It could almost be a story from a Charles Dickens novel: Nearly 800 lower-income households find themselves evicted from an apartment complex in the Venice district of Los Angeles by developers who reportedly want to build luxury housing. The City Council opposes the deal but is defeated in court. After various attempts at mediation, the developers beckon sheriff’s deputies to lock out hundreds of renters from their apartments, only to call off the authorities at the last minute. As this is being written, 40 holdouts are currently refusing to leave their apartments, saying the developer cannot legally evict them.
The agony and what some might call the folly of Lincoln Place has been playing out for nearly 14 years. Although the legal details, which I will attempt to synopsize, are important, they are not the main story. The real issue is: How did this impasse happen, and could it be fixed by either policy or law?
Much of the controversy centers on the interpretation of the Ellis Act, the California statute that has become a point of contention in the Lincoln Place controversy. Enacted in 1985, the Ellis Act responded to a state Supreme Court rulings on a rent control case — Nash v. City of Santa Monica, (1984) 37 Cal.3d 97 — that essentially upheld the right of a local government to stop a landlord from evicting his tenants and demolishing rental housing. In reaction to Nash, state lawmakers approved the Ellis Act, which allows apartment landlords to pull their units off the market and “go out of business” (that is, the business of being a landlord) without restraint from local ordinances.
An early garden apartment complex
During the early 1990s, a group of developers known as Lincoln Place Investors Ltd. began preparing an environmental impact report for a project to replace the 795-unit apartment complex. Built in post-war years as affordable housing for returning GIs, Lincoln Place was a garden apartment complex made up of 52 small, minimally Modernist buildings connected by a set of pedestrian lanes and landscaping. The new developer, meanwhile, intended to build luxury condominiums.
The draft EIR in 1993 concluded Lincoln Place lacked cultural or historical significance, according to the city’s criteria. Although the final EIR came to the same conclusion, the document recommended mitigations, including architectural drawings and photographs, to document the project because of the potential historic interest in a post-war apartment complex. Another mitigation was a requirement to offer the buildings for sale and relocation prior to demolition.
Although the developers won approval from the city’s planning commission in 1995, the Los Angeles City Council followed the recommendation of its Planning and Land Use Committee and denied the application. In rejecting the project, the land use committee had apparently complied with the wishes of then-councilwoman Ruth Galanter, who represented Venice. The investors sued the city, claiming the council’s committee decided against the project in a closed-door meeting, in violation of the Ralph M. Brown open meetings law. The judge ruled in favor of the developers and sent the project back to the council for reconsideration.
The following year, the developers applied for a demolition permit, which was denied by the city. They sued the city again, arguing the city had violated the Ellis Act by preventing them from moving forward with new development. The city argued, in effect, that it could not approve the demolition without first having approved a development project. Again, the ruling went against the city when the judge found the city’s standard for issuing demo permits violated Ellis. The city appealed, only to see the decision upheld by the Second District Court of Appeal in Los Angeles Lincoln Place Investors Ltd., v. City of Los Angeles, (1997) 54 Cal.App.4th 53 (see CP&DR Legal Digest, May, 1997).
The historic preservation aspect
In 1997, historians determined that Ralph Vaughn, a notable African-American architect, had designed Lincoln Place, and that the Modernist buildings had both historic and architectural value. In the belief that landmark designation would help preserve the buildings from demolition, bolstering Lincoln Place’s claim to importance, the state Office of Historic Preservation nominated the project for listing on the National Register of Historic Places. (The federal agency deferred the nomination, asking the state for more information.) In May 1997, Lincoln Place tenants sued the city for failing to impose new mitigation requirements in view of the new findings.
In 2001, Apartment Investment and Management Co. (AIMCO) of Denver, Co., which claims to be the largest apartment owner and manager in the nation, bought a half interest in Lincoln Place. In 2002, after years of further litigation, the project returned to the City Council, which approved a project consisting of 654 condominiums, 52 moderate-income townhouses and 144 low-income apartments.
In the development agreement, the owners agreed to several conditions, including a ban on involuntary evictions. In the same year, the developer applied for permits to demolish five buildings on Lake Street, which they said were not part of the project, possibly to avoid sticky questions relating to eviction and the Ellis Act. The city granted the demo permits, and the developer razed several buildings.
Predictably, the tenants association filed a lawsuit soon after the council’s approval, while an architectural group filed another. Both plaintiffs argued that the EIR was inaccurate for concluding that Lincoln Place lacked historical and architectural significance, and that the city had effectively violated the California Environmental Quality Act by issuing the demo permits.
