Plans for a new water park at Cal Expo appear to be slip-sliding away.Water park fans have been dreaming for years of a return to the site of Sacramento’s former Raging Waters park, which closed in 2022 after 15 years of operation. (Previous coverage in the video above.)A new water park called Calibunga has been the brainchild of California Dreamin’ Entertainment executive Steven Dooner, who initially planned to open it in 2024 as part of a three-year plan for renovations. Dooner later said the park needed to be fully renovated and his company planned a target opening date for 2027. At one point, Chuck E. Cheese was said to be a partner on the project. But there were financial issues behind the scenes. California Dreamin’ Entertainment has been in violation of its lease agreement with more than $202,000 owed to Cal Expo, according to a letter included with a Cal Expo board packet last month. The letter, dated Jan. 16, said that California Dreamin’ Entertainment missed a final extension for paying up. It warned that the lease agreement would be voided on Feb. 2 and Cal Expo would take possession of the water park on Feb. 3. Cal Expo said in a statement that, as of Tuesday, California Dreamin’ Entertainment was in breach of its contractual obligations. This came after it first sent a notice to the company on Oct. 31, 2025, about an unresolved past-due balance. An initial deadline to pay was Dec. 4 and then extended to Dec. 18. Cal Expo said its Long-Range Planning Committee denied another request for an extension on Dec. 11. “Cal Expo looks forward to exploring partnerships and new opportunities for the water park that align with our long-term vision and operational goals that maximize the site’s potential,” Cal Expo said. KCRA 3 also reached out to Dooner for comment. He acknowledged that Cal Expo had terminated the lease. “We don’t believe it’s appropriate to litigate business disputes in the media, but we acknowledge the termination and are focused on addressing matters through the appropriate channels,” he said. Dooner is also the head of another company called California Dreamin’ Presents. The company’s website says it is an official licensing partner of the X Games, which are slated to take place at Cal Expo this summer. A Cal Expo spokesperson said that X Games are “its own entity” and are still scheduled to take place from June 26-28.See more coverage of top California stories here | Download our app | Subscribe to our morning newsletter | Find us on YouTube here and subscribe to our channel
SACRAMENTO, Calif. —
Plans for a new water park at Cal Expo appear to be slip-sliding away.
Water park fans have been dreaming for years of a return to the site of Sacramento’s former Raging Waters park, which closed in 2022 after 15 years of operation.
(Previous coverage in the video above.)
A new water park called Calibunga has been the brainchild of California Dreamin’ Entertainment executive Steven Dooner, who initially planned to open it in 2024 as part of a three-year plan for renovations. Dooner later said the park needed to be fully renovated and his company planned a target opening date for 2027. At one point, Chuck E. Cheese was said to be a partner on the project.
But there were financial issues behind the scenes. California Dreamin’ Entertainment has been in violation of its lease agreement with more than $202,000 owed to Cal Expo, according to a letter included with a Cal Expo board packet last month.
The letter, dated Jan. 16, said that California Dreamin’ Entertainment missed a final extension for paying up. It warned that the lease agreement would be voided on Feb. 2 and Cal Expo would take possession of the water park on Feb. 3.
Cal Expo said in a statement that, as of Tuesday, California Dreamin’ Entertainment was in breach of its contractual obligations.
This came after it first sent a notice to the company on Oct. 31, 2025, about an unresolved past-due balance. An initial deadline to pay was Dec. 4 and then extended to Dec. 18. Cal Expo said its Long-Range Planning Committee denied another request for an extension on Dec. 11.
“Cal Expo looks forward to exploring partnerships and new opportunities for the water park that align with our long-term vision and operational goals that maximize the site’s potential,” Cal Expo said.
KCRA 3 also reached out to Dooner for comment. He acknowledged that Cal Expo had terminated the lease.
“We don’t believe it’s appropriate to litigate business disputes in the media, but we acknowledge the termination and are focused on addressing matters through the appropriate channels,” he said.
Dooner is also the head of another company called California Dreamin’ Presents. The company’s website says it is an official licensing partner of the X Games, which are slated to take place at Cal Expo this summer.
Two-bedroom options begin at $9,360 per month for 1,707 square feet and run up through $14,415 for 2,221 square feet. Three bedrooms are $14,975 for 2,925 square feet and a staggering $33,265 for 3,489 square feet.
Just a mile down the road, though, is a 6,000 square-foot mansion listed for just $15,000 a month. The rental is complete with 5 bedrooms and 7 bathrooms, a pool, hot tub and movie room. In Westlake, $22,000 a month gets you 6,700 square feet of space in a miniature castle. The rental has 5 bedrooms, 6 bathrooms and two spare kitchenettes.
Many of the 22 floor plans at the Residences at Southlake have patios and terraces and extensive closet space. Some of the outdoor spaces include a kitchen area.
The two four-floor buildings feature underground parking and a private dining area in the sky lounge. Other amenities include a dog spa, private co-working areas and EV charging stations.
One of the Residences at Souhtlake buildings is move-in ready, and the other is nearing the end of construction. The luxury apartment complex is just a few minutes’ walk from Town Square.
“We’ve had quite a good set of interest from prospective renters, and we’ve given multiple tours to the HOAs at the Brownstone and Parkview properties, which are the condos right next door,” said a spokesperson for the Residences. “The support we’ve gotten has been overwhelming, it’s been really positive.”
These apartments range from $9,000 to $33,000 a month. Located just a few blocks from Southlake Town Square, the buildings are designed for a luxurious lifestyle. Rachel Royster rroyster@star-telegram.com
Rachel Royster is a news and government reporter for the Fort Worth Star-Telegram, specifically focused on Tarrant County. She joined the newsroom after interning at the Austin American-Statesman, the Waco Tribune-Herald and Capital Community News in DC. A Houston native and Baylor grad, Rachel enjoys traveling, reading and being outside. She welcomes any and all news tips to her email.
The city of Anaheim faces an annual deficit projected at $64 million, so every little bit helps. And, because of the Angels’ poor play, that is exactly what the city got in ticket revenue from its hometown baseball team this year: just a little bit.
Until Sunday, in fact, the city did not know for certain that it would get even a penny in ticket revenue.
As part of their lease to play in the city-owned stadium, the Angels are required to pay the city $2 for every ticket sold beyond 2.6 million. On Sunday, the final day of the regular season, the last-place Angels topped that threshold by 15,506. The payment to Anaheim: $31,012.
In better times — amid a run of six postseason appearances in eight years — the city received more than $1 million annually in ticket revenue. The high point: $1,613,580 in 2006, when the team sold a record 3,406,790 tickets.
Although major league teams do not disclose their financial data, Forbes estimated the Angels generated $120 million in ticket revenue last year. The Angels sold 2.58 million tickets last year, so the city received none of that revenue.
When the city and the Walt Disney Co. — then the owner of the Angels — agreed on that stadium lease in 1996, the 2.6 million figure was largely aspirational. The Angels sold 1.8 million tickets that year. In the previous 30 seasons playing in the stadium, the Angels’ attendance had topped 2.6 million only four times.
The city first received ticket revenue that year, when the Angels’ attendance shot past 2.6 million and topped 3 million. Under Moreno’s ownership, the Angels won five division championships in the next six years and sold more than 3 million tickets every year from 2003-2019.
