Neighbors of a Cheviot Hills assisted‑living complex have taken City Hall to court, filing a lawsuit Tuesday (Feb. 10) that accuses Mayor Karen Bass, top city officials and a nonprofit partner of rushing a taxpayer‑funded Homekey conversion and overpaying by millions. The suit asks a judge to slam the brakes on construction at the Shelby Drive site and unwind the purchase while the claims are litigated.
The Shelby Drive flip
The property at 3340 Shelby Drive, known as the Terraza of Cheviot Hills, was bought by the Weingart Center Association for $27.3 million, according to deed records reported by The Real Deal. Public records and reporting show the same building changed hands privately for roughly $11.2 million just days earlier, a spread that helped spark scrutiny of the Homekey purchase; LAist has laid out the timeline.
Federal probe and the seller's arrest
Federal prosecutors charged Brentwood developer Steven Taylor in October 2025 with multiple counts of bank fraud, aggravated identity theft and money laundering, alleging he used falsified bank statements to secure financing and concealed a double‑escrow resale to the nonprofit. As reported by the Los Angeles Times, prosecutors say the arrest is part of a broader probe into possible misuse of Homekey funds tied to flipped properties.
Councilmembers and neighbors push back
At a recent community meeting, Councilmember Katy Yaroslavsky told neighbors she would only back the Shelby project if it comes with enforceable age restrictions, 24‑hour staffing, on‑site security and a binding operating agreement, according to coverage of the event. The City Attorney and Yaroslavsky say the city is cooperating with federal investigators, and resident Samantha Nussbaum previously organized a GoFundMe to raise money for legal fees tied to neighborhood challenges at the Shelby site; that page lists Nussbaum as the organizer.
What the lawsuit asks for
According to the New York Post, the plaintiffs — identified in the filing as Samantha Nussbaum and Howard Grossman — are seeking emergency relief that would freeze construction, block additional public spending, void the purchase agreement and claw back taxpayer funds. The complaint also asks the court to declare that the city exceeded its legal authority when it approved the deal.
Why this matters for Homekey
The Shelby Drive fight comes as Project Homekey itself faces mounting questions over speed, cost and oversight after the state poured billions into rapid conversions. Coverage and investigations have highlighted valuation gaps and possible misuse of public money on multiple projects, a pattern noted in reporting on 613 additional homes and in a wider probe reported in RealClearInvestigations.
Next steps
Mayor Bass’s office has said the administration has "zero tolerance for corruption" and is cooperating with the U.S. Attorney’s office, and Weingart has said it is reviewing the projects while key staff have been placed on leave, according to reporting. Whether a judge will grant the plaintiffs’ emergency requests or slow the Shelby Drive project while the investigations play out remains unresolved and will be decided in court and in the federal probe.