Once again, the supporters of Lincoln Place lost in court in both cases. Both plaintiffs filed appeals, which were later consolidated by the Second District Court of Appeal. But the appellate court rejected the developer’s claim that the Lake Street properties were not part of the project and thus did not fall under the EIR requirements as “disingenuous at best.” In Lincoln Place Tenants Assn. v. City of Los Angeles, (2005) 130 Cal.App.4th 1491, the justices also ordered the city not to grant any further demo permits to the developer, unless the latter complied with the existing EIR and any new mitigations that might show up in a supplemental EIR (see CP&DR Legal Digest, September 2005).
Meet the new boss
In 2003, AIMCO became the sole owner of Lincoln Place. In March 2005, AIMCO filed Ellis Act eviction notices on more than 300 tenants, saying they had 90 days to vacate. The nice folks at AIMCO gave disabled people a year to move out.
At this point, AIMCO seemed emboldened by a legal theory that the Ellis Act and the CEQA requirements could be separated—in other words, that the developer could evict the tenants under the pretext of going out of the rental housing business, without triggering the tenant protections guaranteed under the 2002 development agreement. Strengthening AIMCO’s claim was the company’s decision not to record its tentative tract map—meaning the developer had no project, technically speaking. Following the same logic, the developer contended it was not bound by the ban on involuntary evictions in the development agreement, because those conditions only took effect when construction started. And without demolition, there was no project. And when the project’s anti-eviction protections kicked in, of course, they would be meaningless, because no tenants would remain. Cigars all around.
AIMCO’s public statements supported the hard-to-believe position that the evictions were unrelated to the development project approved in 2002. “We have the total and unfettered right to take our property off the rental market which we've done under Ellis, and we're looking at our options on how to proceed,” AIMCO vice president Patti Schwayder told reporters in July 2005.
To add further bamboozlement, AIMCO officials claimed that the approved project was no longer in effect and that the developer was not bound by its provisions. “We made no promises, that’s not our map,” Schwayder told reporters, referring to the city’s approved tract map for the project, adding, “It’s the previous owner’s map.”
The claim that the map belongs to the “previous owner” is disingenuous, however, because that owner was a venture between AIMCO and a local developer. Los Angeles City Attorney Rocky Delgadillo seemed to act as if his hands were tied, with aides reportedly telling Lincoln Place lawyers that the “conditions” (that is, the fact that AIMCO had not applied for a new demo permit) did not allow him to act.
In December 2005, AIMCO attempted to rid Lincoln Place of all remaining tenants, calling out Los Angeles County sheriff’s deputies, who locked out 52 households from their apartments. An appeal from Venice Councilman Bill Rosendahl brought the parties back to the bargaining table.
In April 2006, Lincoln Place tenants, city officials, preservationists and AIMCO entered into mediated settlement negotiations. The parties reached a tentative agreement to preserve 242 units, while allowing the developer to build new units of up to six stories in height. A month later, however, the state Historic Commission refused the compromise because the commission was denied the right to review the new structures. AIMCO broke off negotiations.
In January 2007, a Superior Court judge agreed to hear the case of 13 of the remaining tenants, who are challenging the legality of their evictions.
Oh, what a web
Where to begin with the troubling aspects of Lincoln Place? Although current redevelopment law protects affordable rental units by requiring developers to replace all deed-restricted units destroyed in the course of building new projects, those protections are not available for Lincoln Place.
Yet the Ellis Act should not shield AIMCO, which obviously means to develop luxury condominiums and rental housing on the site. AIMCO and its subsidiary that owns Lincoln Place are obviously not going out of the housing business and should not qualify for protection under Ellis. Only the studied pretence that AIMCO has not decided the future of the property allows the developer to maintain this offensive ruse.
My prediction: AIMCO will sell the property to another partnership with a new name, which will be controlled by – who else? – AIMCO. In this way, current ownership can claim in the future that it had no project, and the future owners can claim no liability for past evictions. In the meantime – presto! – the pesky tenants disappear. Neither the Amazing Kreskin nor Donald Trump could do better. AIMCO’s attorneys deserve a bonus.
For Lincoln Place residents, little else remains but a legal cat-and-mouse game that scarcely seems worth playing. Sooner or later, the residents will be forced to accept a financial settlement. Demolishing Lincoln Place and displacing its residents is a sin because the development is not a slum and serves a vital public interest. Given the law and runaway speculation in the luxury condo market, however, the best we can offer the last departing resident of Lincoln Place is a handshake, a housing voucher—and a copy of Hard Times by Charles Dickens.