The Angels have not made a postseason appearance in 11 years — the longest drought in the major leagues — and have not posted a winning record in 10 years. Attendance dropped sharply after the pandemic, and Anaheim has received a share of the Angels’ ticket revenue only twice in the past six years: this year, and $81,150 in 2023.
The city does receive revenue from parking and other stadium events, but only after certain thresholds have been reached. Under the lease, ticket sales are the primary driver of city revenue.
The Angels pay no rent under their lease, since Disney paid all but $20 million of a $117-million stadium renovation. The city said it would make its money back from development of the parking lots around the stadium, which has not happened in the three decades since the lease took effect.
Moreno twice has agreed to deals in which he would own the stadium and develop the land around it, but the city backed away both times: in 2014, after then-mayor Tom Tait objected to leasing the land to Moreno for $1 per year; and in 2022, after the FBI taped then-mayor Harry Sidhu saying he would ram a deal through and ask the Angels for a million-dollar contribution in return. (Sidhu was sentenced to prison last March, after signing a plea agreement that specified he had leaked confidential negotiating information to the Angels. The government has not alleged the Angels did anything wrong.)
In April, current mayor Ashleigh Aitken invited Moreno for a new round of discussions. He made no commitment, and the city subsequently decided to put any talks on hold until the completion of a property assessment designed to determine how many hundreds of millions of dollars would be needed to keep the 1966 stadium viable for decades to come. That study is expected to be concluded next year.
In January, the Angels exercised an option to extend their stadium lease through 2032. They have two other options to extend the lease if they wish: one through 2035, the other through 2038.
The UCLA baseball team was cleared to resume using its baseball stadium at noon Tuesday after a judge temporarily lifted an order barring the team from the stadium on the U.S. Department of Veterans Affairs’ West Los Angeles campus.
U.S. District Judge David O. Carter entered an order Monday restoring UCLA’s access to Jackie Robinson Stadium through July 4, allowing the team to complete its coming season. After that, the stadium will face an uncertain fate.
After a four-week trial this summer, Carter ruled the lease to UCLA of 10 acres on which the stadium sits was illegal because it did not predominantly focus on service to veterans. He ordered the stadium cordoned off in late September.
A class-action lawsuit alleged that the VA had failed in its duty to provide adequate housing for disabled veterans and that its leases of portions of the 388-acre campus for other purposes violated the 1888 deed of the land to the U.S. government for the “establishment, construction and permanent maintenance” of a home for disabled soldiers.
In an attempt to regain use of the stadium, UCLA attorney Raymond Cardozo said the university was willing to nearly double its rent to $600,000 and release two acres for housing. Carter initially spurned that offer while working with attorneys in the case to identify parcels where an initial 106 modular units of temporary housing could be placed.
After selecting the stadium’s parking lot and two other parcels during a hearing Friday, Carter abruptly changed direction, asking attorneys for the veterans who sued why they shouldn’t take the $600,000 and allow the baseball team to play at the stadium when the veterans were not using it. He gave them the weekend to confer with their clients.
Returning to court Monday, attorney Roman Silberfeld said they objected to the terms the judge described.
But Carter said he thought it would not make sense to pass up money that could be used for housing now.
He again urged the university and veterans to come up with a “holistic” agreement by July 4, when the grace period expires, and made it clear he still considers the stadium as a potential site for housing. He suggested that one option would be for UCLA to use more than 30 acres it owns in the Palos Verdes Peninsula for a new stadium.
UCLA praised the decision in a statement attributed to athletic director Martin Jarmond.
“We are excited to practice and play in Jackie Robinson Stadium this season,” it said. “Our young men have been working hard and keeping a positive attitude throughout this period of uncertainty, and we are pleased that they will be able to resume their regular training at the stadium.”
Rob Reynolds, a veteran who acts as a spokesman for the plaintiffs, said Carter’s change of heart “caught everybody by surprise.”
Reynolds said the veterans felt insulted that the amount offered was less than the UCLA baseball coach’s salary.
“It’s a travesty for them to see them get them come back for nothing,” he said.
Invitation Homes, the nation’s largest single-family landlord, has agreed to pay $48 million to settle a handful of allegations, including that it illegally charged undisclosed junk fees, withheld tenant security deposits and engaged in unfair eviction practices.
The settlement was announced Tuesday by the Federal Trade Commission. Among the main allegations made by the FTC was Invitation Homes deceived tenants over the total cost of renting one of its homes.
The company, which owns or manages more than 100,000 homes nationwide, including more than 11,000 in California, did not include mandatory “junk” fees when advertising its rental rates, according to the FTC.
These fees — for things like smart home technology and utility management — at times raised the cost of rent by more than $1,700 a year and were only disclosed when consumers went to sign their lease, the FTC alleged.
By that time, the agency said consumers were in a bind because they had already paid a nonrefundable application fee of up to $55. They may have also forked over $500 to reserve a specific home, which they would only get back if they signed the lease.
Sometimes, consumers weren’t made aware of the junk fees until after they signed the lease and moved in, authorities said.
In addition to junk fees, the FTC alleged Invitation Homes rented out homes that were often in disrepair and systematically withheld security deposits for items that were not the tenant’s responsibility.
Invitation Homes also engaged in several unfair eviction practices, the agency said. Among them, the company told struggling tenants during the pandemic that their only options were to pay, move out or face eviction and failed to inform them of federal eviction protections available at the time, the FTC alleged.
“No American should pay more for rent or be kicked out of their home because of illegal tactics by corporate landlords,” Federal Trade Commission Chair Lina M. Khan said in a statement. “The FTC will continue to use all our tools to protect renters from unlawful business practices.”
In a news release, Invitation Homes said it made no admission of wrongdoing as part of the settlement and described its disclosures and practices as “industry leading.”
“Today’s agreement brings the FTC’s three-year investigation to a close and puts this matter behind the Company, which will, as always, move forward with its continuous efforts to better serve its customers and enhance its practices,” Invitation Homes said in a statement.
The company, which started buying thousands of homes in the wake of the Great Recession, has reached multiple settlements this year.
In July, it agreed to pay nearly $20 million to resolve allegations it made unpermitted renovations across its portfolio in California. In January, it agreed to pay several million to settle allegations it violated the state’s rent cap law.
Under the settlement announced Tuesday, which still must be approved by a judge, consumers would receive refunds and Invitation Homes will be required to include all mandatory monthly fees in its advertised rent.
Jasmine Richardson had been struggling with methamphetamine and fentanyl addiction for more than a decade, but she got sober after completing a six-month program at the Teen Project’s Freehab center on Sunland Boulevard in Sun Valley.
That was right around Thanksgiving last year, and it was the first time the 33-year-old had been clean in years. Still, she wasn’t ready to leave the Freehab just yet; homeless since 2020, she wanted to spend at least a year in the 74-bed rehab facility before finding temporary housing. Then she hoped to move her teenage son up to L.A. to live with her, and to pursue her dream of becoming a veterinarian tech.
All of that was cut short Dec. 4, when the Los Angeles City Fire Department shut down the facility over what it said were building and fire code violations, officials said. The group of 43 women, whose ranks included survivors of human trafficking, substance abuse and homelessness, had a few hours to pack up their belongings and find a new place to stay.
