LOS ANGELES (CN) — A superior court judge, on Thursday, moved to replace the receiver of the non-profit Skid Row Housing Trust, which is responsible for 29 buildings of supportive housing for the homeless, just three months after first appointing him.
The appointment was made in April at the request of both the city of Los Angeles and the non-profit, which was by then nearly insolvent, its buildings in various states of disrepair, threatening the lives of roughly 1,500 formerly homeless residents. A lawyer for the city called it a "humanitarian crisis." Mayor Karen Bass called the appointment a "bold and historic step towards making more housing available in Los Angeles... and saving lives."
But the city began to lose confidence in Mark Adams almost immediately. In May, the Los Angeles Times ran a lengthy story about Adams's "checkered history" of evicting tenants and "inflating his fees by six-figure amounts." City Attorney Heidi Feldstein Soto admitted that she hadn't fully vetted Adams. In June, the Times reported that hundreds of Skid Row Housing Trust tenants had received eviction notices — a violation of the terms of Adams's appointment.
Soon after that, Adams told the court that the receivership was "starving for cash" and unable to secure a loan at the 10% rate that the court had authorized. A lawyer for the city, meanwhile, told the court that the receivership had become a "quagmire," and was already looking for other options. Nevertheless, Superior Court Judge Mitchell Beckloff publicly backed Adams, telling him, “I appointed you because I think you’re the person for this job. I still think you’re the person for the job.”
But city officials disagreed. Housing Department general manager Ann Sewill wrote, in a report released on Friday, that Adams “has not hired sufficient staff to secure and operate the properties and make the necessary repairs and, perhaps more importantly, has not provided the court-ordered reporting and accounting the city and other agencies require.” And he had made little progress on "repairing the fire/life safety systems, fixing plumbing problems in common area restrooms and restoring units that have been cited for abatement."
Sewill recommended that the City Council approve a $10 million loan, at an interest rate of 3%, for the job of fixing up the Skid Row Housing Trust's properties, under one condition: that Adams be replaced by a new receiver, Kevin Singer.
"Why is it that you think things will be different with Mr. Singer?" Judge Beckloff asked the city's attorneys on Thursday.
"We’re at a point where there are irreconcilable differences," said Assistant City Attorney Alia Haddad, noting that Adams's weekly reports weren't "entirely accurate," and that it was "hard to discern, at any given point, what the financial situation is of the receivership."
She said she expected Singer to be far more forthcoming, offering sober assessments without embellishment. "That’s really what we’re looking for," Haddad said.
Adams blamed his problems on a lack of money.
"I’ve had $1.8 million to take care of major problems with 2,000 units of housing," he said. "To say that lack of funds is a problem is an understatement. People are going to be walking off the job." He added: "It just seems that we have different orientations about what can be done in 90 days with $1.8 million." He added that it would probably take another $15 million to get the properties up to code.
Problems with the 29 properties abound. In her report, Sewill said that some were likely "damaged beyond repair," and that they should be demolished. And during Thursday's hearing, which was attended by dozens of lawyers and interested parties, an attorney representing 24 tenants of one of the buildings, who are suing Skid Row Housing Trust, said her clients had been "living in squalor," with only two working bathrooms to serve 35 units.
"I’ve got clients who are having to use buckets instead of toilets," she said. "It just doesn’t seem to be working with this receiver."
The judge reluctantly agreed that it was time to show Adams the door.
"It seems to me that maybe a fresh start is the way to go," said Beckloff, rather gently. He later added: "To me, this isn’t about malfeasance. This is about how we move this process forward."
Even Adams himself, who had objected to his removal, appeared grateful for a chance to wash his hands of the mess.
"I'm happy to submit my resignation this afternoon," said Adams, who appeared in court via Zoom. "It’s a relief to me, quite frankly. Then all these problems are his to deal with. I’d like to exit the stage as quickly as possible."
The judge accepted his resignation, which will go into effect on Friday morning. Singer and Adams promised to work up a plan for a smooth transition. Singer said he would be keeping Adams's property management and security companies in place, at least for now. The city's loan is expected to be approved on Wednesday. Within 30 days, Adams will present Singer with a bill for the costs he incurring during his 90-day term as receiver.
Earlier this month, the judge approved the transfer of seven of the Housing Trust's properties, so Singer's task will be to fix up the remaining 22. Should he succeed, it would add some 500 units of supportive housing, which city officials would certainly welcome. According to the results of the latest homeless count, which were released Thursday morning, Los Angeles has more than 46,000 homeless people — a 10% increase over last year — the majority of which are living on the streets.Follow @hillelaron
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.