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Santa Monica Council Orders Review of NMS Holdings
Santa Monica Real Estate Company, Roque and Mark
Roque & Mark Real Estate
2802 Santa Monica Boulevard
Santa Monica, CA 90404
(310)828-7525 -

Harding Larmore Kutcher & Kozal, LLP  law firm
Harding, Larmore
Kutcher & Kozal, LLP

Convention and Visitors Bureau Santa Monica

By Niki Cervantes
Staff Writer

December 8, 2016 -- The City Council on Tuesday ordered a review of Santa Monica ’s dealings with its largest local housing developer after a judge found evidence of wrongdoing during a recent contract dispute with a Boston developer.

The motion, which was unanimously approved, asks staff to verify the information that NMS Properties, led by developer Neil Shekhter, and all related entities provide in agreements to build and operate housing in Santa Monica.

Co-authored by Council Members Sue Himmelrich and Kevin McKeown,
the motion asks staff to ensure “the municipal corporation (Santa Monica), residents/taxpayers, and occupants of NMS buildings are fully protected from possible misstatements and their consequences.”

NMS spokesperson Eric Rose told the council that the company was being “bullied” by its legal opponent -- Boston-based developer AEW -- and that NMS would be vindicated in its appeal.

NMS has 23 buildings in Santa Monica, with a total of 77 countywide, and is responsible for more than 6,000 apartments close to Expo Light Rail lines, Rose told the Council.

The uproar was spurred by messy litigation outside the city’s borders that resulted in a ruling last month by Los Angeles Superior Court Judge Suzanne Bruguera that included allegations of perjury, forged documents and computer tampering by NMS ("Court Dispute Between Developers Spills into Santa Monica City Council Chambers," December 2, 2016).

The case was filed in 2014 by Shekhter, who alleged that AEW owed him $720 million for violating the terms of the agreement to develop nine "LUXE" apartment buildings in Santa Monica, West Hollywood and Culver City.

On Friday, the judge ordered Shekhter to cede control of the properties and pay the defendant's attorneys’ fees totalling $5,249,643 and $784,284 in court costs.

Michael Tarbet of Santa Monicans for Renters’ Rights (SMRR) asked the council on Tuesday to look closely at the City’s existing and pending agreements with NMS for potential impacts to tenants.

“We want to protect our existing and future tenants,” he said. “Be as careful as you can. This needs to be looked into to the greatest extent possible.”

NMS was already on the critics' radar after the developer made major contributions to a campaign opposing a slow-growth measure that would have required voter approval of most major developments taller than 32 feet.

Mary Marlow, who heads the fiscal watchdog group Santa Monica Transparency, said one group alone fighting the defeated Measure LV on the November 8 ballot received $365,000 from NMS or related entities –- or 73 percent of the group’s $500,000 war chest ("Fundraising for Major Opposition to Santa Monica’s LUVE Measure Tops $1.1 Million," October 28, 2016) .

The initiative would have put at risk at least 18 NMS-involved projects totaling almost 1,375 apartments awaiting approval by the Planning Commission and City Council, she said.

One project with 60 units on Santa Monica Blvd has already been approved by City staff administratively, Marlow said.

She added that 13 pending projects with 981 apartments are located downtown along 5th, 6th, 7th and Lincoln Boulevard.

Marlow's group, as well as the Santa Monica Coalition for a Livable City (SMCLC), have called for a review of NMS projects in Santa Monica, and have asked that the City end all negotiations with NMS and related entities on pending projects.

Critics also want the City to hire independent financial forensic experts to look for possible misconduct.

City Manager Rick Cole said his staff will begin work on the review and determine the potential cost of hiring outside experts.

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