Richardson’s mother, Janet Dooley, picked her up from Freehab and brought her back to Dooley’s home in Huntington Beach. Eight days later, Dooley found her daughter dead from an overdose of meth and fentanyl.
Jasmine Richardson when she was attending middle school in Montana in the 2000s.
(Janet Dooley)
“I believe that if the place hadn’t closed,” Dooley said, “she’d still be alive today.”
More than six months after the closure, questions about why it was forced to shut down are at the forefront of a lawsuit filed by the Teen Project, the nonprofit that operated the Freehab, against A&E Development Co., the facility’s landlord. The nonprofit alleges that A&E breached its lease and failed to maintain conditions that adhered to building codes, regulations, permits and ordinances, resulting in the rehab’s shutdown.
The organization is seeking at least $5 million in damages.
On a GoFundMe page created to raise money for a new treatment facility, the Teen Project blamed its landlord’s “refusal to ensure building’s upkeep” and the Fire Department’s “unwillingness to compromise, and exerting their power, even if it cost our girls their lives.”
According to safety violation notices from the L.A. City Fire Department obtained by The Times, the Freehab had been ordered multiple times since at least September to get a fire permit to operate a residential care facility, hire fire watch personnel, install automatic fire sprinklers throughout the building and obtain a valid permit for the fire door connecting the Freehab and the adjacent building.
The organization was notified via both email and mailed letters addressed to the Sun Valley facility, according to the notices.
The alleged safety issues apparently go back even further. According to Fox 11, LAFD Assistant Fire Chief Kristine Larson told the Freehab’s staff in December: “In 2020, this building was required to have sprinklers, and it does not have sprinklers; therefore, it is unsafe to be occupied for overnight use.”
Lauri Burns, executive officer of the Teen Project, said via email that she found out about the alleged violations a week before the closure.
“They said they weren’t shutting us down and they would give us ample time to fix things, and then they returned one week later and shut us down without notice,” Burns added.
Burns said after learning about the violations, the Freehab complied with nearly all of the requirements and paid around $7,000 a week to have a fire watch on-site at all hours. She said they weren’t able to install sprinklers because that process would take at least a month and require permits and inspections.
Case manager Priscilla Nunez helps put together items in the dining area of the new Teen Project facility in April in Van Nuys.
(Gina Ferazzi / Los Angeles Times)
In its Jan. 31 lawsuit, the Teen Project alleges that A&E failed to address rat and maggot infestations at the Freehab, ignored unauthorized trailers and homelessness in the Freehab’s shared parking lot and didn’t repay the Teen Project for replacing HVAC systems and other amenities.
Because of A&E’s “inability to provide a useable/safe space to lease for its intended purpose,” the lawsuit states, the Freehab was forced to shut down.
“The residents under The Teen Project’s care were traumatically displaced from their safety net, and horrifically resulted in the relapse and death of a young woman only a few days later,” according to the lawsuit.
In court papers, A&E disavowed responsibility for the shuttering of the Freehab, saying “the facts and the law are clear that the A&E is not responsible for ensuring the Premises could be used as a rehab facility.” A&E argued that the Teen Project “voluntarily vacated” the Freehab after the Fire Department and the California Department of Health Care Services revoked permits to operate the rehab facility.
After the Freehab’s shutdown, A&E said, it received a notice from the Teen Project demanding that A&E bring the Freehab up to code. But according to A&E, the lease required it to fix problems only if they were raised within six months of the start of the lease. The Teen Project terminated its lease on Jan. 19 after the conditions to operate the Freehab weren’t met.
The LAFD said in a Dec. 5 statement after the Freehab’s closure that the agency “will continue to provide guidance to the building owner and lessee regarding required compliance with the fire violations and change-of-use permits to ensure the safety and security of the tenants and the property.”
“The California Department of Health Care Services is responsible for ensuring this type of facility is in compliance with the fire code and questions regarding the status of this facility’s license to operate should be directed to them,” according to the statement. “They are also responsible for rehousing any displaced residents.”
LAFD spokesperson Karla Tovar said that a fire code change in 2020 required sprinklers in the type of building that housed the Freehab. The alleged violations were found during a fire inspection and “much research was done with many other agencies before the facility was closed,” she said.
In response to the Teen Project’s allegation that LAFD’s actions somehow contributed to the overdose death of one of the Freehab’s clients, Tovar said in an emailed statement:
“The LAFD is committed to preserving life, protecting property, and safeguarding our communities. Ensuring that buildings operate according to fire and life safety regulations is a matter we take seriously for residents, patrons, employees, and owners.”
A spokesperson from the California Department of Health Care Services confirmed that the Freehab was deemed noncompliant with the fire code. The agency said it was able to get 32 of the 43 women into other treatment centers across L.A. However, Richardson told them she wanted to go home to be with her son, her mother said.
The Teen Project, whose name was born out of “teenagers exiting foster care to homelessness and trafficking,” according to Burns, opened a new facility in June called the Van Nuys Sanctuary. At least 10 of the women who stayed at the Freehab reached out and asked if they could get a spot at the new center, according to Teen Project program director Melissa Coons.
“They have a safe place to be and we really try to make this place look like a home versus an institution,” she said. “We’re really excited to get back to helping the girls in the community.”
Richardson’s problems began in middle school, when she became depressed and started self-medicating with marijuana, Dooley said. It snowballed after she turned 18, when her father died and she later turned to meth. Richardson, her ex-boyfriend and her son lived with Dooley until well into the pandemic, when Dooley said she had to evict them.
Yesenia Sanchez was in the Teen Project program for substance abuse and now works as a cook at the new facility.
(Gina Ferazzi / Los Angeles Times)
“Things got worse and worse, and I had to get them out because I couldn’t live like that,” Dooley added.
After the Freehab closed, Richardson didn’t know what to do. According to her mother, she thought about going to a Narcotics Anonymous meeting. She texted employees from the Teen Project to see if she could get into temporary housing.
On Dec. 11, Dooley dropped Richardson off near the courthouse to handle a legal matter but didn’t hear from her for a few hours. Richardson came home late and said she had been with friends. Dooley got up for work around 3 a.m., and when she came home five hours later, she discovered that Richardson had overdosed.
“Jasmine was incredibly upset and scared” when the Freehab closed, Coons said. “Originally, she wanted to stay with us for a year, and she never really wavered from that.”
Tom Wolf, a recovering fentanyl and heroin addict who founded the Pacific Alliance for Prevention and Recovery, said that structure and routine are especially important in early recovery. Significant emotional events, such as a death in the family, job loss or a breakup can result in relapse.
“These folks were displaced, and even if they were offered shelter or housing in another program, they were displaced from friendships, the support systems and the structure of that specific program,” he said. “If you take all of those things away at once from someone after years of homelessness, it would be easy to go back onto the street and buy fentanyl for $5 and relapse.”
Yesenia Sanchez, 31, struggled with addiction to alcohol, but she has been sober for more than two years after completing the Freehab’s six-month program. She started out as an intern in the kitchen before becoming a full-time cook at the facility.
She wasn’t working the day the Freehab was forced to shut down, but once she heard about the closure, she scrambled to help the women find other places to stay. Some of them, she said, had to go back to living on the streets.
“That was really hard because those were the girls we were helping every day, and we just didn’t have enough time,” she said.
