On Tuesday, while we were trying to get away from L.A.’s problems by spending my birthday exploring inland empire landmarks, the Los Angeles Times broke the story of the collapse of Skid Row Housing Trust, among the largest providers of permanent supportive housing in Downtown Los Angeles, and their desperate search for someone to take over their 29 buildings. The Real Deal and CBS News picked the story up.

And there went any chance for a peaceful day not focused on the troubles of Los Angeles. Because the reporting raised far more questions that it answered, and ever since reading it, we’ve been digging trying to discover the real reason(s) for the crisis. As with the situation at the Hotel Cecil, managed by SRHT for leaseholder Matt Baron, the closer you look the weirder and more infuriating it becomes.

Here are a few significant matters that were overlooked by the Times in its so-called reporting.

On July 11, 2022, an odd SEC filing sought to sell $75 Million in stock tied to distressed mortgages. The offering was called Skid Row AHP, and deceptively used the Skid Row Housing Trust name, signature orange logo and what appear to be images of its buildings and tenants in the marketing of unrelated investments. The entity is a Delaware LLC that was established on 12/17/2021.

According to the filing, the three board members of Skid Row AHP are Chicago based real estate investment promoter Jorge Newbery (a distant relative of the Argentinian aviator and owner of the parent AHP fund, American Homeowner Preservation), Seattle based hedge fund manager Adam Henderson, and Joanne Cordero, who several months ago became interim CEO of Skid Row Housing Trust. At the time of the SEC filing, Cordero was identified as SRHT’s Chief of Staff, since 2021.

Jorge Newbery has had an “interesting” career, starting forty years ago when he appears to have defrauded much of the DIY punk music community through his fly-by-night distribution company, Upstart. He moved on to investing in low income apartments and residency hotels, resulting in a criminal investigation by the Indianapolis Housing Agency, evictions and displacement. More recently, he’s self published books and managed a series of distressed mortgage investment vehicles that get mixed reviews from investors, especially those seeking to cash out.

Soon after Jorge Newbery’s associate Joanne Cordero joined Skid Row Housing Trust, CEO Lee Raagas was forced out. Real Estate Development and Asset Manager Sierra Atilano served as the CEO for six months (approximately April – October 2022), before resigning to take an Executive Vice President position with BRIDGE Housing.

At this time, Chief of Staff Joanne Cordero was given the additional title of Interim CEO, and it is in this role that she is quoted in the Los Angeles Times blaming the non-profit’s collapse in part on property damage by tenants who are presumably suffering from mental illness.

But caring for and sheltering such people is the actual job of Skid Row Housing Trust, not the supercharged, architecturally distinctive ground up property development in which they have long engaged, nor the distressed mortgage fund in which Cordero has a vested interest.

The story of Skid Row Housing Trust’s collapse doesn’t make sense, at least not how it was reported. If they’re so overextended, why not sell a few buildings? They’ve got 29 of them.

But there’s a very simple reason why the non-profit is on the verge of collapse, and you’ll read it here, and not in the Los Angeles Times. The answer is found in a very revealing labor lawsuit. Around the time that Sierra Atilano departed, her predecessor Lee Raagas filed suit against Skid Row Housing Trust and board member Patrick Spillane. We recommend anyone interested in the matter read her complaint.

Raagas’ disturbing filing describes a culture of hostile sex based discrimination by former board chair Spillane and blames him for the 2018 improprieties in managing relocation of the RSO tenants of the Edward Hotel at 713 East 5th Street that resulted in the California Department of Housing and Community Development declaring Skid Row Housing Trust an “ineligible sponsor” that is barred from engaging in real estate development or perhaps even operating the buildings it owns!

In light of these claims of board member incompetence and malfeasance, we find it disgusting that Joanne Cordero seeks to blame the collapse of Skid Row Housing Trust on its vulnerable tenants, and that the Los Angeles Times gives her a platform to do so.

The 2018 date of the ultimately fatal decisions around the Edward Hotel may be significant, since this was the year when Los Angeles City Councilmember Jose Huizar‘s home and office were raided by the FBI in a racketeering investigation to which he has recently pleaded guilty.

In the aftermath of the raids, it would have been extremely difficult for Huizar to intercede on behalf of a struggling non-profit in his Downtown district, even a friendly one like SRHT, whose board chair Patrick Spillane serves as Treasurer of L.A. Streetcar Inc., an unpopular project closely associated with Huizar’s failed Bringing Back Broadway initiative and which the councilman heavily promoted.

Something stinks in Downtown Los Angeles, and it’s not the garbage piled up against the illegally vacated Edward Hotel.

It stinks that the reporters at the Los Angeles Times apparently can’t find, or don’t want to find, significant information like the Skid Row AHP mortgage investment scheme or Lee Raagas’ bombshell lawsuit. It stinks that AIDS Healthcare Foundation has to buy full page ads to refute the paper’s biased reporting and refusal to cover the good work they do to fill illegally emptied Skid Row SROs. It stinks that hundreds of vulnerable tenants and Skid Row Housing Trust employees don’t know if they’ll be able to keep their homes or jobs.

