Homes and Hopes Turn to Tatters

A Watts housing program once lauded nationally as a model for bringing middle-class comfort and homeownership to poor neighborhoods is now a shambles, leaving 38 families in near-slum conditions and the city with $2 million in repair and escrow costs.

City officials have taken control of the development, a clutch of pastel ranch homes known as Franklin Square, from the Watts Labor Community Action Committee, a nonprofit organization that owned and managed it for nearly 25 years. Not one of the houses meets city safety and sanitation codes, according to city inspectors, and one was in such poor condition that it could not be rehabilitated.

Franklin Square residents were promised when the program began that they would own the homes after living there and paying rent for 20 years, but they did not receive their deeds when the two-decade period ended in 1998.

“It’s really been too much,” said Rose Banks, who raised three children in her neat home on East 101st Street, where the furniture has been covered with plastic for months in anticipation of termite repairs and other work. “I’m taking nerve pills. I lie awake at night just thinking about what to do next.”

The city is still unraveling what went wrong at Franklin Square, which was conceived in 1975 by two powerful leaders of that era: the late City Councilman and county Supervisor Kenneth Hahn and a close associate, the late Watts activist Ted Watkins, whose nonprofit Watts Labor Community Action Committee once owned gas stations, a contracting business, a building supply store, a grocery store and 500 units of low-income housing.

But a review of dozens of documents, including the original deeds and contracts, as well as government e-mails and interviews with current and past public officials, shows a near-total lack of oversight for the program, even as residents complained that their houses were in disrepair and their requests for homeownership were not fulfilled.

Los Angeles housing officials said they could find no record of city audits or inspections of Franklin Square before last year, when inspectors combed the houses as part of the city’s investigation. Unlike most city projects at the time, which were set up and monitored by housing or redevelopment officials, the original contract for Franklin Square was signed personally by then-Mayor Tom Bradley, and no specific person at the city was named to oversee it.

Representatives of the U.S. Department of Housing and Urban Development also said they were unable to find records of the regular audits and inspections that are typically required when federal money is used for housing projects.

“It just fell through the cracks,” said John McCoy, deputy administrator for housing at the Los Angeles Community Redevelopment Agency, the state-chartered but city-run agency that has assumed control of Franklin Square and the remaining money. “There was a lot of bungling.”

It would take nearly five years of investigation and lobbying by residents, along with the intervention of two governmental bodies and the determination of a city councilwoman bound to protect her father’s legacy, before the deeds were transferred earlier this year.

It will cost an estimated $2 million to bring the houses up to code, city officials said, although contractors hired by some residents said the price tag could be higher.

After taking control of Franklin Square, the city and the redevelopment agency promised to pay whatever it cost to fix the houses. That commitment changed this month, when officials offered the residents $39,000 apiece, an amount several contactors said would pay for just half of the repairs on many homes. The city also offered residents no-interest loans of $16,000 more, but only if they agreed not to sell the property for 45 years except to low- or moderate-income buyers.

The project’s denouement has pitted the grown children of Franklin Square’s original champions against each other. Janice Hahn, daughter of Kenneth Hahn and now a city councilwoman representing part of Watts, ordered the Franklin Square investigation and led the fight to wrest control of the homes from the Watts Labor Community Action Committee. Watkins’ son and daughter, Timothy and Teryl, have run the nonprofit since their father’s death in 1993, and have defended the organization.

“It’s a sad end,” Timothy Watkins said of the fractious finale to his father’s program, which was featured on national television and in newspapers across the country in the late 1970s and early 1980s.

Through a series of city, state and federal grants, Ted Watkins’ organization received more than $2 million in 1975 to move 39 1950s-era ranch houses from Westchester, where they were in the way of an airport and freeway expansion, to Watts, documents show.

The Watts committee paid $1 apiece for the houses and moved them to a cul-de-sac and two short blocks near the corner of Success Avenue and East Century Boulevard in Watts. Government grants enabled the organization to buy the land from the Community Redevelopment Agency for $19,000.

In the deed for the land was a stipulation that the Watts committee would own the homes -- paying taxes and providing maintenance -- until they were transferred to the residents 20 years later.

Dozens of families applied for the program, which promised lifetime gardening service and a security guard at the development’s entrance. At a 1978 ceremony attended by Kenneth Hahn, Ted Watkins, Bradley and then-Gov. Jerry Brown, 39 families were chosen for the project.