Casey Anderson, another former Freehab client, relapsed almost immediately after the facility closed down. Anderson first started abusing Ritalin as a teenager before getting addicted to meth. She was homeless for more than a year and slept in various parks in Lancaster before deciding she needed to get help.
Casey Anderson outside her sponsor’s home in Simi Valley.
(Michael Blackshire / Los Angeles Times)
Anderson started living at the Freehab in June 2023 and was two weeks away from completing her program when the facility closed.
“It was heartbreaking,” she said. “We all felt safe. We all felt like we had a place to go and then all of a sudden, it was taken from us.”
Anderson didn’t think she would need to go into another program after the Freehab’s closure. Instead, she reverted to living with her parents in Lancaster and quickly got hooked on drugs again. In early April, she contacted one of the program directors from the Teen Project to get on the waiting list for the new Van Nuys facility, where she moved June 6. There were eight women in the program as of June 25.
She is sober again and is hoping to get back to pursuing her dream of becoming a preschool teacher. In the meantime, she recently got a job working as a registered alcohol and drug technician.
“I thought I was ready to leave, but I wasn’t,” Anderson said. “I only had two weeks left, but it turns out I actually needed more. I probably would’ve known that if we had more time to work on it.”
After months of hearings, a federal judge last month ruled that the U.S. Department of Veterans Affairs discriminates against homeless veterans whose disability compensation makes them ineligible for housing being constructed on its West Los Angeles campus.
U.S. District Judge David O. Carter had earlier found that the VA has a fiduciary duty to use the 388-acre campus primarily for housing and healthcare for disabled veterans, casting doubt on the legality of leases that have turned over portions of it for sports facilities, oil drilling and two parking lots.
Neither ruling, however, gave any indication of what remedies, if any, the VA might face. That question will be at issue in a non-jury trial starting Tuesday in downtown federal court, the culmination of more than a decade of legal battles — and half a century of grievances — over the veterans’ land.
In a brief filed last month, attorneys for the veterans asked Carter to issue an order requiring the VA to provide nearly 4,000 units of permanent supportive housing on the campus. That would be an addition of 2,740 units to the 1,215 already in planning or under construction under the terms of a prior lawsuit. They also are asking for the construction of 1,000 shelter beds.
They further ask the judge to enjoin the VA from contracting with developers whose funding sources impose restrictive income limits that bar veterans with disability compensation. If granted, such an order could have a national impact on VA housing construction that relies on third-party developers.
The brief is less specific about the leases to UCLA and the neighboring Brentwood School for athletic facilities and the oil and parking operations. It asks Carter to find the leases invalid but does not say whether they should be nullified or renegotiated to better serve veterans.
American flags decorate tents at an encampment of homeless veterans along San Vicente Boulevard in Brentwood, Calif., on July 4, 2020.
(Luis Sinco / Los Angeles Times)
Justice Department lawyers representing the VA argue in an opposing brief that Carter should not order more housing or issue an injunction because the remedy sought is unnecessary and unfeasible and would place an undue burden on the VA.
The lawsuit, filed last November by 14 veterans and since made a class action, reprised an earlier lawsuit that challenged the leases and asserted an unmet need for permanent housing. In a 2015 settlement, the VA agreed to develop a master plan for the campus. A draft master plan, completed in 2016, called for 1,200 units of housing on the campus in new and rehabilitated buildings with a commitment to complete more than 770 units by the end of 2022. Only 54 of those units were completed by the deadline, and only 233 are currently open.
The new lawsuit, filed by Public Counsel, the Inner City Law Center and law firms Brown Goldstein & Levy LLP and Robins Kaplan LLP, alleges that the VA has reneged on the settlement agreement.
The plaintiff’s lead counsel, Mark Rosenbaum of Public Counsel, said in a hearing last year that the new case was necessary because he had erred by not demanding court monitoring of the 2015 settlement.
“The phrase ‘homeless veteran’ should be an American oxymoron,” the complaint said. “But this is the cruel truth—the federal government consistently refuses to keep its word and take meaningful actions to bring the abomination of veteran homelessness to an end.”
The West Los Angeles campus, formally called the Pacific Branch of the National Home for Disabled Volunteer Soldiers, was established as a home for Civil War veterans on land donated in 1888 by Sen. John P. Jones and his business partner, the socialite and businesswoman Arcadia Bandini Stearns de Baker, scion of a landowning family going back to the mission era. After World War I, the campus “gradually evolved from institutional housing to medical care that allowed Veterans to reintegrate into civilian society,” according to a history on the VA website.
As many as 4,000 veterans lived on the property in the early 20th Century, but the transformation of the campus into a medical center continued after World War II, as advances in battlefield medical care resulted in greater survival rates with more serious injuries. By 1962, the West L.A. VA Medical Center was the largest in the country, with more than 6,000 patients and 4,500 staff.
But in the late 1960s, residential use declined. Then, following the 1971 Sylmar earthquake, the Wadsworth Hospital building was judged seismically unsound and demolished. To make room for a temporary hospital during its reconstruction, the roughly 1,000 remaining residents of the Old Soldiers Home were abruptly evicted. Only about half relocated to other VA facilities, and, after the new hospital opened, the old buildings were left to deteriorate.
Carter ruled in December that the 1888 deed of 300 acres dedicated to the “establishment, construction and permanent maintenance of a branch of said National Home for Disabled Volunteer Soldiers” created a charitable trust and that Congress, in adopting the West Los Angeles Leasing Act of 2016, assumed enforceable fiduciary duties to use the land to benefit veterans.
In May, Carter certified the case as a class action representing all homeless veterans with serious mental illness or traumatic brain injuries who reside in Los Angeles County and a subclass of all class members whose income (including veterans’ disability benefits) exceeds 50% of the area’s median income.
Last month, Carter issued a partial summary judgment in favor of the veterans, finding that the VA discriminates against veterans whose disability compensation makes them ineligible for housing built by developers whose funding sources come with income limits.
“Those who gave the most cannot receive the least,” he wrote.
In the pretrial brief, Rosenbaum argued that the lack of adequate housing at the VA forces veterans with serious mental illness or traumatic brain injury toward institutionalization.
“Homeless veterans with serious mental illness and traumatic brain injury who lack permanent supportive housing experience an institutional circuit of temporary housing, emergency departments, psychiatric institutions, and jails in order to receive healthcare, including mental healthcare, services,” he wrote.
To support their case for more housing, the plaintiffs intend to present testimony from three prominent Angelenos. Developer and former Police Commissioner Steve Soboroff will testify that he has identified space on the campus for an additional 4,000 units. Jonathan Sherin, former director of the Los Angeles County Department of Mental Health, and Benjamin Henwood, director of the Center for Homelessness, Housing and Health Equity Research at the USC Suzanne Dworak-Peck School of Social Work, will testify on the mental health impacts of homelessness.
The government’s opposing brief argued that the 2022 update of the master plan provides for a “supportive, integrated community” with services, amenities and recreational, cultural and open spaces.
The plaintiffs’ demand would impose an undue burden, the government argued, by requiring the VA to build approximately 40 buildings, to obtain a new environmental report clearances for historic preservation and to extend utilities into new areas of the campus.
It cited several improvements the VA has made to its services and changes to the income requirements that make 97% of homeless veterans eligible for federal housing vouchers.
