Old Fire Station Funds Banked by Private Unit : Revenue: Chief Manning heads nonprofit group promoting film use of facility. Controller begins probe.

With its finely restored interior and turn-of-the-century architecture, old Fire Station 23 in Downtown Los Angeles is one of the choicest filming locations in town. The “Ghostbusters” movies were shot there. So were “Police Academy II,” “The Mask,” “V.I. Warshawski” and dozens of other films, commercials and music videos.

But the city of Los Angeles, which owns the historic station, has not received any of the rent or film fees paid during the past decade, or any of the interest it has earned. Instead, the money--more than $200,000--has been banked by a nonprofit organization headed by Fire Chief Donald O. Manning and his top aide, Deputy Chief Gerald L. Johnson, according to its tax records.

The organization, called Olde 23’s, was created to raise funds for a fire museum at the location. But records show that the organization has not spent a single dollar toward that goal. Moreover, the fire station has not been the site of the proposed museum for seven years.

Nonetheless, Manning’s organization has remained in business, renting out the publicly owned station without turning over the proceeds, as required by city law. So sophisticated has the operation become that a glossy color brochure on the station house has been circulated throughout the film industry, proclaiming: “A block long with high ceiling, bay windows, tiles, brick and more!”

Prompted by inquiries from The Times, the city controller’s office has begun an investigation into the unusual arrangement. “I’m grim about this,” said Controller Rick Tuttle who, like other Los Angeles officials, said he was unaware of Olde 23’s existence.

Tuttle said the organization has no standing to collect fees from movie companies or rent from a “caretaker” tenant who lives in the defunct station on 5th Street, where he operates an unlicensed production company and has collected thousands of dollars for the film shoots.

The controller also said that the chief failed to inform his office of the corporation’s existence, even though his auditors in the past year specifically requested such information during two audits and a survey of nonprofit groups affiliated with city departments.

The Fire Commission, whose members said they too were unaware of Manning’s actions, is scheduled to take up the matter at its meeting today.

Perhaps the only person who believed there might be a problem was Greg Wilkins, a management analyst with the Department of General Services. While surveying Downtown buildings in 1986, Wilkins said, he discovered that rent on the Skid Row fire station was not being deposited in the general fund. Despite repeated attempts to reach Deputy Chief Johnson, Wilkins said, his calls went unreturned.

“I got stonewalled,” he said.

Citing today’s Fire Commission meeting, Manning and Johnson have refused to comment.

Inside City Hall, Olde 23’s existence is known only to a handful of Fire Department employees, who use city time to maintain the corporation’s books, prepare its tax statements and deposit the money into the bank account controlled by Manning and Johnson. Olde 23’s lists its business office as Fire Department headquarters. Manning is the president and chief executive officer, its incorporation records show, and Johnson is the secretary-treasurer.

Records for the account at the Los Angeles Firemen’s Credit Union show nearly $210,000 earned from film fees, rent and interest. More than 90% of the money collected by Olde 23’s has been in cash.

Councilwoman Rita Walters, whose 9th District includes old Station 23, said she now believes that fire officials misled her three years ago when she chaired a council hearing regarding a city proposal to sell the property. Walters said she was told that the station was in poor condition and in need of seismic upgrading.

“I was never informed,” the councilwoman said, “that it was used for any purpose.”

Station 23, which is listed on the National Registry of Historic Places, is one of the most elegant firehouses ever constructed. Built in 1910 at a cost of $60,000, the building was the department’s headquarters until about 1920. It was vacated in 1961.

The third-floor living quarters--once the home of the fire chief and his family--feature elaborate mahogany doors, marble fireplace and bath and imported Italian tile. A Library of Congress survey of 250 firehouses concluded that Station 23’s ornate interior was unmatched in its beauty.

“It is a great raw architectural space that you can do a lot with,” said producer John Dennis, who has used the firehouse for AT&T; and Bank of America commercials.

On June 26, 1979, at the urging of the Fire Department, the City Council passed a motion declaring the station the official site of a proposed Los Angeles fire museum.

In directing the department to develop the museum, the council motion stated that no city money be used to fund the project and that the station “not be used for any other purpose.” It also authorized fire officials to seek contributions that could be placed in a trust fund in the city treasury or retained by a nonprofit organization.

Two years later, on March 12, 1981, Olde 23’s was incorporated as a nonprofit public benefit organization with the goal of soliciting contributions to develop and operate the fire museum.

Its original board of directors included Johnson, former Chief John C. Gerard and then-Fire Commissioners Ann Reiss Lane and John G. Lawson. The organization held its only fund-raiser that year, at which it collected $27,005 in donations, according to its tax statement. Manning joined the board when he became chief in 1983.

In taking over the old station, the Fire Department inherited a tenant, James Croak, who had been allowed to live rent-free as a caretaker by the Department of Public Works, which had previously controlled the building.

Croak, a sculptor and general contractor, said he was informed by Johnson that a historic foundation owned the building and that he would have to start paying rent. Olde 23’s financial records show that it began charging Croak $400 a month.

According to Croak, filming at the site began about 1979--a couple of years before Olde 23’s came into the picture--when a location scout knocked on his door saying he wanted to use the station for a commercial. Several other commercials and films were shot at the firehouse, recalled Croak, who said he received from $1,500 to $5,000 a day in film fees that he used to help pay for refurbishing the building.

