Leo Pustilnikov cuts janitors and security at Skid Row housing in LA

by TRD Staff

Leo Pustilnikov has let his Skid Row properties go to the dogs, tenants say.

The Beverly Hills-based investor who paid $10 million for one of the biggest homeless housing portfolios in Los Angeles has cut security and janitorial services, resulting in filth, trespassers and growing fear of violence, the Los Angeles Times reported, citing reports from tenants.

Eighteen months ago, nonprofit owner Skid Row Housing Trust was on the verge of collapse when city leaders pushed the buildings into receivership. The sale of 17 former trust properties to Pustilnikov this fall was supposed to be a marked improvement.

Instead, tenants in multiple buildings say their incoming landlord’s changes have led to worsening conditions, including filthy shared bathrooms, broken shower heads, unusable kitchens, dirt, dog waste, trash and grime.

Such problems have increased at the Produce, Senator, Boyd and Lincoln hotels across Skid Row, tenants tell the Times. A Times reporter saw hallways with trash piled into the corners, and resident photos of trash fires and a video of a half-naked trespasser in a laundry room.

Mayor Karen Bass said she was “absolutely” concerned about service cuts in the buildings.

“We want to make sure that in all of the housing people are safe, they’re cared for, they’re getting the services that they need,” Bass said at a news conference on Skid Row.

The City of Los Angeles had allocated almost $40 million to maintain the portfolio while in receivership.

Pustilnikov says he inherited third-party, 24/7 armed security with two guards on duty overnight and daily janitorial shifts, which cost more than the buildings’ annual rent revenues.

The overhead cost was unsustainable, he said.

He has switched security coverage to night shifts during the week and additional shifts on the weekend. Pustilnikov said he’s planning to spend millions to install cameras and expand trash rooms to more efficiently handle security and waste.

“Instead of simply wasting money to create the appearance of safety, we are investing real money into creating a sustainable, safe and clean environment for tenants,” Pustilnikov told the Times.

Mark Loranger, CEO of Chrysalis, the nonprofit janitorial contractor under the receivership, said that he was saddened to hear about the state of the buildings after the firm’s departure. Properties with shared kitchens and bathrooms need constant servicing, he said.

“This requires daily attention, hourly attention,” Loranger told the Times. “I know that’s costly. But that’s what it takes.”

Under the receivership, security costs at each building were about $33,000 per month, the largest line item in the budget. Janitorial expenses ran from about $7,000 to $17,000 a month, depending on the building.

Pustilnikov said the price tags were too high. Refuse is piling up, he argued, because the properties don’t have large enough trash rooms. Safety is a heightened concern because residents don’t have sufficient social services.

“Wasting money to provide a false sense of security or on outsourced janitorial services that didn’t have space to dispose of waste while failing to provide the actual services that can help save lives is dangerous,” Pustilnikov told the newspaper.

City housing officials said they’re aware of resident concerns in the buildings and inspect the properties weekly.

Regulatory agreements between the city and Pustilnikov require him to provide weekday janitorial services at the Produce and four other properties that require more extensive repairs.

Sharon Sandow, a spokeswoman for the Los Angeles Housing Department, didn’t directly respond to a question about whether officials believe Pustilnikov is violating the contract.

She said that the city was “closely monitoring” the properties — and will take immediate action if conditions are found to be substandard.

— Dana Bartholomew

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