Judge Removes 7 Buildings From Troubled Skid Row Housing Receiver’s Portfolio

A Los Angeles County Superior Court judge approved a deal Thursday to remove seven buildings from a troubled receivership tasked with stabilizing 29 buildings formerly managed by the Skid Row Housing Trust.

In a Thursday afternoon court hearing in Downtown L.A., Judge Mitchell Beckloff at times grew frustrated with the responses from court-appointed receiver Mark Adams, who has faced questions about his suitability to rehabilitate these sensitive properties.

“I don’t know how much problem-solving is going on,” Beckloff told Adams.

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Adams argued that moving the seven properties into the hands of the National Equity Fund, a housing nonprofit, could harm his ability to raise much-needed operational funds. He said the receivership is “starving for cash,” and reducing the number of buildings he could offer to potential lenders as collateral would make fundraising more difficult.

Adams says $1.7 million due

Adams said his company California Receivership Group, Inc, which he uses to run the receivership, has just $336,000 in its accounts, and that it has to pay $1.7 million to cover security services for the next two weeks at its low-income housing buildings. If those security bills aren’t paid soon, Adams told the judge, “There are people threatening to walk off the job.”

L.A. Deputy City Attorney Alia Haddad supported the judge’s decision, saying the receivership has “become a quagmire.”

She noted that more than two months since Adams took over, 19 of the 29 buildings are still on “fire watch” because inspectors have not found functioning fire alarms in the properties. Adams said in a court filing that fire repairs have been carried out in several buildings so far.

In order to meet the receiver’s immediate operational funding shortfall, Beckloff approved Adams to seek a $2 million loan from banks or other investors with interest rates as high as 15% if the city can’t deliver $2 million by the end of Tuesday in order to fund payroll and security services for the next two weeks.

Adams took over management of the trust’s properties in April following news of the organization’s financial implosion and worsening conditions for tenants living on the edge of homelessness. On April 5, three people were found dead in a Skid Row Housing Trust building due to suspected overdoses.

Since then, Adams has come under fire for eviction notices sent to Skid Row Housing Trust tenants by a property management company he hired. Those eviction notices were sent over as little as $56 in unpaid rent, and violated the city’s eviction protections according to the city attorney’s office. Adams has said the notices were a mistake and have since been rescinded.

An investigation by the city attorney's office

City Attorney Hydeee Feldstein Soto previously told the Los Angeles Times that her staff is investigating Adams’ performance. When LAist asked for an update on that investigation Thursday, her office declined to comment. In recent weeks, LAist and the Times identified public court rulings showing multiple judges have found problems with Adams’ handling of past receiverships.

LAist reporting earlier this week also revealed that a prior company Adams used for previous receivership business was banned by the state of California over unpaid taxes. Adams told us he’d look into it and said his current company is in good standing.