EDITOR’S NOTE: Reporter Randy Economy and owner-publisher Brian Hews of the Los Cerritos Community Newspaper broke the story about the scandal in County Assessor John Noguez’s office nine months ago. They followed up in numerous articles on how wealthy property owner’s were able to hire agents with influence to reduce their tax burden. Here is their latest article and a link to emails about billionaire Rick Caruso getting the tax on the Grove shopping center reduced.
By Randy Economy and Brian Hews
Embattled Los Angeles County Assessor John Noguez and his office assisted Los Angeles billionaire real estate mogul and potential mayoral candidate Rick Caruso with preferential treatment that resulted in massive property devaluations at one of the most profitable shopping and entertainment centers in the United States, Los Cerritos Community Newspaper has learned exclusively.
Caruso and his wife Tina donated thousands to two political campaign committees controlled by Noguez including the “Noguez for Assessor Committee 2010” and another to the “John Noguez for Assessor 2010 Attorney’s Fees Fund” in late 2010.
Caruso is one of the most powerful political figures in Los Angeles County and is currently strategizing to become an official candidate for Mayor of LA in the 2013 election.
Los Cerritos Community Newspaper obtained thousands of emails between Noguez and several property tax agents who are now under investigation in what law enforcement officials classify as the largest “political pay to play scheme” in the history of Los Angeles County.
LCCN has been investigating the activities of Noguez and several of his top senior staff members for the past year and has published more than 50 articles documenting massive “pay to play” schemes directed under the approval of Noguez. Since LCCN first began their investigation one lower level appraiser inside the Assessor’s office has been arrested on 60 counts of felony bribery and money laundering counts.
On Thursday, LCCN published several key emails and documents that show how entrenched property tax agents Dale Beckwith and Michael J. Schaaf (who also donated to Noguez’ campaign) were able to flex their political influence on behalf of Caruso that directly resulted in having several Grove parcels, with a 2012 value of $165 million, devalued.
The first case asked for a “Base Value Reduction” on all Grove properties. According to sources in the Assessor’s office, a BVR does not have to go through the appeals process, the properties can be revalued using what is called an “Assessor’s Correction”. One parcel, valued at $13,770,000, was reduced using this correction to $9,050,000, a 34.27% reduction.
Applying that percentage to all other properties would generate a $49 million refund. At a 1.25% tax rate the refund would amount to $612,000 per year.
A Base Value Reduction appeal allows the owner to go back in years and assume the new value. If Caruso owned the property for eight years he would realize a $4,896,000 refund. The rule also allows the carry forward of the reduced amount.
Caruso owns some of the most exclusive real estate in the United States. In Los Angeles County he owns the Encino Marketplace, the Americana at Brand in Glendale, the Grove, and Burton Place Retail Center in Los Angeles. Caruso is also planning to construct a new $500 million luxury resort and casino in Las Vegas, according to several media reports.
EMAIL TRAIL LINKS CARUSO REPS TO NOGUEZ
Emails obtained between Beckwith and Schaaf and members of the Assessor’s office, including Noguez, show a carefully thought out plan for the tax reductions at the Grove going back to 2009. Caruso gave authorization to both Beckwith and Schaaf to represent him on official business regarding his properties before the Assessor’s office, LCCN sources confirmed.
Noguez along with two of his past top appraisers Andrew Stephens and Mark McNeill from the Major Properties was specifically assigned to work with Beckwith and Schaaf on at least 10 different properties owned and controlled by Caruso.
Stephens and McNeill have been placed on “full paid leave” after at least 300 law enforcement officials raided 12 locations in two different states several months ago.
During a three-day period in September of 2009, Beckwith, Mc Neill, Stephens, Schaaf and Noguez communicated back in forth in a series of emails to set the plan for Caruso’s devaluations.
On Thursday, Los Cerritos Community Newspaper Publisher Brian Hews released several key emails and documents that illustrate how Noguez, Beckwith, Schaaf and others interacted in a “very blatant manner,” Hews said.
In one email conversation on September 3, 2009 Noguez notes: “Below are some of the active appeals that Michael (Schaaf) has for the Grove. Dale (Beckwith), are there any other numbers that you might have as the big reduction is really on your parcel? If so, please send them to Mr. (Mark) McNeill asap so we can get this scheduled (to be placed on the Property Appeals Assessment Board Agenda).”
In another email from McNeill to both Schaaf and Noguez on that same morning of September 3, 2009, he writes: “Good morning all! That should work! Send me the apps guys.”
During that same morning Noguez messaged Mc Neill and Beckwith asking how the item was going to be placed before the Property Appeals Assessment Board and on what specific time and date in order to get approval on the reduction for the parcel: “Could we get you to see if Sylvia would let us do September 8, 2009 at 10:30 am? I could have the clerical work in Wednesday and be ready for the Sunday, September 13, 2009 update. This might mean we could get a corrected tax bill in time for the 1st installment for the taxpayers.”
Calls to Caruso, Schaff, and Beckwith were not returned. Beckwith has hung up the phone on Los Cerritos Community Newspaper in the past when asked about his involvement with Noguez and Caruso.