Eviction, Suits Threatened in W. Hollywood Hotel Dispute

A long dispute between the city of West Hollywood and hotelier Severyn Ashkenazy grew more rancorous this week, with the two sides swapping accusations while raising the prospect of a costly legal confrontation.

Ashkenazy accused the City Council of “acting in bad faith” in rejecting a proposal that would have allowed his financially troubled company to convert four apartment buildings to hotels in exchange for a promise to pay the city $4.9 million over the next 20 years.

And the hotelier threatened to evict “in short order” about three dozen tenants of the buildings unless progress is made soon to resolve the conflict.

“We have been as conciliatory as possible, and yet the city persists in trying to get something for nothing, using us as a whipping boy, and we don’t intend to let that continue,” he said. “We will be evicting people in short order unless there is some sign of progress. We have no other choice.”

However, City Councilman John Heilman warned that if any tenants are evicted, Ashkenazy “will do so at his own peril,” and City Manager Paul Brotzman indicated that the city will seek a restraining order, if necessary, to prevent any evictions.

Outside Attorney Retained

“The City Council has made itself clear as to its interest in protecting those tenants. . . . We would not sit idly by without doing all that we can under the law to prevent that from happening,” Brotzman said.

Meanwhile, Brotzman announced that the city has retained an outside attorney to help prepare for a possible lawsuit against Ashkenazy Enterprises Inc., and that a full-time researcher devoted exclusively to the Ashkenazy matter will be hired soon.

“We’ve been instructed by the council to be prepared to negotiate to the extent that it is possible while preparing for litigation in the event that further negotiations fail, and that’s exactly what we’re doing,” he said.

Since it became a city in 1984, West Hollywood has opposed Ashkenazy’s attempts to convert the apartment buildings, located in residential neighborhoods, into small luxury hotels, contending that the conversions are illegal.

Since the five-member council unanimously turned down the proposed settlement three weeks ago after widespread public opposition, there have been no formal meetings between city officials and Ashkenazy’s representatives, and none have been scheduled, Brotzman said.

“The attorneys (for each side) have talked some over the phone. So far that’s been about it,” he said.

The proposal, hammered out during 18 months of private talks between city officials and Ashkenazy’s representatives, had been opposed by the tenants and others who said the city would have been buckling under to Ashkenazy if it allowed hotels in residential areas.

The agreement would have sanctioned hotel status for Le Parc, 733 W. Knoll Drive; Le Dufy, 1000 Westmount Drive; Le Reve, 8822 Cynthia St., and Valadon, 900 Hammond St. Le Parc has operated as a hotel since 1979, when the last of its residential tenants moved out, company officials said.

As part of the deal, Ashkenazy Enterprises agreed not to use the Ellis Act to evict remaining tenants in three of the properties until 1991. The company would have provided hefty relocation fees for tenants who were then forced to leave. But it rejected the idea of allowing tenants to stay on indefinitely in any of the four hotels once the conversions take place.

‘Grand Opening’ Gala

Relations between Ashkenazy and the city, which have seldom been friendly, have been especially strained since the council vote, and were not helped by the company’s decision to go ahead with a gala “grand opening” of the Valadon as a hotel on Wednesday.

To add insult to injury, as far as some city officials were concerned, Ashkenazy’s representatives sent invitations to Brotzman and each of the council members, and even invited Mayor Helen Albert to cut the ceremonial ribbon.

The invitations were accompanied by small gifts, including a wristband, headband and golfer’s hat, touting the Valadon--which has about a dozen residential tenants--as the newest of the company’s nine hotel properties.

Albert, who informed company representatives that she would not attend, called the invitations “bizarre under the circumstances. . . . It’s almost like he’s (Ashkenazy) thumbing his nose at us.”

The Valadon, like the other disputed properties, was built in the 1970s with approval of the county as a so-called mixed-use building. It contains 110 units designated for hotel use and 35 units designated as apartments.

The company contends that the county’s approval simply prohibited additional apartment units because of parking deficiencies and did not preclude conversion of apartments to hotel units. The city maintains otherwise, claiming the conversions constitute an “illegal nonconforming use.

Ashkenazy Enterprises filed for bankruptcy in 1986. Since then, it sold the Valadon to two Illinois savings and loans, which were among its creditors, although the company continues to manage it.

‘Poor Judgment’

Heilman said that although “there may not be anything objectionable from a legal standpoint” about promoting the Valadon as a hotel, as long as the company abides by the limits imposed by the county, “it’s certainly an example of poor judgment.”

“If (Ashkenazy) is trying to promote good will in the community, he’s doing all the wrong things,” he said. “You don’t generate good will by threatening to evict tenants and then sending someone a headband.”

Ashkenazy defended the invitations, saying, “Frankly, we expect them to come. . . . Why wouldn’t they? We’ve embellished the area. It is beautifully landscaped. They should be proud of it as a fine contribution to the neighborhood.”

He sharply criticized the council for “reneging” on the agreement his representatives worked out with city negotiators, insisting that “we were assured every step of the way that the council was fully in sync during the length of the negotiations and were in agreement.

‘Sacrificial Lamb’

“Then, at the end, after a few people with their own selfish agenda to push created a public furor over what had been agreed to, (the council) reneged, using us as the sacrificial lamb for their political ambitions,” he said.

Ashkenazy insisted that the company had always dealt fairly with tenants, and accused them of “trying to keep their hands in our pockets while living in extraordinary comfort, and we resent it.”

“I know some of these people. I have one tenant who has told me he makes $150,000 a year with a real estate company and is trying to build a home in Malibu, and yet he claims that we are somehow depriving him,” he said. “These are not charity cases we’re talking about.”

Heilman dismissed Ashkenazy’s allegation that the council reneged on any agreement. “The council was always aware of the negotiations, and we were always giving direction to (the negotiating team), but we never said, ‘Yes, we’ll go along with this.’ We just said, ‘Get the best deal you can.’ ”

Not Committed to Agreement

“No one on the council ever committed to any agreement until we had the opportunity to hear from the public,” he said. “That’s our job.”

The $4.9 million was to have been paid in 19 annual installments of $250,000 and a final payment of $180,000, with most of the money earmarked to provide affordable housing. It would have included the more than $1.2 million that the company, which also operates the Bel Age and Mondrian hotels in West Hollywood, is said to owe the city in unpaid hotel occupancy taxes and penalties.

The pact also would have given Ashkenazy permission to go ahead with a long-stalled effort to convert the unfinished ninth floor of the Bel Age to luxury suites and to construct two “presidential suites” in the hotel’s rooftop penthouse.

City officials have acknowledged that the Bel Age construction represents one of their few “trump cards” in the negotiations. “There’s no way they’re ever going to get approval to do anything over there at this point unless there’s some favorable resolution of the matter in future,” Brotzman said.