Homeless Service Provider’s CEO Placed on Leave
Introduction to the Issue
Two top officials at the Weingart Center Assn., one of Los Angeles’ most prominent homeless services providers, have been placed on leave while the nonprofit conducts an internal review into its housing projects. Weingart has retained an outside law firm to probe “certain” homeless housing projects “in light of recent reporting raising questions concerning the valuation” of the projects, a spokesperson said in a statement Friday.
The Officials Involved
The two officials — Kevin Murray, a former state senator who serves as president and CEO, and Ben Rosen, director of real estate development — could not immediately be reached for comment. “During this time, the Board has assigned Chief Operating Officer Tonja Boykin to lead and ensure the continuity of Weingart’s mission to empower and transform lives by delivering innovative solutions to combat homelessness in Los Angeles,” the spokesperson, Stefan Friedman, said in the statement.
Background on the Housing Projects
The statement did not specify which housing projects, but the move comes after The Times raised questions about two projects. One is at the center of an ongoing criminal case in which federal prosecutors have accused a real estate executive of using fake documentation to buy a nursing home in Cheviot Hills for $11.2 million, then quickly selling it to Weingart for $27.3 million. A second project would have converted a Torrance hotel into apartment units for homeless people. Weingart planned to purchase the hotel for $30 million — a price that was probably significantly higher than the hotel’s actual value, The Times found.
Use of State and Local Funds
In both cases, Weingart used, or planned to use, state and local funds designated for housing homeless people. Weingart was awarded up to $20.5 million from the city of Los Angeles and $26.6 million in state Homekey funds to acquire and convert the Cheviot Hills nursing home into homeless housing, with a $1.4-million developer fee going to Weingart.
Ongoing Investigations
Earlier this month, the real estate executive was charged with nine felonies over allegations that he used fake bank statements to get loans and lines of credit to buy the property for $11.2 million before flipping it to Weingart for more than double the price. The project has yet to open. Prosecutors have said they are investigating what the city of Los Angeles and Weingart knew about the executive’s actions.
Criticism of Appraisal Values
In Torrance, Weingart planned to use Homekey+ funds to purchase a 122-room Extended Stay America hotel for $30 million and convert it into permanent supportive housing for people who are homeless or at risk of being so. Several independent experts interviewed by The Times criticized the appraisal that Weingart used to justify the $30-million price of the Torrance hotel, with one expert valuing the hotel at $21.5 million and another at $22.7 million, depending on what the buyer would eventually do with the property. “I cannot imagine a world in which this is worth $30 million,” said Richard Green, director of the USC Lusk Center for Real Estate.
State Homekey+ Program
The state Homekey+ program is an offshoot of Gov. Gavin Newsom’s Homekey initiative to quickly shelter homeless people by buying buildings such as hotels and motels and converting them into apartments. Homekey+ projects — funded by Proposition 1, which was approved by voters last year to increase treatment and housing beds — are required to serve veterans and individuals with mental illness or substance use disorders. California has poured $3.6 billion into three rounds of Homekey proposals since the start of the pandemic, according to the Department of Housing and Community Development, which has helped cities, counties and homeless services providers fund more than 250 projects to create more than 15,800 units of housing.
Weingart’s Operations and Impact
Headquartered in Skid Row, Weingart is one of the area’s most prominent homeless services providers, operating or developing more than a dozen housing projects across L.A. County. Friedman said Weingart serves nearly 2,000 people daily through its network of interim and permanent supportive housing sites.
Community Concerns and Investigations
Mike Mauno, a former Torrance city council member, said that after he complained to the FBI about what he suspected was the Extended Stay America hotel’s overvaluation, an FBI agent asked him for a copy of Weingart’s appraisal. “It’s overvalued dramatically compared to the market,” he told The Times. “They’re overpaying for these projects — the question is why?” Weingart pulled out of the Torrance project in August, with Murray blaming the city’s resistance.
Conclusion
The placement of Weingart’s CEO and director of real estate development on leave, along with the internal review and external law firm probe, indicates a serious response to the concerns raised about the valuation of certain homeless housing projects. As the investigation unfolds, it will be crucial to ensure transparency and accountability in the use of state and local funds for homeless services, to protect the integrity of these vital programs and the trust of the community they serve.
FAQs
What is the Weingart Center Assn.?
The Weingart Center Assn. is one of Los Angeles’ most prominent homeless services providers, operating or developing more than a dozen housing projects across L.A. County.
What is the state Homekey+ program?
The state Homekey+ program is an offshoot of Gov. Gavin Newsom’s Homekey initiative to quickly shelter homeless people by buying buildings such as hotels and motels and converting them into apartments.
Why were the two officials placed on leave?
The two officials were placed on leave while the nonprofit conducts an internal review into its housing projects, following recent reporting that raised questions concerning the valuation of certain projects.
What is the role of the outside law firm?
The outside law firm has been retained to probe “certain” homeless housing projects in light of recent reporting raising questions concerning the valuation of the projects.
How many people does Weingart serve daily?
Weingart serves nearly 2,000 people daily through its network of interim and permanent supportive housing sites.