It also argued that housing a majority of veterans with serious mental illness or traumatic brain injury on the campus would “segregate them from the broader community and would likely result in their stigmatization based on their disabilities.”
Carter has not yet ruled on the validity of the leases, which reserve limited time for veterans to use the athletic facilities and generate income from the oil and parking operations for VA operations.
Rosenbaum cited a 2021 report by the VA’s Office of Inspector General concluding that seven of the VA’s land-use leases, including those with the Brentwood School and the oil and parking operators, failed to comply with the West Los Angeles Leasing Act and that seven and a half years after the earlier settlement, no supportive housing had yet been completed.
Lawyers representing Bridgeland Resources LLC intervened in the case and filed a brief in which they argue that the 2017 lease under which the company uses a portion of the VA property to slant drill into a West Los Angeles oil field complies with the West Los Angeles Leasing Act because it provides a 2.5% royalty to the Disabled American Veterans Los Angeles Chapter “solely for the purpose of providing transportation to Veterans on and around the VA Greater Los Angeles Healthcare System Campus.” If that lease were invalidated, they said, earlier leases would then take effect, allowing Bridgeland to expand its operation.
Rosenbaum said those earlier leases also would be invalid.
Neither UCLA nor Brentwood School have had lawyers present or sought to intervene. Spokespeople for UCLA and the Brentwood School declined to comment.
Times researcher Scott Wilson contributed to this article.
BOSTON — The Healey administration is lashing out at Steward Health Care System’s creditors for seeking to block $30 million in state funding to help transition the bankrupt company’s hospitals to new owners.
In a new filing in U.S. Bankruptcy Court, Assistant Attorney General Andrew Troop accuses a group representing creditors seeking to collect $9 billion in debt from Steward of engaging in “brinksmanship” in an effort “to wring out more value from qualified bidders or the commonwealth to salvage their own bad financial, investment or lending decisions.”
“Many of these creditors seem to have lost sight of the importance of providing safe healthcare over the long term, and instead seem intent on saddling bidders with potentially critical levels of debt or obligations, which will only make this crisis a recurring one,” Troop wrote in the seven-page statement.
While the state is “unable” to stop Steward from closing the two hospitals, Troop said it still has “significant police powers” to intervene in the federal bankruptcy process if it “does not result in a clear path to the sale of the hospitals.”
The fiery statement comes as a federal judge in Texas weighs a request from a group representing Steward’s myriad creditors to reject Gov. Maura Healey’s plan to devote $30 million in repurposed Medicaid funding to help transition the sale of six of Steward’s hospitals as part of the company’s bankruptcy proceedings.
Steward plans to put its 31 U.S. hospitals – including Holy Family’s locations in Methuen and Haverhill – up for sale to pay down $9 billion in outstanding liabilities owed to creditors. The company filed for federal bankruptcy protections in May.
Steward said it was not able to find buyers for Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer and announced plans to shut down the facilities in the next 30 days.
U.S. Bankruptcy Judge Christopher Lopez, who is overseeing the case, approved the request to close the hospitals following a hearing Wednesday in a Texas courtroom.
Bids on Steward’s Massachusetts hospitals and other states were due last week, but the company has not disclosed prospective buyers. A hearing on the sales was scheduled for Thursday, but the company asked the federal judge presiding over the case to postpone the proceedings until Aug. 13, without citing a reason.
Last week, Healey officials announced plans to provide $30 million in Medicaid funding to help ensure a “smooth transition” to new ownership for the company’s six remaining hospitals. Healey told reporters earlier this week that “not a dime” of the money will go to Steward or its management team.
But in a court filing this week, a committee representing Steward’s creditors asked Lopez to block the move, arguing that the transition funding would come “at the expense of the rest of debtors, their estates and their creditors.”
On Wednesday, Lopez approved a request by Steward and others to reject a master lease for all the hospital properties, saying the move “is in the best interests of the Debtors, their respective estates, creditors, and all parties in interest.”
The Attorney General’s Office sided with Steward on the lease issue and has accused the hospitals’ landlords – Medical Properties Trust and Macquarie Asset Management – of trying to block the move “to extract concessions from the Steward estate and their mortgagee.
“These hospitals – while each in name a lessee – have been forced to pay the costs typically associated with property ownership, including real estate taxes, maintenance, and insurance,” Troop said in the latest court filing.
Steward’s landlords objected to the request to reject the master lease, arguing in court filings that federal law prohibits the company from stopping rent payments “when their express intention is to continue conducting business in the landlords’ property pending a proposed sale.”
“If a debtor were permitted to reject a lease and stop paying rent, while continuing to conduct business in the landlord’s property, every debtor would do that,” lawyers for the two property owners wrote in a legal filing. “But of course that is not allowed.”
During the hearing Wednesday, Lopez also heard arguments for approving the Healey administration’s request to use the $30 million for transition costs, but it was not clear when he would issue his ruling on the funding.
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhinews.com.
BOSTON — The Healey administration is lashing out at Steward Health Care System’s creditors for seeking to block $30 million in state funding to help transition the bankrupt company’s hospitals to new owners.
In a new filing in U.S. Bankruptcy Court, Assistant Attorney General Andrew Troop accuses a group representing creditors seeking to collect $9 billion in debt from Steward of engaging in “brinksmanship” in an effort “to wring out more value from qualified bidders or the commonwealth to salvage their own bad financial, investment or lending decisions.”
“Many of these creditors seem to have lost sight of the importance of providing safe healthcare over the long term, and instead seem intent on saddling bidders with potentially critical levels of debt or obligations, which will only make this crisis a recurring one,” Troop wrote in the seven-page statement.
While the state is “unable” to stop Steward from closing the two hospitals, Troop said it still has “significant police powers” to intervene in the federal bankruptcy process if it “does not result in a clear path to the sale of the hospitals.”
The fiery statement comes as a federal judge in Texas weighs a request from a group representing Steward’s myriad creditors to reject Gov. Maura Healey’s plan to devote $30 million in repurposed Medicaid funds to help transition the sale of six of Steward’s hospitals as part of the company’s bankruptcy proceedings.
Steward plans to put its 31 U.S. hospitals — including Holy Family’s locations in Methuen and Haverhill — up for sale to pay down $9 billion in outstanding liabilities owed to creditors. The company filed for federal bankruptcy protections in May.
Steward said it wasn’t able to find buyers for Carney Hospital in Dorchester and Nashoba Valley Medical Center in Ayer and announced plans to shut down the facilities in the next 30 days.
U.S. Bankruptcy Judge Christopher Lopez, who is overseeing the case, approved the request to close the hospitals following a Wednesday hearing in a Texas courtroom.
Bids on Steward’s Massachusetts hospitals and other states were due last week, but the company hasn’t disclosed prospective buyers. A hearing on the sales was scheduled for Thursday, but the company asked the federal judge presiding over the case to postpone the proceedings until Aug. 13, without citing a reason.
Last week, Healey officials announced plans to provide $30 million in Medicaid funds to help ensure a “smooth transition” to new ownership for the company’s six remaining hospitals. Healey told reporters earlier this week that “not a dime” of the funds will go to Steward or its management team.
But in a court filing this week, a committee representing Steward’s creditors asked Lopez to block the move, arguing that the transition funding would come “at the expense of the rest of debtors, their estates and their creditors.”
