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Medical building went missing from L.A. County tax rolls

Redondo Beach facility's owners did not receive a tax bill for three years. It is one of 15 cases of questionable assessments forwarded to the D.A.'s office.

September 26, 2012|By Jack Dolan, Los Angeles Times
  • The Prospect South Bay Medical Center in Redondo Beach was not on the county tax rolls for 2005, 2006 and 2007.
The Prospect South Bay Medical Center in Redondo Beach was not on the county… (Rick Loomis / Los Angeles…)

The Prospect South Bay Medical Center in Redondo Beach is home to dozens of doctors' offices — cardiologists, obstetricians and an urgent care center.

But for three years, the $11-million, 47,000-square-foot building disappeared from the Los Angeles County tax rolls. During that time, county officials acknowledge, they never sent a tax bill to the owner.

The assessor's office forwarded the case of the missing building and 14 other questionable assessments to the Los Angeles County district attorney last month following inquiries from The Times.

Prosecutors are in the midst of an influence-peddling probe of the county assessor's office, examining hundreds of properties suspected of getting illegal tax reductions from a former county appraiser.

Assessor officials said they could not explain why one of those buildings vanished from the roll.

"That's the kind of question I find myself asking a lot," said Santos Kreimann, who took charge of the assessor's office after a criminal probe into the department prompted Assessor John Noguez to take a paid leave of absence.

The medical building vanished from the rolls in 2005, 2006 and 2007. In 2008, the county discovered the problem and sent a bill for $330,000 in unpaid taxes to the building's owner, Prospect South Bay Ltd. The firm leases the land from the Beach Cities Health District, a public agency.

Among the other properties the assessor forwarded to prosecutors were Mercedes-Benz of South Bay, the Marriott Manhattan Beach resort and the Cheesecake Factory restaurant in Marina del Rey.

Officials said all of the properties had been assigned to then-county appraiser Scott Schenter, who is the only person arrested so far in the investigation.

In May, prosecutors charged Schenter with 60 counts of fraud for a separate string of tax breaks that allegedly wiped out $172 million in assessed value for some Westside properties.

Shortly before his arrest, Schenter told The Times that he lowered those tax bills in late 2010 and early 2011 to entice the property owners to contribute to Noguez's assessor campaign. Noguez was in debt after spending more than $1 million to win the powerful but relatively obscure job. Noguez has denied any wrongdoing.

The reductions for the new properties under scrutiny predate Noguez's run for office.

Assessor's officials said they have not calculated the toll from the new cases. A Times review of tax records shows the reductions may have removed as much as $286 million of assessed value from county tax rolls between 2002 and 2011.

That number could grow as the assessor's office continues to examine more than 220 properties handled by Schenter in the early to mid-2000s.

Schenter, who has pleaded not guilty to the charges and is out on bail, did not respond to a request for comment.

For most of the 2000s, Schenter was assigned to assess businesses that leased land from public agencies in Marina del Rey and the South Bay, officials said.

The Prospect South Bay medical building at 520 N. Prospect Ave. was one of those properties. Its value fell from $10 million in 2003 to $7 million in 2004. Then it disappeared until 2008.

Schenter was transferred in late 2007, and his successor noticed that despite the boom in real estate, Schenter had reduced the values of dozens of properties.

Gerald Ducot, the registered agent for Prospect South Bay, could not be reached after repeated phone calls and emails. When a Times reporter visited his Brentwood office, a receptionist said Ducot was not available.

Executives at Charles Dunn Real Estate Services, which manages the property for Prospect South Bay according to tax records, did not respond to requests for comment.

Michael Shaw, a spokesman for the Beach Cities Health District, wrote in an email: "We do not know of any reason the property owner should not have gotten tax bills."

Among the largest reductions in new cases under review went to the Marriott Manhattan Beach, a 26-acre resort with its own nine-hole golf course.

Its assessed value fell from $56.3 million in 2005 to $35.3 million in 2006, saving the corporate owner, Host Marriott Corp., more than $223,000 on its annual tax bill, records show.

Host Marriott's media relations office did not respond to phone calls requesting comment.

Mercedes Benz of South Bay got more than $3 million slashed from its assessment in 2005 and again in 2006.

A spokesman for AutoNation Inc., which owns the dealership, said he could find no evidence that management had requested the reductions.

But he noted that the dealership is constantly undergoing renovations. Temporary tax breaks can be granted while buildings are unusable.

Seven of the properties on the list are in Marina del Rey. The Cheesecake Factory's assessed value went from nearly $2 million in 2002 to $465,000 in 2003, assessor's records show. It went back up to $2 million in 2007, the year Schenter was transferred.

The Tahiti Marina apartment complex's assessed value dropped from $25 million in 2001 to $13 million in 2003. It has not changed since, records show.

Manager Eli Janko said she didn't know anything about the property's tax situation and refused to provide the name of someone who did.

Another property, an AMC movie theater in Torrance, went from $17.5 million in 2005 to $2 million in 2006.

The owner had been represented by tax consultant Ramin Salari. His clients dominate the list of Westside property owners who got reductions from Schenter.

Salari's attorney, Mark Werksman, said the case was years ago and his client no longer has the records. But he added: "There was no impropriety in the reduction."

Times staff writer Ruben Vives contributed to this report.

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