Tuesday, July 3, 2018
The City of Santa Barbara's attempts to bring Dario Pini's properties up to code bogged down again when contractors attempting to bid on the work were given the wrong list of needed fixes by the city, and dozens of keys were stolen by persons unknown. About 90 percent of the tenants continue paying their rent, receiver William Hoffman reported to the court on June 27, money his firm "has had to rely on" to make incidental repairs as Pini has given only $1,000 per property so far.
Hoffman has been collecting about $170,000 monthly on the properties, using the money to pay utility bills and employees, and to make minor repairs across 110 units, ranging from replacing broken toilets and door handles to unclogging drains and painting out graffiti. He had begun to get bids on the seven rental properties based on a city fix-it list from February 2017, but a subsequent on-site review in April had found more violations. Hoffman didn't get that information until shortly before Friday's hearing; he asked the court for another two weeks to get accurate bids as the new list was 600 items long.
His report to the court said a door-to-door census indicated that each unit might hold about 25 percent more people than expected, which could affect finding a home for all tenants once the work commenced. Thus far, it seemed no mass displacement had taken place.
At the hearing, Judge Colleen Sterne did not want to dwell on the theft of the keys, saying it was being investigated by the police. But the stolen keys illustrated both Pini's frustration with the receivership and vice versa. Pini had been ordered to cease and desist from working on or even accessing any of the receivership properties, but he'd delayed handing over the original keys long enough to make copies for himself, Hoffman was told. Hoffman's company, Trigild, had set up offices at Pini's apartments at 329 East Carrillo Street, but they found a newly empty apartment freshly painted there one morning. Worried that the landlord had done the work,Trigild replaced the locks on all but one of the buildings, but the new keys were stolen. (Pini's attorney Paul Burns later said the painting had been done by the tenant in order to regain a deposit.) The locks were changed again, said Hoffman, security guards hired, and tenants again contacted to receive new keys. City attorney John Doimas said the police case had been closed as the prints left on a window during the break-in could not be identified.
In court, Burns protested that Hoffman refused to rent vacant apartments and also refused to consider any contractor who had ever worked for Pini. He argued the slow-motion work progress — now 72 days into the bidding process, instead of the allowed 60 — was in part due to Hoffman's "absentee management style." Burns demanded to know why Hoffman's "flat fee" didn't include things like postage or employee recruitment costs, which were being billed separately, and he suggested that Judge Sterne not approve Hoffman's bill, which his client, Dario Pini, had to pay. Hoffman countered that some apartments were infested with cockroaches and bedbugs; they were unsafe for habitation, he said. His employee on site, Nancy Daniels, had long-term experience in construction, Hoffman insisted, and Pini's properties were in good hands during his absence. For receivership, legal, and property management, his flat fee was calculated at $500 per unit, or door.
Judge Sterne was concerned that the end date for the repairs, October 31, was fast approaching. She told Hoffman that with much rebuilding ongoing in Montecito, he might need to base his contractor selection on competence rather than any prior history with Pini.
The arguments then moved to dealing with Pini's home on Mountain Ridge Road, and the Alamar Hotel; with Judge Sterne's intervention, all parties agreed a new receiver — Lowell Sorensen — would be appointed for those two properties. As for the arguments over Pini's formal financial records — which he has yet to produce to Hoffman — the judge again ordered the attorneys to get together and work it out, with Hoffman agreeing to hold the records confidential.
Other technical details that occurred at the hearing involved consolidating two other Pini prosecutions — involving U.S. Bank and Bank of America — with this case, which has 35 named defendants, counting all the lenders, and seven plaintiffs. All sides agreed that the next progress report and case management conference would be July 27, but Sterne's patience wore thin as she attempted to make August arrangements — several attorneys were phoning in their representation of creditors, a few of whom are also plaintiffs, and there were another handful in the courtroom. Hoffman's obstacle was a planned trip to Iceland with seven members of his family, but he agreed to appear in Santa Barbara, along with everyone else, on August 22.