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Settlement Could Give El Pueblo Lease to Entity Suing the City
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| In 1984, a group called Old LA signed a 25-year lease to develop and run the Pico-Garnier Block at El Pueblo. Little progress has been achieved. In 2004, the group, which now includes politically connected Andy Camacho, sued the city over the site. Photo by Gary Leonard. |
Old LA, Which Signed a 1984 Deal to Develop an Historic Site, Could Get Another Crack at Large Property
by Richard Guzmán
DOWNTOWN LOS ANGELES - More than 2 million people visit El Pueblo de Los Angeles Historical Monument every year. Although most gravitate toward the colorful shops on Olvera Street, many also find their way to the historic buildings on the south side of the attraction. They often peek in the windows of the 1870 Pico House, the largest building in El Pueblo and the city’s first three-story edifice.
But when they look inside the building with the inviting brick courtyard, they are likely to see it empty. Occasionally city officials hold meetings on folding tables and chairs. On some occasions there are temporary art exhibitions.
Although for decades there has been talk of putting in a restaurant, retail, offices and even a theater, the building, along with others in the area called the Pico-Garnier Block, has sat nearly unused. The culprit is a double whammy of a flawed lease first signed a quarter century ago (but terminated 12 years later) and a lawsuit filed against the city in 2004.
Lawsuits in Los Angeles are nothing unusual, and legal machinations can stymie major projects for years. What sets the El Pueblo situation apart is that the lawsuit was filed by the Old Los Angeles Company, an entity whose partners include Andy Camacho, a politically connected attorney and restaurateur who over the years has donated tens of thousands of dollars to city officials and their campaigns.
Old LA has long had primary rights to develop the Pico-Garnier Block. But five years ago, they sued the city for $11 million, claiming the city violated the deal by allowing the Chinese American Museum to expand. Despite the close ties with City Hall, no resolution has been achieved.
Now, according to sources familiar with the situation, officials are nearing a settlement. But the deal, they say, could result in an arrangement that might surprise casual observers — it could give Old LA, which has failed to develop the site for a quarter century, another crack at the property.
“I see this moving forward rather quickly,” said Robert Andrade, El Pueblo’s general manager.
Familiar Terms
After years of inaction at the 60,000-square-foot Pico-Garnier Block, City Councilman José Huizar, whose 14th District includes El Pueblo, said he wants the matter resolved within six months.
“The last thing we want to see is the continued vacancy of these buildings,” he said. “They’re beautiful on the outside, but we haven’t used them to full capacity on the inside.
“It’s a loss of revenue to the city, a loss in tourism, a loss to El Pueblo overall where we don’t have the critical mass of people that these buildings can bring.”
The resolution currently being discussed would make Old LA the master tenant for the property, said Andrade (others confirmed this scenario). They would pay rent and common area maintenance fees to El Pueblo.
“It would be incumbent upon them to find a high-class restaurant for the Pico House and then bring in retail stores and offices to fill the space and pay rent,” Andrade said.
Those are familiar terms to Old LA, which in 1984 signed a 25-year lease with the city to develop the block. Ironically, the current negotiations are underway at the time when the original deal would have expired. The lack of progress leads some to question whether giving the developer another opportunity at the site is a good idea.
“I don’t think it’s healthy to have a corporation that hasn’t lived up to the terms of the original lease then get another chance at it without some sort of public explanation, some kind of airing of what the problems were,” said Rodolfo Acuña, a historian and Chicano Studies professor at California State University, Northridge.
Acuña has followed the situation closely. His 1996 book Anything But Mexican detailed protests organized by Olvera Street merchants sparked by the 1984 lease. Merchants leveled accusations that Old LA had obtained a “sweetheart” deal from the city and that money that could be used for developing Olvera Street would instead be used to subsidize the Pico-Garnier complex.
“It should go out for a new bid,” said Acuña, referring to the lease. “You have to find out what the plans are, what they’re going to do, and I think you have to have public hearings on it.”
First Lease
The Pico-Garnier block consists of seven buildings constructed between 1858 and 1905. It contains the city’s first firehouse and theater and the Pico House, the city’s first hotel.
In 1984 the city and the state’s Department of Parks and Recreation, which along with the county were overseeing a $45 million renovation of the area (El Pueblo is now solely a city property), granted Old LA a 25-year lease with an option to renew for an additional 10 years. Old LA was formed for the specific purpose of restoring and developing the property.
