Twenty development projects in Santa Monica’s eight square miles just changed hands after the city’s largest apartment builder announced a major split, according to a spokesperson for the two companies.
NMS Properties is ceding managerial and operational control of all pending market-rate and affordable housing developments to a new company, WNMS Communities, Inc. NMS’s former Executive Vice President, Scott Walter will be CEO of the spin-off company.
“It will be a core part of WNMS Communities’ business to ensure that everyone can live in Santa Monica and the Westside,” Walter said in a press release sent to the Daily Press.
NMS Properties and CEO Neil Shekhter will continue to manage existing buildings but will not be involved in any pending or future development, according to the press release.
The announcement is already drawing skepticism from City Council members who have promised greater scrutiny of Shekhter’s dealings in the city after a Los Angeles Superior Court Judge found he submitted forged contracts to the court in an unrelated civil suit. The nine buildings involved in the suit are now in legal limbo as Shekhter’s attorneys appeal the decision. The judge’s order shifted ownership of the properties to AEW Capital Management who sold the properties late last year, despite Shekhter’s appeal and a stay on the judge’s order. Skekhter values the properties at $500 million dollars.
In the meantime, NMS continues to manage the buildings.
“We’ll be keeping a close eye on tenant security and fulfillment of negotiated promises on all existing NMS buildings, as already directed by the Council,” Councilmember Kevin McKeown said, “and we’re fully aware that the addition of a ‘W’ for new projects doesn’t guarantee that our continuing skepticism is unwarranted.”
At a Dec. 6 City Council meeting, NMS spokesman Eric Rose promised to hand over any documents regarding current or pending contracts with the city. It’s not clear how the split will influence that promise. When pressed, Rose would not commit to providing documents about the company’s financial viability to the City Council.
For the past six years at NMS, Scott Walter was responsible for acquisitions and development projects. During that time NMS became one of the largest landlords on the west side of Los Angeles, controlling about 2,000 units.
The development projects shifting to WNMS control include eight large, pending projects in the city that add up to about 576 apartments. Three of the proposed buildings are on Lincoln Boulevard. A five-story NMS building at 1560 Lincoln Blvd has already been approved and will create 100 more apartments.