Carmel Partners Should be in the Penalty Box

LA WATCHDOG - Carmel Partners, a multibillion dollar San Francisco based private equity firm specializing in multifamily real estate, has proposed to develop a 28 story residential tower with 290 units at 1050 South La Cienega Boulevard, just south of Olympic Boulevard.

This erection, while of right, is out of character with the surrounding residential neighborhoods, including the Carthay Neighborhoods Historic District that borders on the project. 

While there are many questions surrounding this oversized development, the key question is why the City is allowing Carmel Partners to do business in Los Angeles. 

On August 25, 2020, Morrie Goldman, a lobbyist and close associate of former City Councilman Jose Huizar, agreed to plead guilty to “participating in a bribery scheme where [real estate developer Carmel Partners] agreed to make $50,000 in political donations in exchange for Huizar’s official actions for the developer’s benefit.” 

In return, Huizar facilitated the up zoning of the property to allow for a 35 story building located at 520 Mateo Avenue in the low rise Arts District in DTLA, made the appeal of Carmel Partners’ Environmental Impact Report by a major labor organization go away, and reduced the project’s low income housing requirements.  These actions saved Carmel Partners tens of millions in time and money, including $14 million associated with the reduction in low income housing.  

On January 7, 2021, Carmel Partners “agreed to pay $1.2 million to resolve a federal criminal investigation that focused on the company’s relationship with former Los Angeles City Councilman Jose Huizar who voted to approve its 35-story project in the Arts District.” The City was not involved in this settlement. 

But many questions remain.  According to neighbors of the project at 520 Mateo Avenue, construction has begun.  But what about the low income housing requirements?  Was the favorable treatment reversed?  Was the union’s appeal of the EIR reconsidered? How did Huizar handle the fallout from vetoing the union’s appeal?  Were there any quid pro quos?  

The major question is why Carmel Partners is allowed to do business in the City of Los Angeles.  After all, they admitted to participating in this pay-to-play scheme. A $1.2 million fine should not buy them a free pass, especially when the City was not compensated.  And did any of the firm’s other developments receive favorable treatment from members of the City Council, including former City Council President Herb Wesson? 

Transparency is required.  Or will the City continue to ignore this pay-to-play scheme involving a multibillion dollar, out of town developer and allow the firm to do business in our City?

(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, the Budget and DWP representative for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate.  He can be reached at:  [email protected].)