Land Baron of Lawndale : Brash Jonathan Stein Brought Upscale Townhouses to the Blue-Collar Enclave and Made Some Enemies in the Process

When Jonathan Stein came to Lawndale, the upscale condominium wave that swept through neighboring cities had not yet reached this small, traditionally blue-collar town.

Although it was just minutes from many of Southern California’s aerospace employers and some of Los Angeles’ most prized beaches, the city of 27,000 had remained a development backwater.

Stein--a young, brash, Ivy League-educated lawyer with no previous building experience--bought his first lot in the city in 1987 and set out to make his mark as the city’s first builder of luxury townhouses.

He moved to the city, financed a political action committee called Citizens for Increased Property Values and began pushing pro-development ordinances and candidates.

Soon, the city’s leaders were listening, and the council was buying into his vision of Lawndale as the next hot spot in the South Bay real estate boom.

But the big-city values represented by the ambitious newcomer with the vaguely East Coast accent set Stein on a collision course with many locals who were in no hurry to see little Lawndale change from the hometown of the aerospace industry’s riveters to a suburb for its engineers.

Detractors call Stein, 34, an aggressive, self-interested opportunist who “blew into town” to make money without regard for the consequences his developments would have on the city or its services. His critics also call him a carpetbagger, predicting he will move elsewhere once he and other builders have strip-mined the city of its developable lots, leaving behind a place longtime residents no longer recognize.

“He’s got a lot of people fooled as to what’s best for the city,” said longtime resident Herman Weinstein, a semi-retired real estate agent and civic activist. “He’s out to develop the city and leave town.”

Stein’s most virulent critics say he manipulated a majority of the City Council and the Planning Commission, using them for his own benefit. And many still have not forgiven him for the multimillion-dollar libel suit he filed against 26 civic leaders who accused him of trying to control city government.

Supporters, however, say Stein has helped upgrade and revitalize the city.

In the mid-1980s, when Lawndale’s zoning laws were so out-of-date and the Planning Department so mismanaged that many developers refused to do business in the city, Stein saw an opportunity.

“Lawndale was a kind of sleeper town” before Stein’s arrival, said former Planning Commissioner John Clark. “He got people thinking that maybe Lawndale isn’t too bad of a place to invest after all.”

Although in three years he has built just 16 townhouses and four single-family homes, some credit Stein with being the first with the foresight and drive to market Lawndale to younger, upwardly mobile couples priced out of the beach cities and the Palos Verdes Peninsula.

That new constituency elected some of its own last year, putting aerospace engineer Norm Lagerquist and supermarket executive William Johnson on the council.

Ironically, the council’s newcomers didn’t embrace Stein. Instead, the two allied with Councilwoman Carol Norman, a longtime Stein opponent. Mayor Harold E. Hofmann and Councilman Larry Rudolph, whom Stein and his political action committee had backed, are more frequently in the minority now.

The council did, however, endorse the idea of a new Lawndale.

Last month, in a unanimous vote, it created a redevelopment agency over the objections of many longtime residents who for years fought similar proposals out of fear that they may be pushed from their homes.

Stein, who had been quietly lobbying for redevelopment for months, is trying to position himself as first in line with a proposal.

But the council is keeping its distance, wary of the man who has become one of the least-liked public figures in Lawndale.

Jon Stein is an athletic man who seems taller than his 5-foot-11-inch frame. In his well-tailored pin-striped suits, he stands out among the handful of casually dressed residents who regularly attend City Council meetings.

He has been known to stride up to the podium half a dozen times in a single night to lecture on Lawndale history, and he often addresses the council as if he were one of its members.

The bachelor, whose 67-year-old father lives in one of the new townhouses, says he intends to stay in Lawndale and continue his efforts to reinvent the city. Whether at home in his three-bedroom townhouse decorated with trophies from an African hunting expedition or in the heart of the council chambers, he is quick to give his opinions.

In recent conversations, Stein talked about his desire to leave his mark on the city and volunteered his views on everything from civic betterment to his personal life.

Although he has dated the same woman for 3 1/2 years, he said he is not ready to marry or raise a family, preferring the company of men friends to “hanging with a woman 24 hours a day.”

“I’m very good at training future wives,” Stein said. “I get these energetic girls and grind them a little to make them forceful, disciplined and interested in current events.” Women benefit from dating him because when the relationship ends, they have “the ability to be a senator’s wife,” he said.

