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L.A. To Pay Evicted Artists Nearly $400,000 In Relocation Fees

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The L.A. City Council voted unanimously Wednesday to grant $382,850 to a group of residents who were forced to relocate from two Fashion District properties after the dwellings were deemed illegal, reports LA Weekly.

The residences in question are at 931 E. Pico Blvd. (a warehouse space) and 1518 S. Paloma St. Both are owned by Morad "Ben" Neman. The residents—many of them artists— claim that Neman had refused to pay them the monetary assistance to help them relocate, as stipulated by city law when residents are given "order to vacate" notices.

In search of recourse, the residents contacted the L.A. city council about two weeks ago. The council later got the payment approved through an emergency motion. The money will be split between a number of tenants, with funds ranging from $7,900 to $19,700 per tenant, depending on how long they'd stayed at the properties.

Rick Coca, communications director at councilman Jose Huizar's office, told LAist that the relocation fees cover 37 units across the two locations. “Wednesday’s vote was critical in preventing residents caught in legal proceedings at no fault of their own from becoming homeless,” Huizar said in a statement emailed to LAist. “This is exactly what we should be utilizing these type of funds for."

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Wednesday's emergency motion also stated that Neman will be expected to repay the relocation fee to the city.

The events of the Oakland Ghost Ship fire in 2016—in which a fire tore through a warehouse that was being used illegally as a living and performance space and killed 36 people—is regarded as a catalyst for the Fashion District buildings being deemed illegal, and later the order for the residents to vacate the premises. Less than a week after the Oakland fire, L.A. City Attorney Mike Feuer told the Times that he would pursue an “aggressive response” to commercial spaces that have been reconfigured as living arrangements. Feuer had specifically pointed to the 931 E. Pico Blvd. building as a prime example of such a space. The building was said to have no smoke alarms and no accessible fire escapes. A 2016 listing for a space at the Pico address advertises a two bedroom, 3,500 square foot loft that was being rented out at $4,900 a month.

“In the wake of the tragedy in Oakland, I think it’s especially important that we be vigilant,” Feuer said. “What we’re trying to do in the filing in the 931 Pico case and convening this meeting is to avoid a tragedy here.”

In December, Neman was charged with with several misdemeanors in connection with the building, and faces up to $9,000 in fines and 4 1/2 years in jail.

In 2014, Neman was detained after federal and state agents had raided several businesses in the Fashion District area, acting on the belief that some of the businesses were part of a money laundering scheme perpetrated by the Sinaloa drug cartel in Mexico. Neman, along with his brother Hersel Neman, brother-in-law Mehran Khalili, and an employee named Alma Villalobos were accused of hiding $2.6 million in drug money over two years by dividing it into 363 separate deposits, according to California Apparel News.

As for a long-term solution to the problem of illegal dwellings, Feuer said that the city will need to produce more affordable housing units to deter people from resorting to illicit units. “There’s a broader issue: How is the city going to grapple with other commercial properties that house tenants?” Feuer said. “The city must continue to do a better job of increasing our stock of affordable housing.” A 2017 report from the California Department of Housing and Community Development said that, in the Southland, 68,000 new homes are needed each year to keep up with rising population.

This doesn't mean that all makeshift apartments are necessarily illegal, however. In May, L.A. city council voted to approve a path for landlords to legalize "bootlegged" apartments. Some of these units are made from one apartment unit being partitioned into two units. Some are recreational rooms that have been repurposed. A 2015 city report said that 2,560 bootlegged units were discovered between 2010 and 2015. These units would have to show that they're in compliance with city code before that can be legalized.

LAist reached out to Feuer's office, but no one was immediately available for comment.