Hassan Astani: The scrapper
Maybe the name “Sonny” gives you a clue. It’s the nickname Hassan Astani chose from a favored singer, Sonny Bono, a scrappy underdog if ever there was one.
Astani’s dream downtown condo project, Concerto, has gone dissonant. The bank backing the project failed, the FDIC stepped in and the hedge fund Starwood Capital Group won the bidding on the bank’s portfolio, including Astani’s nearly finished $260-million project. Starwood now shares ownership with the feds, and Astani wants control of his project back. He says he’s got the money to finish it and sell the condos as planned.
He’s filed Chapter 11 bankruptcy to help deal with the disaster and launched a PR crusade — including ads in the Washington Post and the Weekly Standard — to the dismay of Starwood, which has objected to an “erroneous” campaign that it says “purposely distorts the facts.” But Sonny the scrapper, who years ago lived in his brother’s VW Rabbit when nothing was working for him, has support in L.A. He once wrote a check for $1.5 million to finish a skid row residential project. Now, those homes for the homeless are full and the condo project that was his baby is still empty.
I just saw the sign on your building, “Move in 2010.” Does it kill you every time you see that?
I feel so betrayed, because this would have been fully occupied by now.
Has this changed your attitude toward the federal government?
I was so proud of our government until a year ago! This has really saddened me. I have a fantastic development, 30 stories tall, $350,000 to $600,000 average price range [per unit], which is perfect for this city. I put in $60 million of my own money. I only have one vendor [for] construction. I was my own contractor. And then OK, the FDIC comes, the government, they’re gonna help me. I thought: They’re going to be so glad that here’s a guy who’s self-funded, they don’t need to do anything. And then they sold [the failed bank’s portfolios] to the worst possible buyer — a Wall Street firm.
This has affected thousands of jobs, millions of dollars, the renaissance of downtown. Luckily for me, I have some money to defend myself. People who cannot afford expensive lawyers or PR or going to D.C. just give the keys to these firms that have sweetheart deals with the government. One of the expressions I loved in this country from the get-go was “survival of the fittest.” I thought as long as you stayed psychologically and physically fit in hard times, and save your cash and work hard, you’ll get through it. If I didn’t have the money I have, and the experience, I would have been crushed. It’s shameful. Survival of the fittest has become survival of the fattest. Whoever is big and fat, like Wall Street and banks, they’re surviving, and that’s the problem.
So at whose feet do you lay the problem?
The FDIC. They took over the banks [and] do whatever they want with the assets and liabilities. For taxpayers they protect deposits, great, but everybody else is screwed. And who’s making the money? These big expensive lawyers that the Starwoods of the world [hire]. [Starwood] has no incentive to work with me. They’re waiting until I run out of money. [Unless things change], by January, February, they put me in default and take over the building.
You’ve been pretty in-your-face to the FDIC.
I was chasing them for six months even before they took over my bank. I said, I know you don’t deal with “small” developers, but this is over a half-billion. We could pay you 10% more than any bidders, all cash [to buy back the project]. All they had to do was sign an agreement. Really easy. They were kind of excited, but then they sent me a formal letter saying they have to sell the portfolio, they don’t have the manpower to do small deals. Six hundred million. In the meanwhile I’m paying a million a month interest at that time, and we finally shut down the job. People went home. Some people lost their businesses, their homes. Everybody said, you should have let it go when the bank started failing. Now they’re waiting for me to finish and give them the key so they can come and take over. I’m putting up a fight.
The construction unions ran an ad on your behalf; who else is in your corner?
[ Los Angeles City Council member] Jan Perry. The mayor, the City Council. [Rep. Lucille] Roybal-Allard has been helpful. Every time there is an article or a blog, I get like 20 “Go Sonny” or “good luck” messages.
What potential did you see in downtown?
In the early ‘80s, I started coming downtown. I was just amazed at these gorgeous buildings, so I kept an eye on it. I became very serious about downtown because they passed adaptive reuse; you don’t have to tear down the building to comply with earthquake and fire. The missing link [downtown] was the residential. So 500,000 people working [here], in and out every day, all of these gorgeous buildings and no residents. And then it started happening. I joined in.
This is a very pretty building and you obviously love design. It must annoy you when developers just build fast, and build junk.
I hate it. You go to some streets, especially in Hollywood, the Melrose area, even the Westside, you see these ugly buildings built in prime locations. That’s something I decided from the start I’m not going to do. I get 20, 30 design magazines every month. I travel; I look at buildings. It’s terrible for L.A. — people come, build a box, and sadly it stays there for the next 50 years. In Italy or France you can’t build an ugly building. The whole culture is against it. You can’t get an architect to design a terrible building; he doesn’t want his name on it. Here, unfortunately, it’s not like that.
Some people say you just got hit by bad timing and changes in the condo market.
Even in the bad times, I never lost a project because I couldn’t sell or rent. You just have to adjust the price a little bit and provide some better terms. [Over time], people overbuild, they go broke, the whole thing stops and the cycle restarts. But in that period prices come down and they get adjusted to reality. It kind of balances out.
The complaints I usually hear are about City Hall.
City Hall is typically [the] thing for developers to complain about. My theory is that you make so much [money] eventually, you’ve got to go through [the process]. You can’t expect them to just sign off on a permit. The city’s concerned about growth; there have always been neighbors putting up a fight, but that’s part of the package. All the anti-growth [sensibility] works for developers, because there is less. So the prices stay up.
Where did you come from, and why do you care about L.A.?
I came here from Iran in 1976 to get my master’s in engineering. As soon as I got to L.A,, it had this feeling that this is home. I really related to the word “Angeleno.” I worked six months in Lakewood and realized in this country, engineers are underpaid and do not get the respect. I wanted to make money. People said to get your real estate license, and that’s what I did. I learned by going to City Hall how to develop. I learned everything from the people at the counters in building and safety, like what do you have to do to get this approved.
It’s kind of like making a movie, but longer. For five or six years you just spend money, and then if you’re lucky and everything you do is right, you get your money back plus some. So you have to understand that’s how it works. Patience is part of this — not getting mad at the city, or at the bank, or at the market.
That sounds like a martial arts philosophy — and surprise, that’s one of your interests.
I started when I was 18, the Bruce Lee days. You have to get the right master. [Mine puts] tai chi and karate together. I met him about 20 years ago. It’s a commitment; it’s kind of like joining the military! I’ve been doing it off and on for 30 years; I am a second-degree black belt.
Does it help you in this battle?
Absolutely. The idea is to get your mind off things at will; otherwise it’s going to drag you down. I’m also involved with swimming in the ocean. You have to be focused on what you do, otherwise you sink, literally.
What happens if you lose? Will you be living in a VW Rabbit again.
Luckily I’m well-[off] enough that I don’t have to, but I have to spend money on legal fees for the next year or so. All this is because of the bank. These guys make so much money they go all out — and take this guy to the cleaners.
patt.morrison@latimes.com
