Seller defends his profit

BURBANK — The attorney of a local landowner has written a letter to the city defending his client's sale of a residential complex to the Burbank Housing Corp.

The December 2006 sale attracted the council's attention recently after Burbank-resident Stan Hymen told the council that the transaction brought a sizable profit for the seller, David Augustine.

Records show that the Burbank Housing Corp. — a Redevelopment Agency-backed nonprofit that buys and rehabilitates residential properties for affordable housing — purchased a two-story, eight-unit complex on Verdugo Avenue for $1.4 million. The transaction was approved by a 4-1 vote at a Jan. 23 council meeting.

But council members were not aware at the time of the vote that the seller had acquired the property for $1.03 million on Nov. 21, 2006, just 10 days before selling it to Burbank Housing at a $365,000 profit.

After that information came to light, the council asked Burbank Housing officials to attempt to reverse the sale. The move was driven, in part, by the desire to send a message that real estate speculators should not undermine the city's attempts to provide long-term affordable housing, Councilman Dave Golonski said.

But the letter to the council from Augustine's attorney, Lawrence Brennan Jr., took exception to recent references to Augustine as a speculator whose activity "might diminish affordable housing in Burbank."

"All of Mr. Augustine's dealings have been transparent, open, arm's length and were conducted publicly … and are a matter public record," Brennan said in the letter.

The letter goes on to say that Augustine, a 50-year Burbank resident, should not have to bear the costs for "what is apparently either (1) the BHC's failure to exercise what would be normal due diligence by any private party, or (2) a case of 'buyer's remorse.'"

The letter also proposes the opening of a dialogue on the matter between Augustine and Burbank officials, which city staffers will pursue, City Atty. Dennis Barlow said.

In the meantime, the Burbank Housing Corp. has suspended all relocation plans for tenants at the Verdugo complex, as well as rehabilitation work, said Ruth Davidson-Guerra, assistant community development director for Housing and Redevelopment.

Relocation efforts for four of eight households in the complex were already underway prior to the council's direction to halt relocation, she said.

Those relocations were completed in order to not further disrupt the affected families.

QUESTION

What do you think about the profit made on a building sold to the city? E-mail your responses to burbankleader @latimes.com; mail them to the Burbank Leader, 221 N. Brand Blvd., 2nd Floor, Glendale, CA 91203. Please spell your name and include your address and phone number for verification purposes only.