Business
An affordable housing complex for Hollywood workers grapples with tenant complaints
Dozens of tenants at an affordable housing complex for arts and entertainment workers are in rebellion amid a dispute over a rent increase and other alleged issues at the Hollywood property.
A group of residents at the Hollywood Arts Collective released a statement Thursday accusing Thomas Safran & Associates, the property management company, and the Entertainment Community Fund, which helped develop the project, of luring them into signing leases under false pretenses.
“After just one year of existence, tenants have been advised by property management, Thomas Safran & Associates (TSA), that their rent WILL BE increased every year,” the resident group said in a press release.
“This is in spite of multiple false verbal promises made to prospective tenants during the application process that rent would not be raised, or if it were to be, that the raises would be minimal, at 2-3%. … The struggle to pursue a dream in Hollywood led many of the tenants to a living nightmare.”
The management company denies misleading tenants and contends that the terms of residency, including potential rent increases, were clearly outlined in the contracts that they signed. Jordan Pynes, president of TSA, called the tenant uprising “very disheartening” in a statement.
“We are saddened and disappointed that some residents of the Hollywood Arts Collective are unhappy with the property,” Pynes said.
“TSA is committed to providing exceptional affordable housing to residents in Hollywood and around Southern California, and the assertion that we did not properly disclose how the affordable Low-Income Housing Tax Credit Program works for this project is simply not true.”
Keith McNutt, executive director of the Entertainment Community Fund’s Western Region, said in a statement that the nonprofit organization “remains dedicated to supporting the performing arts and entertainment community at The Cicely Tyson Residential Building (part of The Hollywood Arts Collective)” in collaboration with the property manager.
This type of quarrel is common at Low-Income Housing Tax Credit properties, according to Anya Lawler, a legislative advocate for the California Rural Legal Assistance Foundation.
“The way that rents are set in LIHTC properties does not guarantee that tenants’ rent will stay affordable over time, and tenants are often unaware of that,” Lawler said.
“It can be really jarring to find out that they’re living in an affordable property, and their rent … can continue to go up in ways that they can’t afford. And it’s a real problem. The whole system is in need of rethinking and reform.”
Billed as a haven for struggling artists, the complex began housing residents in April 2023. The 10-story building on Schrader Boulevard boasts 151 units.
Applicants had to prove they work in a creative field and make 80% or less of the area median income. Rent prices were set between 30% and 50% of tenants’ monthly income at move-in.
After TSA notified residents in August of an impending 7% rent increase, nearly 40 tenants emailed letters protesting the rent spike and airing grievances, including malfunctioning fire alarms and elevator breakdowns.
“As a working low-income artist, this news is financially devastating, and represents a break of confidence in the mission that the Hollywood Arts Collective claims to represent,” the letters read.
Elena Theisner, vice president of property management at TSA, responded to residents’ concerns by scheduling a community meeting. She cited rising operational costs as the primary reason for the rent increase in an email to tenants.
Following the meeting, Theisner told The Times on Sept. 25 that TSA had reached a compromise with residents by agreeing to lower the rent increase to 4%, schedule an informational session and hold quarterly meetings with tenants.
Some residents, however, were not satisfied.
On Oct. 30, the newly formed Hollywood Arts Collective Tenants Assn. emailed TSA and the Entertainment Community Fund a list of demands, including providing new accommodations for residents with disabilities, covering the cost of utilities, enhancing building security and abolishing the rent increase altogether.
Julia Mata, a resident and organizer at the Hollywood Arts Collective Tenants Assn., told The Times that 39 residents signed the demand letter.
On Nov. 5, the building managers provided written responses to each of the association’s demands. They stuck to the 4% rent increase, explaining that the collective is not rent controlled or project-based Section 8 housing, which keeps tenants’ rent payments capped at roughly 30% of their income.
“This is not unique to this building — annual rent increases are normal and to be expected at Low-Income Housing Tax Credit projects,” the response from management read.
