City Funds Flow to Check-Bouncing Developer
Los Angeles parks Commissioner Christopher Hammond is no ordinary deadbeat.
He’s bounced a campaign check to the mayor. He’s bounced campaign checks to six members of the City Council. Hammond, a leading developer of subsidized housing, has even bounced checks to the city attorney, the official responsible for prosecuting people who bounce checks.
Remarkably, this has done little if anything to harm his relations with the elected officials he relies on to approve subsidies for his projects.
Despite the bounced checks, a trail of angry business creditors and the more than $500,000 he owes in back federal and state taxes, Hammond’s business entities have received substantial government subsidies over the last few years and stand to receive, in partnerships with other firms, an additional $31 million for redevelopment of Santa Barbara Plaza, a decrepit shopping center in South Los Angeles.
Hammond is notorious in political circles, having bounced nearly two dozen campaign checks to Los Angeles politicians over the past five years. Accountant David Gould, a campaign treasurer for the mayor and other politicians, said he did not need to consult records when asked about a specific Hammond check.
“It bounced,” Gould said. “I don’t need to look it up. We know that when we get his checks they go that way 90% of the time.”
Hammond has also bounced checks to contractors working on his homes and for his business. He is in default on mortgages for his two homes. His landlord has taken him to court for an alleged failure to pay rent on his corporate offices. He has bounced checks to settle lawsuits over bad debts. He has even reneged on a charitable donation to the American Heart Assn.
Hammond is counting on the Santa Barbara Plaza deal, his second publicly subsidized commercial project, to vault him into the ranks of major commercial builders.
Hammond has been a consultant or developer on nearly 40 affordable housing projects in South Los Angeles, more than anyone else in that part of the city. The publicly subsidized projects are occupied and, by most accounts, running well.
There is no evidence that Hammond has ever misspent government funds provided for those projects.
But his difficulties in making good on his corporate debts have triggered litigation and complicated both of his commercial projects.
Hammond’s personal and corporate creditworthiness also bears on his fitness for public work, raising questions about whether city government has taken a close enough look at his financial practices before awarding subsidies to his projects.
He has substantial community support. The local heads of the NAACP and Urban League urged the City Council to fund Hammond’s deal to redevelop Santa Barbara Plaza.
City Councilwoman Jan Perry said, “He’s one of the few developers who has been ... capable of coming to South Los Angeles to develop projects that transform and create a quality of life you might expect in other parts of the city.”
In a series of interviews, Hammond acknowledged that he has sometimes acted irresponsibly, writing checks without being certain there was money to cover them. But he said he never intended to cheat anyone.
Hammond also asserted that he had put such conduct behind him. “It’s a mind-set change,” he said. “It’s called growing up.”
Hammond said he received a loan last week from an unnamed individual that would make it possible for him to pay off “all tax obligations, mortgages as well as any outstanding minor litigation” by Friday.
Records show that he and his principal company, Capital Vision Equities, owe the federal and state governments back taxes for nine of the last 15 years. Their bill: $521,222.
As of last week, he was in default on mortgages for both of his houses, in Malibu and Los Feliz. His landlord moved last month to evict him from his offices in a Victorian house in the West Adams district for failure to pay more than seven months rent, totaling $33,000. Hammond said the landlord owes him money for $50,000 in improvements. Hammond, 48, said he has a personal net worth of $10 million. He said Capital Vision Equities is also worth more than $10 million and that three other entities in which he is a principal are “all in good financial health.”
Nonetheless, a review of court and campaign records and interviews by The Times turned up three dozen instances in which he or his companies bounced checks from 1999 through 2003 totaling more than $200,000. A majority of those were written in 2001, when Hammond said he became overextended.
Three times, Hammond agreed to settle lawsuits over bad debts, only to bounce the settlement checks.
One case involved his failure to pay $18,500 to a man whose liquor store he acquired while assembling land for his first publicly subsidized commercial development, a shopping center called Chesterfield Square that is anchored by a Home Depot store at Western and Slauson avenues in South Los Angeles.
The owner sued him in 2001. Hammond acknowledged the debt in 2002, paid part of it, and in 2003 settled the case out of court. He had a lawyer hand-deliver a check for $15,714. It was no good.
