Part 124: “This Didn’t Happen Overnight” – Homelessness and the Fiscal Crisis in Los Angeles
Published October 28, 2024.
Photo of encampments on First Street in Downtown Los Angeles on a recent morning next to an empty lot and L.A. City Hall by author (GoPro Hero 11 Black).
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By Zachary Ellison and Ruth Roofless, Independent Journalists
The City of Los Angeles is in deep trouble, and all the finger-pointing in the world won’t solve it, much less presentations and proclamations. Los Angeles City Hall is a world away from Agoura Hills where developer Izek Shomof was recently cited on October 21, for violating Los Angeles County building codes in converting outbuildings for residential occupancy. According to electronic records provided by Shomof’s brother-in-law whistleblower Patrick Wizmann, this wasn’t even the first time that one of most powerful figures in LA had been found to be in violation of County building rules. After first being identified on February 5, 2024, LA County Public Works issued an additional “notice of violation” writing that they are “actively working with the property owner to bring the specific structures with unpermitted occupancy use conversion, back into compliance.” After all, compliance is a process, and it can be costly to resolve issues.
Shomof, one of Los Angeles’s most powerful developers, wrote a self-promoting memoir Dreams Don’t Die last year. According to one source, it slightly exaggerates his role in founding the LA Alliance for Human Rights. The 501(c)(3) non-profit’s primary service is litigation, having “successfully” forced the City and County into settlement to ostensibly meet 60% of the housing needs of the unhoused in each City Council District. Now though, even Alliance seems confused about what to do next, as they still have the City and County engaged in regular hearings, and housing is still out-of-reach to so many; with many more falling out of housing each month. The connection between money, power, housing, and elections has never been more clear in Los Angeles as we close in on November 5. We all get to make choices.
Both Izek Shomof and former business partner billionaire Naty Saidoff have recently given downtown Councilman Kevin de León’s re-election campaign $900 each, and in Saidoff’s case his spouse as well. Saidoff and Shomof engaged in litigation over three downtown properties in 2012, with Shomof prevailing and later writing about the dispute in his book. Dreams Don’t Die completely omits former Councilmember José Huizar, who pioneered the so-called “adaptive reuse” model of re-development, which allowed for the conversion of office space and old hotels in the city’s historic core into residential units. Adaptive reuse created hundreds of millions of dollars, if not billions in wealth for owners of historic buildings practically overnight. Shomof became the so-called “King of Spring Street”, a bold claim for someone who is not a politician, let alone mayor, considering City Hall itself is at 200 North Spring Street in Downtown LA.
LA Alliance’s Murky Origins
The LA Alliance didn’t just sprout up overnight. In fact, the first so-called meeting of the LA Alliance was held on May 13, 2019 in Palm Court, the beaux-arts style ballroom of a Shomof adaptive reuse property. The Alexandria, located at 210 West 5th Street off Spring Street, is one of the biggest rent-controlled residential hotels in the City after The Cecil Hotel. Formerly Hotel Alexandria, it was first built in 1906 for $2M, constructing an addition that included Palm Court in 1911, according to LA Conservancy. Shomof’s conversion into rental units occurred in 2005, 99 years after its original development by the Bilicke-Rowan Fireproof Building Company. Today it is directly across the street from The Last Bookstore, where Dreams Don’t Die was released.
Then-Mayor Eric Garcetti was slow to warm up to LA Alliance, but the unhoused people of downtown were not completely without representation, even if they were not formally invited by Alliance, which insisted at the time that it included unhoused community members. If Skid Row had a mayor, it would have certainly been the late General Jeff Page, legendary Skid Row activist, who was, according to one source, all but locked out of the initial Alliance hearing, only to meet with presiding Judge David O. Carter outside and become friends after taking a walk together. Perhaps this can be considered the first act of “locking arms” as Mayor Karen Bass has sloganed as part of her signature Inside Safe initiative to get people off the streets.
Corruption runs deep in LA
Multiple LA Alliance settlement agreements haven’t yet resolved homelessness in Los Angeles and are set to expire in June 2027. An “evidentiary hearing” over a planned reduction in shelter-system beds didn’t occur as planned this Friday, October 25, with Judge Carter calling off the affair. The hearing had been insisted upon by the Alliance, frustrating all involved parties including the City and County, who made multiple legal filings to the ever-expanding Alliance docket, which is under the jurisdiction of California’s Central District. While the Alliance itself may not be corrupt, its path has paralleled the exposure of significant corruption in Los Angeles. The City’s longest corruption case to-date began November 7th, 2018 when the FBI raided the Boyle Heights home and Spring Street offices of three-term downtown councilman José Huizar.
