Business
L.A.’s most extravagant mansion sells for less than half its list price
The mega-mansion often known as “The One” offered Thursday for $126 million at a chapter public sale. That’s an enormous low cost from its $295-million itemizing value, even with a 12% public sale price bringing the full to about $141 million.
The Bel-Air property set a report for the most costly home offered at public sale, however it fell properly in need of the California gross sales report set by enterprise capitalist Marc Andreessen, who bought a Malibu property for $177 million in October. Probably the most ever spent on a U.S. residence was $238 million by hedge fund mogul Ken Griffin for a New York Metropolis penthouse in 2019. A number of worldwide gross sales have surpassed $300 million.
The customer can be disclosed by March 8, when paperwork should be submitted to U.S. Chapter Courtroom Decide Deborah Saltzman, who will maintain a listening to later this month on whether or not to approve the sale. It’s doable that the successful bidder can be a restricted legal responsibility firm, a authorized entity typically utilized by the rich to cover their actual property purchases.
Greater than three dozen potential consumers toured the 944 Airole Means property over the past couple of months, together with billionaires from the Center East, Asia and California, The One’s itemizing brokers have stated.
Concierge Auctions, which dealt with the sale, stated its public sale website drew views from 170 international locations, together with Australia, the UK, Germany, France and Italy — and generated some 2,800 prospects.
Nonetheless, after the web public sale opened Monday, solely 5 bidders from the US and New Zealand participated. A lot of the motion occurred in the previous few minutes.
Agent Brent Chang of Compass stated the outcomes had been a cautionary story and would possibly immediate builders to suppose smaller, on condition that a number of big mansions have gone out of business in the previous few years. He additionally puzzled if the timing was off given Russia’s invasion of Ukraine.
“The customer pool for that is very small, and with all the pieces occurring in Russia, impulsively these Russian billionaires who might have been your finest wager to purchase it are pulling out,” he stated.
The quantity of debt hooked up to the property initially totaled about $180 million however has since grown to $256 million as extra collectors have made claims, in accordance with a March 2 court docket submitting. Which means many collectors will take losses — regardless that a lot of the public sale home’s 12% price can be returned to the bankrupt property, which isn’t a typical association.
The biggest single creditor is Los Angeles billionaire Don Hankey, who lent $106 million to the dream undertaking of developer Nile Niami. The lender is owed greater than $130 million in secured debt, together with cash he supplied in chapter to restore and spiff up the property on the market.
Hankey, who beforehand stated he would possibly bid for the property if it was severely underpriced on the public sale, stated he didn’t make a suggestion. He stated the sale ought to enable him to get well the money he put into the undertaking, however added that he was shocked at how low the ultimate value was.
“The man who purchased it simply received an incredible deal. He’s received folks prepared to pay $50,000 a day simply to do commercials and movies,” Hankey stated.
The hilltop house, stated to be 105,000 sq. toes, was marketed for $500 million a number of years in the past whereas below development however didn’t discover a purchaser. It was positioned out of business in October after Hankey foreclosed on the $106 million in debt defaulted on by Crestlloyd, the restricted legal responsibility firm established by Niami that legally owns the undertaking.
Turnaround specialist Lawrence Perkins, who was put in command of Crestlloyd when the house was positioned out of business, stated the “market spoke” on the public sale. Nonetheless, he additionally stated it was his duty to proceed fielding late affords that may high the public sale value.
“I’ve received an obligation if somebody is available in, and there’s a greater supply. We’re not soliciting them however it’s not closed till it’s closed,” he stated. “Some folks don’t wish to take part in auctions.”
Dealer Stephen Shapiro, the founding associate of Westside Property Company, stated the low value mirrored the “out-of-control ego” of Niami, who constructed an enormous home that wasn’t actually a house.
“Most builders construct a home that individuals can stay in,” he stated. “He constructed one considering there was going to be demand for this outrageous over-the-top home.”
Niami has been making an attempt to regain management of the property. In December, he proposed making a cryptocurrency referred to as The One Coin that might be backed by the mansion and repay all the house’s money owed.
Previous to the public sale, a Niami spokesperson stated the developer wouldn’t be commenting on the public sale. He couldn’t be reached for quick remark Thursday.
The One is simply the newest L.A. trophy house to finish up in chapter after a blitz of pricey growth within the area’s glitzy hillside and coastal communities.
