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Condo Project Stands Empty in Legal Limbo

April 02, 1989|MICHELE FUETSCH | Times Staff Writer

COMPTON — For the past two years, as more and more working class families found themselves priced out of the Southland's frenzied real estate market, 32 new, slate-blue townhouses in this city have been sitting empty.

Overgrown with weeds and suffering an occasional broken window, the otherwise-intact condominium complex stands in legal limbo at the intersection of Wilmington Avenue and Compton Boulevard. Except for security guards hired to keep out looters who were tearing up carpets and stealing fixtures, no one gets inside the black, wrought iron gates that seal off the Crestview Townhomes.

Outside the gates, government bureaucrats, public interest lawyers and city officials shake their heads at the absurdity of the situation and continue to chip away at the perpetual stream of litigation and red tape that keeps the 32 affordable housing units from needy buyers.

Freeway Replacement Housing

The townhouses are among 1,545 units that have been built to replace housing wiped out by construction of the $2.5-billion Century Freeway, which is cutting a 17.3-mile swath from Norwalk to El Segundo.

The townhouses, which were to sell for anywhere from $10,000 to $100,000, depending on a complicated income formula applied to each buyer, were finished and ready for occupancy in February of 1987. But the man who built them, Pasadena developer Raymond C. Jones, refused to relinquish title, saying the state owed him money.

"They have offered me not one dime," Jones said last week. "They wouldn't pay me. I couldn't pay my bills."

The state, according to its lawyer and officials in the Century Freeway Housing Program, paid Jones more than $2 million to build the townhouses. Under the contract that officials signed with Jones and developers of similar Century Freeway replacement projects, Jones was to give the state the deed to the project when construction was completed.

The state would then sell the townhouses to buyers who agreed that if they ever resold the units it would be to people in a similar low-income situation.

Jones claimed that the construction turned out to cost more than the state paid him. But when state officials said that he did not have documentation to prove it, they refused to give him more money.

Jones then filed suit demanding as much as $4 million in costs and damages.

The state countersued, charging that Jones had breeched his contract, and demanded about $4 million for such things as construction delays, the cost of hiring security guards, and the damage the units have since suffered from neglect.

Meantime, subcontractors filed liens against the townhouses, claiming that Jones had not paid them for their work. The federal government filed a lien charging that Jones owed income taxes. Jones declared that the Crestview Townhouse Corp. was bankrupt, which tied up its deed in court. He also filed personal bankruptcy to protect his assets, he says. On top of that, a bank filed suit, claiming that Jones owed it money.

"The state told us it would take five years to settle this," said Cynthia Coleman, acting director of the Compton Redevelopment Agency, which is an interested but helpless observer in the situation.

Deputy State Atty. Gen. Edwin J. Dubiel said last week: "This thing changes day-to-day. I hope to have it concluded by early summer."

A series of court hearings on the various legal actions surrounding Crestview is scheduled this month and in May. But there is no guarantee that another legal action will not come along to further delay sale of the townhouses.

At least one Compton official, City Councilman Maxcy D. Filer, is pessimistic about the townhouses ever getting into the hands of buyers. "It is never going to happen, in my opinion."

In Compton, a community with high rates of unemployment and families on welfare, officials have been trying to lure more developers of single-family houses and condominiums to the city in an effort to attract more middle-class residents. Developers who have approached the city with apartment house plans have been turned away, while those promising to build owner-occupied units are welcomed.

Filer and other city officials fear that Crestview will eventually end up as a rental complex. "I'd love to see that housing put on the market," Filer said. "But I want it to be done in the right way. I want to protect the people (already living) in that area who have paid for their homes."

Attorney Dubiel says it would be legally impossible for the state to let Crestview become rental housing, but that is likely to happen with two smaller Century Freeway replacement projects in the city of Los Angeles.

Those projects were built in locations where no one would buy them as condominiums, so the Century Freeway Housing Program is negotiating with the Los Angeles Housing Authority, which wants to buy the units and rent them out.

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