Huizar now sits in a Federal prison cell in Lompoc, having been sentenced to 13 years for racketeering. His shoes were filled by State Assemblymember for the 45th district and 50th president pro tempore of the State senate Kevin de León, who now faces a re-election challenge from challenger Ysabel Jurado. Incumbent de León has the political upper-hand, even winning the financial support of Izek Shomof, the Spring Street developer and self-proclaimed “king” who has been one of his biggest critics, chastising de León for withdrawing support for a proposed “Life Rebuilding Center” at the historic Sears, Roebuck & Company Mail Order Building, which both Shomof and Alliance have heavily promoted as a key strategy to addressing Los Angeles’ homelessness emergency. Sometimes, things just converge!
At City Hall on Friday, October 25, Karen Bass could be seen alongside Kevin de León, who once had hopes of running for Lieutenant Governor in 2026, honoring the late Richard Alatorre. Former Mayor Antonio Villaraigosa, who also represented CD14 prior to Huizar, was present. Villaraigosa is now running for Governor of California again in 2026, in a long-shot bid. It was truly a momentous occasion for politicking with only dignitaries and gadflies present. Unbeknownst to the Council, yet another scandal had been forming right before their eyes as Los Angeles Times journalist Dakota Smith would soon report with the help of colleague David Zahniser. The preceding presentation honoring groups for providing food security had included World Harvest, now the subject of an investigation in regards to Kevin de León for making political donations after receiving $1.91 million in discretionary funding from his officeholder account. The group had even gone as far as to feature his image on their vehicle for weekly food giveaways.
Political ties with developers
Izek Shomof had previously donated to State Assembly members Miguel Santiago and Wendy Carrillo who had both sought to represent CD-14 before faltering to Jurado, who has the endorsements of the Los Angeles County Democratic Party as well as the Democratic Socialists of America - Los Angeles (DSA-LA) chapter. Shomof and his family have previously donated to politicians such as former City Council President Nury Martinez, Gil Cedillo, José Huizar, and even Huizar’s ill-fated attempt to install his wife Richelle Huizar as his successor. So as Kevin de Leòn has stated in multiple debates with his challenger Jurado that the solution to Los Angeles’s housing crisis is to go vertical in Downtown Los Angeles, you have to really wonder what he means. Shomof’s book goes as far as quoting Kevin de León making an inflammatory statement about putting the unhoused on 747s to Israel to work on kibbutzes, and yet he also represents himself as the best possible candidate on homelessness, all while attacking County Supervisor Hilda Solis including writing a letter to Judge Carter for failing to address the crisis in his district, which includes Skid Row, the nation’s largest concentration of the unhoused.
Latino politics in Los Angeles have never been more conflicted as Los Angeles Times journalist Gustavo Arellano documented in his 4-part series, writing in billing the series questioningly as: “That’s when I asked myself: How did Latino politics in Los Angeles get to this moment?” In previously interviewing Izek Shomof about the Life Rebuilding Center, he described how he had “told Shomof his proposal was too good to be true.” With Shomof smiling in response, remarking: “It’s true.” The Sears building is still empty, and not a word has been said about it in the race for Council District 14 even as its husk shadows over Olympic Boulevard, renamed after the 1932 Summer Olympics. Were the proposed Life Rebuilding Center ever to come to fruition, even at a reduced bed number of 2,500, it would be the largest such facility in the system, and likely more akin to a warehouse or hospital than housing or a comparable shelter.
The project had previously faced tremendous community opposition, and after a closed meeting with Shomof, even de León had to accede it wasn’t palatable to the Boyle Heights community. Asked for comment about his position on the proposal and the donation, a longtime spokesman for Kevin de León didn’t respond. An attorney for Izek Shomof didn’t respond to a request for comment about his issues with LA County Code enforcement or his donation to Kevin de León. The Life Rebuilding Center, which has its own website and is still featured on the webpage of the Shomof Group as well, and the LA Alliance for Human Rights webpage still has quotes from Shomof associates. The linkage between the developer and the Alliance is clearly still strong, even as evidence suggests the idea of suing the City over homelessness may have preceded Shomof’s backing. Izek Shomof is no longer a visible, public leader in the organization.
