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Los Angeles taxpayers are dragging City Hall to court, accusing Mayor Karen Bass and top housing officials of ramming through a homeless housing deal that court records say was rushed, inflated and barely vetted.
A lawsuit filed Tuesday was brought by residents Samantha Nussbaum and Howard Grossman against the City of Los Angeles, the Los Angeles Housing Department, the California Department of Housing and Community Development, and the homelessness nonprofit Weingart Center Association.
The filing zeroes in on a $27.3 million purchase of a Cheviot Hills assisted-living facility that property records say sold only days earlier for roughly $11.2 million — a staggering markup now drawing attention from state and federal investigators.
City officials approved the Homekey deal despite what plaintiffs say were missed state submission deadlines, according to the complaint obtained by The Post. The filing alleges the project was pushed through using a non-compliant appraisal — and at the cost of displacing elderly residents from a functioning senior living facility.
The complaint claims City officials and their nonprofit partner rammed the deal through City Council, leaning on incomplete or inaccurate information and blowing past required due-diligence safeguards.
Court filings state Los Angeles officials didn’t even learn about the Shelby Drive property until after a key Homekey deadline had passed — yet still rushed the project through for approval.
A spokesperson for Mayor Bass’s office to The Post that the Shelby site in West LA remains a critically important property that is expected to provide interim housing in an area of the city that has extremely limited interim housing supply and that they had reached an agreement that the site was only to be used for seniors.
Her office also said that The U.S. Attorney Office’s investigation of a private developer is ongoing and the City is continuing to cooperate in the investigation.
“Today, we learned that a private developer had been arrested and charged in a complex scheme to defraud lenders across Los Angeles and Ventura Counties. One of the alleged fraudulent schemes involved real estate in West L.A. that was acquired to provide housing for elderly Angelenos experiencing homelessness. My administration has zero tolerance for corruption – period. We’re working with the U.S. Attorney’s office to ensure that anyone who engages in fraud against the city will face the full force of the law and my administration’s unwavering commitment to accountability.”
The complaint also points to a transaction that has already caught the attention of state and federal authorities. In October, federal prosecutors arrested property flipper Steven Taylor, alleging he repeatedly falsified financial records to secure loans and misrepresented how he intended to use the Cheviot Hills property before selling it to the Weingart Center Association for $27.3 million.
U.S. Attorney Bill Essayli announced the arrest, noting the nonprofit used taxpayer-funded money from the City of Los Angeles and the state’s housing department, funds intended to help the homeless, to purchase the property less than two weeks after Taylor acquired it.
While no charges have been filed against the City or Weingart Center officials in this matter, Tuesday’s filing argues the ongoing investigations underscore the need to halt further public spending, the complaint reads.
Nussbaum and Grossman are asking the court to issue emergency relief, including freezing construction, blocking additional public spending, voiding the purchase agreement, and recovering taxpayer funds already spent. They are also seeking a judicial declaration that the City acted beyond its legal authority.
The Weingart Center did not immediately respond to requests for comment.
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