CRA to Sue Bistro Owners Over Loan

The Board of Directors of the Los Angeles Community Redevelopment Agency has voted to take legal action for repayment of a controversial $250,000 loan to the owners of the downtown Stock Exchange nightclub, according to the CRA’s chief deputy administrator, Judy Broverman.

Broverman said Monday that the CRA board voted to sue two owners of the club who had pledged personal assets against the loan, which she said came due at the end of June.

But one of the owners, Brian Potashnik, said that the CRA had reneged on its commitment to lend $1.5 million to renovate the historic Spring Street building where the club is located.

Potashnik said the $250,000 represented an advance on the loan. After the CRA failed to lend the rest of the money, Potashnik said building owners stopped repayment of the $250,000 on the advice of their lawyers.

The CRA was harshly criticized by the Legal Aid Foundation of Los Angeles, downtown homeless advocacy groups and at least two members of the City Council, Zev Yaroslavsky and Ernani Bernardi, for lending public money to a fancy nightclub instead of using the money to house and feed poor people.

CRA officials said the loan was part of an effort to rehabilitate the old Pacific Stock Exchange Building, which is included on the National Register of Historic Places. Broverman said the loan was to be used to help the building meet city fire code requirements.