DOWNTOWN LOS ANGELES — Whenever a new housing development was proposed for the Arts District in downtown Los Angeles, Jonathan Gerald made it his mission to ensure young, low-income artists had a chance to live there.
“We tried to develop affordable housing for artists to preserve an arts community in the Arts District, and we got screwed out of that,” Gerald said.
Gerald runs the nonprofit Affordable Housing for Artists. He said there’s no better example of the disappointment and betrayal he experienced than the stalled development known as 520 Mateo.
It was approved to be a 35-story, 475-unit apartment complex built by a San Francisco-based development company, Carmel Partners. It was ushered through L.A.’s approval process by embattled Councilman Jose Huizar back in 2018.
Gerald said he met with both Huizar and a development executive from Carmel Partners named Neils Cotter, and got assurance that if he and his nonprofit support the project, affordable units would be a priority.
“We met with them. We had asked for and they committed to 15 percent affordable housing,” Gerald said. “And then apparently that was sold out from under us by Councilmember Huizar.”
The development is referred to in federal court filings as “Project M,” and it’s one of the central projects being probed by the U.S. Attorney’s Office as part of an alleged pay-to-play corruption scheme involving Huizar, his associates, and real estate developers.
In a plea agreement filed Tuesday, first reported by Spectrum News 1, the lobbyist for 520 Mateo, Morrie Goldman, agreed to plead guilty to conspiracy to commit bribery and honest services mail fraud.
Goldman admitted to facilitating a $50,000 dollar campaign contribution from the developer to a PAC formed to help Huizar’s wife’s campaign, designed to help her get elected to his seat. In exchange, Huizar would help get "Project M" approved despite a labor union appeal filed against it.
Federal prosecutors said Huizar also pushed to reduce the amount of affordable housing on the project. Instead of demanding the 15 percent Gerald claims he was promised for low-income households, Huizar recommended just six percent for “moderate income” residents.
That move saved the developer about $14 million.
“It was a real betrayal. It was a kick in the guts. I knew these people personally and I trusted them. And it turned out that they were crooks,” Gerald said.
The future of this development and others in the probe are uncertain, with city officials considering what to do with the approvals granted under Huizar’s leadership in the PLUM committee.
Gerald hopes there is now a chance to reverse some of the planning decisions and re-prioritize affordable housing. He said he’s seen the Arts District change drastically in the last two decades and he wants to help young artists find housing in the area that allows them to have the financial security to flourish in their craft.
“They contribute substantially to the fabric of the city,” Gerald said. “It would be of some comfort to know the developers would have to do things that are some degree legitimate, even if they have to go back to square one.”