CIM Group: Hollywood's Richest Slumlord

by Patrick Range McDonald - LA Weekly
Published on September 02, 2009

It’s amazing what persistence, a YouTube video and some well-timed postings on a well-read blog can do these days for neighborhood activists tired of being ignored by City Hall and a very rich, very powerful North American real estate company. Meet Cindy DuHaime and Ziggy Kruse, two women who live in Hollywood, never give up and stick it to the man.

DuHaime and Kruse are tireless community activists — DuHaime as the block captain of the Garfield Neighborhood Watch on Garfield Avenue just north of Hollywood Boulevard, and Kruse as a member of the Hollywood Studio District Neighborhood Council board.

For more than a year, DuHaime has been locked in a battle with CIM group, a real estate investment firm worth more than $1 billion with headquarters in Los Angeles; it owns the Hollywood & Highland shopping center — but also owns derelict, Third World slum–style properties on the northwest corner of Hollywood Boulevard and Western Avenue, including an empty motel known as the Bon-Air and a small apartment building, both of which look bombed-out.

DuHaime lives on a lot behind these filthy, hazardous, broken-down structures that appear to have been struck by a hurricane. She’s been trying to get CIM to board up and secure the properties, and then to finally demolish them.

CIM does not lack the money to handle such a small expenditure, with properties in several major cities. It was co-founded by Richard Ressler, a former cigarette-company executive, Ivy League–educated lawyer and investment banker, and two Israeli-Americans, Shaul Kuba and Avi Shemesh, who struck up a friendship with Ressler years ago when chatting with him about his lawn.

CIM developed much of the Third Street Promenade and is now a major landlord in Hollywood, owning more than 1.7 million square feet there. It now owns the long-disappointing Hollywood & Highland shopping center, which houses the Kodak Theatre. Despite endless assurances by City Councilman Eric Garcetti and his predecessor, Jackie Goldberg, the development has soaked up vast sums of public money and enjoys a key location at a crossroads for global tourism, yet has never delivered as promised to taxpayers.

At Hollywood and Western, by contrast, homeless kids and prostitutes regularly crawl into the abandoned motel slum to camp inside. But Hollywood’s politicians have repeatedly looked the other way, and recently rewarded CIM with key help in securing a public loan of $30 million to bring Cirque du Soleil to Hollywood & Highland, several blocks away. Pushed by Garcetti, the unanimous vote of the Los Angeles City Council to hand CIM such riches has enraged many.

Meanwhile, “We have to live with this,” says DuHaime, standing outside the Bon-Air Motel.

After pleading with CIM Vice President John Given, the Department of Building and Safety and Councilman Tom LaBonge (the slum buildings are in LaBonge’s half of Hollywood, while Garcetti’s district office is about 400 feet away), DuHaime called Ziggy Kruse, whom she met at a public meeting about Hollywood redevelopment.

“After I contacted her,” DuHaime says, “everything took off. She wouldn’t stop talking about it.”

Yet Kruse didn’t get much of a response from either the city or the landowner. “You’re going to hear from the city and CIM that they’ve been ‘working with the community,’ ” says Kruse, standing with DuHaime near the Bon-Air Motel, “but it’s just not the case.”

LaBonge, for example, tells L.A. Weekly he’s been “anxious to see those buildings demolished,” but then he claims the national “economic tsunami” somehow made it difficult for CIM to handle the tear-down — an extremely tough excuse for Hollywood residents to buy.

Then there’s City Council President Garcetti, whose desk in his Hollywood district office at Western Avenue and Hollywood Boulevard looks directly down on the ravaged Bon-Air Motel. But according to his spokeswoman, Julie Wong, Garcetti decided to stay out of the controversy since the buildings are actually in LaBonge’s district.

It is this very mindset — passing the buck — that Kruse and DuHaime are fighting. They dramatically ramped up their tactics against City Hall after August 4, when Garcetti and the City Council earned themselves less-than-glowing headlines by approving a federal Housing and Urban Development (HUD) loan application that, in the midst of desperate times for small businesses in Los Angeles, will hand the giant CIM about $30 million in public money to retrofit the Kodak Theatre at Hollywood & Highland — for a new Cirque du Soleil production.

