LOS ANGELES (CN) – Developers renovating an historic Los Angeles hotel – once the playground of Hollywood legends such as Greta Garbo, Charlie Chaplin and Humphrey Bogart – cannot force permanent tenants to move while repair work proceeds without providing relocation help, District Judge Margaret Morrow has ruled.
Built in 1906, the Alexandria Hotel was once the playground of Hollywood celebrities, but it fell into disrepair following the Great Depression and it has since been known as the last stop before Skid Row. It is currently populated by people one step above homelessness, who suffer from a myriad of physical and mental disabilities.
In August 2006 Alexandria Housing Partners LP bought the Alexandria Hotel for $30 million, intent on renovating the property. Alexandria Housing Partners and co-defendant Logan Property Management Inc. received financing for the rehabilitation from various low-income housing funds. These funds are distributed in part by the City of Los Angeles and its Community Redevelopment Agency (CRA-LA), and include federal HOME program money.
The HOME program is the largest federal block grant to state and local governments designed exclusively to create affordable housing for low-income citizens.
As renovation of the hotel began, the developers sought to move tenants from their permanent units to temporary units so work could proceed. While repairs were being made tenants in the hotel were forced to go without running water for as long as three days in a row, and were often without heat or hot water as the hotel’s boilers were being replaced. Tenants also faced sporadic elevator outages and have had to deal with construction materials and debris left in hallways and other common areas.
Several individual plaintiffs eventually sued Alexandria Housing Partners, claiming the company and CRA-LA failed to provide relocation assistance as required by HOME regulations. Defendants claimed that since Alexandria Housing Partners has not actually received any HOME money yet it is not required to provide assistance.
Plaintiffs moved for a preliminary injunction to require such assistance until trial can commence. Judge Margaret Morrow of the Central District granted the injunction.
“The limited purpose of a preliminary injunction is to preserve the relative positions of the parties until a trial on the merits can be held. A court may issue a preliminary injunction if plaintiff demonstrates either a likelihood of success on the merits and the possibility of irreparable injury or that serious questions going to the merits were raised and the balance of hardships tips sharply in its favor.
“Under the HOME regulations, at the outset of a project jurisdictions administering programs funded under HOME must attempt to minimize resident displacement.
“Plaintiffs contend that none of the services required by the HOME regulations have been provided to the tenants of the Alexandria, and maintain that because no such services have been provided none of the tenants can legally be forced to move from their homes in the hotel.
“Defendants counter that the HOME regulations do not apply to the Alexandria project because no HOME funds have been received by the developer defendants or used in the rehabilitation of the hotel.
“The court is persuaded that plaintiffs have raised serious questions regarding the merits of their claim that the HOME regulations apply to the rehabilitation project at the Alexandria Hotel. The HOME regulations contain strong policy statements regarding the need to protect tenants affected by federally funded rehabilitation projects.
“In addition, as plaintiffs note, the HOME regulations define a ‘displaced person’ as a tenant who has been instructed to move permanently if they move after a funding application has been submitted but before it has been approved.
“As defendants have been unable definitively to refute plaintiffs’ showing that HOME funds were requested for and approved by HUD [the Department of Housing and Urban Development] for use at the Alexandria, it appears that the tenants were displaced and/or relocated in anticipation of the receipt of federal funding.
“In sum, on the current record, the court cannot conclude that the Alexandria is not likely to receive federal HOME funding. The parties do not dispute that multiple Alexandria tenants were relocated temporarily in 2007 following the application for and approval of the HOME funds. There is thus a temporal and logical connection between the promise of federal monies and the potential relocation or displacement of tenants.
“Defendants fail to cite any statutory or regulatory authority supporting their contention that the regulations do not apply until HOME funds are actually received and used in the project.
“Statutory policy statements, the plain language of the regulations, common sense and case law favor application of the HOME regulations to the Alexandria rehabilitation project. Plaintiffs therefore have raised serious questions regarding this aspect of the merits of their claim for relocation assistance under the HOME regulations.
“The court appreciates the financial pressures the developer defendants may face if plaintiffs’ motion for preliminary injunction is granted. In balancing the hardships, however, the court concludes that the likelihood of harm to plaintiffs if an injunction does not issue is substantially more immediate and severe. If the remaining tenants are required to relocate or are evicted without the city defendants making any required relocation assistance available, they will be at serious risk of homelessness.
“For the reasons stated, the court grants plaintiffs’ motion for preliminary injunction.”