Concierge Auctions final 12 months set an public sale report when it offered a Beverly Park house for $51 million — however that was nonetheless greater than $100 million off its authentic asking value. Concierge stated The One was the biggest house ever offered at public sale.
How a lot The One would go for had been one thing of a parlor recreation within the luxurious actual property group, with some considering it’s the final trophy house and others declaring it a white elephant.
The property features a 4,000-square-foot guesthouse, a sky deck with cabanas, a personal theater, a full-service spa, a nightclub and even an out of doors operating observe and moat. It has 21 bedrooms and 42 full bogs.
Nonetheless, the mansion might find yourself being a undertaking for the client.
The home isn’t 100% full and lacks a certificates of occupancy, pending a sign-off from metropolis inspectors on essential permits for grading, electrical and different work. Additionally, it might have development defects and zoning code violations, in accordance with allegations in court docket paperwork.
The mansion was described on the Concierge web site because the “largest within the city world,” however by many accounts, a 27-story house stated to be 400,000 sq. toes owned by a billionaire in Mumbai, India, is taken into account the world’s largest, exterior of royal palaces. Nonetheless, it could be the biggest within the nation.
Underneath the phrases of the public sale settlement, the successful bidder is below authorized obligation to shut the sale by the top of the month or lose a $250,000 deposit.
In making her dedication whether or not to approve the deal, the decide will contemplate whether or not she believes the excessive bidder has the monetary wherewithal to shut the sale, its influence on collectors and different points.
Different huge collectors embody Inferno Funding, an organization run by Julien Remillard, a longtime Canadian investor of Niami’s. Inferno says it’s owed $24 million. Yogi Securities, the funding automobile of Joseph Englanoff, an L.A. physician and one other longtime Niami investor, says it’s owed $14 million.
Compass agent Bret Parsons stated that he thought the value extra mirrored the worth of the hilltop property, with its commanding views throughout town, than the home itself.
“It’s unlucky that Mom Nature’s priceless assets might be plundered for ridiculous trophies,” he stated.
— Occasions workers author Jack Flemming contributed to this report.
Business
Column: GOP targets Medicaid with the return of a terrible idea
In any contest to name the cruelest and most useless healthcare “reform” favored by Republicans and conservatives, it would be hard to beat the idea of applying work requirements to Medicaid.
Yet, it’s back on the table, teed up by congressional Republicans as a deficit-cutting tool.
In a rational world, this idea would have been consigned to the dumpster long ago, and forever. It’s billed as a way to reduce joblessness, but doesn’t. It’s billed as an answer to the purported complexity of Medicaid, but makes the system more complicated for enrollees and administrators. It’s billed as a money-saving reform, but adds to Medicaid’s costs.
Democrats view Medicaid as a health insurance program that helps people pay for health care…Republicans view Medicaid as a government welfare program.
— Drew Altman, KFF
So what does it accomplish? It’s very effective at throwing eligible people out of Medicaid.
House Budget Committee Chairman Jodey Arrington (R-Texas) gave the game away last week when he told reporters that a “responsible and reasonable work requirement” for Medicaid would produce about $100 billion in savings over 10 years, or $10 billion a year.
That wouldn’t make much of a dent in the annual cost of Medicaid’s coverage of its 72 million beneficiaries, which came to about $853 billion last year.
Nor would it do much to defray the estimated $4-trillion 10-year cost of extending parts of the 2017 Republican tax cut, which is the ostensible reason for seeking out penny-ante savings in budget categories such as a social safety net, according to the Washington Post.
Whatever the putative rationale, there are only two ways to extract even $10 billion in savings from Medicaid: Strip benefits from the program, or throw enrollees out.
One other thing about imposing work requirements on Medicaid: It’s illegal. That’s the conclusion of federal judges who reviewed the idea the last time it was implemented, during the first Trump term.
U.S. District Judge James E. Boasberg and a three-judge panel of the U.S. Court of Appeals for the District of Columbia found that the legal waivers that allowed individual states to experiment with work requirements didn’t meet the key prerequisites for such “reforms” according to Medicaid law — that they serve the program’s objectives, specifically the goal of bringing health coverage to low-income Americans.
The courts invalidated work requirement waivers President Trump granted to three red states. When President Biden arrived at the White House in 2021, he canceled the waivers outright and shut down the work-requirement pipeline.
