Eviction notices spurs growing concerns about Skid Row receiver

Windows at Dewey Hotel, owned by the Skid Row Housing Trust, are boarded up after a fire.

June 7, 2023 5 AM PT

A spate of eviction notices issued at properties owned by Skid Row’s largest nonprofit landlord is prompting Los Angeles city officials to demand answers from the person they installed to oversee the buildings.

City Atty. Hydee Feldstein Soto deemed the eviction notices illegal and said the apparent blunder is contributing to an erosion of the city’s confidence in Mark Adams, the receiver appointed by a Los Angeles Superior Court judge in April to fix 29 buildings owned by Skid Row Housing Trust after its financial collapse earlier this year.

“These are formerly unhoused tenants, they are incredibly vulnerable, they rely on critical supportive services,” Feldstein Soto said. “It’s unacceptable that those notices went out, period.”

The notices — sent by Beach Front Property Management, the firm Adams hired — told residents they had three days to pay overdue rent or leave their apartment or else the firm would initiate eviction proceedings that could include additional financial damages and harm to the tenants’ credit rating.

One eviction notice reviewed by The Times showed that the tenant owed $56.

Feldstein Soto’s office sent Adams a letter Tuesday telling him that the notices were prohibited under city laws, including a recently passed measure that does not allow landlords to evict tenants who are only one month behind on rent. It also reminded Adams that he had pledged in court documents never to evict a tenant for overdue rent only.

The city’s letter tells Adams that he has 48 hours to provide a written accounting of how many notices went out and who authorized them.

In an email to The Times, Adams said that the notices were a mistake and sent without his approval. He said he distributed a letter rescinding them to all 1,500 Skid Row Housing Trust tenants on Monday.

“Solely because of failure to pay rent, I will not seek to evict anyone,” Adams said in the letter.

Adams said he didn’t know how many tenants had received the eviction notices, and that any further similar action taken by Beach Front Property Management would be grounds for its termination. A spokesperson for the firm referred comment to the receiver.

The eviction notices are the latest example of concerns about Adams’ performance from city officials and the trust’s tenants.

Two residents of the Boyd Hotel who received eviction notices told The Times that conditions there had changed little, and in some ways grown worse, in the two months of the receivership.

Only one of the four bathrooms on their floor works reliably, they said. A second is in and out of service, and the maintenance crew has locked the other two, they said. Their case managers have been laid off, and people from the street continue to enter the building at all hours to use the bathrooms, sleep, use drugs or buy contraband.

This spring, the city pushed for Adams to be put in charge of the properties after the nonprofit housing provider had largely abandoned them in squalid conditions. Many tenants are elderly, disabled or suffering from mental health and drug problems.

Under a receivership, Adams would have the authority to borrow money to pay for repairs and upgrades to the trust’s residential hotels and other low-income apartment complexes, putting them on solid financial footing — ultimately to allow other affordable housing providers to take over.

Feldstein Soto has said that the trust’s rapid disintegration required the city to turn to Adams, who has handled 300 receiverships over more than two decades, as the only one who could handle the situation despite not fully vetting his resume beforehand.

A Times review of Adams’ record published last month found that in some cases, tenants faced the risk of eviction, property owners lost their houses and multiple judges determined he inflated his fees by six-figure amounts. Additionally, in two cases comparable in size and scope to the trust matter, Adams left years before they were resolved and, in court filings, omitted key facts about his involvement in them.

Feldstein Soto continued to maintain that the situation’s urgency pointed toward Adams as uniquely qualified to address it. But she said she’s been unimpressed by Adams’ performance.

A $1.3-million loan Adams has received came with a 15% interest rate, violating an agreement the city had with the receiver not to exceed 10% interest when borrowing money, a deputy city attorney said at a court hearing last month. Feldstein Soto said the city also has been spot checking trust properties and found that there isn’t always management and security on site, contrary to Adams’ assertions.

“We believed that this receiver had both the liquidity and the experience and expertise to quickly get on top of and manage the situation,” Feldstein Soto said. “I think it’s fair to say we’ve been disappointed.”