On Wednesday, Lopez approved a request by Steward and others to reject a master lease for all the hospital properties, saying the move “is in the best interests of the Debtors, their respective estates, creditors, and all parties in interest.”
The Attorney General’s office sided with Steward on the lease issue and has accused the hospitals’ landlords — Medical Properties Trust and Macquarie Asset Management — of trying to block the move “to extract concessions from the Steward estate and their mortgagee.
“These hospitals – while each in name a lessee – have been forced to pay the costs typically associated with property ownership, including real estate taxes, maintenance, and insurance,” Troop said in the latest court filing.
Steward’s landlords objected to the request to reject the master lease, arguing in court filings that federal law prohibits the company from stopping rent payments “when their express intention is to continue conducting business in the landlords’ property pending a proposed sale.”
“If a debtor were permitted to reject a lease and stop paying rent, while continuing to conduct business in the landlord’s property, every debtor would do that,” lawyers for the two property owners wrote in a legal filing. “But of course that is not allowed.”
During Wednesday’s hearing, Lopez also heard arguments for approving the Healey administration’s request to use the $30 million for transition costs, but it wasn’t clear when he would issue his ruling on the funding.
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhinews.com.
SAN JOSE — The decision by two tenants to exit downtown San Jose might worsen the maladies that already afflict the urban core’s economy in the wake of the coronavirus.
PwC, a professional services titan, and its recently purchased tech company, Surfaceink, are poised to leave downtown after PwC signed a lease for a big chunk of space in a new office building at Santana Row in west San Jose.
The prospect of tenant departures comes at a time when downtown San Jose already struggles with office vacancy levels that have soared to worrisome heights.
“This is going to raise the vacancy rate in downtown San Jose,” said David Taxin, partner with Meacham Oppenheimer, a commercial real estate firm. “With the amount of vacancy downtown, this won’t help the cause.”
At the end of 2023, downtown San Jose’s office availability rate was at an all-time high of 35.7%, according to a report from Savills, a commercial real estate firm. Office availability measures the combination of empty office space offered directly by building owners and space that tenants are offering through sublease.
As further evidence of a feeble real estate market in downtown San Jose, within the last four months, two large office properties were sold at a big loss compared with their prior sales.
In December 2023, an office tower at 303 Almaden Boulevard was bought for slightly under $23.8 million — which was 70% below the price paid for the highrise at the time of its prior sale in 2017 for $80.2 million.
In February 2024, a two-tower office complex at North Market Street and West St, John Street was bought for $34.2 million — a nosedive of 77% compared with the $141.4 million paid in 2019 for the highrises.
While the price declines are jaw-dropping, experts such as David Sandlin, an executive vice president with Colliers, a commercial real estate firm, point out that the newly established prices at least set a current value for office buildings for office buildings in downtown San Jose.
“We now know the price that a Class A building in San Jose will trade for,” Sandlin said in a prior interview with this news organization on the topic.
The price for the 303 Almaden tower worked out to $151 a square foot while the price for the 111 Market Square tower was $105 a square foot. Some experts note that the 303 Almaden highrise is deemed to be of greater quality than the two-tower office complex.
Also of interest with these deals is that the buyers of each of the office properties are separate groups that both are headed up by George Mersho, chief executive officer of Morgan Hill-based retailer Shoe Palace.
PwC, as a result of its decision to move to Santana Row, a destination mixed-use neighborhood in San Jose, will also shift its new subsidiary, Surfaceink, into the same One Santana West office building near the corner of South Winchester Boulevard and Stevens Creek Boulevard.
“The great thing about the PwC deal is that they stayed in San Jose,” said Bob Staedler, principal executive with Silicon Valley Synergy, a land-use consultancy. “With the amenities at Santana Row, it’s understandable why PwC would go there.”
About 1,200 PwC employees will be located at the One Santana West office building. That move is slated to occur in 2026.
Still, downtown San Jose appears more than capable of being a vibrant host for office tenants and conventions.
The recent Nvidia artificial intelligence convention, in addition to compelling keynotes and packed events, was also the catalyst for lively crowds that poured into the downtown in search of meals, drinks, or entertainment.
“The activation of downtown San Jose and the energy downtown is what is going to appeal to companies with younger employees,” Staedler said. “Having a constant stream of events and activities such as jazz festivals, live performances and other exciting events is the way to attract companies to downtown San Jose.”
PwC is expected to vacate 80,000 square feet at an office tower in downtown San Jose, property experts say. Surfaceink leased 7,000 square feet on Stockton Avenue on the western edges of the downtown.
“You could get a new AI company or software company that wants to be in an urban environment in the PwC spaces,” Staedler said.
Political and city leaders will need to adjust their thinking regarding the downtown in order for the city’s urban core to truly rebound.
“Antiquated dreams of a Trader Joe’s or a Safeway in the heart of downtown are days gone by. They are over,” Staedler said. “Downtown needs to focus on vibrancy.”
“This agreement allows for work to proceed as quickly as possible on the replacement of old and failing pipes under Bath St,” the spokesman said.
The project had been particularly challenging from an engineering perspective, and time had been an important factor, he said.
It had investigated alternative pipe routes as part of its planning, but “almost all routes” had to pass under private property in Bath St at some stage.
The only other option was to run the new pipe along…
The state was long aware of conditions under Interstate 10 where a massive fire Saturday severely damaged the freeway south of downtown Los Angeles — with Caltrans inspectors on site as recently as Oct. 6, according to state officials, tenants and a lawyer for the company leasing the land.
The plot of land was leased by Caltrans to a private company that subleased it to small blue-collar businesses at much higher rents.
For years, a pallet distributor, a recycler, a mechanic shop and a garment factory supplier operated between the freeway pillars on East 14th Street a block east of South Alameda Street. Along the perimeters, homeless people camped and lighted fires to keep warm.
The conditions did not raise any apparent alarm bells among state officials who regularly inspected the site. Google Earth photos from January 2023 and March 2022 show dozens of columns of pallets stacked two stories high, amid piles of tires, wood boxes, cardboard and old vehicles, all visible from four streets and a freeway offramp.
“Caltrans staff inspect all airspace lease sites at least annually to check for potential safety hazards and lease violations,” said Eric Menjivar, a spokesperson for Caltrans District 7, which maintains state highways in Los Angeles and Ventura counties. Areas under and next to the freeway are considered airspace.
“Staff also monitor what is placed or stored on site by the tenant. If deficiencies are noted, Caltrans staff notifies the tenant for remedy. The State Fire Marshal also inspects regularly for fire and life safety.”
Menjivar said Caltrans inspected the property Oct. 6 after Caltrans had filed a lawsuit to remove its tenant, Apex Development Inc., for noncompliance with the lease. The suit, filed in September, said the company had not paid its rent in more than a year and had illegally sublet the land to a host of small businesses.
The California Department of Transportation has not provided inspection reports requested by the Times.
Jose Luis Villamil Rodriguez, who started renting a spot on the property from Apex in 2011, said he watched Caltrans inspectors regularly come to the site.
“They would even take photos,” he said. “Everyone knew what was under the freeway, they saw the pallet yard and so I’m pretty sure they were aware of it.”
