The prospective buyer of a half-dozen troubled homeless housing developments in Skid Row announced Thursday he is pulling out of the deal, jeopardizing the future of the properties and one of the city’s rescue efforts. Its largest supportive housing portfolio is in disarray,
AIDS Healthcare Foundation Had agreed to buy six buildings Owned by Skid Row Housing Trust for $27 million in a receivership sale earlier this month. But during due diligence, the foundation learned that the properties needed millions of dollars in further renovations and they are on track. Continue to face large operating lossesfoundation spokesman Ged Kensley said in a statement.
Kensley said, “Any purchaser of these properties will find themselves in the same situation that caused the Skid Row Housing Trust to fail in a short period of time unless a new model can be developed.”
The foundation’s decision throws another hurdle into efforts to save the trust’s properties, and potentially plunges the city into crisis. Increasing funding by approximately $40 million It is already authorized to repair and operate the buildings of the previous year.
After Skid Row Housing Trust Economic collapse in February 2023 And It largely abandoned its 29 buildings and 1,500 formerly homeless tenants., the city pushed its portfolio into receivership in Los Angeles Superior Court. Since then, 11 of the Trust’s new and better maintained properties have been transferred to established non-profit homeless housing providers.
This left 18 buildings without new owners. Receivership Specialists, the firm that has managed the portfolio since last summer, has placed the assets, many of which Old single room hotels without private bathroom facilitiesThey are available for sale on the condition that they remain housing for formerly homeless residents.
Last week, the receiver recommended that L.A. Superior Court Judge Stephen Gorewitch approve the AIDS Healthcare Foundation’s $27 million bid to buy the Boyd, Hart and St. George single-room occupancy hotels and the Lincoln, New Remaining repairs included $5 million. Carver and Rainbow Apartments. There are a total of 415 units in six buildings.
Receivership experts said in court papers last week that unless Gorewitch approved the sale to the foundation by May 10, the receivership’s bank accounts would be empty by the end of the month.
The Hollywood-based foundation, the world’s largest AIDS charity, became Skid Row’s landlord in 2017 and has since purchased 16 properties with approximately 1,500 units in and around the neighborhood. Foundation officials argue that they have filled a gap in preserving homeless housing where public agencies, other nonprofits, and the private market have failed.
But as detailed here, the foundation’s buildings are fraught with problems A Times investigation last fall, The Times found structural failures, pest infestations, dozens of evictions and, in some cases, violence and an increase in tenant code and public health complaints after nonprofits took over the properties.
The effort to sell the trust buildings to the foundation attracted opposition from state housing officials and some Skid Row advocates. California Department of Housing and Community Development sent a letter to the receiver last month The Times report cited that the Foundation Trust “would not be a suitable owner and operator” for the buildings.
At a court hearing last week, Melody Osuna, an attorney for the Los Angeles Community Action Network, which organizes low-income tenants in Skid Row, said the group planned to ask Gorewitch to stop the sale to the foundation.
“We will take testimony from tenants about their ability to remain in their buildings, evictions and other concerns that the buildings could return to the condition that brought them into receivership,” Osuna said.
Any formal written opposition to the foundation’s purchase was to be filed with Gourevitch on Thursday.
The city had not taken any public stance on the deal. Clara Karger, a spokeswoman for Mayor Karen Bass, had said in prior statements that the foundation was the only organization that made a “financially viable offer” for the buildings, but that the city needed to ensure that tenants were provided with comprehensive social amenities. Services gone.
Residents of Trust buildings are entitled to receive case management, mental health and other services as part of their voucher programs. But the foundation does not provide services in many of its buildings citing cost.
It is not clear what will happen now. The departure of the AIDS Healthcare Foundation, which generates more than $2 billion annually in revenue from its network of pharmacies, snatches away perhaps the deepest-pocketed potential owner for the portfolio.
The receiver said in court filings that three other bidders, whom it declined to name, made significant offers for the trust portfolio. But those proposals were lower than the foundation’s or involved complex financing that the receiver believed was not viable, the receiver said.
