Candidate’s Back Taxes Total Nearly $100,000

Ted Stein, the Encino lawyer-developer who is running against James K. Hahn for Los Angeles city attorney this spring, owes Los Angeles County nearly $100,000 in back property taxes on two apartment buildings he owns, records show.

Stein, who filed papers Wednesday declaring his candidacy for the city’s top prosecutorial post, defended his delinquency by pointing out that he is on a five-year installment plan to repay the debts. He said he and his business partners decided in 1992 not to pay their tax bills on time because of high tenant vacancy rates.

“We let them go because you can always redeem them,� explained Stein, a millionaire who served on the city’s planning and airport commissions before deciding last year to seek elective office. “I can see the dirt is starting to fly early. . . . I don’t see what it has to do with my qualifications to be city attorney. There’s many people who have done the exact same thing. It doesn’t make me a good person, it doesn’t make me a bad person.�

But Hahn said the delinquency calls into question Stein’s fitness for public service.

“He hasn’t paid his own taxes. I’m trying to figure out how he can ask the public to elect him to a position to entrust him with their hard-earned taxes,� Hahn said Wednesday. “For all the rest of us, we know that we’ve got to pay our taxes when we get our tax bill. Mr. Stein seems to think there are other rules for him than apply to the rest of us.�

County Treasurer-Tax Collector Larry Monteilh said 30,000 local taxpayers take advantage of the installment plans to repay their debts, facing stiff penalties of 10% immediately and 1.5% per month. But the preferred method, Monteilh said, is to pay property taxes when they’re due.

“Part of property ownership is the responsibility to pay property taxes. That’s part of the deal,� he said.

Stein has spent the past two decades buying and developing property, mainly in the San Fernando Valley. He has the controlling interest in two limited partnerships that own the two buildings whose taxes are delinquent, owning 50% of a $3.36-million, 91-unit apartment building near Koreatown, and 40% of a $2.6-million Chatsworth complex with 60 units.

The partnerships failed to pay taxes on both buildings in 1992, county records show, with current debts of $75,192.23 on the Chatsworth building and $19,776.34 on the Koreatown property. They started paying installments on one property in July 1993 but did not start repaying the other, larger debt until October 1995.

Delinquent taxpayers have up to five years to enter into an installment plan for repayment or the government can seize and sell their property, Monteilh said. The installment plan requires 20% of the debt to be repaid immediately, with additional 20% payments made each year, so Stein’s debts are not scheduled to be paid in full until 2000.

“To me, he’s got his priorities backwards. He’s been running around town trying to raise money for his political ambitions instead of worrying about his personal obligation as a citizen,� Hahn said. “I’d like to know why the taxpayers have to wait while he takes care of every other purchase he wants to make. He’s looking out for himself first and the rest of us last, if at all.�

Hahn, who earns $117,684 a year as city attorney, owns a three-bedroom home in San Pedro worth $77,262, according to property records, but he has no other reportable economic interests, according to the latest documents on file with the Ethics Commission. Records show that Hahn’s property taxes are up to date.

Stein declined Wednesday to disclose his net worth, but property and other records show that in addition to the two delinquent apartment buildings, he owns 100% of a $6.6-million industrial complex that houses his law office, among other things. He also recently sold the last of 27 single-family homes--most valued at about $200,000--that he developed in Sylmar, and owns his $600,000 home in Encino.

According to his statement of economic interest filed with the city Ethics Commission on Wednesday, Stein also holds stocks or bonds in two dozen companies, including Microsoft, IBM, Intel, Boeing, McDonnell Douglas, AT&T; and Disney. He has between $10,000 and $100,000 in 17 of those companies and under $10,000 in the others, the statement says.

Stein said he and his partners made a simple business decision to let the apartments’ taxes get delinquent and pay the debt back in installments, and that his other investments and personal wealth are irrelevant.

“In 1992, the buildings did not have a positive cash flow. I lost money. I put money into that apartment building,� Stein said. “I am paying off the public debt.�

Times staff writer Josh Meyer contributed to this story.