HOLLYWOOD — A three-judge California Court of Appeal panel ruled unanimously last week against the city of Los Angeles and CIM Group, one of the city’s biggest real estate developers, finding the city illegally allowed CIM to build a 22-story tower on Sunset Boulevard.
The court directed the city to void all permits it had previously granted to the developer, including demolition and building permits and certificates of occupancy, and told the city to prepare a new environmental review of the project.
The ruling “again shows that CIM Group illegally demolished the 1924 façade of the Old Spaghetti Factory,” said Robert P. Silverstein, attorney for plaintiff La Mirada Avenue Neighborhood Association of Hollywood. The decision affirms trial court Judge James C. Chalfant’s October 2014 ruling in favor of La Mirada’s complaint.
As a condition of developing the property, CIM Group had to preserve the unique, columned façade of the Old Spaghetti Factory building, part of Hollywood’s streetscape since the 1920s, and incorporate it into the new project. After getting all of its approvals, CIM then violated this core condition, Silverstein said.
“Part of what makes this case so troubling is that Mayor Eric Garcetti and current Hollywood Councilman Mitch O’Farrell never lifted a finger or raised a cry to stop CIM’s illegal construction,” Silverstein added, noting that it was Garcetti — as Hollywood’s previous councilman — who touted preservation of the historic facade as a key project benefit.
“Garcetti and O’Farrell knew the developer’s midnight demolition of the facade on Feb. 21, 2012 was illegal and that all the subsequent construction was illegal,” Silverstein said. “But they did nothing.”
“Beyond the loss of our history and waste of millions of taxpayer dollars, what is so infuriating about this case is that it shows how City Hall’s culture of secrecy and rule-breaking is so blatant,” Silverstein said. Fortunately, the courts have refused to condone this misconduct, he added.
The 22-story, 305-unit project is “a monument to Garcetti and O’Farrell’s hypocrisy,” Silverstein said. “No wonder citizens have so little faith in L.A. City Hall.”
Garcetti and O’Farrell did not respond to requests for comment.
The city allowed CIM to construct significantly less parking for the project than the code required and to save millions of dollars in construction costs because the developer claimed preserving the historic facade was a hardship that made underground excavation difficult, Silverstein said.
The developer “justified the parking variances by relying in part on the requirement to retain the [Old Spaghetti Factory] facade, the judges said in their ruling. “It asserted that the retention of the facade prevented it from developing a subterranean parking structure under that area of the project, thereby limiting the quantity and size of parking spaces the project could accommodate.”
CIM also received $9.6 million in taxpayer subsidies for the project in part because the company agreed to save the facade, Silverstein alleged. It still has that money.
“It’s jaw-dropping how City Hall not only allows special interests to violate the law, but even rewards them with millions of dollars that should be going to police, fire and other public services,” Silverstein said.
With the neighborhood association’s lawsuit only two weeks from trial, the city also granted CIM temporary certificates of occupancy to lease units, Silverstein said. At most, only 65 of the 305 units were leased.
Later, CIM leased out an additional four floors of the building to an AirBnb operation run by Ginosi USA Corporation, for $160,000 a month.
“CIM doubly victimized the original tenants by tricking them to move into the building in the first place and then by subjecting them to an AirBnb operation that generated complaints about prostitution, drug-dealing and other nuisances,” as the tenants testified before the city’s Board of Building & Safety Commissioners, Silverstein said.
“CIM tried to use the tenants as shields against the consequences of its own illegal actions,” Silverstein added. “With this latest ruling, CIM was again barred from using this cynical ploy to save its project from abiding by the law.”
As of three weeks ago, only 17 of the 305 units in the building were still occupied. Most of the original tenants had left after securing a settlement from CIM, Silverstein said.