Nicknamed by his father “General Director of the Universe,” Stein has pet names for the camps that divide Lawndale’s political scene: “honest rednecks,” such as Hofmann and Rudolph; “Yuppie technocrats,” such as Johnson and Lagerquist, and the “Bozo squad,” a label for Norman and other Stein foes who he declares represent “a radical fringe of naysayers, hyper-critics and lunatic whisper-mongers.”

Stein’s style “frightens people,” said community leader Fran Ramsey. His attitude “may be OK on Wall Street or dealing with other high-power lawyers. But (in Lawndale) you’re dealing with home-grown people, a small-town atmosphere with people that go to work from 9 to 5 and who care about the community. They don’t know how to deal with it.”

His defenders say that beneath Stein’s rhetoric is a serious assessment of the social and political forces converging on the city.

Stein plunged into Lawndale politics almost immediately after he bought his first lot in June, 1987, leading a drive to get the council to drop a proposed parking requirement that would have killed his development plans.

Since then, Stein has lobbied the city to undertake a number of projects, including landscaping the median strip along Hawthorne Boulevard and changing the name of Compton Boulevard in the city to Marine Avenue.

But perhaps his most important political fight was the one that led to the passage last year of a condominium ordinance that voided a rule barring developers from putting condos on lots smaller than 10,000 square feet.

The vast majority, 85%, of the city’s residential lots are 5,200 square feet, and almost all were zoned for only two units, usually a small house with a rental cottage behind it.

By permitting condominiums, the new law encourages property owners to cash in by developing their lots. Supporters said it would expand homeownership, and by improving property values help the city pay for added police protection and physical improvements.

Although none of Stein’s projects were affected by the ordinance--all have been built on combined lots with more than 10,000 square feet--Stein helped devise the standards and became one of the move’s strongest advocates.

Critics said two-on-a-lot condos would increase density, worsen parking problems and destroy single-family neighborhoods. Homeowners feared that the double-decked units--two stories would be needed to have room for the open space and parking requirements called for by the ordinance--would rob their existing one-story houses of privacy and sunlight.

After debating it for nearly two years, the council passed the ordinance, but not without stirring up community activists, who fell 45 signatures short of the 941 they needed to put the issue on the November ballot.

Although many are openly uncomfortable with the developer-cum-activist, Stein sees his civic role as necessary for his projects and beneficial to the city.

When he first came to Lawndale, the city’s code enforcement and building agencies were widely ridiculed. The Planning Department routinely approved projects that didn’t comply with city laws. The situation was so chaotic that the planning director resigned under fire and the council, fearful of lawsuits if it enforced the code retroactively, legitimized all the improperly issued building permits in July, 1988.

Stein, who until moving to Lawndale had been living in Manhattan Beach and working at a downtown law firm, noted that lots in North Redondo Beach on the west side of Inglewood Avenue in 1987 were selling for 40% more than their counterparts in Lawndale on the east side of the street.

“In the middle of all this high-priced real estate, Lawndale was an oasis of cheap, dilapidated housing,” Stein said.

Lawndale “was ripe,” but “so hostile to development, that it really took a lot of courage to come in,” Stein said. “. . . . everyone said I was going to go broke.”

But the skeptics were wrong.

His first development, five detached townhouses on 2 1/2 lots on 171st Street, sold out in four months in 1988, Stein said. With more than $1 million in investment capital, he went on to develop and sell three more projects--five townhouses on Eastwood Avenue, six on 171st Street and four single-family homes on Kingsdale Avenue.

After sitting out most of the 1990 housing slump, he began working in September on his fifth project--four townhouses on 165th Street--and has plans to start two more projects by year’s end.

Stein, who gave up his law career in 1987 to take up real estate, raises money by promising investors a 32% return in the year or so it takes him to develop a lot with condominiums. His profit is much less than his investors’, he said.

Although few criticize the quality of his condominiums, many longtime residents have come to despise the future his developments represent, as well as his personal style and the free-spending politicking he has brought to Lawndale.

“He’s arrogant, selfish, greedy and knows it all,” said former Planning Commissioner Pam Sturgeon.

“He wants to run things,” said Steve Mino, a retired aerospace machinist and small businessman. “And if you don’t go his way, he’ll do everything he can to slow you down, or stop you.”