Joseph Kerendian, the lawyer for the store owner, said he was “completely surprised.... I have never had a case where the defendant settles a case and the check bounces.”
Kerendian, who has handled dozens of cases involving unpaid debts, said his client was still trying to collect.
Environmental consultant Terry Hayes sued Hammond after the developer failed to pay him $43,000 for an early assessment on the impact of the Santa Barbara Plaza project. Hayes won a court judgment against Hammond in 2002.
He said Hammond did not pay up until a judge threatened to question him about his finances under oath, a proceeding called a debtor’s exam, or throw him in jail.
Hayes said Hammond explained that he always pays, eventually. “ ‘I’m not no-pay. I’m slow-pay,’ ” he quoted the developer as having said. Hammond denied making that remark.
Gould, the campaign treasurer, said it’s the same story with Hammond and his political donations. “If the person perseveres,” he said, Hammond will eventually make a bad check good -- sometimes by getting someone else to write a new one.
Not everyone is willing to wait. “I wanted to strangle him,” said George Bernharth, a civil engineer who sued Hammond to collect $20,000 for work he did on Santa Barbara Plaza and another project.
Bernharth won a court judgment but said he gave up hope of collecting after an investigator he had hired discovered that banks were taking steps to foreclose on Hammond’s two houses and that some of the developer’s bank accounts were empty. (The threatened foreclosures predated Hammond’s current mortgage defaults.) Then last year, he said, Hammond surprised him by paying “out of the blue.”
Hammond, who has a charming and highly polished manner, said most of his troubles came when he got overextended amassing land for commercial ventures and building too many affordable-housing projects at the same time.
Hammond said his behavior is par for the course for successful developers who are often forced to go deep into debt while financing their projects.
Intentionally bouncing checks is a crime thought to be widespread but rarely prosecuted in Los Angeles. The district attorney’s and city attorney’s offices combined prosecuted about 200 people for it last year. A spot check of these cases showed they involved obvious criminality -- such as passing stolen checks -- not present with Hammond.
Records show that Hammond bounced campaign checks in 2000 and 2001 for $1,000 apiece to Rocky Delgadillo, who became city attorney shortly after the second check was returned for insufficient funds.
As city attorney, Delgadillo prosecutes misdemeanors in Los Angeles. He said he did not consider pursuing charges against Hammond for bouncing checks because police did not bring a complaint to him.
Hammond, who grew up in Claremont, has deep political roots, working on his first political campaign while attending UCLA Law School in 1987.
During that campaign, he met Maxine Waters, now a congresswoman from Los Angeles, and she recruited him to join the 1988 presidential bid of the Rev. Jesse Jackson. The next year, he served as deputy campaign manager for then-Mayor Tom Bradley.
Later, he went to work for church groups seeking to build affordable housing and eventually became a developer.
He made his first foray into commercial development a few years ago at Chesterfield Square, the Home Depot-anchored shopping center.
Part of the financing was a $15-million loan from the Los Angeles Community Development Bank, an experimental institution aimed at funding projects in areas hard-hit by the 1992 Los Angeles riots. Hammond had been a board member of the bank, but stepped down so he could get the loan without facing a conflict of interest.
He then brought in a more experienced developer to build the shopping center.
The $53-million project also received a $7-million city subsidy. It was hailed by community leaders when it opened in 2001 as the largest commercial development in South Los Angeles since the riots.
Hammond, meanwhile, had become one of a relatively few African American business people who regularly raised money for local politicians, tapping a network of employees and business associates, among others.
His fundraising prowess, he said, explains why politicians didn’t much care when his own checks bounced. “None of these elected officials were angry with me,” he explained, “because I raised money for them.” He added that he and his wife raised $30,000 for Mayor James K. Hahn’s current reelection campaign.
Hammond’s wife, Ayahlushim, is also politically active. She is known for providing informal advice to candidates and was employed part-time as appointments secretary to Assemblyman Herb J. Wesson Jr. (D-Culver City) until he stepped aside as speaker earlier this year.
She is employed full-time as a high-level manager for the Community Redevelopment Agency, the city office that is overseeing Hammond’s Santa Barbara Plaza project. She has no day-to-day involvement in the deal.