In 2019, a group which closely resembled the roster of LA Alliance member-plaintiffs called DTLA Alliance for Human Rights, represented by Elizabeth Mitchell for Spertus, Landes and Umhofer, unsuccessfully attempted to intervene in a settled 2016 civil rights lawsuit brought by unhoused plaintiff Carl Mitchell. Counsel for DTLA Alliance was confidentially funded by a roster of downtown business interests that belong to the Downtown LA Industrial Business Improvement District “BID”, which is administered by Central City East Association. CCEA describes itself as “the principal advocate for property owners, businesses, employees and residents”.
Bad faith settlement negotiations
This week, Alliance had sought to compel testimony from Mayor Karen Bass and County Supervisor Lindsey Horvath. The City’s response read: “Plaintiffs’ attempt to call high-ranking ‘apex’ witnesses, including the Mayor and any Council Member, who lack unique, first-hand knowledge of relevant facts, nor have Plaintiffs attempted – much less exhausted – other less burdensome and intrusive ways of obtaining the information they seek.” The County’s response read: “Plaintiffs made no effort to ground this request in any provision of the Roadmap Agreement or County Settlement, because none exists.” The County added: “Plaintiffs cited to a single news article that has nothing to do with this case or the County Settlement at all.”
LA Alliance has previously argued through attorneys Elizabeth Mitchell and Matthew Umhofer that the municipal government acted in “bad faith” in failing to meeting the needs of the homeless population and in dealing with Alliance perhaps more specifically, and they may not have been totally wrong. Elizabeth Mitchell previously worked in the City Attorney’s police litigation unit for over a decade, resigning just days after the FBI raid on Huizar’s home and office, before taking a position in private practice with SLU. Mitchell didn’t respond to a request for comment on where this is all now going, despite responding to questions regarding one of her plaintiffs who had seemingly disappeared in the middle of the years-long legal saga.
The biggest stumbling block to addressing the crisis of homelessness in Los Angeles City, much less the entire County, just might be the Los Angeles Homeless Services Authority (LAHSA), which in legal terms is almost beyond oversight and isn’t party to the settlements with LA Alliance despite being their chief vendor. So the City and County spend money by allocating it to LAHSA, and yet have little to no ability to hold it accountable for performance through its subcontracted providers. The audit being conducted by Alvarez & Marsal under Judge Carter’s oversight has now been officially ordered to completion before January 15, 2025; and it’s both a performance-based and forensic audit. Yet despite there being stumbling blocks in terms of missing invoices to account for spending, particularly in 2019, according to Chief Deputy City Controller Rick Cole in interview at City Hall there are no signs of “fraud” yet that would require investigation, despite such recordkeeping being required by the city’s Ethics Commission. According to Cole, it will take multiple years for the of Los Angeles to address its fiscal crisis.
Missing money, unclear audit results
The question everyone seems to want to know isn’t just where the money went, but why Los Angeles’s performance at both levels hasn’t yet reduced the number of people on the streets. Answering this question correctly is more complicated than it seems, but the A&M auditors are reportedly at work. Their audit has now been formally expanded to cover costs both associated with the Los Angeles Police Department as well as County Services such as mental health. Giving the Court the ability to oversee LAHSA more effectively would require a change in state law and approval by the Governor of California, Gavin Newsom. To date, he’s shown little appetite for getting into the details of this policy despite having given a sweeping order to clear encampments. The Governor’s press release from August 9 states: “Since Governor Newsom took office, the state has invested over $40 billion to boost affordable housing, and additionally, more than $27 billion to address homelessness.” That’s real taxpayer money, with results in debate. Meanwhile voters are being asked to approve LA County Measure A this November.
Where did all the money go? Prior State efforts to audit their spending stalled because there wasn’t enough data about outcomes to audit. According to one source, asked about the City’s fiscal crisis “this didn’t happen overnight,” but rather has been years in the making, and is integrally connected with State and Federal spending. Formally, the federal Department of Housing and Urban Development has oversight of LAHSA. Asked whether Los Angeles was running out of money for homeless shelters, Chief Deputy Controller Cole demurred on the question. Los Angeles’s fiscal crisis is no secret, with Controller Kenneth Mejia issuing public warnings of an approaching cliff.