As part of the agreement, Old LA planned to turn the property into retail space, restaurants, shops and offices. According to the City Attorney’s office, Old LA was led by Albert Ehringer, Robert Morris and John Wilson. Camacho’s name is not listed in documents from the time.
But for years, little happened with the property. The restaurant and other elements never arrived.
In 1996, the city wanted to move forward with seismic rehabilitation of the block and complete upgrades to nearby sidewalks and streets. It decided to terminate its lease with Old LA, which by this time included Camacho as a partner.
“Due to a number of factors that were beyond the control of the parties; and due to a number of significant changes in circumstances, performance for the lease has been delayed,” reads part of the lease termination agreement.
Although Old LA agreed to end the deal, it did not want to be out of the picture. The termination agreement states that the company had already spent some money on plans for the site and wanted a way either to recover it or to profit from those expenditures.
According to city and Superior Court documents, the termination agreement gave Old LA the right to match any offer presented by another developer when the project was put out to bid. If another developer was selected for the site, they would be required to negotiate with Old LA for all the plans the company had prepared for the development of the block.
As part of the agreement, the city said it would not lease the property to any party for more than one year. The then-proposed Chinese American Museum, however, was exempt from the clause as long as the lease did not give the museum additional space.
According to the lawsuit filed in July 2004 by Old LA, the city violated the termination agreement when in 2003 and 2004 it leased a total of 28,000 square feet to the museum. The museum opened in the Garnier Building in 2003.
The complaint states that the lease denied Old LA the “benefit of the bargain” it had with the city. It argued that by leasing a substantial part of the Pico-Garnier property to the museum, the city eliminated the company’s ability to develop the property.
Camacho did not return multiple calls from Los Angeles Downtown News.
No ‘Bum Deals’
The office of City Attorney Carmen Trutanich would not comment on the specifics of the case, but confirmed that they are in settlement discussions with Old LA.
Trutanich, when approached last week and asked about the lawsuit, said the settlement has yet to cross his desk. When asked to comment on anything that could happen at Olvera Street, he said, “We’re not going to make any more bum deals.”
City officials, including the offices of Mayor Antonio Villaraigosa and Chief Legislative Analyst Gerry Miller, which is one of the departments advising city officials on the matter, did not return calls from Downtown News.
Others said that Old LA’s record of not developing the site raises concerns about a deal that could result in giving them yet another El Pueblo lease.
“The history speaks for itself in the sense that it’s been 25 years since the property has been tied up with Old LA and nothing has occurred,” said David Louie, a member of the El Pueblo Board of Commissioners. “If the city is thinking about settling the lawsuit by engaging in a long term agreement with Old LA, my sense is that you would have to look at it very, very carefully based on their history.”
Although Huizar said he wants a quick resolution, he is holding off on making a decision on whether Old LA should get another shot at running the property.
“I’m waiting to hear from the City Attorney’s office as to why it would make sense to do this,” he said. “If they could convince me and the council that it’s better to settle this and move forward with this rather than all the different options before us, we’ll do that. As of right now, they are saying that they’d rather negotiate with Old LA.”
City Ties
The Camacho family has long ties to the city and has donated to local elected officials. According to disclosure statements filed with the city Ethics Commission, Andy Camacho has contributed at least $35,000 to Los Angeles politicians or their campaigns since 1998. Camacho was also co-chair of a June 2008 fundraising event for Mayor Antonio Villaraigosa held at L.A. Live’s Nokia Theater. Contributions by co-chairs were listed at $10,000 on the event flyer.
Andy’s son, Don Camacho, who is president of Camacho’s Inc., has donated at least $7,000 to city officials since 2002, according to Ethics Committee filings. Don Camacho recently stressed that he is not part of Old LA.
Andy Camacho also has a long history at El Pueblo. He founded the Camacho’s restaurant business in 1984 when he purchased El Paseo Inn, a Mexican restaurant on Olvera Street. Other restaurants followed, including Camacho’s Cantina at Universal CityWalk. The company is a partner in Liberty Grill, the fine dining destination near Staples Center.
The company also has a concession contract at LAX and at Ontario Airport. Through the partnership with Levy Restaurants, the firm operates concessions stands at Staples Center, Dodger Stadium and the Home Depot Center in Carson.
Even when the company was in the midst of the lawsuit over the El Pueblo space, the city granted Camacho’s Inc. a lease for a second site at the monument. In June 2008, they agreed to a five-year deal for 3,460 square feet of space in the Bank of America Building at El Pueblo. It is supposed to be a coffee shop and restaurant, though progress on opening the business has been slow. In September, the El Pueblo Board of Commissioners rejected a request by Camacho’s Inc. to have its rent deferred.
