By KIMBERLY ACEVEDO
Arnold Goldstein, Samuel Walton and David Paulsen filed a lawsuit claiming projected losses in the value of their six apartment buildings and the projected loss of rent.
The landlords say they notified city officials on Jan. 2 that the vacancy rate exceeded 5 percent in Long Beach buildings with 100 or more units. According to the Emergency Tenant Protection Act of 1974, once such a vacancy rate occurs, a municipality must declare an end to rent controls.
With local home, condo and apartment values rising steeply in recent years, such a move in Long Beach could send rents in those buildings skyrocketing.
The landlords claim that the vacancy rate for their buildings is currently 6.2 percent, a figure city officials were skeptical about.
According to Goldstein, the city ignored the notification of the high vacancy rate. "The city has kind of ignored our situation," he said. "We don't expect them to be very receptive." Since being notified of the vacancy rate, Goldstein added, the city has made "no attempt at all to verify the vacancy factor."
But Long Beach Corporation Counsel William Holst said the city responded to the landlords' claims and requested additional documentation. While some documentation was provided, Holst said, more was still needed. "The City Council is obligated to gather [information] and conduct a public hearing," Holst said.
The city held a public hearing during the City Council meeting on Tuesday night. Some of the nearly 300 residents who attended testified on past and present vacancies in their apartment buildings, along with lawyers representing the landlords. The council adjourned the hearing, and has scheduled a continuation on April 15.
Goldstein is seeking $16.5 million in damages for three buildings he owns. Walton is seeking $11 million, and Paulsen, $8.75 million.
The buildings in questions are 465 and 630 Shore Road, 10 Monroe Boulevard, 25 Franklin St. and the Executive Towers at 854-860 East Broadway. The landlords claim that a total of 53 apartments are vacant in those buildings, 23 of them in the Executive Towers. Some Long Beach residents and city officials found that hard to believe in a community that recent census figures indicate has only about a three percent total vacancy rate.
If the city should lose, taxpayers would be footing the bill for the 810 specified renters in Long Beach, one attorney charged. Besides the potential damages the city could absorb, interest would grow at a rate of 9 percent throughout the case -- and any appeal -- the attorney alleged.
While Holst called the lawsuit "absurd," Goldstein said he believes the "owners of the buildings are living up to the law and asking for what they believe they are entitled to."
Following a similar 1996 lawsuit against the city, a court last year awarded damages totaling $6 million to Walton and Paulsen. Goldstein said the damages they received were "a result of Long Beach's refusal to recognize [its] legal obligations. The same thing is happening. We don't expect them to act any differently."
The city has appealed that decision.