In court, an attorney representing Adams said that lenders required the higher interest rate after investors in some of the trust’s better properties expressed a desire to remove them from the receivership, making the deal more risky for them. Through a spokesperson, Adams said that there is 24/7 security at every site and that he never pledged to have round-the-clock management.

The two tenants at the Boyd, a 112-year-old residential hotel with 61 units, said they’ve been withholding rent because they have long-standing legal claims against Skid Row Housing Trust over conditions at the building.

Maintenance crews, they said, are beginning to repair or replace clogged sinks in individual rooms but that drains are still chronically backed up and mold is growing in showers in shared bathrooms on each floor. Some people, they said, block the drains intentionally to use the showers for laundry.

The two male residents spoke to The Times anonymously, one to respect his 12-step program and the other out of concern his job would be jeopardized.

They said the receiver has staffed the building with guards from three security firms, but they have not stopped non-residents from entering the hotel at all hours to use the bathrooms, sleep, do drugs or buy contraband.

“There’s been people that have been living there that are not on a lease or not attached to anybody,” one said.

At first the guards were throwing the interlopers out but then stopped, they said.

One man said a homeless person who had struck him with a steel baton several months ago has returned after his release from jail.

They said that a tenant on their floor runs a store out of his unit selling cigarettes, beer and liquor, and street people come to his door at all hours.

One of the residents emailed The Times a photo Tuesday of trash and feces in a hallway that he said was left by a non-tenant.

The men suspected the eviction notices were a ploy to get them to leave their apartments because they were complaining about the Boyd’s conditions.

“I think they want to empty the building and start over with brand new people,” one said.

Joseph Woods, an attorney representing the two residents and co-counsel in a habitability lawsuit filed on behalf of tenants in two other Skid Row Housing Trust buildings, said he has seen some small but important steps taken by the receiver.

“We are pleased to see that elevators are being kept in good repair and functional order, which was not true in the past,” Woods said.

Woods said that the receivership has added security, but it remains inadequate.

Feldstein Soto, Mayor Karen Bass and other city leaders have said their primary goal has been to prevent mass evictions of the trust’s tenants, a potential catastrophe that could add hundreds to Skid Row’s already overwhelming homeless population.

“This was an absolutely egregious mistake,” Bass said of the eviction notices in a statement. “I support the city attorney’s investigation into this incident and steps she is taking to ensure that the rights of all tenants of Skid Row Housing Trust properties are protected and secured.”

City Councilmember Kevin de León, who represents Skid Row, said that Feldstein Soto and Adams have cut the council out of decisions about the receivership. The eviction notices, he said, provide another example of the need for the council to exercise greater oversight.

“It’s not a good first step to introduce yourself to the city by erroneously or mistakenly issuing out eviction notices, sending a panic into already very vulnerable residents,” said De León, who authored a council motion calling for more regular updates on the receiver’s activities after last month’s Times story on Adams’ background. “When it comes to the receiver and the city attorney, it’s on both of them. They gotta own it.”

De León also said he’s deeply concerned about the receivership’s effects on the city’s finances, especially given prior cases in which judges have cited Adams for overbilling.

Normally, receiverships pay for repairs and the receiver’s fees by tapping properties’ equity or through proceeds from a property sale. But with the trust on the brink of insolvency and federal and local restrictions preventing tenants’ rents from ballooning, city housing officials have acknowledged the city treasury likely will be on the hook for at least some of the still-unknown costs.

Adams has assigned 18 employees, including himself, to the trust matter with hourly rates from $151 to $465. An accounting filed by Adams in court lists $187,000 in expenses and advances incurred by his firm in April. Additionally, Adams has received authority from the court to borrow up to $5.3 million to finance repairs.

“I don’t think the majority of the council members are aware that the city’s budget is an ATM machine that will be strictly controlled by a judge and a receiver,” De León said.

Feldstein Soto said that her office was leading an investigation into Adams’ performance and expects to reveal its results before the next court hearing in the case scheduled for June 15. She declined to describe what the investigation entailed but didn’t rule out that she might recommend Adams be replaced.

“We, at this point, have to consider all kinds of possibilities,” Feldstein Soto said.