The bedbugs should be gone from seven of Dario Pini’s rentals sooner rather than later after Judge Colleen Sterne ordered him to pay $350,000 to have them tented and up to 500 tenants relocated during the fumigation. The bedbugs, cockroaches, and termites infesting the buildings create “abhorrent” living conditions, the receiver overseeing them wrote in his September report, and fumigation was a priority. As well, one of the 57 contractors contacted to repair the hundreds of Building and Health & Safety Code violations refused to bid until the vermin were dead.
In mid-April this year, the City of Santa Barbara succeeded in having a receiver, William Hoffman of San Diego, appointed by the court to bring eight of Dario Pini’s ill-kept properties up to code. Inspectors and the city attorney, Ariel Calonne, had spent years tussling with the prolific landlord for work done without permit that ranged from sloppy to unhealthy to dangerous. At the eighth property, a hotel on Chapala Street, a sewer lateral had been installed under the radar, the day’s skirmishing revealed.
For anyone charging by the hour, Friday morning’s hearing was a good gig. Fully seven attorneys were on the phone and another six in the courtroom for nearly three hours, representing all sides plus lenders and insurers. The receiver, famously, is not charging by the hour but by the “door” he is managing. Those doors came into question on Friday, with a crucial sticking point the number of tenants behind those doors who would need to be housed elsewhere during the fumigation.
What stuck in Dario Pini’s craw, however, was that he had to give Hoffman so much money, or extra money at all. His attorney, Paul Burns, told the court often and frequently that Hoffman was paid $60,500 every month as a receivership fee. Pini couldn’t control his fury during a long discussion of why $350,000 should be deposited with Hoffman to tent the buildings and re-house their tenants. “He has $1 million in my rent!” he shouted from the audience. “If Mr. Pini is saying he doesn’t want to fund this,” said Judge Sterne calmly, looking his attorney in the eye, “then we have a bigger issue.” (Past receiver reports indicate Hoffman has collected about $170,000 in rent monthly.)
Everyone simmered down, and after extensive ifs, ands, and buts from Paul Burns and rebuttals from Hoffman’s attorney Fernando Landa about the exact cost and who exactly was going to be moved, Judge Sterne ordered Pini to pay up by next Friday. At Assistant City Attorney’s John Doimas’s request, the list of names would be under court seal and confidential, the judge agreed.
Of the estimated 500 tenants, about 100 at a time would be moved out of their apartments for four days, likely to be housed at a Motel 6. Pini would pay each of them $75 per day for food; Sterne firmly stated they would choose their own food, a point of dignity, she believed, rather than accept the landlord’s offer of his food truck.
Sterne also wanted all tenants, not just the lease-holders, to be moved by the receiver in order to guarantee that hard-to-get-rid-of bedbugs didn’t move back in with the tenants. Among Hoffman’s suggestions is a shower vehicle at the apartments for tenants as they leave and laundering of clothes.
Still, with the day’s fight over money, the receiver’s attorney Fernando Landa asked for clarity on how long Pini had to pay — five business days, said Sterne — if they would go next to the lenders for the money if Pini doesn’t pay — yes, the judge said — and then Hoffman could go to third-party lenders for the money? The judge affirmed again. The city’s counsel John Doimas rose to ask, if this is how the funding is going six months after the receiver order, how would they ever get the more expensive renovations done?
This process and what the receiver will do is a template, Sterne answered, for the upcoming “biggies” — the renovation of the properties. “Punctilious” accounting was expected from the receiver, she stated. And she gave the attorneys marching orders, with the full expectation of appellate review down the line, for proposed orders and detailed information.
In light of that, the bid from Pueblo Construction was approved for code violation repairs at the property on Mission Street, despite Burns’s protests that Hoffman favored its “corporate” approach over other local contractors. Judge Sterne stopped an exchange of insults that started up between Burns and Landa, and indicated that with the record being challenged at every turn, the details mattered, especially as the work progressed. In the two rounds of bid requests — in which fewer than a handful of contractors submitted some sort of bid — Pueblo seemed the only one capable of doing that.
Editor’s Note: This story was corrected on November 4, 2018, to remove acceptance of a bid for work on the Arrellaga Street property. Only the bid on the Mission Street property was approved.