The building managers also declined to cover residents’ utility costs beyond existing discounts or provide additional security measures. They were more amenable when it came to disability accommodations and community amenities — granting some and agreeing to consider others.
Central to the conflict are various artist-friendly facilities — such as a recording studio, galleries and a theater — that residents say were never provided or were falsely advertised as perks.
McNutt said in a statement that a number of services will be available to Hollywood Arts Collective residents starting in 2025. Those services will include career and financial wellness workshops.
McNutt added that the fund is working with the city to begin construction on the Rita Moreno Arts Building — a structure next to the apartment complex with a 71-seat theater to be rented for rehearsals, performances, film screenings and other purposes.
Targeted for completion in 2026, the arts building is not intended to be “a direct amenity solely for residential tenants” — though residents may be permitted to use the theater when it isn’t being loaned out, according to a document provided to The Times.
“This has been a much more lengthy process than anticipated,” McNutt said in a statement, “but will deliver more wonderful amenities for the local community in Hollywood, including a beautiful new theater, two gallery spaces for non-profit arts partners and our new training center.”
The building management team is scheduled to meet with disabled tenants Tuesday evening to review their requests, which included accommodations for individual units and more accessible parking spots. The Hollywood Arts Collective Tenants Assn. is expected to hold a news conference Wednesday.
Business
The Container Store files for bankruptcy amid stiff competition
The Container Store has filed for Chapter 11 bankruptcy protection amid steep losses, slumping sales and increased competition.
Business in its stores and online will continue as usual while it restructures, the Texas-based home goods, storage and custom closets chain said late Sunday. Customer deposits for in-home services will be honored, and merchandise orders will be delivered as normal.
“The Container Store is here to stay,” Chief Executive Satish Malhotra said in a statement. “Our strategy is sound, and we believe the steps we are taking today will allow us to continue to advance our business.”
The Container Store peaked in its 2021 fiscal year, when the company exceeded $1 billion in sales for the first time and posted record earnings as consumers spent heavily on home remodeling and redecorating projects during months of pandemic quarantine. A national de-cluttering craze, set off by organization expert Marie Kondo, also benefited the chain.
But since then, the Container Store has struggled.
Part of the company’s struggles are due to competition from rivals including Target, Walmart and Amazon, which often sell storage items that are similarly stylish at a lower price point. And with housing prices and mortgage rates remaining stubbornly high, many prospective home buyers have been forced to wait on the sidelines, dampening demand for a wide range of products and services that come with outfitting a new property.
For the three months ended Sept. 28, the Container Store reported a loss of $16.1 million. Sales totaled $196.6 million, down 10.5% compared with the same quarter a year earlier. Same-store sales fell 12.5%.
Founded in 1978, the Container Store operates more than 100 stores around the country. In Los Angeles County, it has locations in Century City, El Segundo, Pasadena and Woodland Hills.
It filed for bankruptcy protection in the Southern District of Texas, two weeks after the New York Stock Exchange notified the company that its shares would be suspended for failing to maintain an average global market capitalization of at least $15 million over 30 consecutive trading days.
The Container Store said it expected to confirm a plan of reorganization within 35 days and emerge from bankruptcy soon after as a private company. The company said at least 90% of its term loan lenders had pledged $40 million in new money financing.
The Chapter 11 process does not include Elfa, a separate customized closet business based in Sweden, which is owned by the Container Store.
In an email to customers Monday, Malhotra said the company had felt “the impact of the challenging macro-economic environment” but reassured them that “our obligations to you will be fulfilled as expected.”
“You can feel confident that any orders, deposits or business you have with us are safe,” he said.
It has been a tough month for large-format retail chains. Last week Party City filed for Chapter 11 bankruptcy and said it would close all of its roughly 700 stores nationwide, and Big Lots said it would begin going-out-of-business sales at about 870 stores after a deal to sell the company fell through.
Business
Judge enters default judgment in suit against Kanye West's private school
A judge entered a default judgment against Kanye West’s Christian private school in Los Angeles Superior Court on Wednesday in connection with a lawsuit filed by a former employee.