There’s one positive update. According to another source, the City has now clawed back $70,000 from service provider Hope The Mission over the so-called “Ramengate” scandal, where unhoused people were being given Ramen noodles alone at one City-operated shelter site. The only reason this was discovered was a report to the Controller’s Office of Kenneth Mejia, but they’re actually overwhelmed with more complaints than they have staffing to investigate. Additionally, the Controller lacks sufficient power to effectively conduct oversight of Mayor Karen Bass’s Inside Safe program. Clearly, something has to change, including up to new legislation that would allow for government to effectively increase accountability that at present stops with an 80-year old U.S. District Judge, who served in combat in Vietnam, and people still seem to think they can outsmart.
Soldier’s Home Stalemate
This hasn’t been the case yet in the West LA Veterans hearings in Powers v McDonough, which seemingly parallel the separate LA Alliance Hearings topically on calendar. The U.S. Department of Veterans Affairs is now appealing Judge Carter’s order to build thousands of new temporary housing units for veterans on its property, according to the report by Los Angeles Times journalist Doug Smith, who wrote that “the appeal threw confusion into Carter’s initial plan to get 106 modular units installed on the campus* in the next 90 days.” Veteran advocates object to the term “campus” because the West LA VA property has been illegally occupied by the University of California, Los Angeles and Brentwood School for decades, essentially turning the National Soldier’s Home into a private property. The educational institutions’ leases do not directly principally benefit veterans as the West LA VA Leasing Act requires, nor do they help with veterans’ housing and health struggles. Addressing the housing and homelessness crisis has never been more seemingly frustrated by powerful interests unwilling to even sit and work on real solutions.
Judge Carter was left exasperated. With former Los Angeles Times journalist Gale Holland describing how in Court at the VA news, he had remarked: “Are you going to go back on your word or keep your word?” Adding, “I truly believe veterans are going to die.” The reality is that people die on the street of Los Angeles with an increasingly regularity. So even the VA rejected a proposed settlement with the wealthy Brentwood School that would have included a lump sum payment of $5 million dollars because it wouldn’t control the funding. They also wouldn’t even agree to spend existing funding on housing, claiming that it would take away resources from their medical services. The VA claimed to Holland to have housed 1,854 veterans in 2024, and more in Los Angeles than everywhere else, arguing “The court exceeded its legal authority.” UCLA’s baseball stadium, shuttered on the Judge’s orders would reportedly cost $7 million dollars to raze. UCLA doubled its proposed rent increase to $600,000 annually. The WLA VA Hearings much like the LA Alliance Hearings have seemingly already reached a stalemate.
Link: Dream's Don't Die by Izek Shomof
Link: LA Alliance for Human Rights, et al. v City of Los Angeles, et al.
Link: Community shuts down proposal for homeless resource center at Sears building
Link: Life Rebuilding Center Website
Link: FBI Raids home and offices of LA City Councilman Jose Huizar
Link: The Powerful Legacy of General Jeff Page, West Coast hip-hop pioneer and ‘Mayor of Skid Row’
Link: Shomof Group Webpage
Link: State watchdog agency is investigating donations to Kevin de León’s reelection campaign
Link: The story of Latino political power in Los Angeles
Link: Power Y Glory Latino Politics in Los Angeles
Link: Column: Can a giant, empty Sears building help solve homelessness in Los Angeles?
Link: Governor Newsom cleans up homeless encampments in Los Angeles
Link: VA appeals judgment ordering thousands of housing units built on its West Los Angeles campus
Link: VA appeals landmark ruling ordering it to build housing for homeless veterans
Ruth “Roofless” has lived outside in the City of Los Angeles continuously for over five years. She attends public meetings about homelessness and exposes widespread programmatic corruption from within.
Zachary “Obama” Ellison is a whistleblower journalist who is writing an investigative journalism series about Los Angeles on politics, investigations, and media.
Ruth and Zachary have teamed up to collaborate on a series covering the LA Alliance lawsuit and more. We hope to expose the inner workings of the government real estate development world and the impact felt by the people residing there.
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