State inspectors flagged fire hazards and other lease violations year after year at the site where the 10 Freeway fire began, yet Caltrans did not initiate the eviction process against the tenant until this August, 3 1/2 years after the company stopped paying rent, according to newly released documents.
Caltrans released a small portion of its inspection records late Friday as the “initial step” in a “thorough examination of its 600-plus Airspace leases at sites around highways statewide.” California’s airspace leasing program rents out state-owned land beneath freeways and bridges as a revenue source for mass transportation projects.
“This review will ensure compliance with lease agreements, including that sites are clear of potential fire hazards, and is in addition to the annual inspections Caltrans staff conducts, as well as safety inspections by the State Fire Marshal,” said Eric Menjivar, a spokesperson for Caltrans District 7, in an email.
The state, at Gov. Gavin Newsom’s direction, is planning a “top-to-bottom” review that will inventory every airspace site, track its proximity to sensitive structures and other potential risks. Cal Fire and the Los Angeles Fire Department will jointly inspect the leased lands locally. The reviews will continue until Caltrans is “confident all lease sites comply with state and federal law and do not pose a safety risk” to the public or state infrastructure.
“If a site is found to be in violation of its lease agreement in a manner creating a safety hazard, Caltrans will take swift legal action,” Menjivar said.
‘Numerous lease violations’
That didn’t happen in the past, at least not at the site where an inferno would eventually erupt along a stretch of the 10 Freeway, according to the records released by the state. Caltrans has not released the report from the most recent inspection on Oct. 5, but a log of notes submitted by inspectors provided to the Southern California News Group indicates there were “numerous lease violations” at the time.
Mainak D’Attaray, an attorney representing the leaseholder of the site, Apex Development of Calabasas, previously claimed his client had been cleared by Caltrans’ inspections.
“They did annual inspections and had no issues until something happened,” D’Attaray said.
But in fact, Caltrans inspectors flagged hazardous conditions at the site at 1361 Lawrence St. in Los Angeles in every year since 2020, according to the inspection log. In February 2020, an inspector found the site had “multiple subtenants from washing machine appliances, (to) car and truck parking and wooden pallets storage.”
The agreement between Caltrans and Apex, which held the lease from 2008 until the fire, specifically barred the storage of flammable materials and inoperable vehicles. It also required authorization for any and all subleases. Caltrans, in an eviction lawsuit filed in September, alleged Apex rented the property without approval to at least six different businesses, while one of those subtenants has said it was closer to 12.
A spot inspection the next year uncovered “numerous violations regarding the storage of hazardous materials,” according to the logs. The deficiencies were supposed to be corrected by October 2021.
During a surprise inspection the following year, however, Caltrans once again found Apex in violation of its lease with “multiple high pile issues, solvents, oils, fuels and other things expressly prohibited by the lease.” Apex was out of compliance in multiple categories. Hazardous materials weren’t stored in designated areas, the pavement wasn’t being adequately maintained, and the inspector deemed the site “unsatisfactory” due to rodents, graffiti and litter.
“This is a filthy unmaintained lease,” wrote inspector Daryl Myatt in an August 2022 report. “This area has been utilized since the mid-1970s and looks like it.”
Homeless encampment
Myatt noted that a homeless encampment in the area, which had been cleared out weeks earlier, had returned. Both Apex and the subtenants who rented from the company have said they suspect the freeway fire was started by someone from a nearby encampment.
In response to the findings, Caltrans sent Apex a notice listing a series of hazards at three of the five airspaces the company rented from the state. The two others were not inspected at the time because Apex had prevented the inspector from accessing the sites, which itself was a violation of the lease, according to the letter.
At the Lawrence Street site, beneath the 10 Freeway, Caltrans ordered Apex to remove “idle wood pallets from under freeway underpasses and structures,” drums of used waste oil and liquid propane gas canisters.
The company was required to place fire extinguishers every 75 feet, according to the letter.
The conditions seemingly didn’t improve. Stacks of pallets, stretching up to the underside of the freeway, are visible in images captured by Google Street View in every year since 2017.
Rent payments stopped in 2020
The company wasn’t paying any rent during the three-year period in which Caltrans continuously flagged the same hazards, according to the records. Apex stopped paying rent in April 2020, the month after Los Angeles County enacted a moratorium prohibiting landlords from evicting tenants of commercial and residential properties, according to Caltrans.
By May 2022, Apex owed $169,501.58 for the Lawrence Street site alone.
The state notified Apex in a letter at the time that Los Angeles County’s moratorium was no longer in effect and gave the company a month to either pay the past due amount or set up a 12-month payment plan.
D’Attaray declined to comment on the missed payments due to the pending litigation.
A log provided by Caltrans states that Apex owner Ahmad Anthony Nowaid allegedly told an inspector in 2020 that he’d fallen behind because “he’s having payment issues with his tenants.”
One of those subtenants, Rudy Serafin, told the Southern California News Group that Nowaid used that same excuse earlier this year. Serafin estimates Nowaid collected $23,000 from the tenants at the Lawrence Street site every month.
Serafin paid with checks and recently told Nowaid’s rent collector in early November that he could easily prove he’d been paying rent if needed during the ongoing eviction case.
“A week-and-a-half later, our place was burned down,” Serafin said.
It’s unclear if Apex set up a payment plan, but the company did not begin paying rent again, according to Caltrans. The lawsuit states Apex did not pay any rent from September 2022 through August 2023. Such cases allow a landlord to request only a maximum of one year of back rent.
In total, Apex is estimated to owe close to $300,000 for the Lawrence Street site and more than $2 million for all five sites combined.
Eviction process lag
It’s unclear why Caltrans waited until this August to start the eviction process. The lease with Apex had been month to month since 2016 and allowed either side to terminate it with 90 days notice. The agreement states that 10 days of non-payment of rent is considered a breach of the contract.
Asked about the length of time, Menjivar said Caltrans makes “every effort to help the tenant resolve violations before pursuing legal action.”
“Should violations remain unresolved, notice is given to the tenant and the tenant is asked to bring the property back into compliance or risk legal action,” he said in an email.
Menjivar said Caltrans filed its eviction lawsuit after Apex “refused to vacate the site.”
“Per state law, all tenants are afforded due process,” he said. “Eviction and removal of a tenant’s property is unlawful without a court order.”