“My father, Tom Bradley and [Jerry] Brown stood up on a stage with a jar, and literally pulled names out,” Janice Hahn recalled.

Their faces smiling in newspaper photos marking the big day, the winning families prepared to move in.

“I was very happy that first day,” Banks said. “I thought it was the greatest thing that could ever happen to me. But once we got into these houses it was a nightmare.”

From the start, said resident Betty Carson, dealing with the nonprofit was difficult. “It was terrible,” said Carson, 70. “And when we reached the 20 years, we felt betrayed.”

In the months before the names were drawn and the program officially began, Watkins -- with the city’s approval -- changed the terms of the program. Instead of flat-rate rents of $200 a month, the houses would carry market-rate rents -- eventually as much as $800 -- with the cost borne jointly by the residents and HUD.

The result was more money for the Watts committee and a greater expense for some tenants, such as Lois Doyle, who soon earned too much to qualify for assistance and paid the entire cost of the higher monthly rent.

Under the committee’s deal with the city, tenants like Doyle who rose out of poverty should have been immediately eligible to purchase their homes for the original price, minus a credit for the number of months they had already lived there. Instead, Doyle and the federal government paid a total of $125,000 over 20 years for her house, which was valued at about $24,000. Had she been able to get a conventional 20-year mortgage in 1978, her monthly payments would have been about $200 a month and totaled $49,000, according to the Mortgage Bankers Assn. of America.

Combined, the tenants’ payments and the HUD subsidies brought the Watts committee about $6.4 million over the 20 years.

Of the original 39 families, 25 stuck it out for the full 20 years, in a city where people change addresses on average once every seven years. But when the 20-year period ended, the committee did not turn over the deeds to the homes.

Moreover, documents show that as far back as 1981, tenants had been complaining about the condition of the houses.

Copies of letters kept by several tenants show that residents sent a petition that year demanding that the committee repair inoperable windows, provide locks for sliding glass doors and reinstate a security guard service that had been featured prominently in the promotion of the subdivision.

“They treated us like dogs over here,” said Joann Marzett, who has spent her own money on repairs to her home on East 101st Street.

The committee’s repairs were shoddy at best, she said, and requests for work on the houses were frequently ignored. When work was done, residents were often charged for it -- and encouraged to buy their materials from the committee’s own building supply store, she and others said.

“Someone should be aware of what is going on in Franklin Square,” resident Carolyn King told an official at the Community Redevelopment Agency in 1983, according to an internal memo dated Sept. 28 of that year. “Some of the people are living so badly, and they are afraid to complain because they feel they have no place else to go and they have invested all their moneys in hopes of becoming a homeowner someday.”

Timothy Watkins provided The Times with a computer printout representing repair requests for 19 of the homes from 1992 through 1999. The report showed that of 510 requests, 212 repairs were made. Tenants were charged for 28 of those, typically involving broken heaters and plumbing problems.

Here are some examples, all taken from the report provided by the Watts Labor Community Action Committee:

* In 1991 a tenant reported a pipe broken in a wall. But the repair was not made until July 1992, by which time wood was buckling on the floor and water was running behind and beneath the bathroom floor. The report shows that the tenant reported the problem at least three times.

* In 1994 a tenant reported that there was a “bad sewer odor” when using the shower. No repair was made.

* In 1995 another tenant reported that the living-room ceiling leaked and that the front door was rotten from rain. The repair was not made, according to the report.

“I had confidence in them for a while,” said resident Virgie Citizen, 85, whose fragile health keeps her confined to a small room that in winter is warmed only by a space heater. “But then after a while I stopped having confidence in them because every time I asked for something to be repaired they’d tell me I didn’t need to have it done and I had to pay to have it done.”

Timothy Watkins said that any damage to the homes occurred after June 1998, when the program officially ended. At that time, he said, the tenants stopped paying rent and the organization had little money to repair or maintain the homes.

Los Angeles Principal Building Inspector Mike Lee, who examined each of the Franklin Square houses, said the damage predated that time.

“It’s stuff that’s been neglected for years and years and years,” Lee said. “There’s some damage that I’m sure was brought on by the tenants, but the majority of it’s just been deferred maintenance.”

Federal records show that the houses scored just 49 points out of a possible 100 on a HUD inspection conducted six months after the program ended. A HUD spokesman said that the houses showed deficiencies on health and safety grounds.

