(800) 399-4529
Close this search box.

Low-income Tenants Win Another Fight Against Slumlord Who Stands to Profit $4.2 Million in Potential Sale

LOS ANGELES, June 20, 2016 — Low-income tenants of the Madison Hotel no longer need to suffer abuse at the hands of management. Today, Judge Yvette M. Palazuelos issued a temporary restraining order that forbids owners and management of the residential hotel from harassing the residential hotel’s tenants. Real estate mogul Kameron Segal, who bought the Madison last year for $5.6 million, stands to profit more than $4 million if the building is sold.

Despite a lawsuit and two preliminary injunctions, low-income tenants of the Madison Hotel continued to face a barrage of harassment at the hands of management taking direction from Segal. Today’s ruling is a huge victory for 16 low-income residents of the Madison, many of whom are elderly, disabled, and military veterans, and for Los Angeles Community Action Network (LA CAN), a tenant-organizing group.

The Madison Hotel, located at 423 E. 7th St., is one of the few remaining affordable housing options in the downtown area. Many of the tenants, some of L.A.’s most vulnerable residents, have called the building home for decades. Since the June 2015 purchase of the building, 423 E. 7th Street, LLC, and its management company, William Holdings, LLC, both managed by Segal, have engaged in a range of illegal, deplorable tactics apparently aimed at forcing tenants to leave their homes. Management employees have ridiculed individuals for their disabilities, age and sexual orientation, demanded access to plaintiffs’ units at all hours and for questionable reasons, and threatened to forcibly remove tenants from their units. When LA CAN attempted to organize tenants to fight back, management banned guests, including tenant organizers and attorneys. Tenants, most of whom cannot afford to leave, have no way to escape this harassment and the resulting emotional harm and fear.

Management has also neglected much-needed maintenance. The building is infested with roaches due to irregular trash collection, furniture is infested with bed bugs, and the building’s only elevator is often out of service — trapping disabled residents in their rooms for days at a time.

The plaintiffs filed the ongoing lawsuit against the hotel’s owners and management, regarding harassment and uninhabitable conditions at the building, in November 2015. They are represented by attorneys from Legal Aid Foundation of Los Angeles (LAFLA) and Inner City Law Center (ICLC). In March, Judge James C. Chalfant granted a preliminary injunction requiring William Holdings, 423 E. 7th Street LLC, and Kameron Segal to respect tenants’ right to host guests and to permit tenants’ rights organizers to enter the building to meet with residents. This was the second preliminary injunction granted to plaintiffs. The first, issued on February 11, 2016 ordered the defendants to heat the building during the winter months.

The 222-unit property is currently on the market for $9.8 million. If it sells at that price, Segal stands to make $4.2 million on the deal, in part because of the rapid gentrification of downtown Los Angeles.

Return to press release archive