Anyway, happy birthday to me. Loving Los Angeles isn’t for sissies or lazybones, and scooping the L.A. Times is a pretty cool birthday present. I’ll put it on the shelf next to the Historic-Cultural Monument designation I helped obtain for the Los Angeles Times buildings themselves, which confessed racketeer Jose Huizar gutted and rewrote for the benefit of developer Onni Group.

Here are two of the more startling things we spied on Tuesday’s ramble, jaunty Mr. Milk Bottle and the modernist ruins on San Bernardino’s courthouse row. Decay can be beautiful, but we’d love to see the world get cleaned up.

As we find additional information that may help untangle the truth about Skid Row Housing Trust, we’ll add it below.

The bio of Interim CEO Joanne Cordero appears deliberately vague: “Before joining SRHT, Joanne served as COO of a non-profit, an industry-leading financial education and services provider, and a HUD-approved housing counseling agency.”

The non-profit mortgage lending organization where she worked from 2019-2020 is called Springboard CDFI. Established 1982 as San Diego Neighborhood Housing Services, it is still in existence. You can find its 990s here, with Cordero’s initial uncompensated appearance as President in 2018, suggesting she was hired on or around 12/31/2018, after longtime President Gabe Del Rio left to become CEO of the Home Ownership Council of America. Cordero’s compensation in 2019 was $144,669 and $196,592 in 2020.

Starting in January and into March of 2019, the Commissioner of Business Oversight for the State of California gave Springboard CDFI several chances to file its required annual report, with no response. As a result, on April 3, 2019, the organization’s lending license was revoked. You can find documentation of the subsequent settlement agreement here.

Additionally, the Department of Housing and Urban Development Mortgagee Review Board took the following actions: “On May 12, 2020, the Board voted to impose a civil money penalty of $14,819 against Springboard CDFI dba Springboard Mortgage Collaborative… based on the following alleged violations of HUD requirements: Springboard (a) failed to maintain the minimum required liquid assets in fiscal year 2018; (b) failed to timely report the failure to maintain the minimum required liquid assets in fiscal year 2018; and (c) failed to timely notify HUD of a sanction in fiscal year 2019.”

Just over a week before news of Skid Row Housing Trust’s implosion broke, local real estate blog Urbanize reported on the status of The Ambrosia, a 90-unit supportive housing complex at 800-816 W. 85th Street in South Los Angeles. The Real Deal picked it up. The trigger for the story was a January 2023 notice issued by the Los Angeles Housing Department that “approximately $1.7 million in Section 8 project-based vouchers are sought annually to cover operations for the property.”

Urbanize was apparently not aware that some time before May 2022, “due to capacity concerns,” SRHT contracted to sell the property on 85th Street, and transfer the associated HHH redevelopment funds, to Texas based Domus Development, LLC. The property is to be managed by Century Affordable Development Inc.

Perhaps it was this unwanted press attention for a project no longer owned by SRHT that led to the all-staff meeting and subsequent story in the Los Angeles Times.

In this May 2022 inter-departmental memorandum from the L.A. Housing Department, you can find details about the property sale and transfer of both The Ambrosia and HHH-funded Confianza project in Van Nuys.

How many people in the City Family knew about the grave problems with Skid Row Housing Trust, and kept it secret from the public?

This is the Edward Apartment Hotel, a Skid Row Housing Trust property at 713 East Fifth Street. It was built in 1924, and extensively remodeled by the Community Redevelopment Agency circa 1993-95, creating 47 SRO apartments and 9 bathrooms. The units are rent controlled, and it is meant to provide stable housing for Skid Row community members.

It is this handsome structure that SRHT proposed in 2018 to demolish, destroying 47 units in order to create 50 units (+1 manager’s unit) and space for supportive services. The improper eviction of The Edward’s protected tenants is what fired CEO Lee Raagas claims in her lawsuit was the cause of SRHT being declared an “ineligible sponsor” by the CDHDC.

In July 2022, SRHT posted two photos to Facebook showing a person taking possession of a unit at the Edward Hotel on “move in day” for “new residents.” If the claims in Lee Raagas’ lawsuit are true, this suggests that after SRHT evicted the tenants in 2018, and rendered the building uninhabitable with unpermitted interior work that removed the elevator and air conditioning system, it then engaged in additional unpermitted work to return the building to habitable status. There is an application to install a new HVAC system, but the permit is not approved.

Has the building been inspected to ensure that it is safe place for people to live in, and that any work done between 2018 and 2022 is up to code?

You can see the building’s LADBS history here, including two attempts to gain a demo permit (1, 2) and an attempt to get a new building approved. See also the new building’s Draft EIR, Initial Study and CEQA documents.

The historic name of this establishment is Edwards Hotel, but for unknown reasons, SRHT changed it to Edward. We hope that a new owner will restore the proper name, respect the building’s value as a contributor to the Fifth Street Single-Room Occupancy Hotel Historic District, a potentially eligible historic district, and not seek to evict dozens of tenants to build a slightly bigger building. Any Skid Row housing non-profit board that thought this was a good use of its limited resources has serious problems, even without its primary State granting agency ending their relationship.

