New Wilmington Arms, a housing project so notorious as a drug bazaar that one city councilman says it should be demolished, is for sale.
Its owners, Goldrich & Kest, say that after a decade of trying to turn the troubled project around, they are throwing in the towel.
“We’re exhausted,” said Robert Hirsch, the Goldrich & Kest partner in charge of the sale. “We’ve spent 10 years with it, and all we’ve been is kicked. We’ve not been able to do the turnaround that we have done with other projects we owned.”
A collection of cocoa-colored buildings at the corner of Laurel Street and Wilmington Avenue, the project is home to about 1,000 people, most of them women and children on public assistance. At least seven of the 163 units are boarded up. Grass around the complex is dried and dying. Mattresses and other trash are strewn about.
Police, city officials and Goldrich & Kest agree that drug dealing has been the No. 1 problem at Wilmington Arms for years.
“Everyone knows what goes on there,” Councilman Maxcy D. Filer said with disgust. “I think we should proceed by declaring it a public nuisance and abate the nuisance by confiscating and demolishing it.”
Four years ago, police records showed that in a 12-month period there were 63 drug-related arrests in or around the complex. On a recent Saturday morning, police conducted a surprise visit, armed with a search warrant and confidential information that pinpointed one apartment as having a cache of drugs. They did not find drugs in the apartment, but arrested three young men in the parking lot on charges of possessing drugs for sale.
In 1985, in an effort to force Goldrich & Kest to rid the project of dealers, the City Council passed a public nuisance ordinance that allows the city to go to court to confiscate and demolish a property if its owners will not take steps to evict dealers and renters who allow their apartments to be used for drug sales.
The city stopped short of going to court, however, when Goldrich & Kest, which owns more than 100 low-income housing projects around the state, promised to take steps to clean out the drug dealers. The firm, which bought the project in 1978 from an owner that had gone into default, said it would improve security, put in new lighting and remove the carports that often shielded drug transactions.
Goldrich & Kest took those measures, but Hirsch says the firm has run out of ideas for dealing with what he says is an escalating drug problem in inner-city areas.
“We have put forward a very substantial amount of money and our best efforts to date and it’s entirely logical that a new broom with proven core (inner-city) experience . . . will do a much better job and give the tenants a much better environment,” he said.
Hirsch says that the firm has tried many times to evict drug dealers who are tenants and tenants who allow dealers to use their apartments. But the firm has been stymied, he says, because the courts are reluctant to evict people.
Filer and City Housing Director Ambrose Stevens are skeptical of Goldrich & Kest’s efforts to clean out Wilmington Arms. They point out that the firm owns another low-income project on Rosecrans Avenue--Douglas Park Apartments--that is a model of civility. Police say they have had no trouble with drugs there.
Hirsch says the three-story design of Wilmington Arms, with interior hallways, makes it difficult to properly police. Goldrich & Kest build most of the projects they own, but did not build Wilmington Arms, Hirsch said. A much better living and policing environment can be created in a garden-style project in which all the units open onto the outside, he said.
Stevens said Goldrich & Kest’s management team is not adequate. “Under the proper management it is not going to be in the condition that it is,” he said.
The firm has a buyer for the project. The purchasing syndicate includes Paul Saben, a Sepulveda investor, and Robert Fillet, an investor from Newport Beach. They have recruited a management firm, Alpha Property, which they say can operate the complex properly.
‘Bargain Sale’ Considered
City officials, however, are considering exercising options under a new federal program that would increase the city’s share of the money to be made on the housing project sale. Known as a “bargain sale,” the federal program is designed to promote low-income housing investment and the rehabilitation of troubled projects.
The program requires that the project be sold to a public agency such as a city or to a charitable organization. The city or the charity would immediately sell to a specified buyer at a higher price. To sweeten the deal financially for the buyer and seller, the original seller would get a charitable deduction and the eventual buyer would get tax credits, which are, theoretically, supposed to allow the buyer to have money left over for rehabilitation.
Higher Price Sought
Goldrich & Kest wanted to sell to Saben under this arrangement, but the city staff is recommending that the city look for other buyers who might be willing to pay it a higher price. A resolution authorizing the city to solicit other potential buyers is being prepared by Stevens, the city’s housing director.
“For once in our lives,” Stevens said, “let’s go for the best deal.” This is the city’s chance, he said, to make some money and to scrutinize the next owner.
Goldrich & Kest could proceed with the sale to Saben and still get all the tax benefits if the two can find some other public agency or charitable organization that wants to participate. Saben said there are many such groups willing to be intermediary buyers.
Hirsch says his firm wants to sell to Saben and Fillet’s group because they trust it and its management firm to do a good job at Wilmington Arms. Hirsch also said he advertised widely for buyers, but received only a few offers.
But Paul Provda, founder of the Foundation for Social Resources Inc. in Santa Monica, a nonprofit housing group that is advising the city about its options under the federal program, says that there are as many as 40 other potential buyers that might be interested in Wilmington Arms, and that the city should seek out the buyer willing to give the city the best offer.