The state was long aware of conditions under Interstate 10 where a massive fire Saturday severely damaged the freeway south of downtown Los Angeles — with Caltrans inspectors on site as recently as Oct. 6, according to state officials, tenants and a lawyer for the company leasing the land.
For years, a pallet distributor, a recycler, a mechanic shop and a garment factory supplier operated between the freeway pillars on East 14th Street a block east of South Alameda Street. Along the perimeters, homeless people camped and lighted fires to keep warm. But the conditions did not raise any apparent alarm bells among state officials who regularly inspected the site. Google Earth photos from January 2023 and March 2022 show dozens of columns of pallets stacked two stories high, amid piles of tires, wood boxes, cardboard and old vehicles, all visible from four streets and a freeway offramp.
“Caltrans staff inspect all airspace lease sites at least annually to check for potential safety hazards and lease violations,” said Eric Menjivar, a spokesperson for Caltrans District 7, which maintains state highways in Los Angeles and Ventura counties.
“Staff also monitor what is placed or stored on site by the tenant. If deficiencies are noted, Caltrans staff notifies the tenant for remedy. The State Fire Marshal also inspects regularly for fire and life safety.”
Menjivar said Caltrans inspected the property Oct. 6 after Caltrans had filed a lawsuit to remove its tenant, Apex Development Inc., for noncompliance with the lease. The suit, filed in September, said the company had not paid its rent in more than a year and had illegally sublet the land to a host of small businesses.
The California Department of Transportation has not responded to a Times request for the inspection reports.
Jose Luis Villamil Rodriguez, who started renting a spot on the property from Apex in 2011, said he watched CalTrans inspectors regularly come to the site.
“They would even take photos,” he said. “Everyone knew what was under the freeway, they saw the pallet yard and so I’m pretty sure they were aware of it.”
Rodriguez said the pallet yard business had been under the freeway for about seven years. He said the owner was constantly storing and moving the pallets. Rodriguez said he never interacted with the inspectors. Out of caution, Rodriguez said he had fire extinguishers at his job site. “Whether others didn’t, I wouldn’t know,” he added.
Caltrans had rented the 48,000-square-foot lot to Apex and its owner, Ahmad Anthony Nowaid, starting in 2008. Under Apex’s lease agreement, the property could be used only for parking operable vehicles and “open storage”; other uses required the approval of Caltrans and the Federal Highway Administration, something the company does not appear to have secured. Apex was also not allowed the storage of inoperable vehicles, flammable materials or other hazards.
The lease agreement between Caltrans and Apex was filed in court as part of the state’s lawsuit against the company for unpaid rent. As of September, Apex owed nearly $80,000 in back rent.
A court hearing in the suit is scheduled for early 2024.
Apex through its attorney, Mainak D’Attaray, confirmed that Caltrans had inspected the lot at East 14th Street at least once a year. The lawyer also rejected that the various small businesses renting from Apex were there illegally; he contended that Caltrans “was fully aware of the sublessees and their operations.”
He argued that state officials were scapegoating the company and knew about homeless encampments and the presence of Apex’s tenants under the freeway.
“Even the State of California’s Fire Marshall inspected the premises,” D’Attaray said in a statement. “Apex is sympathetic to the loss of property and the adverse impact the fire has caused the people of Los Angeles. But Apex was not involved in the fire. Apex is being unfairly scape-goated for something over which it had no control.”
The lot at the edge of the Fashion District is one of five that Caltrans had rented to Apex’s owner, Nowaid. Caltrans had filed eviction proceedings for all five properties, saying Nowaid’s firm owed a total of at least $620,000 in unpaid rent.
Earlier this week, Gov. Gavin Newsom criticized Apex and its owner without specifically identifying Nowaid.
“This guy and this organization, whoever the members of that particular organization are, have been bad actors,” Newsom said at a press conference. “They stopped paying their rent, they’re out of compliance, and as was stated yesterday … they have been subleasing this site to at least five, maybe as many as six tenants, without authorization from Caltrans or authorization from our federal partners.”
D’Attaray said the governor and Mayor Karen Bass were trying “to excuse their own failures to adequately address the public safety issues caused by the unhoused.”
D’Attaray said that Apex had repeatedly called the Los Angeles Fire Department to report fires started by homeless people who camped around the perimeter of the lot. He claimed that the city’s fire and police departments responded “dismissively.”
“The unhoused persons camping along the fence line of the premises were allowed to remain and accumulate all types of refuse and materials over which Apex had no control,” D’Attaray said in the statement.
A spokesperson for Newsom rejected the idea that the governor’s statements were off base.
“CalFire currently believes the fire was caused by arson — the criminal act of deliberately setting fire to property — in a fenced-off area that Apex was responsible for maintaining while they continued to assert rights under the lease,” the spokesperson said.
A representative for Bass did not immediately respond to requests for comment.
Carina Quinto, who runs a mobile mechanic shop out of the freeway underpass, said she had been watching news reports about the fire and was surprised to hear officials say they had no idea what was going on under the underpass.
“Supposedly the city didn’t know the kind of businesses that were running under the freeway. They knew exactly what we were doing,” she said. Someone from sanitation came regularly to check that oil was properly disposed, she said.
When asked for proof of the visit, she said, it burned up in the fire.