Residents of Hollywood Biltmore Take Their Fight to Court : Renewal Puts Investors, Poor Tenants on Collision Course

The apartments at the Hollywood Biltmore are dark and small and dirty. The courtyard is unkempt. The place is like dozens of others in Hollywood that have slipped into decay.

But a real estate company recently bought the Biltmore and wants to fix it up. The city’s $922-million project to restore Hollywood has made older apartment buildings attractive to investors.

It all fits in with a master plan. The city rejuvenates stores and restaurants and hotels. Investors move in, speculating that people will want to live in a newer, cleaner Hollywood.

There’s only one catch: the people who live there now. Many can afford no better. Renovated buildings will mean higher rents, rents they cannot pay.

At the Biltmore, the new owner has persuaded all but a few low-income tenants to move out. Some had to be paid to leave. Those who have remained say they are hanging on for their lives.

“It ain’t the Ritz. We’ve all lived better,” tenant Nat Holt said. “But we’ve got a place that works for us and we don’t want to move.

“Redevelopment in my book is only one word--raise the rents,” said the 64-year-old retired film industry worker. “They should buy empty buildings or build new ones. Don’t kick people out into the street.”

Samuel Palazzola, another tenant, has organized the Biltmore’s residents and they have gone to court, claiming that the new owner is trying to force them out by making living conditions unbearable. For much of July, water was shut off at the apartment building for eight hours a day, five days a week.

The owner, Realty Investors and Property Management, contends that the water was shut off for plumbing repairs. A Superior Court judge ordered the water turned back on until a hearing can be held today.

“You can’t blame them for trying to make money. But they use all sorts of tactics to harass us,” said Stefan Neilson, a four-year resident. “The bottom line is they want everybody out.”

Redevelopment, in any city, will inevitably bring forces to bear on surrounding residential neighborhoods, said Gregory Lipton, a visiting scholar at the UCLA School of Architecture and Urban Planning. When a residential area is rejuvenated, there is the danger that some people will lose out.

“If the redevelopment is in a big enough scale, the area becomes hot and people want to live there,” said Lipton, who is studying such changes in major American cities from 1970 to 1980. “You change your demand for housing. There are more dollars chasing fewer units. Plus, the cost of rehabilitating housing increases the rents.”

This dynamic has been documented in neighborhoods surrounding sections of Boston, New York City and Washington, Lipton said.

Officials at Los Angeles’ Community Redevelopment Agency, who are entrusted with restoring Hollywood, say redevelopment is designed to attract private developers and better housing.

The promised rebirth--the goal of a 30-year plan approved by the City Council in May, 1986--has already sent investors scrambling for storefront property along Hollywood Boulevard. Redevelopment officials say it is unavoidable that small businesses will be forced out by rising lease prices.

Real estate experts see a similar run on residential properties. At the Biltmore, tenants say they pay as little as $350 a month for a medium-size single apartment. Renovated or new apartments in the same area can rent for as much as $200 more per month.

“The side effect of the infusion of new dollars into a property is that rents will be higher,” said Diana Bradford Webb, a project manager for the redevelopment agency. “But it’s not intended to be at the expense of tenants there.”

Tenants have a place to turn, Webb said. The Redevelopment Agency has earmarked 20% of the $922 million to finance low- and moderate-income housing in Hollywood.

Such housing is now available in four buildings, where rents start as low as $250 a month for a single. The apartments are primarily intended for residents displaced by demolition. Webb said she hopes that agency-funded housing will also accommodate people priced out of renovated apartments. But Hollywood residents are concerned that there won’t be enough low-cost housing. Realty Investors and Property Management, one of many developers active in Hollywood, has renovated 30 apartment buildings in only 2 1/2 years.

Restored Hotel

There are entire neighborhoods of run-down buildings that await similar treatment, located just off the boulevard, where new businesses and the Roosevelt hotel--restored to its original Spanish Colonial Revival grandeur--stand as glittering harbingers of redevelopment.

In surrounding neighborhoods, the buildings are faded and marked with graffiti. Children play in littered streets. Young men with long hair and droning radios sit on car fenders. These streets have yet to feel the effects of redevelopment. But odds are they will.

“Buyers come in and pay people to move out. They renovate and jack the rents sky high,” said Stanley Treitel, who owns a government-financed building for low-income residents on Franklin Avenue. “More and more buildings are going to be fixed up as the redevelopment project progresses. It’s hard to say where all these people are going to go.”

There are municipal rent-control laws and redevelopment policies to protect these tenants. For instance, they cannot be evicted from a building under renovation unless $10,000 worth of improvements are made to each unit.

But residents and tenant advocates argue that many people aren’t aware of such laws.

“The issue is power. Landlords have it and tenants feel that they don’t,” said Michael Feuer, the director of Bet Tzedek Legal Services, which helped Biltmore residents get their water turned back on. “If more people were aware of their rights, then those few landlords who do flout the rights of tenants wouldn’t feel free to do so.”

Some Happy to Leave

Many tenants in buildings set for renovation are happy to leave rather than endure the inconveniences of construction, said Nicki Frank, president of Realty Investors and Property Management. Others can be persuaded to move.

“Of course we want people to relocate,” Frank said. “We offer them money.”

Some Biltmore tenants received as much as $1,500 to vacate. Younger, working residents were glad to take the money and run. But Holt and others surviving on fixed-incomes said that sum would last them only a few months.

Tenants who remain during and after renovation will not have their rents raised beyond the 7% maximum allowed by rent-control ordinances, said City Councilman Michael Woo.

“People have the legal right to say no” to a landlord’s request that they leave, Woo said.

The councilman and redevelopment officials also stressed that renovation and resulting higher rents are not unique to redevelopment.

“I think this is a general problem with the rent control laws,” Woo said. “If it is a large enough problem, some kind of change can be made in the law.”

At the Biltmore, work has ground to a halt. Frank says that with the water turned on, it is impossible to make necessary repairs.

‘Living Like Animals’

Frank is passionate about her work. On a recent afternoon, she led a reporter on a tour of the buildings her company has renovated in Hollywood. These places, once dingy and ramshackle, are now freshly carpeted and painted, with flower beds out front, wrought-iron gates and colorful canvas awnings.

“The people who were living in these low-income properties were living like animals. It was disgusting,” Frank said. “I remember Hollywood as a child. It was a beautiful, beautiful place. I’m proud that I’m trying to make it that way again.”

Frank said her apartments rent for higher rates after renovation, but would not say how much rents had been raised.

Some of the tenants at the Biltmore--there are 25 left in the building--say they would rather stick to their inexpensive apartments, run-down or not.

“Hollywood never was nice,” Holt said. “I moved here in ’41 and it was tacky then. This redevelopment is a scam. It’s just a rip-off for people to make money.”

Times staff writer Carlos Lozano contributed to this article.