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Wednesday, Feb 1, 2023

Firms Feel Heat From Homeless

Frustration and outrage are growing among business and property owners in and around downtown’s Skid Row as homeless tent encampments spread, bringing with them increased crime.

A rash of tent fires has damaged businesses, windows have been repeatedly broken, merchandise stolen, and employees assaulted. As a result, many business owners are ready to bolt – but those who own their buildings are trapped, unable to sell their properties.

Harry Tashdjian moved his auto upholstery business, Veteran Co., from Mid-City to Gladys Avenue on Skid Row two years ago, lured by easier freeway access and the prospect of merging his retail store into his existing warehouse building there, which he spent more than $500,000 upgrading.

But Tashdjian’s dream has turned into a nightmare. Homeless tents have proliferated on Gladys, which he says has driven away customers. And in recent months, two fires in tents leaning against his building caused thousands of dollars in damage to his property.

“If we were renting, we would definitely consider leaving,” Tashdjian said. “But we’re heavily invested in this building and can’t just pick up and leave. So we’re stuck. We’re outraged that the city hasn’t done more to stop what’s going on here.”

The crime and related problems have become so pervasive that even downtown’s most ardent boosters are now alarmed.

“I’m aghast at what’s going on,” said Hal Bastian, a revitalization consultant who has been a downtown booster for 20 years. “The homeless situation isn’t just impacting Skid Row, it’s now impacting all of downtown. If you think that we’re going to rent 8,000 apartment units and 2,000 condo units when people have to step over homeless lying on the street with open sores, you are sorely mistaken.”

While the official boundaries of Skid Row haven’t budged much in recent years – 50 blocks from Spring Street on the west to Third Street on the north to Alameda Street on the east and Seventh Street on the south – the unofficial boundaries have grown as homeless tents have spread. Now, almost all of the Industrial District is within these unofficial boundaries, as is a portion of the Historic Core and part of the Fashion District.

For now, the L.A. Downtown Industrial District is bearing the brunt of the problem. One gauge is the trash left behind there. According to figures released by Raquel Beard, the business improvement district’s executive director, contractors picked up enough trash last year to fill 64,000 bags, a 9 percent increase over 2014.

Crime soaring

Crime statistics gathered by the Los Angeles Police Department show a dramatic increase in crime on Skid Row over the last two years. The overwhelming majority of the victims have been the homeless themselves.

According to Officer Deon Joseph, senior lead officer for the area, rapes are up 91 percent since 2014, aggravated assaults up 73 percent and robberies up 71 percent.

He said the biggest change was that in 2014, a pair of court rulings in response to lawsuits from civil rights and homeless advocates allowed the tents to stay up day and night.

“With the tents now allowed to be up 24-7, it gives criminals a place to hide and allows for more overdosing of drugs and preparing of drugs for sale,” Joseph said.

He also said the LAPD had received more complaints in recent months from business owners that their employees or customers had been assaulted, but he offered no statistics on that. Anecdotally, he said, he has heard from more business and property owners that crime and the homeless encampments are impacting their businesses, making it extremely difficult for them to operate.

The fallout is spreading beyond where the homeless base themselves. Some homeless people venture into the Historic Core during the day and take up panhandling.

“We’re seeing an uptick in aggressive panhandling and incidents involving unstable people walking into stores and creating tense interactions with customers and employees,” said Blair Besten, executive director of the Historic Core Business Improvement District.

Besten also said parking lot attendants, store employees, and shoppers have all become targets of violent crime.

Frequent fires

That litany of troubles has been joined in recent months by an increase in the number of fires in the tents that house the homeless, many set out of retribution for drug deals or other street transactions gone bad.

“Tent fires have become the norm around here,” said the Downtown Industrial District’s Beard. Because the tents are up against and often tied to buildings, when a tent catches fire the building burns, too.

This is especially pernicious for property owners, who have both seen insurance premiums spike and, like Tashdjian, are stuck with buildings that are essentially unsellable.

Like Tashdjian, Harvey Monastirsky business has also seen his business suffer. Four years ago – when such fires were still a rarity – the building near Gladys housing his wholesale liquor warehouse suffered more than $400,000 in damage from a tent fire.

Monastirsky’s insurance company picked up the tab, but declined to renew its coverage, forcing him to find another carrier. He’s now paying about $6,000 a year for insurance, six times as high as his premium before the fire, and that policy only covers the contents, not the structure.

“While I can handle the higher premium cost, insurance is still a major concern,” he said.

Getting out

Some businesses – the lucky ones perhaps – have fled. According to Beard, at least 17 businesses have moved out from the Industrial District in the past two years, many in the food manufacturing sector.

One business that exited is Advanced Knitting Mills, an apparel contractor whose Skid Row troubles were chronicled by the Business Journal last fall. Owner Yaron Tarashandegan owner moved the company to Compton a few months ago.

“We moved because we got tired of the situation,” Tarashandegan said. “The homeless in front of the store, the smells, the assaults on employees – it’s not getting any better.”

He still owns the building on Ceres Avenue and can’t find a tenant to move in. He blames city officials for not doing enough to combat the homeless problem.

“We’re paying property taxes for the homeless to have more rights than property owners? It’s a joke.”

Industrial property broker Iqbal Hassan of downtown’s Quantum Associates said it is becoming harder now to sell property in the Skid Row area. Prospective buyers tour buildings, but when they emerge and see the homeless encampments and the trash, and smell the stench, they walk away, he said.

The city’s hands are largely tied on homeless tent encampments, thanks to that pair of court rulings two years ago.

“We understand the frustration of everybody – homeless advocates and businesses – and we’re doing our best in the short term but working extremely hard in the longer term,” said Rick Coca, spokesman for Councilman Jose Huizar, whose district includes downtown.

Longer-term initiatives to reduce the homeless population include a $138 million city budget allocation for homeless programs, much of which is earmarked for helping move the homeless into housing.

But some in downtown’s business community believe much more dramatic action is needed.

Downtown booster Bastian said he doesn’t expect the situation to improve much unless area businesses band together and file suit against the city and Los Angeles County. He believes businesses must sue on civil rights grounds, arguing that every community in the county must take its fair share of the homeless.

“That would end the practice of this homeless problem being ghettoized in downtown’s Skid Row,” he said.

Howard Fine
Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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