La Casa de la Raza Lawsuit Flares Up

The meeting of La Casa de la Raza’s board of directors last Thursday night was over before it started. Though the purpose was to “ratify a number of votes the board has taken lately,” said Board President Michael Gonzalez, a procedural glitch prevented any formal action from taking place. But it wasn’t as if nothing happened. “This place was the sweat of everybody,” said critical community member Kathleen Morales. “Nobody got a penny. They didn’t take anything. What happened?”

A historic political and cultural center of the Latino community, La Casa has been celebrated for bringing music, food, and educational programs to the city’s Eastside. But long-term, well-documented financial troubles have crippled the center, a castle-like 26,000-square-foot converted warehouse on Montecito Street.

For two years, Ed St. George, prolific student housing developer, has emerged at La Casa, causing both relief and consternation. He plans to buy half of the building for about $1 million to “keep the doors open,” he said. The other half would become Casa Redevelopment Company, which St. George would manage, court files state. Proponents of the plan stress the entity would remain under La Casa’s control. The deal would help the nonprofit pay back its nearly $1 million debt; it must be finalized in bankruptcy court in February. The bankruptcy judge thinks this “deal is great,” Gonzalez said. “Everybody gets paid.”

Raising an objection has been founding member Tommy Costello, who owns the mortgage note and has previously expressed an unwillingness to sell it. St. George said, “He doesn’t have a choice.” For his part, Costello questioned the validity of Thursday’s meeting, the pending sale, new boardmembers, and St. George’s involvement. “Is it a good deal for La Casa?” he wrote on a document he disseminated copies of at the meeting. Another meeting is expected to be held in the coming weeks.

The new boardmembers include Mark Martinez, Luis Villegas, and Gary Colmenar, all of whom St. George said he met through his philanthropic work in the community. “They are all Hispanic, still very close to their culture, very successful,” St. George said. “They understand how to run a business …. We have some really great ideas. It involves livening up the neighborhood and vitalizing it but also have businesses in there that work in conjunction with La Casa. What I am envisioning is businesses that could go in and grow businesses that are more engaged with the future.” Board President Gonzalez agreed. La Casa “will continue to do what they have done for the last 48 years ​— ​serve the Latino community,” he said.