Are Owners of Historic Properties Actually Maintaining and Restoring Them?

The owner of the El Palacio and The Lotus, two apartment buildings designated as West Hollywood cultural resources, will go before the city’s Historic Preservation Commission tonight to address complaints that it hasn’t done enough to restore those buildings while the company has benefitted from tax breaks associated with the cultural designation.

The buildings are owned by limited liability companies controlled by Lawrence Taylor of Malibu, founder of Christina Development Corp. Both are part of West Hollywood’s “Courtyard Thematic Grouping.”

The Lotus, located at 1216-1224 N. La Cienega Blvd., is a 14-unit apartment building built in 1928 in what is known as the “Exotic Revival” style. El Palacio, located at the northeast corner of Fountain Avenue and La Cienega, is an 18-unit building built in 1931 in a Churrigueresque Spanish Colonial Revival style.

Christina Development Corp. bought the buildings in 2014, at which time the previous owners already had gotten a tax break under the Mills Act. The Mills Act, enacted in 1972, is a state law that allows local governments to give tax abatements to owners of historically significant properties who commit to restoring and maintaining them.

According to a memo from Antonio Castillo of the city’s Community Development Department, the Mills Act contract with the then-owner required it to develop a 10-year plan for restoring each building’s historic qualities. Those plans were updated and approved by the Historic Planning Commission in 2007.

But the memo notes that while Christina Development made some improvements specified in the plans, it also has made changes that don’t comply with the contract it signed that gives it the Mills Act tax breaks. Those breaks are significant. For example, the El Palacio building is valued for tax purposes at $8.18 million. But with the Mills Act contract, the tax is levied on a value of only $2.93 million. The Lotus is valued at $5.80 million, but that has been reduced to $2.15 million under the Mills Act.

Castillo’s memo notes several problems with the El Palacio building. They include cracked stucco, finials that remain stored in the basement rather than reinstalled, painting of wood staircase posts in public areas and incompatible marble flooring in one vestibule and the installation of a modern gray flooring in another. At The Lotus building the doors in public vestibules have been overpainted and wood staircase posts have been painted and flooring in the public vestibules has been replaced.

The estimated cost for the work at the updated work plan for The Lotus is $435,000 and that for El Palacio is $487,500.

At least two West Hollywood residents have complained to the HPC about the owners work on the properties. Another has submitted a letter to HPC praising Christina Development’s work.

Matt Dubin, a resident of El Palacio, has complained about the work on that building and The Lotus.

“There have been numerous actions taken by this owner that demonstrate a disregard for the Mills Act contract, the Secretary of the Interior’s Standards, city staff, tenants and your commission, Dubin wrote. “The behavior is not that of benign neglect nor is it rooted in the naiveté of an owner who is unaware of their obligations under the contract; it is far worse. There is a demonstrated pattern of simply choosing to flout the rules whenever it suits them.

“While they have applied for numerous certificates Of appropriateness to modernize the building (security systems, perimeter fencing, trash enclosures, etc.) they have drastically altered character-defining features of the property without COA application. These alterations are clearly non-conforming and non-compatible. Furthermore, they have been deployed in a haphazard manner with extremely shoddy workmanship.

“ The interior vestibules, in particular, are rife with partially completed work applied in an inconsistent manner. Adjacent floors, doors and newel posts have been left with different finishes and transitions are startlingly abrupt. The owner has been cited by the city and given ample time to cure problems that they created, yet have not made a single effort to bring the property back into compliance.”

Dubin notes that if the city should cancel its Mills Act contracts with Taylor’s companies, it would have to pay a fines of more than $2 million, based on the properties fair market value.

Allegra Allison, a former HPC commissioner, has sent a letter asking that the city not extend and renew its Mills Act contract with Taylor’s companies.

“The owners of El Palacio and the Lotus have been fortunate for the monetary assistance that the Mills Act provides for the restoration and maintenance of historic buildings but, they have not done the work,” Allison wrote.

“The Mills Act is not in place to simply assist property owners to receive an enormous financial benefit by only pretending to do the work required to maintain their buildings.

“From what I’ve seen, the owners of El Palacio & the Lotus, have haphazardly done a melange of work for what appears to be for show; ignoring the proper restoration and preservation of the buildings, all the while, claiming they are doing so.

“The property owners knew what they were getting in to when the entity purchased the two properties. A legal contract is in place, to do the work in exchange for a huge tax break and nothing has been done. (Wouldn’t this essentially be tax fraud?)“

Mark Goode, an El Palacio tenant and a former resident of The Lotus, sent a letter to HPC praising Christina Development.

“I have been a resident at El Palacio for the past 3 years. Prior to 2015 I was a tenant and resident at the historic Lotus apartment property next to the El Palacio,” Goode wrote. “It has been a privilege for our family to live at such a beautiful, historic and well managed residential property.

“Prior to 2014, these properties were neglected, poorly managed and in a sad state of disrepair. Thankfully, Larry Taylor and Christina Development recognized the intrinsic and historic value at both El Palacio and the Lotus. Since their acquisition in 2014, I have witnessed a substantial effort and significant financial investment made by Christian to repair and restore both of these properties to their original splendor. I can say with confidence that El Palacio is superbly managed with devotion to the property and residents.

“Our El Palacio apartment (Unit G) was beautifully updated with a new windows, kitchen and bathroom fixtures, while preserving the original floors and layout. Christiana has also invested in the improvement of the garage, laundry room, entry foyers, and landscaping. They have also added new fencing, gated garbage zone and security cameras to insure both the safety and sanitation for our property and its residents.”

Lloyd Hussey, Christina Development’s director of acquisition, noted that the company acquired the buildings only 36 months ago and already has spent hundreds of thousands of dollars to restore and maintain them.  “We plan to restore those properties back to their original status,” he said.  Hussey said that Christina Development has worked closely with city planners on the restoration and maintenance of the building, although he acknowledged that it has made some mistakes.  He said the city has notified the company that it used inappropriate paint on some doors and installed flooring with the wrong finish, both of which Christina Development intends to fix.

The Historic Preservations Commission meets at 7 p.m. tonight at the Plummer Park Community Center, 7377 Santa Monica Blvd.