Developer Leo Pustilnikov, a pioneer of a legal loophole to approve homes in tony Beverly Hills, may now be the largest owner of homeless housing in Los Angeles.
A judge has approved his purchase of a portfolio of 17 Skid Row buildings for formerly homeless residents in Los Angeles’ Skid Row for $10 million, the Los Angeles Times reported.
The seller was Receiver Specialists, a receiver that controlled the apartments and aging single-room occupancy hotels with 1,200 units once owned by the Skid Row Housing Trust.
The price works out to $8,333 per unit.
Los Angeles County Superior Court Judge Stephen Goorvitch said the sale to the owner of Beverly Hills-based SLH Investments was in the best interest of poor tenants and L.A. taxpayers who had to foot the bill for maintenance and repairs of the buildings for 16 months.
“This is a solution that is the product of collaboration, hard work and checks and balances,” Goorvitch said. “Only time will tell whether this will be a success story, but I am optimistic.”
The judge also approved the sale of an additional building, known as the New Genesis, to KE Ventures, an affiliate of Washington, D.C.-based Dalian Development, the multifamily arm of Fateh Family Office, for $2.1 million.
Both deals are slated to close next month.
With the earlier transfers of 11 other properties to nonprofit landlords, all 29 buildings once controlled by the Skid Row Housing Trust have found new owners.
Under the terms of the deal, reported by The Times last month and formally announced in court papers filed by Receivership Specialists, Pustilnikov will pay $19 million for the portfolio — and then receive $9 million back to cover renovations and repairs.
For the trust buildings, Pustilnikov formed a partnership, Hope for an Affordable LA, alongside North Hills-based Hope the Mission, which will oversee social services.
Ann Sewill, general manager of the Los Angeles Housing Department, said she has been impressed with Pustilnikov’s attention to the properties and attempted visits with tenants across the portfolio.
“We have a clear-eyed view of how to put these buildings back into financial and physical viability,” Sewill told the Times.
Pustilnikov, who has long been interested in acquiring the trust buildings, now owns high-value residential and commercial properties across Los Angeles County.
The 38-year-old developer has pioneered using the state legal loophole known as builder’s remedy that allows developers to skirt zoning in cities with uncertified state housing plans. He currently has projects in the pipeline for 3,500 homes in Beverly Hills and Redondo Beach.
In the past decade, he estimates having completed more than $1 billion in real estate deals, according to a profile by The Real Deal.
— Dana Bartholomew
Read more
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