The deal came under intense criticism from bloggers, city residents and the Los Angeles Times, which wrote in an editorial that “city leaders are unable to support their optimistic claims about the CIM loan with anything but the flimsiest of evidence.”

Kruse and DuHaime jumped in. “People heard that CIM got the loan for the theater,” says DuHaime, “but they don’t know that CIM is also a slumlord. This [repair of local slum buildings] is where HUD money should go.”

Kruse attended a Los Angeles City Attorney neighborhood forum at City Hall on August 13, explaining the situation to newly elected City Attorney Carmen Trutanich. Trutanich asked if CIM was “breaking the law.” Kruse smiled and said “yes,” since CIM received an abatement order from the Department of Building and Safety on March 26, 2009, with which it has failed to comply. Trutanich covered his political backside by saying the $30 million loan was not in his “wheelhouse” of responsibility, but he eventually sent his prosecutors to check out the CIM properties at Hollywood and Western. They found a gruesome, hazardous site straight out of Dickens, piled with garbage, including urine-soaked trash and used tampons.

By that time, Kruse had gotten the attention of blogger Dakota Smith’s Curbed L.A., a well-read, generally prodevelopment, prodensity and probusiness real estate blog. Kruse sent Smith pictures of the properties. Smith promptly wrote a long story and posted extremely embarrassing photos of the motel and buildings. The piece got 52 comments. Smith contacted CIM’s Given, then followed up with another post. The coverage spread through the blogosphere.

“It’s not clear whether all the attention being given to Hollywood and Western is warranted (the neighbors will certainly say it is),” wrote Smith on August 24, “but right now it seems the entire city has fixed a beady eye on this corner, site of three derelict CIM-owned properties.”

In the meantime, DuHaime and Kruse met city prosecutors Tina Hess, William Rivera and Nick Karno on August 18 at the site of the Bon-Air Motel, with CIM Group Vice President Philip Friedl in attendance. While Kruse says City Attorney Trutanich “hasn’t filed any charges,” his prosecutors had a much more proactive reaction than Garcetti or LaBonge, who’ve been fine with letting the situation fester, or Building and Safety, which issued an abatement warning and then failed to make it happen. The prosecutors were “stunned beyond belief,” Kruse says, and held a tense street meeting with Friedl.

On August 19, Kruse and DuHaime made a foray into civic journalism on YouTube. In their video, which runs at just less than four minutes, DuHaime takes Kruse and her cameraman and editor, Andre Campbell, on a tour showing sights — including towering heaps of garbage that CIM has allowed to accumulate — that have disgusted many YouTube viewers. Kruse, who has named her project Hollywood Neighborhood News TV, plans to produce more videos.

DuHaime vividly remembers how CIM’s Given promised her more than a year ago that CIM would quickly demolish the abandoned slums. CIM, in a prepared statement to L.A. Weekly, admits the buildings were slated for demolition “over six months ago.”

CIM’s statement goes on to blame government bureaucrats but, curiously, doesn’t cite names: “An unusual set of regulatory overlays delayed permit readiness until mid-July. The council office (Tom LaBonge) and neighbors were apprised of this situation and of an expected demolition commencing at the end of July.”

That, of course, did not happen. “We’ve heard a lot of promises,” DuHaime says.

But Kruse’s and DuHaime’s persistence has created so much shameful attention — no thanks to Garcetti or LaBonge — that even CIM couldn’t handle it. A few days ago, the megadeveloper started tearing down the wrecked apartment building. (A few days later, they also began dismantling the empty horror movie–style motel that threatened to become its corporate logo.) Kruse and her cameraman were there to film the first bulldozers.

“Good things are finally happening,” Kruse says in HNN TV’s second YouTube news report. “The properties behind me are finally being demolished as we speak. It’s going to take a while, but it’s being done. We will be back.”