Brookins Hid Ownership of Building, Report Says : Redevelopment: The bishop received an additional renovation loan by using a church corporation, a city investigator charges.

City investigators have found that on two separate occasions Bishop H. H. Brookins disguised his ownership of a run-down office complex to obtain controversial government renovation loans, according to a report that will be considered today by the City Council.

The Times reported in February that Brookins received an initial $238,000 loan of federal poverty funds in 1982 through a non-existent California church corporation that was listed as the building’s owner.

Brookins then qualified for an additional $91,000 in loans by leading city officials to believe that the property was still owned by the church corporation, said George C. Hughley, chief of the Community Development Department’s special investigations unit.

But records show that a private company established by Brookins acquired the property in 1984--well before the new loans were issued in 1985 and 1986.

“It’s another case of misrepresentation on the bishop’s part,” Hughley said in an interview Tuesday. “He misrepresented the whole situation to get roughly $90,000.”

Neither the original loan amount nor the additional $91,000 would have been approved if city officials had known that Brookins or a company he incorporated--California Southway Development Corp.--owned the property, Hughley said.

Brookins, a longtime leader of the African Methodist Episcopal Church and political mentor to Mayor Tom Bradley, could not be reached for comment Tuesday at his Washington office.

The bishop’s attorney, J. Stanley Sanders, told the City Council’s Community and Economic Development Committee last week that it is “far-fetched” to suggest that Brookins misrepresented his interest in the complex. Sanders also said there is no evidence that Brookins has personally benefited from his ownership of the property.

The City Council and the economic development committee are scheduled this morning to consider a proposal to recover about $48,000 that the city paid for rent in the Southwest Los Angeles office complex. Community Development Department reports have concluded that the money is owed to the city because Brookins had a conflict of interest in his dual role as a landlord who collected city rent for his Crenshaw property while serving as head of a 10-year-old poverty program located in the building.

Last week, Hughley told the council committee there was “irrefutable evidence” that Brookins, not the church, had owned the building since 1977.

Deputy City Atty. Frank Orozco said Tuesday that his office agrees that Brookins owned the property for the past 13 years and had a conflict of interest. The city attorney will recommend today that the council sue to recover the back rent, Orozco said.

But Sanders insisted that the property was purchased by the African Methodist Episcopal Church in 1977, transferred to Southway in 1984 and first acquired by the bishop in 1988, according to a 29-page report submitted to the council last week on behalf of Brookins. Thus, Sanders said, Brookins had no conflict and does not owe the city a penny.

If that is the case, Brookins and Southway would owe thousands of dollars in back property taxes because the property was not reassessed at a higher value when it changed hands in 1984 and 1988 as Sanders now contends, city officials said. Instead, the property value remains at the 1977 level because no change of owners was reported.

“(Sanders) has either got to say that Brookins bought this property in 1977 (and improperly obtained the city loans) . . . or he’s got to say this whole thing was a (tax) scam,” Hughley said in an interview. “ . . . You cannot have it both ways.”

Sanders responded: “I disagree. I think we can have it both ways. We’ll see.”

The three-story building housed the South Los Angeles Development Corp., a program headed by Brookins that offered job training and education for poor residents. A few years after the city issued the renovation loan to Brookins, the program moved from the renovated building to a dilapidated office next door. Brookins then leased the renovated offices for $10,000 a month to a private trade school. The program, meanwhile, has received more than $500,000 in federal funds through the city while suffering from a long history of problems ranging from failure to pay taxes to theft of public funds, according to state and city reports. In February, the city canceled its $87,142-a-year contract with the poverty program.

Today, Brookins personally owns the building, which loan records indicate is worth about $1 million.

There are conflicting accounts about how the building was acquired: Sanders said that the AME Church purchased the building in 1977 for $250,000 from Clark E. Parker, an insurance company executive and an acquaintance of the bishop. Parker told the district attorney’s office that he donated the building to the church through Brookins, investigative reports show. And Brookins told investigators that he spent the $250,000 on building improvements and unspecified financial obligations.

The city investigation concluded that Brookins disguised his ownership of the building by placing it in the name of a non-existent organization, Southern California Conference AME Church Inc. The company was never registered with the California secretary of state, records show.

By using the church organization, Brookins was able to receive the federally funded loan, Hughley said.

The building was then acquired in 1984 by California Southway Development Corp. as part of a plan by Brookins to put together a group of investors willing to carry the building for tax benefits, Sanders said in his report.

The following year, Brookins went back to the city to apply for an additional $91,000 to finish the renovation, Hughley said. But when he applied for the new loan, Brookins submitted the owners as the AME church group, not Southway, Hughley said.

Hughley suggested that the bishop did this for two reasons: The city would not have approved the loan to a private corporation held in Brookins’ name, and the existing loan agreement required Brookins to repay the city if the church no longer owned the property.

“This was a specific act,” Hughley said. “It’s obvious why he did it: To get some more money.”