Ultimate Disney Fan Event in Anaheim as a Disney Legend along with more than a dozen actors, composers and other contributors.

Egan’s relationship with the world of Disney started at a young age. She grew up in Seal Beach, less than an hour away from Disneyland, and says her mother would take her and her siblings to the park on a school day every year.

“It just never occurred to me that you could actually work for that company, that could be what you do for a living,” Egan told LAist “It just seemed like play all the time.”

She was the first actor to play a Disney princess on Broadway in 1994, and said at the time it was a risky decision.

“We really didn't know if it was going to work. In essence, taking a cartoon and bringing it to the live audience, having to change some of the mythology because, you know, we can't be a 10-inch tall teapot. You have to be a full human-sized teapot,” said Egan.

But she says the audience loved the Broadway production as much as they loved the movie.

She went on to voice the sharp-tongued Megara from "Hercules," who she calls a “Disney heroine ahead of her time.”

“Honestly her flaws are what make her so relatable. I hear from a lot of young women ‘Oh Meg, I could relate to Meg.’ I go, ‘Me too. Honestly yeah, string of bad boyfriends, same.'”

Egan has harnessed her love for Disney into her production company, 10th & Main, with producing partner Adam J. Levy. Together they’ve produced Disney Princess: The Concert, which has toured across five continents, the recurring production aboard Disney cruise ships called Broadway Star Series and other programs.

10th & Main is also putting together a show for the D23: The Ultimate Disney Fan Event this weekend called Disney Rewind Concerts. Egan says it’s celebrating the Disney movies from the ‘80s and ‘90s.

“ We have the voice of Goofy, Bill Farmer, and Jodi Benson, the voice of Little Mermaid, is in the concert. We've got Disney icon Jim Cummings, who's the voice of 400 Disney characters,” said Egan. It’s happening on Friday and Saturday night and will be streamed on Disney+.

D23: The Ultimate Disney Fan Event runs this weekend Aug. 14 through Aug. 16 at the Anaheim Convention Center. There will be performances and panels from the cast and producers of Percy Jackson and the Olympians, The Simpsons, Camp Rock 3 and others.

The 2028 Olympics and Paralympics in Los Angeles will cost billions to put on, but there are currently no guarantees that any of that business will go to companies or small businesses in the city of Los Angeles.

That's a problem for local officials, who point out that the city of L.A. is the host and financial backer of the Games and should therefore reap the benefits.

Olympic contracts for things like IT services, cleaning and construction for the Games are worth up to $4 billion, according to LA28. L.A. City Council President Marqueece Harris-Dawson filed a motion Wednesday asking the private Olympics organizing committee LA28 to commit to giving some of those contracts to businesses in the city specifically.

The move responds to critiques of LA28's procurement plan, which council members in April warned could end up leaving out the city of Los Angeles entirely.

LA28 says it's aiming to keep 75% of its spending in the Greater L.A. area, and put 25% towards small businesses. Its procurement plan pledges to prioritize "hyperlocal" businesses in the city of L.A., but makes no explicit promises. Instead, it identifies "local" as anywhere in L.A., Orange, Riverside, San Bernardino and Ventura counties.

Harris-Dawson's motion would direct city staff to request LA28 go further, developing an L.A.-specific spending commitment.

"There is no assurance that Olympic-related spending will meaningfully benefit Los Angeles businesses, workers, and communities in proportion to the City's role as host," the motion reads in part.

The motion still needs to get through council, but there are indications that it will meet an unwilling LA28.

LA28 CEO Reynold Hoover told the city council earlier this year that organizers would prioritize city businesses, but that he would not commit to a plan that would limit LA28's financial options.

"If I focus solely, first and foremost, on the city of L.A. for small business, then I am artificially reducing the pool of competition, placing greater risk on the city taxpayers and placing greater risk on the backstop of the city of L.A.," Hoover said.

The motion reflects the latest way city leaders are trying to limit risk and increase rewards for Los Angeles, which is on the hook for a potentially large amount of money if the 2028 Olympics and Paralympics are a financial failure.