A city inspection last year showed that none of the buildings was up to code, and at least one needed to be torn down, according to Janice Hahn and the inspection reports. Thirty-one of the houses did not have adequate light, 37 had broken or missing windows, 22 could not be heated to a temperature of 70 degrees and all 39 were infested with rodents or insects, including termites. Two did not have hot and cold running water, according to the inspection reports.

“When we saw the condition of the houses, we were plainly shocked,” Hahn said. “There are people with no floors in the kitchen. Just dirt. And people with mold on the carpets and windows painted shut. There are people who have no heat.”

The home where Consuelo Guzman lives with her husband, children and other relatives had broken glass in front and missing windows all along the back. The house has three major cracks in the foundation, a broken heater, buckled concrete and exposed electrical wires.

“It was doing sparkles and we just cut it off,” Guzman said of one of the electrical outlets.

Timothy Watkins said that repairs were performed as often as possible during the 20-year term of the project, but that sometimes money was short and the work was delayed. He denied that the work was shoddy, and blamed a small group of residents, including Marzett, for stirring up trouble.

“I have a lot of friends living in Nickerson Gardens and Jordan Downs who would love to live in those houses,” Watkins said, referring to two notorious public housing projects.

In the fall of 2001, a group of residents paid a visit to Janice Hahn, who had just been elected to the City Council. Rose Banks, a vivacious 60-year-old who pilots an old Cadillac around Watts and knows everybody in the neighborhood, and her daughter, E’Shell McCraney, took the lead.

“I was in tears,” said Banks. “I was crying. I told Janice, ‘You’re not going to believe me. You’re going to have to see these houses for yourself.’ ”

McCraney dropped a pile of documents on the councilwoman’s desk. Hahn went to see the houses and talk to the neighbors. She promised to get the residents their deeds and rehabilitate their homes.

Hahn sought the assistance of her brother, Los Angeles Mayor James K. Hahn, who assigned an aide to look into the problems at Franklin Square.

“Janice and I felt that these folks had fulfilled their part of the bargain, and we wanted to help them realize their dreams,” Mayor Hahn said.

It was another 18 months of snafus and delays until the deeds were filed. The Watts Labor Community Action Committee frequently failed to return phone calls, e-mails and letters about the houses from the city attorney’s office, according to internal memos and e-mails.

Teryl Watkins, who took over as the Watts committee’s president after her father died, preceding her brother in the job, said that she began to investigate transferring ownership to the tenants “a few months” after the two-decade period ended.

She and Tim Watkins blamed part of the delay on a two-year legal investigation into a restrictive covenant on the deeds that has since been removed.

None of the public officials involved in cleaning up Franklin Square have criticized the Watts committee or the Watkinses publicly.

Janice Hahn said that she thinks that the committee -- despite owning 500 units of low-income housing -- did not have enough experience to know how to manage Franklin Square properly.

Hahn’s efforts on behalf of the Franklin Square residents have rankled Timothy Watkins, who is active in local politics and served as the councilwoman’s appointee to the city’s redistricting commission last year.

“It’s a nuisance,” said Timothy Watkins, who was named a Democrat of the year for 2002 by the Los Angeles Democratic Party. “It’s a huge embroilment.”

He is particularly miffed that the councilwoman “ordered blanket inspection” of the homes without telling him. “This has been a bump in our relationship,” he said. “Her whole role in this has been to advocate for those tenants. She didn’t consult us.”

Rather than investigate the committee’s role, the city has focused on trying to fulfill the promise made to the residents so many years ago, city officials said. In late January, the first 25 deeds were recorded, and the city’s promise to rehabilitate the properties was formally recorded with the deeds.

The 13 families that have not yet reached 20 years in the project were promised their deeds soon. Thanks to “soft” mortgages provided by the city, they will make no further payments on their homes, and the loans will be forgiven when they reach the 20-year residency mark.

When the work on the houses is done, Timothy Watkins said, the story will have a happy ending: True to his father’s vision, the Watts Labor Community Action Committee and the city would make homeowners of people who had previously been on public assistance.

Janice Hahn, trying to shore up her own father’s legacy, views it a little differently.

“It’s a wonderful story,” the councilwoman said. “But it has a dark side.”

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Times data analyst Sandra Poindexter contributed to this report.