Despite that legal history, Medicaid work requirements remain a beloved hobby horse of conservatives. The idea is a component of Project 2025, the right-wing road map to federal policy changes in a second Trump administration. So let’s take a closer look at the record.
The place to start is with conservatives’ historic disdain for Medicaid. This derives, as Drew Altman of the health policy think tank KFF astutely observed, in part from the divergent partisan views of the program: “Democrats view Medicaid as a health insurance program that helps people pay for health care.” By contrast, “Republicans view Medicaid as a government welfare program.”
Thinking of Medicaid as welfare serves another aspect of the conservative program, in that it makes Medicaid politically easier to cut, like all “welfare” programs. Ordinary Americans don’t normally see these programs as serving themselves, unlike Social Security and Medicare, which they think of as entitlements (after all, they pay for them with every paycheck).
From the concept of Medicaid as welfare it’s a short step to loading it with eligibility standards and administrative hoops to jump through; Republicans tend to picture Medicaid recipients as members of the undeserving poor, which aligns with their view of poverty as something of a moral failing. Work requirements, then, become both a punitive element and a goad toward “personal responsibility,” a term that appears in Project 2025’s chapter on Medicaid.
The idea that work requirements for Medicaid can have a measurable effect on joblessness is the product of another misconception, which is that most Medicaid recipients are the employable unemployed. As is often the case with right-wing tropes, this is completely false.
According to census figures, 44% of Medicaid recipients worked full time in 2023 and 20% worked part time. An additional 12% were not working because they were taking care of family at home, 10% were ill or disabled, 6% were students, and 4% were retired. Of the remaining 4%, half couldn’t find work and the remaining 2% didn’t give a reason.
That might account for why Arkansas, the one state that actually implemented work rules under the Trump administration, experienced no increase in either “employment nor the number of hours worked” among the Medicaid-eligible population, in the words of the Congressional Budget Office.
Official state statistics showed that in the first six months of implementation, 17,000 Arkansans had lost their Medicaid eligibility. That figure was what provoked Boasberg to suspend the Arkansas program and block a similar effort in Kentucky before it could even start.
The Trump administration had approved Medicaid work requirements for 13 states and had approvals pending in nine others — all were under the control of Republican governors or legislatures or both — before the waivers ran into the court blockade and ultimately into the accession of the Biden administration.
The Arkansas rules required Medicaid enrollees to show 80 hours per month of employment, job search, job training or community service. Pregnant women, the disabled, students and a few other categories were exempt. Enrollees who didn’t meet the requirement for three months were summarily excised from Medicaid and couldn’t reenroll until the following year.
Evidence compiled by healthcare advocates suggested that administrative snafus largely prevented even employed enrollees from submitting evidence of employment. The work hour reports had to be made online, even though the reporting website was out of order for long stretches and many enrollees didn’t have adequate internet access.
The effect of the policy on health coverage in Arkansas was calamitous. Medicaid enrollment fell by a stunning 12 percentage points. The percentage of uninsured respondents in the 30-49 age cohort, which was the first group targeted in a stepwise introduction of the requirement, rose to 14.5% in 2018 from 10.5% in 2016.
None of this reality dissuaded the authors of Project 2025 from resurrecting work requirements for Medicaid. Their discussion is redolent with disdain for the program and its enrollees — especially for beneficiaries of the Affordable Care Act’s Medicaid expansion, which added childless low-income households to a program that had chiefly covered families with children.
Since the 1980s, Project 2025 asserted, Medicaid had “evolved into a cumbersome, complicated, and unaffordable burden on nearly every state.”
The truth is, of course, that in the most significant expansion of the program, under the ACA, 100% of the cost of covering the new enrollees was borne by the federal government from 2016 through 2018, gradually declining to 90% in 2020 and thereafter. That’s significantly higher than the federal share of costs for the original enrollee category.
Project 2025’s Medicaid chapter falsely states that the ACA “mandates that states must expand their Medicaid eligibility standards” to include all individuals with income at or below 138% of the federal poverty level.”
The truth is that this was originally part of the ACA, but it was invalidated by the Supreme Court, which ruled that the federal government must give states the choice of whether to accept the expansion. That’s the state of affairs to this day. The Supreme Court decision came down in 2012, so the Project 2025 authors don’t have much of an excuse for their ignorance of the facts. Anyway, 10 states, most of them deep red, still haven’t accepted the expansion.
