Homeowners Pass on Money to Save the Neighborhood : Developer's Plan to Buy, Raze Houses for Apartments Runs Into Buzz Saw

Times Staff Writer

On a Saturday morning in April, three homeowners who had long lived side by side in a mid-city area of circa-1920s Spanish bungalows had a fateful meeting with a developer.

They had arranged the session after getting wind of what the future might hold for their neighborhood, made up mostly of single-family homes with a few small apartment buildings here and there.

The quiet, racially integrated area, bounded by Pico Boulevard and Airdrome Street, Fairfax Avenue and Crescent Heights Boulevard, was apparently slated for an apartment-house building boom. "If this whole area is going to go, we'll go too," homeowner Veda Steinhart said she thought at the time.

Warning on Moratorium

According to Steinhart and others at that meeting, the developer, whom they identified as Kenneth Bank, gave them a lesson on how to accomplish a quick, lucrative getaway. Secrecy was essential, they said Bank told them, lest the rest of the neighbors figure out what was going on.

Any discord could start an uprising, possibly resulting in downzoning or a moratorium on building apartments where they are currently allowed under zoning laws.

The plan, perfectly legal, was to obtain permits during a lengthy escrow, demolish the homes the second escrow closed and quickly lay the foundation for the apartment buildings before they could be stopped, Bank explained to the group, several of them recounted.

The homeowners took the developer's advice to heart--and turned it against him and all of the others who, as homeowner Fern Paillet put it, "want to come in and rape our neighborhood."

In a telephone interview Wednesday, Bank said he did not remember the meeting the same way. Asked if he had stressed a need for secrecy, he said, "I don't remember saying anything of the kind.

"I didn't go to that meeting to give those people an education. I went there to buy a piece of real estate."

Instead of selling out and moving on, the homeowners became the nucleus of a newly formed group called Pico-Fairfax Good Neighbors Assn.

At City Hall

About 100 of them were at City Hall on Tuesday morning in support of an emergency measure to keep the character of their neighborhood as it has been for more than 60 years. A proposed moratorium on building and demolition permits could prevent a selling panic and delay construction of wall-to-wall apartments while an interim control ordinance is passed. Later a new permanent plan will be devised.

The old master plan, adopted years ago, calls for apartments, a use not likely to be popular in the slow-growth climate of today.

At the homeowners' urging, Councilman Nate Holden, who represents the neighborhood, proposed the moratorium to the Los Angeles City Council on Tuesday. The council referred it to the Planning Commission for a review scheduled for today, and will vote on it next week.

It was clear from the comments of several council members that the survival of this tiny area has citywide implications. "These are the kinds of neighborhoods where the battlegrounds really are," said Councilman Joel Wachs.

At stake is whether middle-class residential neighborhoods of single-family homes will survive in the city, or whether they will be supplanted by multidwelling units, Wachs said.

The president of the homeowners' group, attorney Terry Steinhart, a 21-year property owner, said the rarity in Los Angeles of a stable, peacefully integrated neighborhood offered a sociopolitical basis for maintaining its charm. Coupled with slow-growth sentiment, "I think the climate is favorable to our position," he said.

Area Rediscovered

The predominantly black middle-class area, a part of town known as Mid City, has seen a substantial influx of young white professionals in the last several years. With home prices soaring and traffic congestion growing, the centrally located area has been rediscovered. Its authentic Spanish homes, many of which sit on lots that are fairly large by Los Angeles standards, make it particularly desirable.

Louis Sapiro, a three-year-resident, called the area "a shining example of integration," where many houses are being fixed up and remodeled. Prices, which have doubled and tripled over the last several years, are, for the most part, in the $350,000 to $400,000 range, he said.

And then came the deluge. Virginia Thomas, a school counselor who attended the April meeting with the developer, refers to her pile of junk mail as her "Realtors-bugging-us" file. Since she started saving them in February, Thomas has a few dozen pieces of mail from real estate dealers and developers urging homeowners to sell their property. One flyer said, "All cash offers on your property."

Thomas and others said they received phone calls offering to buy their houses sight unseen. The price offered on the property was based on how many units could be built there.

"They couldn't have cared less about the house," Veda Steinhart said. She likened the process to blockbusting, where a few people would be offered a high price, causing others to get scared and sell cheap.

Some Sellers Were Elderly

A few of those who sold were elderly people, who had bought their homes for a relative pittance decades ago, she said.

But after meeting with developer Bank, the Steinharts, the Thomases and, ultimately, others starting thinking about where they could take their profits and "move up." Their answer: nowhere as nice as where they already lived, without saddling themselves with monster mortgage payments, higher property taxes and a less convenient location.

Residents said they are alarmed by the prospect of more apartments, which attract a more transient crowd and which, the Police Department has advised them, bring more crime to the area. One new building has already borne that out, when someone shot from an apartment into the window of a home next door.

Ardelia Middleton, a retired X-ray technician, bought her home 23 years ago for $31,000 and has been offered $375,000 for it, sight unseen. After the City Council meeting, Middleton said she feels like the neighborhood "is being invaded" by developers "who are sneaking by everybody."

She said she must walk daily for her arthritis and frets about an anticipated influx of gangs and drugs if the area goes over to apartments.

After pressuring Holden for the interim control ordinance, and getting his assurance that matters were under control while the public hearing and approval process were in the pipeline, homeowners relaxed--until Aug. 25.

Single-Family Home Razed

That day, without warning, a single-family dwelling on Hi Point Street was razed. The site was excavated the next day, leaving a huge hole and causing an uproar as the homeowners accused Holden of misleading them.

The developer of the Hi Point Street lot was identified by Holden aides as Mike Stern. Stern was out of town and not available for comment Wednesday, a woman at his office in Beverly Hills said.

Holden's office was flooded with calls and a toughly worded mailgram was dispatched to him from the Good Neighbors group. At an evening meeting last week attended by more than 160 irate homeowners, Holden said he rushed to the excavation site, bringing council President John Ferraro with him, to illustrate the urgency of the situation.

Kenneth Topping, director of the city Planning Department, told the homeowners that the giant hole in the ground gave the city "full legal grounds to declare an emergency." The remedy, a moratorium on issuing building and demolition permits in their neighborhood, was drafted "practically overnight" and would offer "very drastic, very immediate" relief, Topping said.

Topping said comparable emergencies exist in more than a dozen places in the city. One of them in the Wilshire area of Holden's district was included in the proposed moratorium.

At the council session Tuesday, Holden and some of his colleagues complained about a Building and Safety Department practice that allows developers to obtain building and demolition permits for property they don't yet own. "That's shocking," Holden said.

Councilwoman Gloria Molina said she had the same problem in her Eastside district, as did Ernani Bernardi in the San Fernando Valley. "I think this is wrong. Why do we permit this?" Bernardi asked.

Holden introduced a measure to punish developers who illegally demolish buildings by preventing them from building on the property for five years. The current penalty is a fine of $1,000 or six months in jail.

At the meeting last week with his constituents, Holden warned them that developers had a "pipeline to city hall" and would fight a moratorium or downzoning. "It's not going to be a cakewalk," he said.

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