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Assessor's value for Hollywood landmark fell well below sale price [Updated]

May 3, 2012 |  2:16 pm

The Old Spaghetti Factory

Updated at 5:45 p.m.

Serious problems roiling the Los Angeles County assessor’s office have reached a former Hollywood landmark: the Old Spaghetti Factory on Sunset Boulevard.

Last summer, Ramin Salari, a property tax consultant and campaign fundraiser for county Assessor John Noguez, lobbied to reduce the shuttered restaurant’s tax bill because, he said, the land it sat on wasn’t worth the $14 million his clients had paid for it.

He convinced Noguez’s staff to assess the shuttered eatery, and three smaller parcels nearby, for $7.2 million.

A month after Salari won the last of several six-figure tax refunds based on the lower value, the property owners sold the lots for $21 million, nearly three times the value set by Noguez’s staff, according to records reviewed by The Times.

As news of the refund and subsequent sale spread among rank-and-file county appraisers, some in the office saw it as confirmation of a growing suspicion that Noguez and his top aides were ignoring their duty to assess fair market values.

Instead, the appraisers feared, Noguez was inappropriately lowering values to give tax breaks to Salari and other campaign contributors.

“What other reason would they have to do grievous things like this, if it wasn’t payback for the [campaign] money,” asked recently retired appraiser Jim Jochimsen, who said he was removed from the Spaghetti Factory case in early 2011 after opposing Salari’s proposed reduction.

The reduction was “ridiculous” because it was clear the property was increasing in value, Jochimsen said. The developers who owned it had won permission from zoning authorities to build even bigger. They’re now approved for a 22-story tower with retail space and more than 300 condos, according to published reports.

Salari refused to discuss the Spaghetti Factory case when questioned by a Times reporter Wednesday.
Assessor’s office spokesman Louis Reyes said Thursday he was still researching the case, but it’s possible the property’s value may have dipped at some point because of uncertainty over the planned development’s future.

The property also transferred ownership in 2010, between two entities owned by the same company.
In a series of appeals finalized in July 2011, Salari successfully lobbied for a $7.6-million value for the shuttered restaurant in the 2008 tax year and a $6.3-million value for 2009, county records show. After the internal transfer within the company, the property was assessed at and $4.8 million for 2010, Reyes said. Those changes saved then-owners Sunset & Gordon Investors $231,872 in property taxes, records show.

As part of a wide-ranging corruption probe prompted by complaints from assessor’s office employees, investigators from the Los Angeles County district attorney’s office executed a search warrant last week at Salari’s Phoenix home. They also searched Noguez’s Huntington Park home and assessor’s offices across Los Angeles county.

County records show Salari and his immediate family members contributed at least $10,000 to Noguez’s successful 2010 campaign for county assessor — a position that makes him responsible for setting the taxable values of every property in Los Angeles County, the nation’s largest tax roll.

Salari acknowledged in a recent deposition that he also solicited contributions from all of his clients. Some of those clients have told The Times that Salari suggested his ability to win large tax refunds for them was a product of his close relationship with Noguez.

Jochimsen said that while he was still assigned to the Spaghetti Factory case, Salari told him he should stop resisting the proposed reduction because his new boss wouldn’t approve. “C’mon Jim, you know this isn’t what John wants,” Jochimsen said Salari told him.

When Jochimsen still refused, he said Mark McNeil, a colleague who had campaigned for Noguez and had been promoted after the election, took over the case and granted the reduction. McNeil, whose office was also searched by investigators last week, declined to comment for this story.

But in an interview last week, conducted outside his Culver City office as police were inside seizing his computer, cellphone and files, McNeil said he had done nothing wrong. But he acknowledged that Noguez “might have” asked him to keep an eye on appeals from some prominent donors.“Not for any improper purpose,” McNeil added.

Reyes, the assessor’s spokesman, said neither McNeil’s nor Jochimsen’s names appeared in his preliminary review of the case documents, which are not public. He would not say who signed the documents approving the refunds. McNeil was in a supervisory role, deciding who handled the case, so his name would not typically appear on the form. Jochimsen said his name wouldn’t be there because he got pushed aside.

McNeil was promoted shortly after Noguez’s election and began systematically taking over appeals for tax reductions brought by “well-positioned tax agents” and “politically influential” campaign contributors like Salari, Jochimsen said.

McNeil would sit in the cafeteria in the basement of the Los Angeles County Hall of Administration with the agents and come up with values for properties that “had no relationship to the facts,” Jochimsen said.

Investigators are also looking at a former county appraiser from the Culver City office who has admitted secretly and improperly slashing tens of millions of dollars from the assessed values of 151 high-end properties in Brentwood, Beverly Hills, Pacific Palisades and other Westside communities.

The former appraiser, Scott Schenter, told The Times he broke the rules in the hope that the wealthy owners would show their appreciation for the lower tax bills by contributing to Noguez.
Schenter said he was under “brutal” pressure from Noguez, and McNeil, to raise money for the race.

Through a spokesman, Noguez has admitted he asked Schenter to “check the status” of the properties that eventually got improper reductions, but denies asking Schenter to lower their values. Noguez has also admitted asking Schenter to raise money for his campaign, but said Schenter was just “one of thousands” of people he hit up for contributions.

McNeil has denied asking Schenter to solicit contributions.

[Updated: The report has been updated to reflect new information provided Thursday afternoon by the assessor's office.]


D.A. probing former appraiser in assessor's office

County seeks reasons for $50-million drop in tax estimate

L.A. supervisors grill assessor over change in property tax forecast

-- Jack Dolan, Ruben Vives and Doug Smith

Photo: The 1924 building at 5939 W. Sunset Blvd. was last used as the Old Spaghetti Factory. Credit: Francine Orr / Los Angeles Times