Board in Dark When It OKd Exemption, Rent Official Says

The Santa Monica Rent Control Board “overlooked” damaging information in its own files when it allowed an apartment owner with a long history of alleged rent control violations to convert his building to a hotel, according to the board administrator.

Howell Tumlin said the board was unaware of complaints lodged against Daryoush Nourafchan when it exempted his 220 California Ave. apartment building from rent controls earlier this month.

Tumlin said a new staff report failed to mention that a board investigator had once recommended criminal prosecution of Nourafchan for violations of the rent control law, or that he was involved in an ongoing eviction dispute.

“It strikes me as odd that the staff report didn’t discuss the history of the property,” Tumlin said. “The appropriate thing would have been to tell the board. . . . The report doesn’t allude to any complaints, and it should.”

The oversight was called to the board’s attention by Eleonora Swanson, who was evicted from Nourafchan’s 36-unit Cal Mar Hotel this summer. Swanson claimed that the board erred in awarding Nourafchan’s hotel exemption without full knowledge of the property. Commissioner Wayne Bauer agreed, and has asked the board to reconsider Nourafchan’s exemption at its Oct. 3 meeting.

“I was originally under the impression that the evidence was sufficient to make a finding,” Bauer said. “We considered the case pretty quickly and nobody brought up any past difficulties with the property.”

Nourafchan, whose family has other real estate holdings in Santa Monica, refused to comment. City officials said it is surprising that the board overlooked the fact that the building had such a long history of tenant-landlord disputes.

Santa Monica City Atty. Robert Myers’ office took Nourafchan to court over alleged rent control violations in 1980. And Tumlin produced a Nourafchan folder bulging with hearing records and tenant complaints, including Swanson’s one-page objection to the exemption request.

Commissioner Eileen Lipson, who chairs the board, said the agency apparently made a mistake by acting without reviewing the voluminous Nourafchan file. Lipson said she hoped the board would reconsider the matter.

“It sounds like an administrative mistake,” Lipson said. “The name (Nourafchan) sounded familiar . . . but it didn’t mean anything to me at the time. I’m sure our attorneys will figure out what the correct procedure is.”

Lipson said that the board based its decision on the most recent staff report that recommended the exemption, which frees Nourafchan of financial restraints imposed under rent control. The report stated that the bulk of Nourafchan’s tenants are transients, but failed to acknowledge that any of his permanent tenants objected to the exemption.

It was only later that board members learned that Nourafchan’s property had been the focus of considerable controversy. Nourafchan has owned the two-story building, located north of Wilshire Boulevard and one block from the ocean, since February, 1978.

The first Rent Control Board report on Nourafchan was compiled in October, 1979, when five tenants and one former tenant alleged that he was guilty of serious violations of the city’s rent control law.

According to the report, all but one of Nourafchan’s tenants were under leases, paying an average rent of $225 a month, when he purchased the property. Within three months of the purchase, Nourafchan served 30-day eviction notices to all but one of the units for the “purpose of making extensive renovations,” the report stated. A sign advertising weekly and monthly rentals was placed on the building shortly afterward.

Only three of the 35 original tenants served with the eviction notices fought them and won, according to the report, which added that Nourafchan charged $600 to $675 a month for the units, which he considered hotel rooms. In addition, the report noted that Nourafchan initially failed to register with rent control, even though he advertised the building as an “apartment-hotel” in the telephone directory, and failed to pay any bed or occupancy tax to the city in 1978 or 1979.

The board investigator concluded that Nourafchan had chosen to “ignore or evade” the taxes. He also determined that at least seven of the Nourafchan units were legally protected by rent control, and that Nourafchan had charged excess rents while trying to illegally evict tenants. Based on those findings, the examiner recommended that the board “initiate criminal prosecution.”

Instead, the city attorney’s office charged Nourafchan with illegally evicting tenants in 1980. Deputy City Atty. Shane Stark said the case was one of the first prosecutions that occurred under rent control. “He (Nourafchan) had locked out tenants, and he was rather evasive of process (serving) as I remember it.” Stark said. “We had to literally chase the guy.”

The charges were later dropped under a plea bargaining agreement that required Nourafchan to register seven of his units with the rent board in compliance with the rent control law. The ruling also required that Nourafchan apply for exemptions for his remaining units and make his records available to the rent board staff.

Swanson, who had lived in apartment 112 of Nourafchan’s building since 1974, said she was under the impression that she was protected by rent control under the agreement. The wife of a traveling scientist, Swanson divided her time between New York and Santa Monica, and records show that she paid her $370 monthly rent by wire from funds in the Long Island Trust Co.

Swanson said the arrangement worked until last April, when she learned while traveling in Europe that her son was unable to enter her apartment because the lock had been changed. Upon returning to New York in June, Swanson said she found a certified letter stating that the April rent was overdue.

“I immediately called (Nourafchan’s) number,” Swanson said in a sworn statement made after the eviction. “ . . . I inquired as to the purpose of the three-day notice since the money had already been wired. . . . His reply was, ‘That’s not what my books show. Let me see your receipts from December, 1984, through April, 1985.’ At no time was there any mention of (eviction).”

Walter K. Rosen, an attorney retained by Swanson, sent records of Swanson’s payments to the apartment building management on June 7. When Nourafchan’s representatives claimed that they had not received the receipts, Rosen said he mailed another set of copies in late June. “At no time during the period described herein was I informed . . . that proceedings to evict Mrs. Swanson from the apartment were undertaken,” Rosen said in a sworn statement.

Swanson said that she did not learn of the eviction until July, when she received a notice in New York stating that she had about three weeks to claim her “abandoned property” before it was sold at public auction.

“As soon as I could I returned to California and made arrangements to safeguard the property,” Swanson said. “(Nourafchan) actively concealed the (fact that an eviction proceeding was under way) to obtain possession of my apartment, so that he could rent it for a higher amount.”

Swanson reported the dispute in a form attached to Nourafchan’s exemption application in August. In a one-page handwritten objection, Swanson told the board that Nourafchan was evicting her on “fraudulent” grounds in order to free her apartment for use as a hotel room.

She sought to speak out against the exemption again on Sept. 12, when the rent board met to consider the application. But the board raised the issue and approved it without giving her an opportunity to speak.

Asked about the incident, Tumlin said the board apparently overlooked her request. He called the matter “regrettable” and said that the board would do everything possible to rectify the matter.

Swanson, meanwhile, is still trying to get back into her apartment while paying to keep her belongings in storage. “I’ve been told that they’ve rented my apartment to somebody else,” she said. “I feel like a bag lady.”