The Labyrinth Leading to Food Market for Watts

It sounded like a simple feel-good story about the groundbreaking for a new and desperately needed South Los Angeles food market to replace one that had been destroyed by a mysterious fire in 1994.

But as I checked it out, the tale took a surprising turn into the labyrinth of moral ambiguity and complexity so often found in L.A. politics, especially when it involves rebuilding inner city neighborhoods that have been abandoned by most investors.

While the federal and city governments were considering loans to rebuild the Family Farm Market, its owners were charged with arson, accused of burning their store down for insurance money. Four family members were held in county jail on $1-million bail each, awaiting trial. A store janitor testified at the preliminary hearing that they were responsible for the fire.

Three and a half months later, charges were dropped. The janitor had returned to his native El Salvador. He told the family lawyer in a deposition that he had lied at the preliminary hearing. The prosecution’s case was destroyed.

A troubled Councilwoman Rita Walters and other officials struggled with the dilemma, but in the end they granted the government loans. “What right did I have to put a roadblock in front of them?” Walters says. “I am neither judge nor jury.”

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Fuad Faraj and his wife, Sarah, took over the Family Farm Market at 43rd Street and Central Avenue in 1977. From the 1920s through the ‘50s, this stretch of Central, with its clubs and great musicians, had been the heart of L.A.’s African American community. But the neighborhood declined, a process hastened by the 1965 Watts riots. By the time the Faraj family arrived, the nearby residents were poor African Americans and Latinos, and commerce was pretty well dead.

Fuad is Lebanese. Sarah is Palestinian. They met in South America as they worked their way from country to country to the United States, where they arrived all but broke. Their family helped them buy the Family Farm Market with several partners, and they and their children worked long hours, seven days a week.

In time, they bought the market building, the land and adjacent property, and in the early ‘90s decided to build a bigger and better store. By that time, city-backed apartments were being built across the street. Maybe there wasn’t music, but Central Avenue was showing signs of life.

But not enough life for most money lenders, who are reluctant to finance construction in South L.A., especially after the 1992 riots. Prospective South L.A. merchants must cobble together complex packages of government and private bank loans. A number of financial consultants around town have developed the knowledge and political contacts needed for such deals. Eventually, the Faraj family linked up with one of them, Michael Banner, a son of South L.A. with experience in banking and financial services. He got the Faraj family together with the city Community Relations Department.

About this time, Banner joined Mayor Richard Riordan’s administration as director of the Los Angeles Local Development Corp., a city agency that loans start-up money to new businesses in minority areas. In his administration post, he helped win approvals on the Faraj loan package.

Councilwoman Walters, who represents the area, also backed the city loan of $760,000, and the federal Small Business Administration approved loans of $740,000 more. Linda Griego, president of RLA, the post-riot reconstruction group, supported the financing. All thought that a new and expanded Family Farms Market would help spur the rebirth of Central Avenue.

The rest of the money came from a private bank, Cedars Bank, which Banner said has close ties to the Lebanese community.

Then, early in January, 1995, the fire leveled the old store.

Afterward, according to Deputy Dist. Atty. Michael Cabral, arson investigators found that gasoline had been spread through the store before the fire. A Municipal Court judge ordered the father and three family members to stand trial. But the trial was canceled when the key witness, the janitor, returned to El Salvador.

The family’s oldest son, Ziad, one of those arrested, said he and his family had nothing to do with the blaze. The family lawyer, Paul F. Hannabach, added: “It is absurd to think these people would do it.” They have sued their insurance company, which refused to pay their claim. The case goes to trial in Superior Court next week, and will no doubt provide more details.

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News of the Farajs’ arrest was a shock to the project’s prominent backers.

Councilwoman Walters ordered the city portion of the loan package held up. Council members have the political power to do this on projects in their district.

“I wanted to find out what happened,” she said. “If they were in jail, accused of arson, how could they get a loan?” When she learned that the charges had been dropped, Waters didn’t know what to do.

Although the neighborhood wanted the market, Walters worried that she and everyone else would look bad when word got out, especially if the media blasted them.

Waters consulted a deputy city attorney, Pam Snowden, who noted the criminal case appeared to be finished. “I felt reassured and I certainly felt people are innocent until proven guilty,” Walters said. She supported the city loan.

So did Riordan’s office. Development aide Banner had no doubt. “For me it was not a tough decision,” he said. “I am from Watts. I know how it is to get in your car and drive to find a Safeway. These are real things for me. It wasn’t a factor, that I might be criticized.”

Did Banner and Walters do the right thing? Should the deal have been held up until more was learned about the suspicious fire? Or were the officials correct in moving ahead with the food market in a long-neglected area that is beginning to come back?

What would you have done?