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Prosecutors launch inquiry into missing $425,000 in Bell redevelopment deal

March 24, 2011 |  4:04 pm

Los Angeles prosecutors said Thursday that they had opened an inquiry into an unusual redevelopment deal in Bell in which $425,000 is unaccounted for.

The city of Bell purchased the land for $1.35 million in 2006, paying more than twice the assessed value, as part of a redevelopment deal along Atlantic Avenue. The seller was required to make a "charitable contribution" of $425,000 back to the city, records show.

The Times reported Thursday that neither Bell city officials nor the seller can account for what happened to the donation.

In response to the report, the Los Angeles County district attorney's office will examine what became of the funds.

"We have to pursue whether it's an accountancy thing or whether this is a criminal issue," said Jennifer Lentz Snyder, assistant head deputy of the Public Integrity Unit. "We are definitely looking at it."

The Times requested that the city provide an accounting of what it did with the donation. In a letter, City Atty. Jamie Casso said city staff conducted a "diligent search of its records" but was unable to account for the contribution.

Records and interviews show that then-City Administrator Robert Rizzo and former General Services Director Eric Eggena oversaw the purchase and wanted the land as part of a revitalization effort in the city's small business district.

Rizzo and seven other current and former city officials have been charged by prosecutors with corruption, mostly related to efforts to conceal their unusually high salaries. All have pleaded not guilty. Eggena was not charged, but authorities last month served search warrants at two homes where he has stayed.

The site bought by the city is home to a carwash. The high sales price put the deal beyond the reach of the carwash owners, who were leasing the property and had the first right to make a purchase offer.

Prior to the purchase, the family that owns the carwash had battled the city, which shut down the business for about a year because of alleged code violations.

One of the family members, Eldon Neesan, said Thursday that he welcomed increased scrutiny of the deal, which he hoped would be "the final step of putting that darkness behind us."

--Robert J. Lopez and Paloma Esquivel

RELATED:

Times investigation: Money missing after suspect redevelopment deal in Bell

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