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A City Council committee Monday approved a recommendation concerning the removal of Mark Adams, the receiver appointed to oversee 29 dilapidated buildings in the Skid Row area that house approximately 1,500 low-income tenants.
The council’s Budget, Finance and Innovation Committee also greenlighted a related recommendation to authorize a $10 million loan to maintain and repair buildings under the receivership.
Both recommendations were approved on 3-0 votes with Councilwoman Monica Rodriguez absent from Monday’s meeting.
Housing Department General Manager Ann Sewill and City Attorney Hydee Feldstein Soto explained the need for the loan, which is contingent on the appointment of a new receiver, Kevin Singer, who would replace Adams.
“From the perspective of my office and me specifically, this is a difficult ask,” Feldstein Soto said. “We would not be here if we weren’t persuaded that it’s absolutely necessary to preserve the housing and the services for 1,500 of our most vulnerable residents.”
The council does not have the authority to fire Adams, who was appointed by a Los Angeles Superior Court judge at the city’s request. The council would have to petition Judge Mitchell Beckloff to dismiss Adams and appoint a new receiver.
The buildings are owned in whole or in part by the Skid Row Housing Trust, which collapsed financially earlier this year.
Sewill released a report Friday stating that some of the buildings could be irreparably damaged and should be demolished. In addition, the Los Angeles Times reported that many of the tenants suffer from “filth, clogged plumbing, pest infestations and constant intrusions by street people who use drugs, set off fire alarms and sleep in hallways.”
Adams has drawn criticism for allegedly failing to make progress on rehabilitating the buildings and finding credit at good rates. Last spring, a firm he hired sent eviction notices to hundreds of tenants who were behind on rent.
Adams, whose appointment did not include the authority to evict tenants, said he did not authorize the notices and retracted them.
Adams told The Times that he would respond to the city’s report in court, and cited Beckloff’s previously stated support for him.
Feldstein Soto told the committee that she was not there to “rehash whatever may have happened in other receiverships in the past,” but rather strictly on the “basis of what has occurred in this receivership.”
She reiterated that with Adams there has been a lack of transparency, including the accounting of “approximately $3.5 million worth of rent” that her office estimates Adams has collected since he was appointed as receiver in April.
“So even as recently as last Friday, the proof is in the pudding. And even despite a court order requiring reporting, we still have not got the kind of report that one would expect from a financial fiduciary like a receiver,” Feldstein Soto said.
“We’ve lost confidence that this particular receiver can perform,” she added.
Councilman Bob Blumenfield, chair of the budget committee, recognized that the homelessness situation in the city is a “humanitarian crisis” and asked how a new receivership would address the issues aforementioned differently.
Feldstein Soto responded that Singer, who is principal and CEO of Receivership Specialists, was originally identified by Sewell. He was vetted by the Housing Department and the City Attorney’s Office.
“I’ve personally communicated with the city attorney for San Francisco, who gave him glowing reviews, and we have to the best of our ability done as diligent job as we can,” Feldstein Soto said.
Sewill in her report indicated the loan will be repaid when the properties exit the receivership, either by the limited finance partners or by other housing from the Housing Department and possibly from other government partners.
The $10 million loan is expected to cover receivership costs and repayment of the Adams‘ expenses, for up to six months. Though there may be additional costs for repairs and other expenses that are not yet known by the city.
Sewill indicated that the goal is to stabilize the trust properties as safe places to live until each property can be transferred to a replacement general partner or owner.
“We need to have confidence that what’s going on with these buildings — with these properties — would be at the caliber of services that we would come to expect in the situation,” Feldstein Soto said.
“And for all those reasons, it’s very difficult to come and admit a mistake. But I do think part of our jobs is that if there’s a mistake to correct it.”
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