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Compton residents of Alameda Court sue developer, others

alameda2Owners of a City of Compton-sponsored affordable housing community known as Alameda Court, are accused of perpetrating an illegal ‘bait and switch’ scheme against its residents.  Tenants filed a lawsuit in early 2015, and have a jury trial scheduled to start October 2016 in Dept. 28 at 111 N. Hill St.

The property located at 501-522 Alameda St. was initially zoned M-L for limited manufacturing.  A zone change request was granted November 8, 2006.

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In February 2007, Alameda Courts were approved by council.  The Disposition and Development Agreement between the Agency and Alameda Court, LLC for the disposition of Agency-owned property at 501 and 521 South Alameda Boulevard. As part of the development, the Commission designated Long Term Housing Corporation, a partner of Alameda Court, as a Community Housing Development Organization (CHDO) which enabled the developer to receive $855,000 of HOME funds towards the development.

The units were initially slated to be sold to in the price range of $300-$400k, however, the developers would continuously ask for additional monies, via the now closed redevelopment agency, to bring down the purchase price of the homes.

In December 2010, Lynn Boone, Compton resident, questioned why the Alameda Court homes were still vacant. She indicated that funds were authorized by this commission to loan the developer two million dollars to bring the cost of the homes down to a low-to-moderate income level. 

Agenda items related to Alameda Court rotated amongst the several bodies that convene under the auspice of: Housing/Urban Community Development and regular city council meetings.

Related: HOUSING DEVELOPMENT COMMISSION AGENDA Tuesday, February 22, 2011

In June 2011, Kofi Sefa’boayke, Director of the Agency appeared to request $2 million be loaned to the owners, using nine of the properties as collateral.  Council unanimously denied.

Related:  URBAN COMMUNITY DEVELOPMENT COMMISSION AGENDA Tuesday, July 05, 2011 

All of councils and the redevelopment agencies efforts failed, because property tax estimates were not realized, since the 28 units that were to be sold, were now for rent.

According to the lawsuit, owners of Alameda Court falsely advertised the units, located at the corner of Myrrh and Alameda in Compton, as an affordable “rent to own” opportunity. Under their leases, residents agreed to pay an above market rental rate for their units and in exchange, their security deposit and a portion of their rent would be held in trust and used as a down payment for the purchase of the unit.

Each lease contained the following “rent to own” provision which stated: “this is a lease with option to buy, upon buyers’ closing, sellers will credit buyers $[200-350]/month for the total months of rent paid and security deposit toward the purchase.” Residents were further promised that the purchase would be financed in part through a City of Compton sponsored lending program.

According to the lawsuit, as residents began to inquire as to the purchase opportunity and, more importantly, the whereabouts of the money supposedly being set aside as a down payment, they were told by Defendants that the units were no longer available for purchase and that their ‘down payment’ would not be refunded.

“These folks have endured hellish ongoing harassment,” says attorney Brandon Fernald who is representing Plaintiffs in their lawsuit. “My clients remain determined to get their story out and hopefully prevent other families from suffering through a similar experience.”

The Compton Successor Agency continued to submit RECOGNIZED OBLIGATION PAYMENT SCHEDULE’s to the Department of Finance in 2013, after the dissolution of the redevelopment agency, and were seeking administrative costs attached to Alameda Court, which were denied.

Is this why the tenants couldn’t purchase their homes?

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4 Responses so far.

  1. Deborah says:

    I’m so sick of these scam artists who use good folks to fill there personal $$ gabbing screams. It’s not only these low life’s. House prices, even with the housing cash, banks with held sales, foreclosures would only sell for cash so contractors and real estate agents be came the next winners. But losers stayed the same, regular folks who just want a home.

  2. Anonymous says:

    Misuse of federal money is what’s going on. If the money was to provide affordable housing, whose idea was it to sell market rate then try to hide it by renting to low-income folks, then keep jacking up their rent?

  3. Robert Ray says:

    There were problems with this property before the plaster on the walls ever dried. The units facing Alameda were supposed to be mixed use, commercial sales and residential. This immediately raised questions because there is no parking on Alameda in front of these units. And, from day two, potential occupants were constantly questioning the pricing of the units. I really hope these tenants win this lawsuit and I would really love it if Kofi Sefa’boyake and the City of Compton could be made to pay for their involvement in this whole mess.

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