Home Sale Halted Over ‘Party House’ Link : Government: Council delays selling property to executive, who was sued by the city over raucous parties at Studio City mansion.

The Los Angeles City Council halted the sale of a city-owned Beverly Glen home to a real estate executive Tuesday after learning he was sued by the city in August for throwing loud, raucous parties at a Studio City mansion.

At the request of Councilman Joel Wachs, the council delayed selling a 51,000-square-foot Benedict Canyon Drive property to Steven M. Powers, the chairman of Health Concepts Inc., a Nevada-based real estate firm and owner of an adjacent home.

The council had voted unanimously Tuesday morning to sell the property for $114,000. But later, members voted to void the decision pending further study after Wachs learned that Powers was sued Aug. 2 by the city attorney’s office for allegedly violating liquor laws and building and safety codes.

“After what he did, I don’t want him to benefit from the city,” said Wachs, whose district includes the Studio City mansion. “I don’t want what happened in Studio City to happen in Beverly Glen.”

But in an interview Tuesday, Powers said there is no need to scrutinize the sale, adding that he is helping the city by buying the land. “It’s not like they are giving me any benefits,” he said.

The city paid $116,500 for the Benedict Canyon Drive property to settle a 1968 lawsuit by its previous owners, who charged that the land was damaged by a landslide due to the city’s widening of Benedict Canyon Drive.

The property is an irregularly-shaped lot on a slope with a 2,548-square-foot single-family home near the top of the incline. The $114,000 sale price was based on a 1991 appraisal and on several restrictions imposed on the land, according to a city report.

Prior to the vote, city officials were apparently unaware that Powers was the same man who managed the Studio City “Party House” that was the subject of a civil lawsuit and more than 100 complaints to police.

“This is amazing,” Deputy City Atty. Deborah Sanchez, who prosecuted the city’s lawsuit, said after learning of the proposed land sale. “This has been quite a ride dealing with that case.”

The suit alleged that the Wrightwood Drive mansion in Studio City was the site of “underground parties” where liquor was sold illegally, party-goers blocked nearby driveways, copulated and urinated on neighbor’s lawns and played loud music until the early morning.

To settle the city’s civil suit, Powers and the tenants and owners of the mansion signed an agreement to tone down the events by stopping the illegal sale of alcohol, advertising the parties and halting them at 10 p.m.

But Sanchez said that just before Powers and the others signed the agreement in September, ownership of the mansion was apparently transferred to a Delaware corporation in a “very strange maneuver” that put the power of the entire agreement in question.

But the agreement appears to be moot because a Texas mortgage company took control of the Studio City mansion on Nov. 17 and placed it in foreclosure, Sanchez said. The mortgage company has since begun eviction proceedings on the tenants who hosted the loud parties, she said.

Powers defended his right to buy the Beverly Glen land, saying the city has no reason to halt the sale. He added that the land is a liability to the city that no one else is interested in buying.

“I don’t see why they have to be concerned,” he said. “Nobody else can buy it. This is a headache that I’m taking off the city’s hand.”

Powers noted that under the proposed sales agreement, he would be required to raze the single-family home on the Benedict Canyon Drive property and keep the lot clear, to be used only as a yard for the adjacent 1,300-square-foot home.

Powers and his real estate firm manage and own the adjacent home but he said he did not know who would live in the home or how it would be used.

Powers also rejected criticism from Sanchez, saying that the agreement he signed to settle the lawsuit involving the Studio City mansion is valid as long as he manages the property.