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No Violations Found in Review of City of Santa Monica's Agreements with Developer
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By Jonathan Friedman
Associate Editor

March 27, 2017 -- Following the orders of the City Council, City of Santa Monica staff reviewed all current and pending agreements between the City and NMS Properties, and no violations were found, according to a report issued last week.

Council members requested the review late last year after a Los Angeles Superior Court judge declared there was evidence of wrongdoing by NMS, including forgery and perjury, in its ongoing legal battle with Boston-based developer AEW ("Santa Monica Council Orders Review of NMS Holdings," December 8, 2016).

Councilmember Kevin McKeown had proposed the review because “it's only prudent for us now to review all those documents,” he said in December, "in light of recent news coverage and Superior Court action."

The six-page document submitted to the council last week addresses various types of agreements between NMS and the City.

That includes 14 properties featuring at least one unit restricted to renters with a maximum income, three development agreements, one settlement agreement and 10 pending applications.

No agreement violations are noted in the document. It also states that potential violations in cases such as fraudulent income statements are possible but not likely because of the amount of effort it would take to make them.

“[A] potential risk is that a building owner could fabricate income and asset information for tenants,” the report states. “However, because creating fictitious names, social security numbers, tax returns, bank statements, etc. would require a concerted and sophisticated effort, the potential for abuse is also likely minimal.”

NMS spokesman Eric Rose told The Lookout that the company feels “vindicated” by the report.

“NMS is pleased that the City’s thorough inquiry is resolved,” wrote Rose in an email. “[The report] clearly shows that NMS has been in full compliance with all of its regulatory agreements and obligations.”

He added, “The report also validates that the private business dispute between AEW and NMS has nothing to do with the City of Santa Monica.”

NMS’ battle with AEW continues to make its way through the court system ("Court Dispute Between Developers Spills into Santa Monica City Council Chambers," December 2, 2016).

The same judge who determined various wrongdoings last year by NMS also at that time ordered the company to cede control of nine properties (seven in Santa Monica) to AEW. That decision has been set aside while a Court of Appeal panel reviews it.

In the meantime, Lincoln Property Company has been ordered to control the holdings until the legal battle is settled. The City report says Santa Monica staff are working with Lincoln to ensure NMS’ agreements are being met.

And in January, control of all of NMS’ pending residential projects were handed over to a related newly formed company named WNMS. The new company was not mentioned in the City’s report.


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