Rodriguez said the pallet yard business had been under the freeway for about seven years. He said the owner was constantly storing and moving the pallets. Rodriguez said he never interacted with the inspectors. Out of caution, Rodriguez said he had fire extinguishers at his job site. “Whether others didn’t, I wouldn’t know,” he added.
Caltrans had rented the 48,000-square-foot lot to Apex and its owner, Ahmad Anthony Nowaid, starting in 2008. Under Apex’s lease agreement, the property could be used only for parking operable vehicles and “open storage”; other uses required the approval of Caltrans and the Federal Highway Administration, something the company does not appear to have secured. Apex was also not allowed the storage of inoperable vehicles, flammable materials or other hazards.
The lease agreement between Caltrans and Apex was filed in court as part of the state’s lawsuit against the company for unpaid rent. As of September, Apex owed nearly $80,000 in back rent on the property that burned.
A court hearing in the suit is scheduled for early 2024.
Apex, through its attorney Mainak D’Attaray, confirmed that Caltrans had inspected the lot at East 14th Street at least once a year. The lawyer also disputed that the various small businesses renting from Apex were there illegally; Caltrans “was fully aware of the sublessees and their operations,” he said in a statement.
The attorney argued that state officials were wrongly blaming the company and knew about homeless encampments and the overall conditions at the site.
“Even the State of California’s Fire Marshall inspected the premises,” D’Attaray said in a statement. “Apex is sympathetic to the loss of property and the adverse impact the fire has caused the people of Los Angeles. But Apex was not involved in the fire. Apex is being unfairly scape-goated for something over which it had no control.”
The lot at the edge of the Fashion District is one of five that Caltrans had rented to Apex’s owner, Nowaid. Caltrans had filed eviction proceedings for all five properties, saying Nowaid’s firm owed a total of at least $620,000 in unpaid rent.
Earlier this week, Gov. Gavin Newsom criticized Apex and its owner without specifically identifying Nowaid.
“This guy and this organization, whoever the members of that particular organization are, have been bad actors,” Newsom said at a news conference. “They stopped paying their rent, they’re out of compliance, and as was stated yesterday … they have been subleasing this site to at least five, maybe as many as six tenants, without authorization from Caltrans or authorization from our federal partners.”
D’Attaray said that the eviction suits were retaliation by Caltrans for a lawsuit that Apex had filed in June, accusing the agency of interfering with his business.
He said the governor and Mayor Karen Bass were trying “to excuse their own failures to adequately address the public safety issues caused by the unhoused.”
Apex had repeatedly called the Los Angeles Fire Department to report fires started by homeless people who pitched tents around the perimeter of the lot, D’Attaray said. He claimed that the city’s fire and police departments responded “dismissively.”
“The unhoused persons camping along the fence line of the premises were allowed to remain and accumulate all types of refuse and materials over which Apex had no control,” D’Attaray said in the statement.
A spokesperson for Newsom rejected the idea that the governor’s statements were off base.
“CalFire currently believes the fire was caused by arson — the criminal act of deliberately setting fire to property — in a fenced-off area that Apex was responsible for maintaining while they continued to assert rights under the lease,” the spokesperson said.
A representative for Bass did not respond to requests for comment.
A Caltrans engineer, who asked to withhold his name because he was not authorized to speak, said that it was the state agency that should have seen this coming.
“Caltrans has known about this for a long time,” the engineer told the Times earlier this week. “They have permitted lessees to store flammable stuff underneath these freeways for decades. They’ve had a couple of fires in the last three years that have affected columns, but inspectors can’t completely get underneath the bridge to make a thorough inspection because of all the junk.”
In Atlanta, a similar fire in 2017 caused a portion of the 85 Freeway to collapse after a 39-year-old homeless man who police said had been smoking crack set fire to an upholstered chair on top of a shopping cart.
The fire ignited combustible materials stored under the freeway. Federal investigators found the Georgia Department of Transportation partly responsible.
In an alert sent out to transportation agencies across the country, the National Transportation Safety Board warned: “Although catastrophic fires fueled by materials stored underneath bridges are relatively rare events, the loss of this structure demonstrates what can happen if bridge owners are not vigilant about monitoring and controlling such materials.”
The I-85 closure snarled commuter traffic on the region’s busiest throroughfares for six weeks. In response, Caltrans wrote up a policy directive directly based on that incident that prohibited the storage of flammable materials under its bridges and required access for bridge inspections.
It is not clear if it was enforced.
Assemblymember Miguel Santiago (D-Los Angeles) said the fire on Saturday “should have never happened.
“There’s already protocols in place,” he said. He praised the governor’s response to the fire and his administration, which has pushed the effort to “Fix the 10.”
Santiago said he felt confident that the governor’s office and Caltrans would provide information about the state’s leases, including a review of litigation and enforcement mechanisms.
“Once we get the information there needs to be strong accountability mechanisms in place to prevent anything like this from ever happening again and putting the public at risk.”
Carina Quinto, who runs a mobile mechanic shop out of the freeway underpass, was bewildered by officials. She had been watching news reports about the fire and was surprised to hear officials say they had no idea what was going on under the underpass.
“Supposedly the city didn’t know the kind of businesses that were running under the freeway. They knew exactly what we were doing,” she said. Someone from sanitation came regularly to check that oil was properly disposed, she said.
When asked for proof of the visit, she said, it burned up in the fire.
Times staff writers Taryn Luna and Thomas Curwen contributed to this report.
The Mission Inn Museum could lose its home at its namesake’s historic confines in Riverside if the hotel and the foundation that runs the museum cannot agree on lease terms.
Since 2000, the museum, run by the Mission Inn Foundation, has been housed within the Mission Inn Hotel & Spa, which was built in 1902 and over the years has hosted several U.S. presidents and celebrities including Albert Einstein, Amelia Earhart, Clark Gable and Harry Houdini.
The hotel, run by the Historic Mission Inn Corporation, has been named a National Historic Landmark.
“The Mission Inn Foundation and Museum is being threatened with eviction from the Mission Inn hotel, our home of over 30 years,” the foundation said in a news release.
The museum hosts historical artifacts relating to the mission and offers guided tours of the grounds to guests as well as students.
“If the Mission Inn Foundation is evicted, this may all end,” the foundation said.
Last week, the foundation launched a GoFundMe campaign for a legal fund that, as of Friday, has gathered $1,110 toward its $10,000 goal.
A Change.org petition in support of the museum had gathered 850 signatures as of Friday.
The foundation claims that when the site was sold by the city to private buyers, “the Mission Inn Foundation was specifically written into the sales agreement to ensure that the community would retain access to its most treasured landmark.”
The foundation was to “retain museum space within the hotel, retain the right to give tours and to conduct other museum services for 50 years.”
The situation, however, is more complicated due to a move made by the state in 2013.
The museum has occupied its space under a 22-year lease agreement made in 2000 between Riverside’s now-dissolved redevelopment agency and the Mission Inn Corporation, according to a statement from the city. The lease agreement included two renewal options, each for 10 years.
The redevelopment agency then subleased the space to the museum at no charge.
But in 2013 the local redevelopment agency and hundreds of others across the state were thrown out of business by the California Legislature. Authorized by law since 1945, redevelopment agencies used a portion of property tax money to partner with developers to encourage development in blighted areas.
