What We Know About The Legal Disputes Behind The 10 Freeway Property That Burned

The property that burned under the 10 Freeway Saturday was rented by a company with multiple legal disputes with Caltrans, each accusing the other of mismanaging properties under freeways.

The fire burned more than 100 concrete support columns underneath 450 feet of highway, forcing the closure of a key transit artery through downtown L.A. It's not expected to reopen for three to five weeks, according to Gov. Gavin Newsom.

In September, Caltrans sued Apex Development, Inc., the Calabasas-based company that rented the space, alleging it had failed to pay $78,000 in rent on the property for a year.

The state was trying to evict Apex from five freeway properties, alleging it owed at least $400,000 in back rent.

Lease agreement prohibits subleasing, flammable materials

Caltrans also alleged that the company had subleased its spaces in violation of its rental agreement. Apex sublet parts of the 10 Freeway property to at least six other companies, according to the lawsuit.

The companies included one that stored wooden pallets, a mechanic, and one that sold wire hangers and other materials to businesses in the nearby Garment District.

Photos of the area after the fire showed burned out cars, shipping containers, motors and produce strewn about the ground. Newsom said highly flammable sanitizer was among the items that burned.

In an aerial view, cleanup crews work beneath the closed I-10 Freeway following a large pallet fire.

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Mario Tama

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Getty Images

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The rental agreement states the 48,000 square foot space shall not be used “for any storage of flammable materials, explosives or other materials.”

The agreement also states, “The Premises shall be used and occupied by Tenant only and exclusively for the purpose of parking of operable vehicles and open storage.” It states Apex needed permission from Caltrans and the concurrence of the Federal Highway Administration to use it for any other purposes.

It's unclear if Apex obtained that permission. Apex had been renting the site since 2008.

The governor said the state has filed eviction notices against Apex in connection with four other properties under freeways, including two near the downtown site and another in Sun Valley under the 5 Freeway.

Apex is owned by Ahmad Anthony Nowaid. One of his attorneys declined to comment on the fire or the lawsuits.

Caltrans is also under scrutiny

Caltrans and its maintenance of its properties is also coming under new scrutiny in the wake of the fire.

“I think there are going to be some tough questions asked of Caltrans,” said Assemblymember Miguel Santiago, who represents parts of L.A. affected by the massive traffic problems resulting from the freeway closure. “Why isn’t there regular checking of what’s underneath there to make sure it's safe?”

Newsom said the agency’s practice of renting space under freeways — called airspace leasing — is under review.

In a 2020 lawsuit, Apex accused Caltrans of failing to take care of two properties in Sun Valley and downtown. Apex was fighting an eviction from those properties at the time.

Apex claimed it was forced to spend over $700,000 to remove contaminated soil, pavement waste, and “approximately 1,000 tires” from the properties. The lawsuit was thrown out.

Caltrans did not immediately respond to an email request for comment.

The practice of storing flammable materials under elevated freeways has faced scrutiny in the past. In 2017, a freeway in Atlanta collapsed after construction materials caught fire, prompting criticism of the practice from the National Transportation Safety Board.

Meantime, L.A. City Councilmember Traci Park introduced a motion Tuesday calling for greater protections of citywide infrastructure, citing the freeway fire. Park underscored the prevalence of encampment fires along freeway underpasses and overpasses.

Investigators say the 10 Freeway fire was arson but have not determined who started it.

Park asked the L.A. Fire Department to report back on the number of encampment related fires that have happened along freeway underpasses, overpasses, and embankments so far this year. Mayor Karen Bass has also called on LA Fire to catalog what’s being stored beneath the freeways.