April | 2020 | Michael Kohlhaas dot org

Spend some time hanging around business improvement districts and you’ll certainly hear a bunch of entitled zillionaires whining, bragging, or lying about how they voluntarily agree to spend their own damn money to provide services that the City of Los Angeles is too incompetent, too broke, or too both of these to provide. They just love explaining this to everyone. And the City of Los Angeles is also thrilled with that narrative. This City-produced BID FAQ explains it quite clearly:

[A] majority of business owners of commercial property owners in a given area decide to acquire special benefits and to pay for those benefits themselves.

The story serves everyone’s interests. The BIDdies get to imagine themselves as heroes of putative private sector efficiency and the City gets a bunch of useful idiots to carry out policies that would be incredibly illegal if the City did them directly. Everybody wins but the citizens of Los Angeles. The part you don’t hear too much about, though, the part that none of them really like to discuss, is that when property owned by the City or by other public agencies is included in a BID then the City or the other public agency is also subject to these assessments.

This is specifically authorized by the Property and Business Improvement District Law under which BIDs are established in California.¹ This means that when the City Council approves a business improvement district it’s often also approving an ongoing annual payment to the BIDdies. Which, by the way, can be substantial. Over the last few days I looked at various public records involved in BID formation in LA and learned that the City of Los Angeles is on the hook for annual payments to BIDs of at least $2,278,604.²

If LAUSD, Metro, and the County are included the total is $3,710,281 and property owned by the State of California brings the total amount of public money paid annually to LA BIDs to $4,203,276.³ These days, with the City of Los Angeles furloughing employees and moaning about the price of hotel rooms to protect unhoused residents from the ongoing pandemic, there are much, much better uses that that money could be put to.⁴ Continue reading The City Of Los Angeles Shells Out More Than $2.2M Per Year To Business Improvement Districts — Add In Other Local Public Money — Like LAUSD — And Metro — And LA County — The Total Is More Than $3.7M Per Year To The BIDdies — Not Sure How Many People That Could Put In How Many Hotel Rooms For How Many Nights — But It’s A Lot — Not Sure How Many City Employee Furloughs That Money Could Prevent — But It’s A Lot More Than Zero Of Them — Remember That When They Tell You They Can’t Afford Something — They’re Choosing Not To Afford It →

I recently wrote on the fact that at least seven members of the Los Angeles City Council are landlords, which may well have something to do with their reluctance to implement serious and effective protections for vulnerable tenants during the pandemic.⁵ And in the last few days tenants’ rights activists have organized two demonstrations at the home of Los Angeles Mayor Eric Garcetti to protest his failure to implement a blanket eviction ban and rent forgiveness during the pandemic.⁶

So it didn’t really surprise me that much to learn that Garcetti is also a landlord. But I was surprised by the layered complexity of his real estate holdings, at least as compared to the fairly straightforward setups the Councilmembers have.⁷ It all starts, of course, with his Form 700, which lists three properties on Schedule B.⁸ One of these is a commercial building in the City of Beverly Hills⁹ but the other two are residential rentals in the City of Los Angeles.

First up we have 1299 Meadowbrook Avenue, which consists of three units,¹⁰ bought by Garcetti and his wife, Amy Wakeland, in 2016 as reported in the Los Angeles Times. On August 8, 2018 Garcetti and Wakeland formed the 1299 Meadowbrook LLC and then a few days later signed over the property to that entity as recorded in this grant deed.¹¹ According to the Times article in 2016 the main house was listed at $5K per month and the two apartments at at least $2K each.¹²

The next property listed is 1809 W. 37th Place, which is a duplex near Exposition and Western. This is listed as Amy Wakeland’s sole property, which is consistent with the grant deed, on which Garcetti’s name does not appear. She bought the property on July 10, 2018 and, I guess to be extra-safe, that same day Garcetti filed a transfer deed assigning his rights in the property to Wakeland.¹³

And then things get really interesting! On Schedule A-1 of his Form 700, which covers “Stocks, Bonds, and Other Interests,” Garcetti lists a couple of limited partnerships, which are IPDR Associates and Del Rey Vista Associates. Later, on Schedule C,¹⁴ it turns out that IPDR owns a hotel at 435 Culver Blvd and Del Rey owns an apartment building at 11519 Culver. These two corporate entities were formed decades ago by zillionaire real estate developer Edward Zolla and are now owned¹⁵ by his widow, Susan Zolla.¹⁶ Continue reading Eric Garcetti And His Wife Amy Wakeland Own Three Rental Properties Between Them — One Commercial In The City Of Beverly Hills — And Two Residential In The City Of Los Angeles — But Even More Interesting Than That Is Garcetti’s Shares In Two Real-Estate-Owning Limited Partnerships — Formed Decades Ago By Zillionaire Gil Garcetti Crony Edward Zolla — And Now Controlled By His Widow Susan Zolla — Both Of Whom Have Been Major Donors To Eric Garcetti’s Campaigns — And Apparently Also To His Personal Wealth By Allowing Him To Partner Up With Them In A Hotel And An Apartment Building →