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A Los Angeles-based affordable housing company that has completed at least two projects in San Diego County has been the subject of a series of scathing investigative stories in The Los Angeles Times in recent weeks.
The Times has reported that Advanced Development and Investment, Inc. is under federal investigation for allegedly funneling hundreds of thousands of dollars into the pockets of politicians in Los Angeles in return for being awarded tens of millions of dollars’ worth of publicly funded affordable housing projects.
The company was part of a team that was approved for a loan of up to $6.7 million by the San Diego Housing Commission in 2006 to build Arbor Terrace Apartments, a 71-unit affordable housing complex on Florida Street in North Park. ADI also received public funds to build Springbrook Grove, a 40-unit project in Fallbrook.
ADI is the second affordable housing developer that has done business with the Housing Commission to come under serious scrutiny recently.
In the last couple of years, I wrote several stories about affordable housing developer The Amerland Group, which had five executives charged with manslaughter last year in connection to a 2008 fire at a Bay Area project. A related company, C&C Development , was formed by two former Amerland executives and is working with the Housing Commission again.
The Los Angeles Times series on ADI paints an extraordinary picture of a company intimately intertwined with the political process. Here’s a snippet from one of the stories:
In Glendale, where the city has paid ADI more than $33 million over the last five years, ADI subcontractors flooded council members with campaign contributions. In the two years leading up to the 2009 council election, nearly one of every four dollars received by the top four candidates for the council — more than $100,000 in total — came from those companies, their employees and those employees’ relatives. Collectively those donations outstripped any other known source in the race.
State law prohibits companies such as ADI from contributing more than $250 to council members who serve on Glendale’s housing authority board when the firms have financial business pending before that board. In addition, Glendale council members are barred from accepting campaign contributions of more than $250 from companies that are seeking contracts or other business from the board. The board is made up of all the council members and two other people.
The Times stories cite reports filed by a court-appointed receiver, lawyer David Pasternak, who has accused the company of “a wide range of possible criminal activity” including building substandard housing and filing false records.
Councilman Todd Gloria, whose district houses Arbor Terrace, told me he’s taken a look at the Times’ stories.
“Naturally, it’s concerning,” Gloria said. “Those allegations are quite serious. But it’s news to me.”
Gloria said he’s placed a call to the Housing Commission, whose staff told him they weren’t aware of any problems at Arbor Terrace.
“As more details come to light, if we can find specific issues, we can check that against the project here, but as of this time I’m not aware of any concerns with the project here in San Diego,” Gloria said.
I stopped by Arbor Terrace, which is owned by ADI, last week and talked to some of the residents. Some of the people I talked to were pleased with the building. Others complained of poor construction materials and of cupboards falling off walls and paint that smeared when they tried to clean it.
Sing Stiles, who moved to San Diego from Cambodia as a young child, has been living in Arbor Terrace since 2008. She’s currently in the process of moving out of her apartment.
“We’ve been constantly sick here. My children have been sick about six times in the last few weeks and I’m sure it’s because of the air quality in this place,” Stiles said.
Stiles moved into Arbor Terrace when she was pregnant with her third child. Three months after moving in, she said, she went to her storage unit, located on the lower floor of the project, to retrieve the baby clothes and toys she had stored there.
“It was all covered in mold,” she said. “I had to throw it all away — about $1,300 worth of stuff.”
Stiles said she complained to the management company about the mold problem. They told her the mold was due to a water leak. It took the company a year and a half to start making repairs, she said.
The managers of Arbor Terrace scrambled to fix the ruined storage units last year, only when state inspectors arrived at the building, Stiles said.
Last Friday, Stiles took me to see the storage units. Some had been repaired. A mass of exposed electrical wires hung from the bare walls and broken fluorescent tubes littered the floor.
“I gave them a bill for my things, but they won’t give me the money,” she said.
Finally, Stiles said, she decided to move out.
I knocked on the door of Arbor Terrace’s management office last Friday. I could see people inside and someone at the complex had placed a padlock on the storage room door when we left, but nobody answered.