The state Legislature voted in 2011 to abolish the agencies in order to bolster state tax revenues for schools and public safety agencies. The action was later upheld by the California Supreme Court.
Cities were allowed to form “successor agencies” to complete business started by the defunct redevelopment agencies but could not enter into any new business.
As a result, in 2022, when the successor agency in Riverside attempted to exercise its option to renew its lease with the Mission Inn hotel, state regulators denied its bid.
“The request to renew the lease was denied, with the (State) Department of Finance stating, ‘Pursuant to HSC section 34163(c)(1), successor agencies shall not renew or extend the term of leases,’” the city said in its statement.
The city said it has attempted to work with the hotel and the foundation for two years to either relocate the museum and “generally facilitate a good outcome.” But now the outlook for the museum looks uncertain.
“To date … these efforts between the Mission Inn and the Mission Inn Foundation have not borne fruit,” the city said.
On Sept. 29, the Mission Inn Foundation was served with a notice to vacate the premises.
The Historic Mission Inn Corporation has made “numerous” new lease offers, which the foundation has rejected, Patrick O’Brien, an attorney for the corporation, told the Press-Enterprise.
The Mission Inn Hotel & Spa did not immediately return a request for comment.
Karl Hicks, board president of the Mission Inn Foundation, told the Press-Enterprise that the offer was a single, five-year lease with no renewal options and “nothing after that.”
MIAMI, FLORIDA: In an aerial view, the City of Miami skyline, where many renters reside in the … [+] apartment buildings. (Photo by Joe Raedle/Getty Images)
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With so many fluctuations in today’s market, securing the right tenant has become crucial—they will be a source of cash flow for your investment and losing one could lead to short-term or long-term losses. This means you’ll want to carry out solid research before presenting any leases. You’ll also want to make sure the terms are set up in a way that provides protection for your interests.
That said, the perception that this type of relationship is a “one-way street,” in which the tenants exist to provide rent for landlords and nothing more, is largely a concept of the past. Today, regardless of whether you are dealing with multifamily, office, or retail, you’ll want to consider what you as a landlord can offer renters. When done well, you can help tenants on their own success paths, which can bring benefits for everyone involved in the investment.
Carrying out Diligence
Before taking on a tenant, you’ll want to know, first and foremost, with whom you are dealing. For multifamily, this could be as simple as researching their history and carrying out a credit check. You can follow up on references too. Of course, there are countless nightmare situations which involve tenants who have a bad track record and lack the financial wherewithal to make payments. Taking steps to vet individuals before offering a lease will help you avoid those headaches later. Keep in mind that each state has rules regarding what you can and cannot do when verifying tenants. Speak with a good rental broker for advice on measures you’re allowed to take and to ensure you’re following the legal guidelines.
For office and retail investments, finding the right tenant can be even more important since the leases are typically longer-term. Retail spaces might have three- to five-year leases. It’s common for office leases to run 5 years, 10 years, or even more. In contrast, for multifamily the length of the lease might be only a year. You could also have fewer office and retail tenants than multifamily (or just one).
The Right Tenant Lease Terms
For office and retail, part of the negotiation process often involves how the tenant will initially take the space. There may be specific needs that the business has which require renovations or construction work. You’ll want to agree on how the building will be delivered. There could be tenant improvement allowances, which are given by the owner to help the tenant cover expenses related to moving into the space.
Many times, landlords will provide tradeoffs with tenants and offer free rent in exchange for the tenant carrying out the upfront work. On other occasions, the landlord may be responsible for a good portion of the tenant improvement allowance. In some cases, these types of concessions could mean that you, as a landlord, won’t receive rent for a year or two.
For this reason, you’ll want to do all that you can to ensure you’re bringing on a creditworthy tenant. You can speak to past landlords to verify that the tenant is financially capable and a good steward of the space. To know what’s commonly expected in your market, work with a local leasing broker who is familiar with the customs. Also bring in real estate counsel to help you get the best terms and protect your interests.
When Larry Haber, the managing partner of the Commercial Real Estate Department of the bi-coastal firm Abrams Garfinkel Margolis Bergson, joined an episode of my podcast, “The Insider’s Edge to Real Estate Investing,” he stressed the importance of legal considerations when setting up a lease. Be aware of the “good guy clause,” which states that a tenant who is current on the lease has the option of giving back the keys and walking away, provided the place is in good condition.
Financials for Office and Retail
Credit tenants have sufficient guarantees and financial backing, and are often household names or national chains. You can find credit ratings at places like Moody’s or S&P. Avison Young also has Net Lease Advisor, where you can check the average cap rate associated with a tenant along with cap rate trends. As of August 2023, Sonic was listed with a credit rating of B2 by Moody’s, B+ by S&P, and a cap rate of 5.34%. It had a cap rate of 6.10% in 2021 and 5.42% in 2022. CVS had an average cap rate of 4.8%, shifting from 5.70% in 2021 to in 5.40% 2022. Its S&P rating was BBB and Moody’s ranked it Baa2.
Smaller, non credit tenants will typically have a higher cap rate, and they will often pay higher rents to adjust for that. They may be asked for more security too, since they lack a corporate guarantee. If you’re planning to resell the asset, the tenant and associated cap rate could play a significant role. A bank might be looking for the lower risk that typically comes with a credit tenant that has a corporate guarantee.
Don’t Overlook Smaller Players
While some sources will view a national tenant as being more creditworthy than others, I always like to point out that a mom and pop tenant can be just as valuable. Many of these mom and pop tenants have held their business for a long time and maintain great pride in their space. They will often do everything possible to make the space work and carry on, even if there’s a downturn. This was especially true in certain areas post Covid, when we saw many national tenants close stores and make large scale exits.
With a changing market, the relationships you cultivate with tenants will continue to have utmost importance. As you set up a lease, understand what’s in the fine print, especially if you’re making a significant financial investment initially. When carried out well, you can have a long-term tenant who will ultimately become your partner in the building and investment.
The PwC Tower (left) has a zero vacancy factor. Photo / Michael Craig
Don’t call them ghost towers any longer because the chief of a billionaire landlord and a research boss have cited rising numbers of workers back in Auckland’s heart.
On Monday, Precinct Properties chief executive Scott Pritchard talked of office popularity soaring, “work from work” being the latest trend and a study of lift movement in buildings showing many of the approximately 10,000 people on two waterfront blocks returning Monday to Friday.
Gavin Read, JLL research head, backed that up, saying research his business released in May showed Auckland office block vacancies had dropped, as more people returned to work, commercial space made a comeback and more leasing deals were struck.
The ANZ Centre: 22 per cent is empty. Photo / Dean Purcell
Last year, the Herald reported on three big blocks with many empty floors. The ex-Chorus House at 66 Wyndham St was then 59 per cent empty, the former Lumley Centre at 88 Shortland St was 30 per cent empty and the ANZ Centre on Albert St was 22 per cent empty.
But JLL’s most recent survey found 66 Wyndham only 47 per cent vacant in this year’s first quarter, the ex-Lumley Centre now called Shortland and Fort only 5 per cent vacant and the ANZ Centre on Albert St just 7 per cent vacant.
Precinct sold half the ANZ skyscraper on the Albert/Swanson corner to giant American business Invesco in a deal struck in 2018, then the other half…
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