County leasing gets costlier

December 25, 2019 | By admin | Filed in: nexmcumgj.

first_img AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREWalnut’s Malik Khouzam voted Southern California Boys Athlete of the Week McCauley’s report culminates an inquiry sparked several years ago when U.S. Department of Health and Human Services officials said they were concerned about leases for welfare offices and the possible waste of federal dollars intended to help mostly poor people. The county owns about 5,000 buildings and leases 358 additional facilities. Under lease-back deals, state and federal governments can provide a higher rate of reimbursement to counties that lease space rather than own it outright. McCauley’s report also comes as the District Attorney’s Office is investigating the county Chief Administrative Office’s Real Estate Division to determine whether its head, Chuck West, provided inside information to a prominent Westside developer that built three of the office buildings, then leased them back to the county. The District Attorney’s Office probe, which officials said Tuesday is ongoing, led to West, also known as Charles Mazouch, 55, of South Pasadena, being put on paid leave Sept. 14. Los Angeles County must reimburse the federal government $6 million after years of inflating claims and misspending taxpayer dollars on lucrative lease-back deals for four welfare offices, according to an auditor’s report released Tuesday. The report’s author says county government also must reduce future claims by $1.4 million annually for state and federal reimbursement of building-lease costs for the four offices – two in El Monte and the others in Glendale and West Los Angeles. In addition, county Auditor-Controller Tyler McCauley said he now intends to review all county leases that involve state and federal reimbursements. “What I need to do is start looking at all of these contracts for space costs to make sure they comply with federal guidelines,” McCauley said. That was a day before investigators served search warrants seeking financial records and vacation photos of West and his wife and any recordings demonstrating any conspiracy between West and the developers, according to the warrants. Warrants seeking similar documents and photos also were served on developers Robert Sonnenblick and Nelson Del Rio and their wives. West has denied that he had any inappropriate dealings with Sonnenblick-Del Rio, including providing the developer with inside information or allowing officials to pay for his vacations to Jamaica, Europe and Breckenridge, Colo. Sonnenblick-Del Rio officials did not return calls for comment. Dave Parker, manager of Chase Glendale Services, said the firm owns the Glendale office building and leases it to the county. “Out of 500 deals I’ve done, this is how I’ve done all of them,” Parker said. “Ours is a straight deal. I just finished a similar deal with a national church organization. I’m really surprised.” In his report detailing the lease-back deals, McCauley wrote that in one case the Department of Public Social Services had searched unsuccessfully for 10 years for an office building in West Los Angeles because of the limited amount of office space available. After the long delay, the county issued a request for proposals in April 1999 for a build-to-suit lease. The county received three bids and selected Sonnenblick-Del Rio. The developer’s proposal included bringing the city of Los Angeles into the transaction to maximize the county’s reimbursement and ensure tax-exempt status, McCauley wrote. Under the arrangement, the city financed the purchase of the land and the construction of the building, using tax-exempt certificates of participation. The city leased the building from SDR West Los Angeles Leasing Corp., a nonprofit subsidiary of SDR, and then leased the building to the county. At the end of the lease, the city will get title to the building. “While the (Chief Administrative Office) did use a (request for proposals) to obtain bids for the facility, the CAO did not follow typical RFP procedures in evaluating the bids,” McCauley wrote. CAO letters to the Board of Supervisors in August 1999 and January 2000 indicate that a committee – a real estate consultant and representatives from county departments – participated in reviewing the proposals. A real estate consultant, Alan Kotin, who analyzes leases for the county at Marina del Rey and on the Grand Avenue project, issued a report indicating the SDR proposal was the most financially advantageous for the county, McCauley wrote. But while the Board of Supervisors ultimately approved the lease agreement, Kotin did not provide a final recommendation, and there was no documentation available on how the final selection was made, McCauley wrote. On Tuesday, Chief Administrative Officer David Janssen defended the process. “I happen to think it’s a good thing to add in an outside consultant,” Janssen said. “He concluded what the committee was looking at was the best deal for the county.” But Jon Coupal, president of the Howard Jarvis Taxpayers Association, disagreed. “This is another example of how government in general is an extraordinarily inept and corrupt manager of real-estate assets,” Coupal said. Troy Anderson, (213) 974-8985 troy.anderson@dailynews.com 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set!last_img


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