Anti-Development Groups Motivated by Good or Greed?
Written by Peter Strauss of Iconic Investments
I recently read an article on Curbed LA’s website about the derailing of the proposed mixed-use project at the corner of 8th and Catalina in Koreatown. The 27-story apartment building had gained the support of both Mayor Eric Garcetti and the LA City Council despite objections of community groups and neighbors.
I was curious to know the intention of these neighborhood “NIMBY” groups. Was their motivation to do good or greed? As I began to research, I came across terms like “greenmail,” which is a tactic used by unions, business competitors and NIMBYs to force developers into giving concessions by threatening CEQA (Environmental Impact Report) lawsuits. Most of the time, the concession demands have nothing to do with the environment. They only benefit the self-serving interests of these groups. For example, unions will often use this tactic to push union labor on construction projects.
This led me back to the 8th and Catalina project. Who is Fix the City and why are they filing a lawsuit demanding the developer produce an environmental impact report after final approvals were granted? Fix the City claimed this project would increase traffic and impact public services. The judge sided with Fix the City, thereby delaying the project by two years.
Let’s Make a Deal!
This was the first I had heard of Fix the City. Its president, Michael Eveloff, is a 20-year veteran of neighborhood advocacy. He served as the president of the Century City neighborhood group Tract 7260 before starting his own association: Fix the City. In my research, I noticed Fix the City had almost $3.0 million dollars in assets on its balance sheet. Seemed like a lot of money for a non-profit that was just formed in 2012. I then discovered that in 2012, when Century City Mall owner Westfield wanted to stop offering three hours of free validated parking to increase revenue, they needed to get the approval of the community group Tract 7260. Eveloff, who at the time was president of Tract 7260, argued that increased parking rates would result in mall patrons parking on local Century City streets to avoid paying higher parking fees.
To gain the approval of Tract 7260 and increase parking rates, Westfield sat down with Eveloff and agreed to pay Tract 7260 $3.1 million. Some may use the term “greenmail” or “hush money”; I prefer extortion. At the same time of Westfield’s payment in 2012, Eveloff secretly formed Fix the City. The agreement between Westfield and Tract 7260 became public because Tract 7260 sued Fix the City, alleging that Eveloff steered the $3.1 million from Westfield into his own, newly formed non-profit, Fix the City, instead of having the money directed to Tract 7260.
Another example of “greenmail” or “hush money” was between developer Rick Caruso and the Westbury Condo Association. Caruso paid the homeowners association of the 11-story condo building on San Vicente and Burton Way $500,000 so the association could make repairs to their building. In return, Rick Caruso got Westbury Condo Association’s approval for his new project, 333 La Cienega.
A few years back, a developer was planning on building 100 condos in the Melrose/Larchmont area. The project was opposed by La Mirada Neighborhood Association, led by Robert Silverstein, who threatened a CEQA-based lawsuit. This would have caused delays and possibly challenged the size and scope of the project. The developer settled paying $90,000 to the Silverstein Law Firm for “legal fees” and a “monitoring payment” of $250,000 to the La Mirada Neighborhood Association. These deals are normally kept confidential, with no transparency to the public. This particular settlement was leaked by an anonymous source at City Hall. La Mirada and Silverstein are the proponents of the Target on Sunset and CIM Group’s Sunset Gordon Tower.
I go back to the question: Are these groups in it to do good for mankind and the City or is it self-serving greed? These “ambulance chasers” find loopholes in the law and the City’s general plan to exploit developers for their own benefit — not for the benefit of the public. The stalled Target project on Sunset Blvd is needed and welcomed by the Hollywood community — just not Silverstein.
Advocates like Silverstein and Eveloff are not elected on behalf of the communities that they purport to defend, yet they play a huge role in shaping our City. Therefore, I believe greater scrutiny of these groups is warranted and critical.
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