Hahn named Hammond to the commission overseeing the city’s Department of Recreation and Parks in 2001, a few months after Hammond bounced a $1,000 check to the mayor’s campaign.
It was not Hammond’s first public position. In 1998, he served on a citizens group that advised the county government on how to do a better job collecting bad debts.
Hahn and the City Council are now banking on a variety of business entities linked to Hammond to redevelop Santa Barbara Plaza, near Crenshaw and Martin Luther King Jr. boulevards.
The sprawling, blighted shopping center, which will be renamed Marlton Square, is an eyesore to those who live nearby in the wealthiest African American neighborhoods west of the Mississippi.
Hammond’s plan, to bulldoze the center and create new housing and stores, could help repair the mayor’s relations with politically minded residents of the area, damaged when he did not support a favorite son, Bernard C. Parks, for a second term as police chief.
The $123-million plan mixes new housing with commercial redevelopment and requires a public subsidy of $37 million. It won the crucial backing of state Assemblyman Mark Ridley-Thomas (D-Los Angeles), then the area’s councilman.
Hammond got off to a shaky start. His company’s good-faith deposit check for $100,000 to the city bounced in early 2001.
The next year, Hammond and his company bounced checks for $5,000 and $10,000 to the anti-secession campaign Hahn was leading. Hammond arranged for his partner, Gerald Katell, the developer he had brought in to build Chesterfield Square, to write a good check for $15,000 to make up for it, records and interviews show.
Records and interviews also show that Hammond or his companies have also bounced campaign checks to City Council members Parks, Perry, Tony Cardenas, Wendy Greuel, Janice Hahn, Tom La Bonge, Alex Padilla and Ed Reyes as well as former councilmen Nick Pacheco and Mike Woo. Hammond, in an interview, disputed bouncing checks to Parks and Perry.
The bounced checks had no apparent effect on decision-making at City Hall. All but two bounced before the mayor and a unanimous City Council approved a plan to provide $6 million to get started on a 180-unit affordable-housing project for the elderly, one element of the new Marlton Square.
The structure of the deal is complicated, but Hammond’s firms are involved in all of its phases. One of his firms, along with another controlled by professional football player Keyshawn Johnson, serves as the project’s “master developer,” records show.
The master developer is in turn forming partnerships with established single-family housing and retail developers, which would receive the remaining $31 million in public subsidies as the project proceeds. City officials said these entities, not Hammond, would be held responsible if anything goes wrong.
The Community Redevelopment Agency board is scheduled to consider giving the project a final go-ahead next month.
Hahn said he knew Hammond had bounced some checks and had a heart-to-heart talk with him. But Hahn said: “I didn’t know the extent of this problem. There’s just no way you can excuse that.”
Still, the mayor said, he stands by his man. Hahn said the existing shopping center needs to be replaced, and the city is adequately protected.
Hammond’s fans include Peggy Hill, executive director for housing and health at the First AME Church foundation.
She said Hammond has helped arrange government subsidies for its affordable-housing projects and is “always helping somebody with something.... Chris’ heart is so big, I don’t see how it stays in his chest.”
The American Heart Assn., however, is not leading a cheering section. The charity sued Hammond for failing to make good on a $12,000 pledge that bought him two tables at its 24th Annual Heart Ball in early 2001.
Hammond finally paid late last year.
Hammond has also stiffed individual workmen.
Court records show he bounced a check in 2001 that was the final payment to Steve Johnson, who painted his beach house in Malibu. Johnson told the court he was owed $1,820 and obtained a judgment, which Hammond paid late last year.
Hammond bounced another check to a man he had hired to fix up his principal residence, in the Los Feliz hills.
Aria Ben painted, landscaped, repaired a garage and refinished staircases. When he deposited Hammond’s check for $18,000, his bank told him it was no good.
Ben sued in 2002 and Hammond agreed later that year to pay him $23,000.
Hammond made partial payments, but did not pay off the debt until this year, said Ben’s lawyer, Erica Tabachnick.
When he finally did, Tabachnick said, Hammond’s lawyer called and asked her to sign a statement that Hammond had acted in good faith and refrain from speaking to the media.
Tabachnick gave the request a moment’s thought.
“I said, ‘Absolutely not,’ ” she recalled. “ ‘Your client is the most bad-faith guy I’ve ever run into.’ ”
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