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Former restaurant site now part of Noguez investigation

Los Angeles County prosecutors are examining large property tax breaks extended to the owners of the Old Spaghetti Factory parcel in Hollywood as part of an influence-peddling investigation of Assessor John Noguez.

May 08, 2012|By Jack Dolan, Los Angeles Times
  • Los Angeles County Assessor John Noguez, here addressing county supervisors at a recent meeting, said that placing a fair value on the site of the now-closed Old Spaghetti Factory and four empty lots nearby was “complicated” because they were under a “cloud of litigation” at the time.
Los Angeles County Assessor John Noguez, here addressing county supervisors… (Brian van der Brug / Los Angeles…)

Los Angeles County prosecutors are examining large property tax breaks extended to the owners of the Old Spaghetti Factory, the now-closed Hollywood landmark, as part of their influence-peddling investigation of Assessor John Noguez.

Prosecutors are also looking at more than a hundred Westside properties whose owners got secret, improper tax reductions from a former assessor's office employee who said he broke the rules hoping to generate contributions to Noguez's campaign account.

"All of these transactions play a part in our investigation, and the cumulative effect may play a part in our decision to prosecute," said David Demerjian, who heads the district attorney's team handling the corruption probe.

"I have the entire public integrity unit on this case," Demerjian added.

Ramin Salari, a tax consultant and prominent Noguez campaign contributor at the center of the investigation, represented developers who bought the Old Spaghetti Factory for $14.2 million in 2006 so they could demolish it and build a condominium tower.

Through a series of appeals, Salari convinced Noguez's staff that the property's fair market value had been in drastic decline, a Times review of county records showed.

The former restaurant site and four empty lots nearby are now treated as one property and are currently assessed at $7.8 million, according to the assessor's website. But in August 2011 they sold for nearly three times that amount, $21 million, The Times found.

On Monday, Noguez acknowledged that Salari complained directly to him about the assessment of the property, but he said he did not instruct anyone to lower the values. "Like any good manager, I asked the appropriate staff to address the issue," Noguez wrote in an email to The Times.

He added that placing a fair value on the properties was "complicated" because they were under a "cloud of litigation" at the time.

Salari's attorney denied any wrongdoing.

"These properties were distressed, they were in disrepair, and for purposes of tax assessment they were worth the amounts that Mr. Salari advocated," said his attorney, Mark Werksman. "The fact that some buyer put a higher value on them, based on his future plans, is not the point."

Many of Salari's appeals, and subsequent reductions, were finalized by Noguez's staff a month before the sale.

As news of the refunds and subsequent sale spread among rank-and-file county appraisers, some feared that Noguez was inappropriately lowering values to give tax breaks to Salari and other campaign contributors.

Recently retired county appraiser Jim Jochimsen said the reductions were "ridiculous" because the owners had won permission from zoning authorities to build big. They're currently approved for a 22-story tower with retail space and more than 300 condos, according to published reports.

When Jochimsen refused to agree to further reductions in early 2011, he said his new supervisor, Mark McNeil, removed him from the case.

During their raid of the assessor's offices two weeks ago, investigators paid particular attention to the work spaces of McNeil and his supervisor in 2011, Andrew Stephens.

While Jochimsen was still assigned to the Spaghetti Factory appraisal, he said Salari told him he should stop resisting the reductions because his new boss wouldn't approve. "C'mon, Jim, you know this isn't what [Noguez] wants," Jochimsen said.

Salari and his immediate family contributed $10,000 to Noguez's campaign, county records show. In a recent deposition, Salari said he also solicited contributions to Noguez from all of his clients, who hire him to negotiate property tax reductions.

Demerjian on Monday said his entire16-member team is still going through evidence seized April 25 during early-morning raids at a dozen locations in California and Arizona.

Investigators hit Noguez's Huntington Park home, Salari's Phoenix-area home, and business and assessor's office locations across Los Angeles County.

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