“I was not a wealthy person,” Croak said in a phone interview from the New York loft where he now lives. “So I just hit on the idea that I’d have these (film) guys come in and use the money to fix the place up.”

Croak said that when Olde 23’s found out he was charging film companies for use of the building, the corporation wanted a piece of the action, collecting its first film fee in 1984 for “Ghostbusters,” the blockbuster comedy that popularized the firehouse as a location site.

Olde 23’s tax documents show a $3,000 donation for “Ghostbusters” from Columbia Pictures--even though a spokesman for the Internal Revenue Service said it does not consider film fees a donation but rather payment for a service.

Former Fire Commissioner Lane said she and her colleagues on the five-member oversight panel were aware that the station was being rented out but assumed that the money was going to the city. “I had no idea they were putting money into this pot,” Lane said. “We thought the (Community Redevelopment Agency) was the controller of the property.”

As Olde 23’s profits began to grow, documents show, fire officials began lobbying for the selection of a new museum site, saying that the Downtown station was in a bad neighborhood, lacked parking and was too small to house a museum.

So in 1988, the City Council selected a vacated station in Hollywood as the new museum site and created a special fund to help finance the project. There is no mention in City Council files of Chief Manning or any other fire official offering the assistance of Olde 23’s, which had more than $92,000 in its bank account, according to its financial records.

“I don’t remember hearing anything about that,” said former Councilman Mike Woo, who sponsored the motion to move the museum site to his Hollywood district.

When Croak moved out in 1985, he was replaced by Daniel Taylor, 42, who lives in a funky loft on the third floor and operates his production company at the site, even though he does not have a permit to conduct business there from the city clerk’s office.

“All I know,” Taylor said, “is that I’m on a lease that says I can do what I’m doing.”

The rental agreement negotiated with Taylor is written on a standard city lease form, designating Los Angeles as the landlord. Yet Olde 23’s, and not the city, has been the beneficiary of the more than $38,000 paid by Taylor.

The $400 month-to-month lease stipulates that the premises are to be used as a “caretaker residence of Los Angeles City Fire Department Museum.” Unlike other leases between the city and a tenant, this one was neither signed nor stamped by the city clerk’s office.

Fire officials typed two additional provisions on the form. One stated that the fire chief could terminate the lease at any time and the other said: “Lessee also agrees that lessor may conduct motion picture filming upon said premises.”

Taylor said he was told to collect a $500 daily fee for Olde 23’s each time the station was used for filming. “They laid out the book for me,” he said, “and I followed the book.” He also charged the production companies additional money that he kept himself.

Producers and locations scouts interviewed by The Times say they have paid Taylor between $1,000 and $2,000 a day to use the firehouse. Although the production companies generally wrote checks, Taylor said, he was required by then-Battalion Chief Dean E. Cathey to reimburse Olde 23’s in cash or money orders.

On two or three occasions, Taylor said, he failed to give Olde 23’s its share of the film fees. And that prompted an angry response from Cathey on one occasion. “Daniel misled (the production company) on the procedure and also collected the fee,” Cathey, now an assistant chief, wrote to his secretary. “I want to talk with him again to jack him up.”

A week later, according to Olde 23’s records, Taylor delivered the $500 in cash.

Tracking the film money collected by Olde 23’s and apparently owed to the city is difficult. Records provided to The Times contain gaps of up to 10 months in monthly bank statements. In addition, there are discrepancies between permits issued by the city Film and Permit Office to use the firehouse and the number of shoots logged by Olde 23’s in its records.

Since 1988, the oldest date for which the film office still maintains files, 24 different production companies have been issued permits to shoot 54 movies and commercials at the firehouse. But Olde 23’s has logged payments in its monthly ledger for only about half of those shootings.

For instance, the permit office shows that Dektor Higgins & Associates used the firehouse for a beer commercial on Sept. 28, 1990.

Pat Parrish, the location manager for the shoot, said her records indicate that she paid Taylor $3,000 for one day of shooting and two days to transform one area of the fire station into a blues club and then tear it down. She also said she wrote a letter, as required by the department, to Cathey requesting permission to film there, as she had done for two other commercials.

The nonprofit’s records also list nine movies and commercials for which no city permits were issued. Moreover, Olde 23’s files contain a check stub dated November, 1987, for a $500 rental fee for “Big Trouble in Little China”--an action movie starring Kurt Russell--but show no record of the money being deposited into the organization’s bank account.

In at least two instances, Olde 23’s collected fees for filming that took place at two fire stations elsewhere in the city. The organization’s records show, for example, that a $2,550 “contribution” was received from Warner Bros., which used a vacant fire station in Echo Park last year for one day to shoot the upcoming “Batman Forever” movie. The location manager, Laura Sode-Matteson, said she was told by a captain in the community relations unit that the money would be used to renovate Station 23. This despite the fact that the station was no longer the site for the museum.

“We hope that this donation will assist you in your efforts for the restoration of the wonderful Station 23,” Sode-Matteson wrote to Chief Manning in a Nov. 17, 1994, letter that was enclosed with her check.

Additional letters in Olde 23’s files show that other producers also were under the impression that they were making donations for the proposed museum, even though the corporation listed the money as rental income in its tax statements.

The city controller’s office said that its investigation, among other things, will attempt to track all funds received by Olde 23’s and determine whether there are inconsistencies in its records.

“I can assure you,” said Controller Tuttle, “we are going to get to the bottom of this to see how these funds were handled.”