December 11, 2023

The corporate leasing the location the place the hearth began beneath the ten Freeway hadn’t paid lease for a 12 months, was illegally subletting the property to a dozen companies and seems to have been in violation of security requirements designed to stop such calamities.

Apex Improvement of Calabasas final paid lease in September 2022 and owed greater than $600,000 to Caltrans, based on court docket information.

Apex and proprietor Ahmad Anthony Nowaid rented the property — and three others alongside the ten — by California’s “airspace” leasing program, which rents out state land beneath and alongside freeways to fund mass transportation initiatives.

The ten Freeway hearth and the long-standing situations that fueled the inferno have now raised issues concerning the Division of Transportation’s capability to supervise such leases statewide.

“There must be an investigation,” Assemblymember Miguel Santiago mentioned. “Caltrans ought to transfer at lightning pace to examine all of those amenities and all our airspaces to make sure that they’re in compliance, to make sure public security is upheld and to make sure that this doesn’t occur once more.”

Gov. Gavin Newsom at a press convention Monday, Nov. 13, indicated the hearth was possible deliberately set by an arsonist and famous the state can be reviewing different airspaces because of this. 4 of the state’s leases with Nowaid are alongside the ten Freeway, information confirmed. The leases allowed for the “parking of operable automobiles and open storage,” based on copies included within the eviction circumstances.

Caltrans didn’t require Nowaid to acquire hearth insurance coverage.

A number of of the websites gave the impression to be in violation of their leases with piles of flammable supplies and broken vehicles seen from the road.

Apex Improvement, the corporate leasing the Caltrans property the place the ten Freeway hearth started, holds three different “airspace” leases for land beneath the identical freeway. Staff at one other property leased to Apex on Hooper Avenue and sixteenth Avenue beneath the ten Freeway on Wednesday, Nov. 15, 2023. 

The unique lease between Apex and Caltrans for the land at 1361 Lawrence St., the place the freeway hearth occurred, expired in 2015 and transitioned to a month-to-month settlement on the time, but the state didn’t begin the eviction course of till August this 12 months, information present. The next month, California filed a lawsuit in opposition to Nowaid, two of his firms and a slew of small companies illegally subleasing that website and 4 different freeway properties, based on the court docket information.

Apex blatantly violated its lease on the Lawrence Avenue property for greater than a decade, even earlier than the corporate stopped paying lease. Photos captured by Google Maps over time present flammable supplies stacked in opposition to freeway columns in almost yearly since 2009. Caltrans issued strict storage pointers in 2018 requiring supplies to be saved 20 ft from columns following a hearth that collapsed a portion of Interstate 85 in Atlanta.

Nowaid allegedly crammed a dozen companies onto the 49,000-square-foot website the place stockpiles of wooden pallets, cardboard and leftover hand sanitizer ultimately ignited to close down one of many busiest freeways within the nation. Greater than 300,000 commuters use the ten day by day and officers estimate it might take three to 5 weeks to restore the harm.

Caltrans didn’t reply to a sequence of questions on its lease with Apex, its inspections, or the revenues earned from airspace leases on the whole.

Primarily based on the past-due lease, Caltrans made about $600,000 per 12 months from all 5 properties leased to Nowaid and his firms, based on court docket filings.

Squalid situations

Interviews and the state’s eviction filings recommend Nowaid operated the state-owned land with little scrutiny, providing below-market charges to the handful of companies keen to function in generally squalid situations. Considered one of Nowaid’s tenants estimated he made $23,000 per thirty days off of the Lawrence Avenue property the place the hearth originated, although Caltrans charged him $6,518 per thirty days, or $78,000 per 12 months, to lease it.

Rudy Serafin moved his enterprise, Serafin Distribution, onto the property in 2009, only a 12 months after Nowaid obtained his first lease from Caltrans. The lease prohibited subleases with out Caltrans permission and required Nowaid to pay half of any further lease from a sublease to the state. Neither appears to have occurred.

A state worker got here by about a couple of times a 12 months to examine the property, however by no means raised any issues concerning the flammable supplies stacked subsequent to freeway columns, Serafin mentioned. The a number of companies working on website, together with a mechanic, a recycler, and a pallet firm, had been apparent and the Caltrans worker appeared to be conscious that Nowaid was subleasing, he mentioned.

Each would have been clear violations of Apex’s lease and the state’s security pointers.

Drawn by low lease

Although the situations might be problematic, Serafin mentioned the $4,500 he paid in lease outweighed the negatives. A equally sized constructing would have value 3 times as a lot, one thing he couldn’t afford with the slim margins he made. The low lease and the shut proximity to the freeway and to his purchasers, significantly within the vogue district, made the placement precious for his enterprise, he mentioned.

“We’re the sort of individuals that basically work to eat the subsequent week,” Serafin mentioned. “We don’t have a number of financial savings, we don’t have some huge cash. I had all of it in my enterprise.”

Serafin buys hangars, packing containers, tape, elastic and different in-demand provides — resembling hand sanitizer and masks in the course of the pandemic — in bulk after which sells the items off, generally separately. He estimated he had about 50 to 100 bottles of hand sanitizer left when the hearth hit early about 12:30 a.m. Saturday close to East 14th and Alameda streets.

“That’s how we make our cash, we purchase 100 and we promote it one after the other,” he mentioned. “I wasn’t hoarding something. I want I might have offered it.”

Serafin estimates he misplaced $800,000 price of product within the blaze. None of it was insured. No insurance coverage firm would supply him a coverage, he mentioned, due to the situations within the surrounding group, the place homeless encampments and smaller fires had been frequent. The police hardly ever responded to calls about the issue, he mentioned.

Situations precarious

Within the final two years, the situations had grow to be noticeably extra precarious, he mentioned.

People from a homeless encampment roughly a block away often dumped buckets of feces into the drains outdoors of Serafin’s enterprise. Hoards of rats swarmed at evening and the smells, and flies, throughout hotter climate made it unimaginable to eat lunch on website in the course of the summer time, he mentioned.