When the first developers arrived in Westwood in the 1920s,
their problems largely consisted of dealing with dust storms and
rabbits.
Today, a wider array of problems face Westwood developers,
including stringent planning and construction limitations, rising
real estate prices and sometimes disputes between property
owners.
For Jeff Katofsky and Barry Beitler, two developers and owners
of property in Westwood Village, a current legal battle and
dissolution of their business partnership has some community
leaders concerned about what broader effects the selling off of the
developers’ jointly owned property could have on the
area.
The bitter quarrel between Katofsky and Beitler deals with
accusations of fraud and breach of contract that occurred in the
course of their property partnership.
While Beitler maintains that Katofsky committed fraud by
withholding portions of lease and property sales, Katofsky charges
Beitler with retaining salary that was due to him for providing
legal services to Beitler, according to the Los Angeles Business
Journal.
Citing irreconcilable differences, Katofsky said their views on
how a business should be run were so different, he was not
interested in being Beitler’s partner.
“I don’t want to be associated with him in any way
… I want this all to end as soon as humanly possible,”
Katofsky said.
The result is that Katofsky is set on selling off all their
joint property and has begun to do so, even though Beitler has
objected “at every step of the way,” and has filed a
series of lawsuits in an attempt to block the property sales,
Katofsky said.
Richard Arshonsky, an attorney representing Beitler, said he
could not comment on the particulars of the case, nor make any
general statements about such lawsuits, because the legal dispute
was ongoing.
Some business owners who maintain a strong relationship with
Katofsky and Beitler say they are not worried about the
ramifications of the legal dispute and trust the two developers to
make sure they are taken care of.
But with the selling of property in the Village comes concern
over the future of proposed projects, new landlords, and changes to
existing rental agreements.
One of the properties currently mired in the legal battle
concerns the lot behind Jerry’s Famous Deli. The lot was the
proposed site of the “Broxton-Le Conte Commercial and
Entertainment Center,” which was planned to include a
multiplex Mann Theater and a Trader Joe’s, among other
amenities.
The project was well on its way to materializing after receiving
the approval of many residents and the Westwood Design Review Board
in December 2004.
But now the project is at a standstill, leaving hopeful
residents and business owners with uncertainty about the
project.
Yet another potential consequence resulting from the dissolution
of the partnership is the likelihood of rising rents and leases in
the Village.
As Katofsky and Beitler proceed to sell off their disputed
property ““ three of which have already been sold ““ new
landlords may raise rents to compensate for the high price of
purchasing a building in a booming real estate market.
For at least one of Katofsky and Beitler’s tenants,
however, certain safety nets were built into an agreement between
the developers and the tenant.
Jennifer Prats, one of the owners of a Cuban bistro in Alhambra
attempting to open a similar establishment on Weyburn Avenue in the
Village, said Katofsky and Beitler were good landlords and she
would not be worried in the event of a sell-off.
For over a year now, Prats said she has not paid any rent while
her and her father have worked to get the necessary city approvals
for their restaurant. They are currently working with the Alcohol
Beverage Control of California and hoping to attain a liquor
license.
In addition to the rent waiver, Prats said if their location was
sold, Katofsky and Beitler would either have to buy them out of
their lease or the new owner would have to take up their old
lease.
“They have been great landlords ““ very patient. I
can’t complain,” Prats said.
For Katofsky, the thought of leaving Westwood is not a pretty
one, but for now it is the only solution, he said, adding that he
did not know if he would stay to work in Westwood on his own.
But lease guarantees may not be enough for some tenants. Many of
the lease agreements in Westwood are known as triple net leases, in
which tenants are subject to paying a proportion of the
building’s property tax and other fees on top of their
rent.
The result is that when a building is sold at higher price,
tenants may have to pay higher property taxes, even if the landlord
doesn’t raise a tenant’s actual rent.