Friday, March 14, 2008
Hotel Owners Settle Suit With City Over ‘28-Day Shuffle’
By Sherri M. Okamoto, Staff Writer
The current and former owners of two residential hotels have agreed to pay over $1 million to settle a suit by the City of Los Angeles alleging the use of various schemes to violate the rights of their tenants, City Attorney Rocky Delgadillo said yesterday.
“Skid Row has been termed one of the most dangerous places in American,” the city attorney said during a press conference at City Hall, and this reputation has “cloaked the predatory practices by businesses” in the area that the city’s “most vulnerable residents” call home.
These “predatory practices,” involve food stamp fraud, dumping mental patients, and a practice known as the “28-Day Shuffle,” the city attorney said. Delgadillo explained that the hotel owners were “rob[ing] tenants of their legal rights,” by forcing tenants to move from one hotel to the other, from one room to another, or in and out of the same room “every 28 days or so” or they were “just forced onto the street” in order to deprive them of legal protections requiring longer periods of occupancy.
Jeff Isaacs of the city attorney’s Special Litigation Unit explained that after 30 days of continuous occupancy, an occupant becomes a “tenant” under the law who cannot be evicted without legal process. State laws and city ordinances criminalize the practice of turning people out in order to avoid having these rights accrue.
Defendants in the case included 111 Zuma Corporation, the former owner of the Frontier Hotel; Rosslyn Hotel LLC, the owner of the Rosslyn Hotel; and Robert Frontiera, who controls both corporations.
In addition to shuffling the tenants, the owners were accused of harassing and intimidating residents, locking residents out of their rooms, and illegally evicting residents to facilitate the conversion of the Frontier hotel to upscale lofts without paying relocation fees.
The Ellis Act requires that a landlord pay evicted tenants monetary relocation assistance in some situations, including when the property is taken off the rental market. Tenants who are 62 years old or older, handicapped, or disabled, or who have one or more minor dependent children are entitled to receive $5,000 upon eviction. All other evicted tenants are entitled to receive $2,000.
The settlement agreement provides for injunctions on the owners regarding the operation of the buildings. The agreement also requires that the owners pay $200,000 in civil penalties, $140,000 as reimbursement to the city for investigative costs, and a minimum of $700,000 for a restitution fund.
The restitution fund will be used to pay the relocation fees for the approximately 200 residents whom the owners required or persuaded to leave the Frontier Hotel. An independent claims administrator will locate eligible tenants and distribute the funds.
Under the terms of the settlement agreement, the owners are still financially responsible for any substantiated claims if the restitution fund is depleted. If the number of claims does exceed $700,000, then the remaining balance will be converted into an additional civil penalty.
Delgadillo said that he believes this was the first successful prosecution of the 28-day shuffle practice within the state. He promised to prosecute any residential hotel owner within the city who engages in the practice while pledging his commitment to protecting the city’s poor and homeless.
Becky Dennison, co-director of the Los Angeles Community Action Network applauded the settlement, opining that “the lawlessness on Skid Row is almost entirely people preying on the poor and homeless,” and that slumlords are the “worst criminals in Skid Row.”
Barbara Schultz of the Legal Aid Foundation of Los Angeles echoed her sentiments and said, “[This case] sends a message to residential hotels owners that they don’t get a free pass from following housing laws.”
The parties are awaiting court approval of the settlement agreement.
Copyright 2008, Metropolitan News Company