Above, a press clipping and photograph that illustrate the history worth preserving on East Fifth Street.

On August 11, 2022, Abode Communities sued Skid Row Housing Trust for $186,769, representing twelve unpaid invoices for architectural services for SRHT’s 649 Lofts housing and medical clinic project (2021). In its complaint, Abode states that SRHT agreed it owes this money and promised to pay by March 30, 2022, but did not pay.

The most interesting thing about the lawsuit is that Abode identifies itself as a California Non-Profit Corporation, but it identifies Skid Row Housing Trust as “a business entity, form unknown,” Does Abode have reason to believe that SRHT is no longer a non-profit?

To learn more about this project as told by SRHT, see the video posted by the Southern California Association of Non-Profit Housing, How We Got It Built: Project Case Study Featuring Skid Row Housing’s 649 Lofts.

Buried in the fine print of the SEC filing for the stock sale of Skid Row AHP LLC is the statement that “Skid Row Housing Trust… has entered into a Consulting Services Agreement with Restora, LLC (“Restora”), a majority-owned subsidiary of the Skid Row Housing Trust, whereby Restora will enhance the Company’s access to bidding opportunities for distressed mortgage assets with governmental agencies such a HUD, Fannie Mae, and Freddie Mac… In consideration of these services and the use of the “Skid Row” name, the Company will pay the Skid Row Housing Trust a consulting fee equal to 1% of the investment capital raised by the Company. Under the Consulting Servicing Agreement, Restora is entitled to appoint one Director to the Company’s Board.”

Three months later, in October 2022, it was announced that Restora was the winning bidder for Fannie Mae’s Twentieth Community Impact Pool of Non-Performing Loans. The transaction was expected to close on December 9, 2022 and includes approximately 61 loans totaling $13 million in unpaid principal balance (UPB). The loans are geographically located in the Miami-Dade area.

Freddie Mac reports that “given the delinquency status of the loans, the borrowers have likely been evaluated previously for loss mitigation, including modification or other alternatives to foreclosure, or are in foreclosure. Mortgages that were previously modified and subsequently became delinquent comprise approximately 94.0 percent of the pool balance. Also, purchasers are required to honor the terms of existing loss mitigation agreements and solicit distressed borrowers for additional assistance except in limited cases and ensure all pending loss mitigation actions are completed.”

Funny thing about Restora LLC. The organization shows up on OpenCorporates as being founded in 2017 as a California LLC (entity information: 201704610325). Then between August 9, 2020 and January 26, 2021, SRHT’s longtime CEO Michael Alvidrez was removed as agent, and replaced with the generic The Skid Row Housing Trust, manager. A search on the California state business portal shows that on April 13, 2021, Restora LLC was registered as a Delaware LLC (entity information: 202111310509), with its agent listed as PARACORP INCORPORATED in Sacramento.

If deeply distressed Florida mortgage loans seems like a strange thing for the Skid Row Housing Trust to be focusing on to the apparent detriment of managing its Los Angeles properties and paying its local bills and debts, that’s because it is.

However, it is a category of financial instrument with which SRHT Interim CEO Joanne Cordero has experience: her name shows up on pages 65-67 of James Xanthos’ 2009 testimony to the Financial Industry Regulatory Authority (FINRA)’s Department of Enforcement in the matter of Citigroup Subprime. Here, Cordero is described as an independent contractor and outside consultant surveilling the health of mortgage loans. Xanthos is uncertain, but thinks his boss Susan Mills might have brought her in. Mills is a named defendant in the Federal Housing Finance Agency’s lawsuit against Citigroup. In 2014, Citigroup settled with the DOJ for $7 Billion for misleading the public about toxic mortgage loans.

James Xanthos’ testimony is hosted as a Word file on the Financial Crisis Inquiry Commission (FCIC) website’s searchable version hosted by Stanford University’s Rock Center for Corporate Governance and Stanford Law School. We have uploaded it here for ease of access.

On 2/14/2023, The Real Deal picked up our reporting on the peculiar distressed Florida mortgage fund activity in which the collapsing Skid Row Housing Trust is involved: When asked for a comment, SRHT did not respond.

On 3/17/2023, the Los Angeles Times published a report on the shocking conditions inside the Skid Row Housing Trust properties, including red tagged uninhabitable buildings, unsecured doors, roaming intruders, non functional toilets, lack of on-site managers or security, arson fires, leaks, mold and broken elevators. This organization should have announced their financial collapse and sought outside aid long before it came this this state, and the board and senior staff need to be held accountable for putting their vulnerable tenants in harm’s way.

Also on 3/17/2023, Los Angeles City Councilmembers Nithya Raman and Hugo Soto-Martinez filed a motion for Los Angeles to provide $700,000 to pay for security for Skid Row Housing Trust’s neglected residency hotels. Interested people can click the envelope icon to subscribe and follow the motion as hearings and votes are held, or provide written comment by clicking NEW.