Whether Old LA will be given another shot at developing the Pico-Garnier Block remains to be seen, but one thing is certain, officials said: The lawsuit has prevented anyone else from developing the space, and the Pico House and other buildings have largely sat empty.
“It’s precluding us from any long range determination until that gets settled,” Andrade said.
Additional reporting by Jon Regardie.
Contact Richard Guzmán at richard@downtownnews.com.
But when they look inside the building with the inviting brick courtyard, they are likely to see it empty. Occasionally city officials hold meetings on folding tables and chairs. On some occasions there are temporary art exhibitions.
Although for decades there has been talk of putting in a restaurant, retail, offices and even a theater, the building, along with others in the area called the Pico-Garnier Block, has sat nearly unused. The culprit is a double whammy of a flawed lease first signed a quarter century ago (but terminated 12 years later) and a lawsuit filed against the city in 2004.
Lawsuits in Los Angeles are nothing unusual, and legal machinations can stymie major projects for years. What sets the El Pueblo situation apart is that the lawsuit was filed by the Old Los Angeles Company, an entity whose partners include Andy Camacho, a politically connected attorney and restaurateur who over the years has donated tens of thousands of dollars to city officials and their campaigns.
Old LA has long had primary rights to develop the Pico-Garnier Block. But five years ago, they sued the city for $11 million, claiming the city violated the deal by allowing the Chinese American Museum to expand. Despite the close ties with City Hall, no resolution has been achieved.
Now, according to sources familiar with the situation, officials are nearing a settlement. But the deal, they say, could result in an arrangement that might surprise casual observers — it could give Old LA, which has failed to develop the site for a quarter century, another crack at the property.
“I see this moving forward rather quickly,” said Robert Andrade, El Pueblo’s general manager.
After years of inaction at the 60,000-square-foot Pico-Garnier Block, City Councilman José Huizar, whose 14th District includes El Pueblo, said he wants the matter resolved within six months.
“The last thing we want to see is the continued vacancy of these buildings,” he said. “They’re beautiful on the outside, but we haven’t used them to full capacity on the inside.
“It’s a loss of revenue to the city, a loss in tourism, a loss to El Pueblo overall where we don’t have the critical mass of people that these buildings can bring.”
The resolution currently being discussed would make Old LA the master tenant for the property, said Andrade (others confirmed this scenario). They would pay rent and common area maintenance fees to El Pueblo.
“It would be incumbent upon them to find a high-class restaurant for the Pico House and then bring in retail stores and offices to fill the space and pay rent,” Andrade said.
Those are familiar terms to Old LA, which in 1984 signed a 25-year lease with the city to develop the block. Ironically, the current negotiations are underway at the time when the original deal would have expired. The lack of progress leads some to question whether giving the developer another opportunity at the site is a good idea.
“I don’t think it’s healthy to have a corporation that hasn’t lived up to the terms of the original lease then get another chance at it without some sort of public explanation, some kind of airing of what the problems were,” said Rodolfo Acuña, a historian and Chicano Studies professor at California State University, Northridge.
Acuña has followed the situation closely. His 1996 book Anything But Mexican detailed protests organized by Olvera Street merchants sparked by the 1984 lease. Merchants leveled accusations that Old LA had obtained a “sweetheart” deal from the city and that money that could be used for developing Olvera Street would instead be used to subsidize the Pico-Garnier complex.
“It should go out for a new bid,” said Acuña, referring to the lease. “You have to find out what the plans are, what they’re going to do, and I think you have to have public hearings on it.”
The Pico-Garnier block consists of seven buildings constructed between 1858 and 1905. It contains the city’s first firehouse and theater and the Pico House, the city’s first hotel.
In 1984 the city and the state’s Department of Parks and Recreation, which along with the county were overseeing a $45 million renovation of the area (El Pueblo is now solely a city property), granted Old LA a 25-year lease with an option to renew for an additional 10 years. Old LA was formed for the specific purpose of restoring and developing the property.
As part of the agreement, Old LA planned to turn the property into retail space, restaurants, shops and offices. According to the City Attorney’s office, Old LA was led by Albert Ehringer, Robert Morris and John Wilson. Camacho’s name is not listed in documents from the time.
But for years, little happened with the property. The restaurant and other elements never arrived.
In 1996, the city wanted to move forward with seismic rehabilitation of the block and complete upgrades to nearby sidewalks and streets. It decided to terminate its lease with Old LA, which by this time included Camacho as a partner.
