Of flammable material and unmaintained leases

More than a month after an arson fire at a storage yard damaged a key Los Angeles freeway, the state has hired security guards to watch out for smoke and other trouble at three additional sites beneath Interstate 10 that were leased to the same bankrupt businessman.

Associated Press journalists visited the properties and saw wooden pallets and other hazardous and flammable material much like what fed the Nov. 11 inferno under the freeway, which is used by 300,000 vehicles daily. Rats scurried beneath cars, trucks and RVs in various states of repair as electrical wiring snaked across the ground.

The state has subcontracted the security services as it fights to evict Ahmad Anthony Nowaid and scores of tenants subleasing through him in violation of his contracts with the California Department of Transportation (or Caltrans), according to court records. They are due back in court this month. No arrests have been announced in the arson case that forced a one-week closure of a 2-mile stretch of a key corridor for America’s supply chain and for commuters in the nation’s second-largest city. Gov. Gavin Newsom said the property was in the hands of “bad actors.” The state leased more and more land to the businessman even as accusations mounted against him, raising questions about the government’s vetting process before it leases land under California’s freeways and highways. Nowaid leased the storage yard that burned and four other properties from Caltrans — all but one of them under I-10 — through his companies, Apex Development Inc. and Metro Investments Group.

The guards from Treston Security Services are also at a receiving area where combustible items were moved to from properties leased to Nowaid, and a maintenance yard where Caltrans has set up temporary offices, Caltrans said. On a December afternoon, one of those guards wearing a neon vest sat in a folding chair outside a gated storage yard stacked with wooden pallets that is leased to Nowaid. Six tenants subletting spaces under I-10 described Nowaid as a bully. They showed receipts of their monthly payments to The Associated Press. Nowaid owes the state nearly $223,000 for one property, according to court documents. “Where did all our money go?” said Alberto Mazariegos, who stores his business’s industrial laundry machines at the site where he paid $1,100 in monthly rent. “The state empowered this guy. They are responsible too.” A person who answered a phone number listed for Nowaid referred questions to an attorney, Mainak D’Attaray. The attorney didn’t respond to calls and emails seeking comment on any of the allegations. D’Attaray said in a statement in November that Apex was not to blame for the fire and had made improvements to that property, though he said the company had not been able to access the premises shortly before the blaze happened. The Nov. 11 fire quickly spread, fuelled by wooden pallets, supplies of hand sanitiser and other flammable materials stored there in violation of the lease contract. The inferno damaged nearly 100 support columns of the interstate. Sixteen people who were living there, including a pregnant woman, were safely evacuated. The Biden administration gave the state $3 million in response to the disaster, though Caltrans has not released a final price tag. Records show the state was aware of problems at the sites managed by Nowaid, with inspectors offering blistering reports identifying unsafe conditions for years. Among the legal filings involving Nowaid while he did business with the state starting in 2008:

• A 2015 restraining order granted to a man who alleged civil harassment from Nowaid.

• A 2016 lawsuit by a recycling business owner who said she was subletting from Nowaid and was illegally locked out after he posted “two attack dogs at the premises, presumably to greet anybody who would dare enter,” the court filing said. The lawsuit was eventually dismissed.

• A $70,000 settlement in a 2019 case against one of his companies to cover unpaid wages for construction workers. In 2017, Caltrans sold Nowaid land used for a mobile home park in Ceres, California. Residents there filed a lawsuit in 2022, accusing him of overcharging for rent while leaving the property in squalor. That suit is ongoing. Caltrans said the agency conducts reference checks before leasing its properties but declined to answer other questions about Nowaid’s history. Nowaid’s name is tied to at least 20 firms — including real estate, property management and construction businesses – that have registered with California’s Secretary of State. Two of his businesses separately filed for bankruptcy in 2016 and 2019, according to state court records.

Following the fire, Newsom ordered a review of all 601 so-called “airspace” sites that Caltrans has leased around roadways. The program dates back to the 1960s and most of the properties have been used for parking lots, cellphone towers, open storage and warehouses. The lots range anywhere from a few hundred to thousands of square feet, and they are concentrated in Los Angeles and the San Francisco Bay area. The airspace leases have brought in more than $170 million for public transportation over the past five years. The sites leased by Nowaid’s companies “are outliers, and relatively few sites present confirmed safety or fire concerns,” Caltrans said in a statement.

State inspectors paid six visits to the site that burned, starting in 2020, and reported repeatedly that flammable and hazardous materials were being stored there. In February 2020, inspectors noted multiple subtenants, wooden pallets and washing machines. In September 2021, inspectors reported hazardous materials, and in August 2022, in a surprise visit by inspectors and the fire marshal, they found solvents, oils and a homeless encampment that had returned. “This is a filthy unmaintained lease,” inspector Daryl Myatt wrote in a September 2022 report. “This area has been utilized since the mid-1970s and looks like it.”

In that same month, Caltrans warned Nowaid that hazardous materials were also found at two other sites leased by him, and inspectors were denied access to the remaining two. Weeks before the fire, a tenant at one of the properties said Nowaid not only locked him out of his own business but showed up “with a person with guns” and that he was afraid that Nowaid might kill him. The case was dismissed when the tenant failed to show up in court. Nowaid’s tenants at another property flagged as unsafe said they installed lighting, large water tanks, and purchased fire extinguishers, which Nowaid was supposed to provide. About a dozen people work there at businesses ranging from a mechanic shop to a scrap metal recycling trade. Caltrans officials visited this summer and told the tenants they would be evicted because Nowaid hadn’t been paying rent. The tenants said they want to rent from Caltrans directly and would adhere to the rules.

“It makes me angry,” said Felix Hernandez Rubio, a mechanic who paid monthly for seven years. “I have good credit. Some fool should not be allowed to ruin my name. This is violating my rights.”

Associated Press