Isaiah Meadows, Yeezy Christian Academy’s former assistant principal, sought a default judgment in his wrongful termination and unpaid wages lawsuit against the school — later rebranded Donda Academy — and other defendants for failure to appear through licensed attorneys.
The judge, Christopher K. Lui, ruled in favor of Meadows’ motion. He also ruled that the answers given by defendants — Yeezy Christian Academy, Donda Services LLC and Strokes Canyon LLC — in response to Meadows’ complaint be stricken.
Last year, a lawyer representing West, and the three other defendants denied “each and every allegation of Meadows complaint,” in a filing with the court.
In August, Brian Blumfield, West’s most recent attorney who was representing the music mogul and other business entities in the matter, sought his removal from the case on the grounds that the defendants had terminated their relationship in June and that they had refused to speak to or pay Blumfield, according to court filings. The judge granted the request.
Meadows had alleged that he brought many of the school’s health and safety issues to the attention of West and the school’s director. But they were left unaddressed and Meadows was later fired.
According to the complaint, a skylight in one of the classrooms didn’t have glass, allowing rain to fall in the building. West reportedly did not like glass.
“Water would soak into the floor, which would lead to a moldy smell for the next few days.”
Further, electrical and telephone wires were also allegedly left exposed and on one occasion an electrical fire started near a student dining area.
In 2020, Meadows was offered $165,000 salary to work, according to the suit. However, he claimed that West later reneged on his promise to pay for his rent after doing so for three months — Meadows had relocated with his family from North Hollywood to Calabasas to work at the school.
The rent payments ended in February 2021, Meadows claimed after he “was suspended after calling for meetings and raising concerns regarding operations of the school.”
Meadows alleged that his salary was then cut and he was later demoted and worked as a teacher’s assistant and physical education teacher. That April, he sent an email outlining his concerns about his pay and that of other staff members.
Nearly two weeks before the new school year was to start in 2022, Meadows was told that he was being terminated “with no explanation as to why.”
The suit is one of at least five filed against West and Donda Academy since 2023 that allege a hostile workplace as a result of West’s conduct, which includes claims of discrimination and antisemitism, and retaliation, as well as various health and safety issues at the school’s property that was located first in Calabasas, then Simi Valley and finally in Chatsworth.
Donda Academy abruptly shut down in October 2022, amid a cascade of fallout from West’s antisemitic comments, which led a number of his business partners such as the Gap and Adidas to sever ties with him.
There were reports that the school reopened shortly thereafter; however, according to the California Department of Education, the school has been closed since June of this year.
Business
Santa, aka the IRS, might be dropping $1,400 into your stocking this year
Everyone’s favorite Christmas gift giver, the Internal Revenue Service, has announced that it will be doling out more than $2 billion in checks to Americans this month as part of its effort to make sure everyone received their stimulus payments from 2021.
The federal tax agency has announced that an internal review showed many Americans had never received their economic impact payments, which were supposed to go out following the filing of 2021 tax returns. Because of this, the agency is paying out the money they still owe Americans who never received their checks.
Although most eligible Americans received their stimulus payments, the checks will be sent to those who qualified but filed a 2021 tax return that left the space for recovery rebate credit blank.
Those people are eligible for up to $1,400 from the federal government. The payments should be received by late January 2025, at the latest.
“These payments are an example of our commitment to go the extra mile for taxpayers. Looking at our internal data, we realized that 1 million taxpayers overlooked claiming this complex credit when they were actually eligible,” said IRS Commissioner Danny Werfel. “To minimize headaches and get this money to eligible taxpayers, we’re making these payments automatic, meaning these people will not be required to go through the extensive process of filing an amended return to receive it.”
Stimulus payments of $1,400 were sent out to Americans as part of a $1.9-trillion COVID-19 relief bill. Millions of Americans were eligible for the payments.
To get a check, Americans were required to make less than $75,000 per year or under $150,000 as a household.
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