Scoop: What the heck is happening at Skid Row Housing Trust?

Gentle reader,

On Tuesday, while we were trying to get away from L.A.’s problems by spending Kim’s birthday exploring inland empire landmarks, the Los Angeles Times broke the story of the collapse of Skid Row Housing Trust, among the largest providers of permanent supportive housing in Downtown Los Angeles, and their desperate search for someone to take over their 29 buildings. The Real Deal and CBS News picked the story up.

And there went any chance for a peaceful day not focused on the troubles of Los Angeles. Because the reporting raised far more questions that it answered, and ever since reading it, we've been digging trying to discover the real reason(s) for the crisis. As with the situation at the Hotel Cecil, managed by SRHT for leaseholder Matt Baron, the closer you look the weirder and more infuriating it becomes.

Here are a few significant matters that were overlooked by the Times in its so-called reporting.

On July 11, 2022, an odd SEC filing sought to sell $75 Million in stock tied to distressed mortgages. The offering was called Skid Row AHP, and deceptively used the Skid Row Housing Trust name, signature orange logo and what appear to be images of its buildings and tenants in the marketing of unrelated investments. The entity is a Delaware LLC that was established on 12/17/2021.

According to the filing, the three board members of Skid Row AHP are Chicago based real estate investment promoter Jorge Newbery (a distant relative of the Argentinian aviator and owner of the parent AHP fund, American Homeowner Preservation), Seattle based hedge fund manager Adam Henderson, and Joanne Cordero, who several months ago became interim CEO of Skid Row Housing Trust. At the time of the SEC filing, Cordero was identified as SRHT's Chief of Staff, since 2021.

Jorge Newbery has had an "interesting" career, starting forty years ago when he appears to have defrauded much of the DIY punk music community through his fly-by-night distribution company, Upstart. He moved on to investing in low income apartments and residency hotels, resulting in a criminal investigation by the Indianapolis Housing Agency, evictions and displacement. More recently, he's self published books and managed a series of distressed mortgage investment vehicles that get mixed reviews from investors, especially those seeking to cash out.

Soon after Jorge Newbery's associate Joanne Cordero joined Skid Row Housing Trust, CEO Lee Raagas was forced out. Real Estate Development and Asset Manager Sierra Atilano served as the CEO for six months (approximately April - October 2022), before resigning to take an Executive Vice President position with BRIDGE Housing.

At this time, Chief of Staff Joanne Cordero was given the additional title of Interim CEO, and it is in this role that she is quoted in the Los Angeles Times blaming the non-profit's collapse in part on property damage by tenants who are presumably suffering from mental illness.

But caring for and sheltering such people is the actual job of Skid Row Housing Trust, not the supercharged, architecturally distinctive ground up property development in which they have long engaged, nor the distressed mortgage fund in which Cordero has a vested interest.

The story of Skid Row Housing Trust's collapse doesn't make sense, at least not how it was reported. If they’re so overextended, why not sell a few buildings? They’ve got 29 of them.

But there's a very simple reason why the non-profit is on the verge of collapse, and you'll read it here, and not in the Los Angeles Times. The answer is found in a very revealing labor lawsuit. Around the time that Sierra Atilano departed, her predecessor Lee Raagas filed suit against Skid Row Housing Trust and board member Patrick Spillane. We recommend anyone interested in the matter read her complaint.

Raagas’ disturbing filing describes a culture of hostile sex based discrimination by former board chair Spillane and blames him for the 2018 improprieties in managing relocation of the RSO tenants of the Edward Hotel at 713 East 5th Street that resulted in the California Department of Housing and Community Development declaring Skid Row Housing Trust an "ineligible sponsor" that is barred from engaging in real estate development or perhaps even operating the buildings it owns!

In light of these claims of board member incompetence and malfeasance, we find it disgusting that Joanne Cordero seeks to blame the collapse of Skid Row Housing Trust on its vulnerable tenants, and that the Los Angeles Times gives her a platform to do so.

The 2018 date of the ultimately fatal decisions around the Edward Hotel may be significant, since this was the year when Los Angeles City Councilmember Jose Huizar's home and office were raided by the FBI in a racketeering investigation to which he has recently pleaded guilty.

In the aftermath of the raids, it would have been extremely difficult for Huizar to intercede on behalf of a struggling non-profit in his Downtown district, even a friendly one like SRHT, whose board chair Patrick Spillane serves as Treasurer of L.A. Streetcar Inc., an unpopular project closely associated with Huizar's failed Bringing Back Broadway initiative and which the councilman heavily promoted.

Something stinks in Downtown Los Angeles, and it's not the garbage piled up against the illegally vacated Edward Hotel.

It stinks that the reporters at the Los Angeles Times apparently can't find, or don't want to find, significant information like the Skid Row AHP mortgage investment scheme or Lee Raagas' bombshell lawsuit. It stinks that AIDS Healthcare Foundation has to buy full page ads to refute the paper's biased reporting and refusal to cover the good work they do to fill illegally emptied Skid Row SROs. It stinks that hundreds of vulnerable tenants and Skid Row Housing Trust employees don't know if they'll be able to keep their homes or jobs.

Anyway, happy birthday to Kim. Loving Los Angeles isn't for sissies or lazybones, and scooping the L.A. Times is a pretty cool birthday present. We'll put it on the shelf next to the Historic-Cultural Monument designation we helped obtain for the Los Angeles Times buildings themselves, which confessed racketeer Jose Huizar gutted and rewrote for the benefit of developer Onni Group.

Here are two of the more startling things we spied on Tuesday's ramble, jaunty Mr. Milk Bottle and the modernist ruins on San Bernardino's courthouse row. Decay can be beautiful, but we'd love to see the world get cleaned up.

If we learn more about Skid Row Housing Trust, we’ll share that on our blog.

yours for Los Angeles,

Kim & Richard

Esotouric

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UPCOMING WALKING TOURS

• Saturday, February 11 - Broadway: Downtown Los Angeles’ Beautiful, Magical Mess • Saturday, February 18 - Evergreen Cemetery, 1877 • Saturday, February 25 - Westlake Park Time Travel Trip • Saturday, March 11 - Downtown Los Angeles is For Book Lovers • Saturday, March 18 - Franklin Village Old Hollywood • Saturday, March 25 - Angelino Heights & Carroll Avenue • Saturday, April 8 - John Fante’s Downtown • Saturday, April 15 - Raymond Chandler’s Downtown