In a city where the average family income is $35,000, few can afford his three-bedroom, two-bathroom townhouses, which cost about $350,000 and feature such amenities as marble entryways, fireplaces, beveled glass windows and bathrooms with two-person Jacuzzis. Many say the people who can afford his Cape Cod-style townhouses will change the community’s neighborly, working-class character.

Stein--who graduated from Harvard University magna cum laude and was editor of the law review at the University of Pennsylvania Law School--can be caustic. He blames renters for crime and refers to many longtime residents as “old fogies.”

Detractors accuse him of violating local political etiquette: by introducing his own political action committee to the city, by wooing planning commissioners with expensive gifts of food and wine and by suing those who oppose him.

The PAC has given about $12,000 in the past three years to the campaigns of Hofmann, Rudolph, former Councilman Dan McKenzie and former Planning Commissioner Gary McDonald, who has run three times for the council. Stein is the group’s president and treasurer and counts as members the 488 homeowners who have asked to be on his mailing list. There are no dues.

His severest critics say he will stop at nothing to get his way. In April, 1988, Stein filed a $4.5-million libel lawsuit against then-mayor Sarann Kruse and 25 civic leaders for accusing him in a widely distributed letter of being an “out-of-town developer” who was “trying to take over” city government.

A judge later dismissed the lawsuit, but not before the defendants, many of whom were elderly and on fixed incomes, spent more than $40,000 on legal fees.

Stein makes no apologies for the suit, saying it succeeded in getting Kruse to “stop lying about me.” But many say they will never forgive him.

“It left people afraid to deal with the process,” said defendant Bob Kruse, the mayor’s ex-husband. “It left them with the idea, ‘If I open my mouth, I could get sued.’ It also made people in the community feel they had to choose sides.”

Stein this month threatened a new suit--this time against a group of city activists who are appealing approval of his 165th Street project, which they say violates open space and setback requirements. When the activists complained at the last council meeting about the threats, Stein backed off. Admitting he “used poor judgment” in threatening to sue, he said he would alter his building plans to eliminate the problems.

With a new council in power, it’s not clear whether Stein can maintain his influence or if his tough tactics have begun to work against him.

The council members--especially the newcomers--have tried to keep him at arm’s length in recent months.

Johnson last summer expressed outrage during a council meeting at a letter Stein sent encouraging him to create a three-vote block with Hofmann and Rudolph.

Lagerquist, who refused to appear in a candidates’ debate Stein’s group had sponsored in November, said Stein promised him a seat on the Planning Commission if he would bow out of the race. Stein, who supported McDonald, acknowledged trying to get Lagerquist to withdraw, but said he merely told him that a man with his talents was sure to “end up on a commission.”

Even longtime supporters Hofmann and Rudolph are opposing Stein’s initiatives more often. Both have criticized him for the recent lawsuit threat.

The proposal that Stein is preparing for the new redevelopment agency will test his political influence.

In a recent interview, Stein described himself as ready for bigger challenges and said he wants to lead the city’s first effort at redevelopment. Before the council even endorsed the idea last month, he was trying to interest major developers in a partnership and assembling a team of experts to come up with a proposal.

The project Stein envisions would cost at least $50 million and includes both residential and commercial areas, he said. It would be of the same quality as his condominiums and would represent “an extension of the kind of work I’ve been doing all these years,” he said.

But council members recognize that redevelopment inspires fear in some residents and that it may be harder to win the public’s trust with Stein at the helm.

“When the city tries to choose a developer, all developers will be considered, as well as their past projects and what they have to offer the city,” Johnson said.

Stein, who sees himself as “a miniature version of Maguire Thomas,” the developer of the multibillion-dollar Playa Vista project near Marina del Rey, is confident he has the “political sensitivity” to handle Lawndale’s first redevelopment project.

“There’s only one person in Lawndale who can make it work,” Stein said, “and that’s me.”

HOW THE COUNCIL LINES UP ON DEVELOPER JONATHAN STEIN The newcomers Norm Lagerquist

William Johnson

Sometime-allies

Carol Norman

Longtime foe

Harold E. Hofmann

Larry Rudolph

Newcomers Lagerquist and Johnson have allied with Norman, a longtime opponent of Jonathan Stein. Stein has backed Hofmann and Rudolph.