“Due to a number of factors that were beyond the control of the parties; and due to a number of significant changes in circumstances, performance for the lease has been delayed,” reads part of the lease termination agreement.
Although Old LA agreed to end the deal, it did not want to be out of the picture. The termination agreement states that the company had already spent some money on plans for the site and wanted a way either to recover it or to profit from those expenditures.
According to city and Superior Court documents, the termination agreement gave Old LA the right to match any offer presented by another developer when the project was put out to bid. If another developer was selected for the site, they would be required to negotiate with Old LA for all the plans the company had prepared for the development of the block.
As part of the agreement, the city said it would not lease the property to any party for more than one year. The then-proposed Chinese American Museum, however, was exempt from the clause as long as the lease did not give the museum additional space.
According to the lawsuit filed in July 2004 by Old LA, the city violated the termination agreement when in 2003 and 2004 it leased a total of 28,000 square feet to the museum. The museum opened in the Garnier Building in 2003.
The complaint states that the lease denied Old LA the “benefit of the bargain” it had with the city. It argued that by leasing a substantial part of the Pico-Garnier property to the museum, the city eliminated the company’s ability to develop the property.
Camacho did not return multiple calls from Los Angeles Downtown News.
The office of City Attorney Carmen Trutanich would not comment on the specifics of the case, but confirmed that they are in settlement discussions with Old LA.
Trutanich, when approached last week and asked about the lawsuit, said the settlement has yet to cross his desk. When asked to comment on anything that could happen at Olvera Street, he said, “We’re not going to make any more bum deals.”
City officials, including the offices of Mayor Antonio Villaraigosa and Chief Legislative Analyst Gerry Miller, which is one of the departments advising city officials on the matter, did not return calls from Downtown News.
Others said that Old LA’s record of not developing the site raises concerns about a deal that could result in giving them yet another El Pueblo lease.
“The history speaks for itself in the sense that it’s been 25 years since the property has been tied up with Old LA and nothing has occurred,” said David Louie, a member of the El Pueblo Board of Commissioners. “If the city is thinking about settling the lawsuit by engaging in a long term agreement with Old LA, my sense is that you would have to look at it very, very carefully based on their history.”
Although Huizar said he wants a quick resolution, he is holding off on making a decision on whether Old LA should get another shot at running the property.
“I’m waiting to hear from the City Attorney’s office as to why it would make sense to do this,” he said. “If they could convince me and the council that it’s better to settle this and move forward with this rather than all the different options before us, we’ll do that. As of right now, they are saying that they’d rather negotiate with Old LA.”
The Camacho family has long ties to the city and has donated to local elected officials. According to disclosure statements filed with the city Ethics Commission, Andy Camacho has contributed at least $35,000 to Los Angeles politicians or their campaigns since 1998. Camacho was also co-chair of a June 2008 fundraising event for Mayor Antonio Villaraigosa held at L.A. Live’s Nokia Theater. Contributions by co-chairs were listed at $10,000 on the event flyer.
Andy’s son, Don Camacho, who is president of Camacho’s Inc., has donated at least $7,000 to city officials since 2002, according to Ethics Committee filings. Don Camacho recently stressed that he is not part of Old LA.
Andy Camacho also has a long history at El Pueblo. He founded the Camacho’s restaurant business in 1984 when he purchased El Paseo Inn, a Mexican restaurant on Olvera Street. Other restaurants followed, including Camacho’s Cantina at Universal CityWalk. The company is a partner in Liberty Grill, the fine dining destination near Staples Center.
The company also has a concession contract at LAX and at Ontario Airport. Through the partnership with Levy Restaurants, the firm operates concessions stands at Staples Center, Dodger Stadium and the Home Depot Center in Carson.
Even when the company was in the midst of the lawsuit over the El Pueblo space, the city granted Camacho’s Inc. a lease for a second site at the monument. In June 2008, they agreed to a five-year deal for 3,460 square feet of space in the Bank of America Building at El Pueblo. It is supposed to be a coffee shop and restaurant, though progress on opening the business has been slow. In September, the El Pueblo Board of Commissioners rejected a request by Camacho’s Inc. to have its rent deferred.
Whether Old LA will be given another shot at developing the Pico-Garnier Block remains to be seen, but one thing is certain, officials said: The lawsuit has prevented anyone else from developing the space, and the Pico House and other buildings have largely sat empty.
“It’s precluding us from any long range determination until that gets settled,” Andrade said.
Additional reporting by Jon Regardie.
Contact Richard Guzmán at richard@downtownnews.com.
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