Project 2025’s approach to Medicaid validates Altman’s perception that conservatives see the the program chiefly as welfare. Its goal is chiefly to find ways to cut costs, including through block grants (which deprive states of the flexibility they might need to fight disease outbreaks such as the pandemic), benefit caps and lifetime caps.
It proposes reducing or eliminating the 90% federal match rate, which would do nothing for enrollees and strain state budgets while preserving a few dollars for the feds. It calls for reducing Medicaid payments to hospitals, which keep some institutions, especially rural hospitals, fiscally afloat.
It calls for rooting out “waste, fraud, and abuse,” that all-purpose chimera evoked by budget-cutters as a painless way of reducing costs, but which no one ever seems to accomplish. And it calls for eliminating the “cumbersome” process of getting waivers improved — in other words, open the door for conservative political leaders to strip away the healthcare guarantees and standards that make Medicaid an effective deliverer of healthcare.
Don’t be fooled. The Project 2025 folks and their adherents in the coming Trump White House don’t want to make Medicaid more efficient, as they claim. They want to make it less relevant and less effective — and cheaper, the better to preserve those tax cuts. Those 72 million enrollees? They’ll just be collateral damage.
Business
L.A. City Council postpones vote on wage hike for hotel and airport workers over tourism concerns
The Los Angeles City Council on Wednesday postponed a vote on a major boost to wages for hotel and airport workers, voicing concerns that the pay hike could damage the city’s tourism industry.
The council’s decision to put off the vote until Dec. 11 came as hotel owners were threatening to pull out of a deal to provide tens of thousands of rooms during the 2028 Olympic Games if the pay increase is approved, saying it would decimate their bottom line.
The council had been scheduled to vote Wednesday on whether to finalize changes to an existing city ordinance that would raise the minimum hourly wage for workers at large hotels and Los Angeles International Airport from the current $20.32 to $25 on Feb. 1. The minimum pay would then climb incrementally each year to reach $30 an hour by July 1, 2028, as the Olympics are set to open.
During a heated discussion of the proposed wage boosts, several council members questioned whether an analysis of the economic impact of the wage hike that was commissioned by the city had been thorough enough.
“People are going to lose their job if we do this as currently proposed,” Councilmember Traci Park said during the meeting.
Doane Liu, executive director of the City Tourism Department, warned the council that the report understated the effect the proposed minimum wage increases would have on the prices of hotel room rates. Higher wages, he said, would lead to “unintended consequences” as hotels would have to increase rates or cut back on staff and services, which would hurt the luxury and convention business.
As Wednesday’s meeting went on, council members introduced several amendments that, if adopted, would narrow the scope of the proposal and slow down its implementation. One amendment suggested by Councilmember John Lee would delay the jump to a $25 hourly minimum wage until six months after occupancy rates at hotels and LAX passenger traffic had returned to pre-pandemic levels. Lee also proposed slowing down the annual increases to $1 each year — a pace that probably would mean not reaching the $30 hourly wage until after the Olympics.
Marqueece Harris-Dawson, the council’s president, directed the city’s chief legislative analyst to answer questions raised by council members in advance of the council’s Dec. 11 meeting. If the council votes at that meeting to have city lawyers rewrite the ordinance, it would still need to vote at a later date on whether to formally approve and implement the wage increases.
After the council moved to table the discussion, dozens of hotel and airport workers represented by unions that backed the wage boosts filed out of council chambers, chanting, “We’ll be back” and waving red and purple signs that read, “Stands with tourism workers” and “Olympic wage now.”
In City Hall’s cavernous lobby, Kurt Petersen, co-president of a union that represents hotel workers, told workers the council had been swayed by pressure from the tourism industry.
“Today some of our council members unfortunately listened to the CEOs,” Petersen said.
Nelly Hernandez, 57, an employee at airline catering company Flying Food Group, said she currently makes $20 per hour, and a wage increase would help her achieve economic stability.
She sends money back home to her sister in El Salvador and wants to be able to save for retirement. “Everything is so expensive right now,” she said.
