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Big victory for California Hotel tenants

November 3, 2008

by Lynda Carson

California Hotel tenant Mitchell Stevens proudly shows the lobby to the press. The tenants have been cleaning and managing the hotel themselves since being abandoned by their landlord. – Photo: E, Indybay.org
Oakland - In a huge victory for the tenants of the California Hotel, Alameda County Superior Court Judge Richard Keller ruled on Oct. 29 to keep in place a temporary restraining order against Oakland Community Housing Inc. (OCHI), stopping the corrupt nonprofit housing developer from evicting the tenants or shutting off the gas, water and electricity at the historic hotel they reside in.

According to attorney John Murcko, “The judge appointed Anne Omura of the Eviction Defense Center as a trustee to operate the California Hotel for the court, with full powers to hire a management company to manage the hotel. Ms. Omura will be allowed to rent out all 150 rooms at the California Hotel, so that there will be enough of an income coming in to properly manage and maintain the building for the current 52 low-income renters still residing there after refusing to move when threatened with eviction.

“The tenants prevailed. There was no one from Oakland Community Housing appearing in court today to oppose the tenants’ needs or Judge Richard Keller’s ruling. This is a big victory for the people,” said Murcko.

Altogether, over 500 low-income Oakland renters have been facing eviction by their landlord, Oakland Community Housing, and its management agent the John Stewart Co. after refusing to move from their housing complexes throughout the city of Oakland, despite being attacked by city officials and abandoned by OCHI and John Stewart.

With the help of Anne Omura of the Eviction Defense Center, the residents of the California Hotel have been responsible for three months of self management at the historic hotel, while the residents of Marin Way Court and Nueva Vista have been managing their housing complexes for the last two months since being abandoned and threatened with eviction if they continue to remain in their homes.

On Aug. 27, after accusing OCHI of running a “shell game,” Judge Keller ordered the case to be continued until Oct. 29. At the Aug. 27 hearing, with more than 20 tenants in court from the California Hotel listening intently to the judge, the tenants had been delighted to hear the judge say that he was willing to appoint a receiver to run the historic hotel.

At that point, the tenants’ attorney John Murcko said: “This is positive. If the judge had a case against the tenants, he would have ruled against them already. Judge Richard Keller agreed that the tenants of the California Hotel have the upper hand in this case because OCHI has violated the regulatory agreement involving low-cost loans that stipulate that OCHI is required to provide housing to the low-income tenants of the California Hotel for a 30-year period.

“OCHI and their partners are corrupt and abandoned the hotel. I want the judge to allow the empty rooms at the hotel to be rented out so that there is enough money coming in to properly manage the building for the next 12 years. There’s no point in selling the building or forcing the tenants out of their housing, because there’s no place for the tenants to go. Most of the tenants are elderly, and many are disabled. This is not about making money; this is all about housing the poor.”

OCHI has spent around $9 million in local, state, and federal loans for renovations to the California Hotel, after agreeing in 1992 to offer 30 years of low-income housing to Oakland renters.

“OCHI and their partners got ungodly credits and tax benefits,” said Judge Keller.

Like other nonprofit housing organizations in Oakland and the Bay Area, OCHI established a nonprofit subsidiary for each of the many properties it developed through the years. OCHI then charged fees to each of the subsidiaries. All the money disappeared from each location through the years, finding its way back to the corrupt main organization.

For the California Hotel, OCHI set up a nonprofit organization called CaHon Associates, Inc. Since OCHI reopened the hotel around 1991, CaHon Associates, using the name Cahon Inc., filed 990 tax forms with the IRS on only two occasions, making it nearly impossible for anyone to see where all the money went through the years that flowed into the California Hotel and eventually disappeared into the nonprofit organization known as OCHI.

Due to a lack of oversight, many local nonprofit housing organizations have become corrupted. Many are in violation of state and local laws, while abusing the rights of their tenants who are often low-income, elderly or disabled.

As recently as July 15, OCHI, CaHon Associates and the John Stewart Co. abandoned the tenants at the California Hotel after trying to frighten them out of their homes and threatening to cut off their water and utilities. The tenants fought back and refused to move.

For breach of contract, the tenants sued OCHI and the John Stewart Co. for $2.5 million, and on Aug. 6 the tenants filed an additional claim against Oakland city employees Sean Rogan, Marge Gladman and the City of Oakland for $53 million for their involvement in the scheme to force the tenants out of the hotel.

After pulling in many millions in subsidies to develop around 19 properties, in addition to the rents they have been collecting through the years, the corrupt nonprofit housing developer is now trying to claim that it is broke.

In a show of force meant to frighten the California Hotel tenants out of their homes, on July 21, in a surprise visit, five squad cars containing eight to 10 cops descended upon the hotel. Barely minutes later, James Edwards, the deputy chief of the Oakland Fire Department, Vincent Crudele of the Fire Code Inspection Services Unit and Rick Fielding plus several of his assistants from the Oakland Building Services Division joined the Oakland cops to conduct a search of the old hotel, located at 3501 San Pablo Ave., including the rooms of all the tenants.

According to the tenants’ attorney John Murcko, “There’s no one left in OCHI to run the organization. They all ran off except for one person, and it’s basically only the tenants and the attorneys left to fight this out in the courts.”

Since July 15, the tenants have been providing their own security, managing the hotel and keeping it clean, with the assistance of Anne Omura of Oakland’s Eviction Defense Center. John Murcko is one of the founding members of the Eviction Defense Center.

The reason 500 low-income tenants are presently at risk of losing their housing in OCHI properties throughout Oakland is that OCHI tried to dump them in a scheme to reuse the properties to bring in higher revenues. The scheme backfired on OCHI when the tenants refused to be bullied out of their homes.

On July 23, the residents of the California Hotel celebrated their first week of resident control by dropping a large banner in front of the hotel that said, “We Will Not Be Moved.” Just Cause Oakland continues to ask the community to come out and show their support of the tenants at the California Hotel. Food Not Bombs has responded by contributing free food to help the tenants in their time of need.

The historic California Hotel was built in 1929 and became a popular Oakland location that catered to the African American community and many legendary performers, such as Billie Holiday, Count Basie, Ike and Tina Turner, Fats Domino, James Brown and many, many others. In the East Bay, the California Hotel was the only full service hotel that welcomed African Americans during the 1950s.

Lynda Carson may be reached at tenantsrule@yahoo.com.

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