At left is 615 San Pascual in 2019 when the court was ready to order it demolished. Contractor David Chase bought it and has restored the three buildings on the property, right. | Credit: Courtesy

The rats are gone, mold and rotten wood disposed of, litter cleaned up, and tenants housed again in six rental properties owned by Dario Pini that the City of Santa Barbara put into the hands of a receiver in 2018. Pini, well-known for being reasonable to his tenants and for owning the most affordable and rundown apartments in town, had collected hundreds of Building Code violations on each property from city inspectors, and a trial court appointed a receiver to take over their management and fix everything.

Several construction contractors and two sets of receivers and property management companies have accomplished the feat of bringing roughly 2,000 code violations into compliance at seven of Pini’s properties. One property was sold to general contractor David Chase: an aged bungalow at 615 San Pascual Street that was canted on its foundation, the walls tilted to such a degree that the roof connected with air at one corner. Two adjoining buildings had housed three families — who were ordered to vacate — and all the units were set for the wrecking ball when Chase bought the property from Pini. Assistant City Attorney John Doimas described the restored units as “gorgeous” and enthusiastically called San Pascual a success story. The once dilapidated buildings now look neat and trim from the outside and have sturdy railings; cars are back in garages that had been filled with odds and ends like bathtubs, doors, and cabinets.

Four properties were back in Pini’s hands in December. Two apartment buildings — on Valerio and Cota streets — were signed off by the city in February; after proof of payment to the contractor was furnished, Judge Colleen Sterne released the properties on March 19. Altogether, Pini has paid $4.1 million in construction and repairs. The last property in receiver Kevin Singer’s hands, a hotel under re-construction at 26 Chapala Street, has roughly $700,000 worth of construction to be completed. Pini’s attorney, Paul Burns, forecast that it would leave the receivership in the next three months.

Over the course of the three-year receivership, all the parties — including a half dozen lending institutions and banks — met regularly in Judge Sterne’s courtroom. Pini complained bitterly that the receiver cost him too much money, and the first receiver, William Hoffman, had to threaten to take out loans for the construction costs before Pini would advance funds. Behind the scenes, the language between the attorneys seemed taut. Judge Sterne regularly said that the end of the case was the appropriate time to attempt to recoup receiver or attorney fees and costs, as those fees continued to accumulate.

In the most recent skirmish, the city claimed approximately $543,427.42 in fees and costs as the prevailing party at trial; in lieu of getting payment now, the city wanted Pini to post a bond for the amount. Pini’s rebuttal went back to details from the 2018 trial. At that time, the city asked to put 11 properties in the receivership. He argued that because only eight properties were in the receivership, he prevailed on the other three and is therefore also owed attorney fees of approximately the same amount. The three properties included Pini’s own home and the Fiesta Motel on State Street, neither of which have been signed off by city inspectors.

Judge Sterne’s minute order from March 16 notes that there wasn’t enough money in the receiver’s estate to pay the attorney fees, even if she were inclined to grant them now. She again said the end of the case was the time to do that, and that the end was nearing. A motion to determine if the first receiver, Hoffman, had overcharged Pini for his services is scheduled for June 21.

The original intent of the Health & Safety Code charges that got a receiver appointed was to find a way to treat the tenants equitably, as some were bound to be displaced or severely inconvenienced by noise and debris as old walls or roofs were ripped out and new ones installed. The code also required tenants to downsize if too many people lived together in an overcrowded situation, and an unknown number of leaseholders were given notices to vacate. Some chose to move family members to second apartments in the same building, some moved away, and some stopped answering the door. Those who moved were entitled to relocation assistance, but the city inevitably found that tenants lacked large moving expenses because they did it on their own, and the very small gap between their rent and the prevailing rent left them with just a few dollars in compensation.

Attorney Doimas didn’t have a figure on how many original tenants remained in their apartments, but the most recent receiver’s report gives a hint. The February report looks at the receiver’s two remaining properties, Valerio and Cota. Combined, the 36 units were completed, but only 23 of them held tenants. According to Pini’s attorney, Paul Burns, the issue of tenants in overcrowded apartments “went quietly away” when the pandemic eviction moratorium hit.

Correction: This story was corrected to state that the Valerio and Cota Street properties were released from the receivership on March 19, one court date was corrected from April 19 to April 16, and the construction costs amount added.

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