In a last-ditch effort to sway the council, the board of directors of the Hotel Assn. of Los Angeles sent a letter this month to the city’s Olympic organizing committee arguing the proposed ordinance would jeopardize contracts requiring the hotels to provide the committee with about 40,000 rooms during the Games at prices that were negotiated in 2020 with a lower minimum wage in mind. The higher wages, it said, would balloon hotels’ labor costs so much that sticking to the terms of the deal would be untenable.
“Renting rooms under these circumstances would result in devastating financial losses that could not be recouped under any reasonable scenario,” the letter said. “To put it plainly, this staggering increase in costs makes it unfeasible for most if not all signatory hotels to participate in LA28’s hotel room block.”
If the wage hike goes through, the letter said, “many if not all” the hotels represented by the group would use a clause in the contracts to back out of the deal. The rooms were to be used to house thousands of people associated with the International Olympic Committee, the U.S. Olympic Committee, corporate sponsors, journalists and others during the Olympics and Paralympics, the letter said.
Even if the council doesn’t abandon the pay hike altogether, the hotel association said it hoped to be able to persuade the council to amend its terms in order to lessen the financial impact on hotels. Particularly worrisome was a provision in the proposed ordinance that would require hotels to cover an hourly $8.35 “health payment” for workers on top of the wage hikes.
The ordinance was first proposed last year by Councilmembers Curren Price and Katy Yaroslavsky, with Hugo Soto-Martínez and several other council members supporting the measure. Movement forward on the law was stalled for more than a year as contract negotiations between scores of local hotels and Unite Here Local 11, the politically powerful union that represents their workers, were underway.
The push for the increased wages for hotel workers is the latest demonstration of Unite Here Local 11‘s political muscle. A decade ago, the union successfully got elected officials to approve a minimum wage for hotel workers that is higher than the one that covers most other workers in the city, which currently is $17.28.
While the council’s support for the wage hike aligns with the progressive tack elected officials in the city have typically taken, the wage increase proposal comes at a time when voters across the state have been somewhat more ambivalent, rejecting a statewide measure to boost the minimum wage and booting out progressive Los Angeles County Dist. Atty. George Gascón in the November election.
Workers in the city’s tourism industry have for years raised alarms about the cost of living in Los Angeles, and amid concerns the Olympics will drive up housing costs even more, unions backing the proposed pay hike have said increased pay is necessary to keep workers from being priced out of the city.
An estimated 23,000 workers would be covered by the proposed increases, and about two-thirds of them live in the city of L.A., according to the report released in September, which was commissioned by the city’s chief legislative analyst. Although the majority of those affected by the pay raises would be airport workers, hotel workers’ wages tend to be lower and those employees would therefore receive a bigger boost, according to the report. Airport workers would see average hourly increases of $3.87 and pay for hotel workers would climb on average $6.24, the report finds.
Petersen said the wage proposal is a fair way to improve workers’ lives as hotels and other businesses stand to reap the benefits of the city hosting the Olympics.
“Right now the way it’s set up is a corporate giveaway,” Petersen said of the Olympics. “L.A. should be loud and proud about doing this.”
Times staff writer David Zahniser contributed to this report.
Business
UC service and hospital workers launch two-day strike over contract talks
A union representing nearly 40,000 University of California workers began a two-day strike Wednesday to protest what it claims is bad faith bargaining by university negotiators as the two sides try to hammer out new labor agreements.
The work stoppage, which affects service and patient care workers at all UC campuses and medical facilities, will continue until 11:59 p.m. on Thursday. AFSCME Local 3299 and the university system have been in talks over new contracts for nearly a year.
“Instead of being a constructive and transparent partner seeking to bring us closer to agreement, UC has sought to drive us farther apart,” said AFSCME Local 3299 President Michael Avant in a statement. “By failing to meet its most basic legal responsibilities to the dedicated professionals who clean its facilities, serve students food, and treat its patients, UC has left workers with no choice but to exercise their legal right to strike,” he said.
University officials disputed the union’s allegations, saying in a statement that “we fundamentally disagree with AFSCME’s claims of bad faith bargaining and characterization of unacceptable bargaining proposals.” Negotiators for the two sides, the university said, had met more than 20 times between January and May and the university system had proposed salary increases for union members that would hike pay by an average of 26% over a five-year contract.
Union members authorized the strike with 99% of members voting in support just weeks after filing formal charges with the state’s Public Employment Relations Board alleging bad faith bargaining.
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