North Sac’s hot mess

An incumbent whose wages are being garnished. A challenger accused of labor exploitation. And a third candidate without support. The District 2 council race is a mess.

Allen Warren is seeking reelection in a district where he may not even reside.

Allen Warren is seeking reelection in a district where he may not even reside.

Photo illustration by Maria Ratinova

This story has been updated with a statement from Sean Loloee.

Sacramento taxpayers are paying down a $10,000 debt on behalf of a City Council member who may not even live in the district he represents.

Those are the bombshell takeaways from a 2014 small claims judgment that went to collections for District 2 incumbent Allen Wayne Warren, whose City Council wages have been garnished since 2016, SN&R has learned.

Court records and other government documents lay out the extent to which the mercurial politician and businessman has cross-faded his roles: Though it was Warren the developer who lost in small claims court, it is Warren the elected official who is spending heavily on his reelection campaign while taxpayers pick up his legal tab through his salary.

Warren, whose New Faze Development company nearly went under during the recession, has fought hard against creditors in the past. But they were large financial institutions deemed complicit in the economic collapse, not low-income tenants paying subsidized rents.

Technically, Warren has been the subject of four separate earnings withholding orders, El Dorado Superior Court and Sacramento County Sheriff’s Office records show. All stem from the same legal dispute, involving a small Placerville apartment complex that New Faze surrendered to foreclosure in 2012.

Months after Wells Fargo reclaimed the distressed property, it sold to North Highlands landscape contractor Kevin Woody. But Warren never returned the security deposits he collected from four low-income tenants, Woody asserted in a letter to New Faze and in a court declaration. In the grand scheme of things, the amount Woody sought on behalf of the tenants wasn’t much, only $3,650.

Reached by phone, Woody described his tenants as disadvantaged and said the building they occupied had fallen into “such disrepair” due to rampant mold and a crumbling roof.

“These are Section 8 tenants,” Woody said. “He’s basically stolen their money. I just want him to return it.”

Woody said he tried to resolve the issue out of court, but couldn’t get past Warren’s controller. He said the four tenants signed on as co-plaintiffs since they couldn’t afford mounting legal actions on their own. A small claims judge ruled in the tenants’ favor, but Warren didn’t pay the judgment.

This is how the relatively modest sum of $3,650 ballooned into a $10,000 collection fee with interest.

Incidentally, $10,000 is the same amount that Warren donated to his campaign this past Valentine’s Day. And back in 2012, the same year this dispute unfolded, financial disclosures show that Warren loaned his very first council campaign nearly $153,000.

The fact that Warren has made a point of being largely self-financed and immune to special-interest money while skirting small-time creditors “is not a great look,” said Jessica A. Levinson, a Loyola Law School professor who specializes in campaign finance and political corruption, among other topics.

“Frankly, it just makes him look financially irresponsible,” Levinson, director of Loyola’s Public Service Institute, added. “I think his constituents will be surprised to see where their money goes.”

Warren, who earns nearly $67,000 annually from his council salary, told SN&R during a January endorsement interview that he donated his council pay to charity. His staff didn’t provide documentation to support the claim, and Warren’s campaign manager said Warren wouldn’t discuss the small claims judgment until after Tuesday’s election.

One person who wants Warren to answer is Darin Dias, who receives disability income and still resides at the Placerville apartment building that New Faze used to own.

“He’s lucky I never got my hands on him. … The dude stole my frickin’ money,” Dias told SN&R. “I know if it was the other way around, I’d be in jail for a felony. … What, [does] he think he’s above the law because he works for the government?”

Because the small claims judge doubled the amount that Warren owed, Dias received $2,000, half of which Woody controls as the current security deposit.

The Sacramento County Sheriff’s Office issued the fourth and final earnings withholding order—totaling $2,654 (including $889 in interest)—against Warren on Jan. 6. It lists Warren’s “last known address” in Carmichael, an unincorporated suburb in the county’s jurisdiction.

Assessor records show the Carmichael property is owned by Allen W. Warren, and lists it as a one-story, 3,900-square-foot residence with four bedrooms and four bathrooms valued at $1.46 million. The only other address directly linked to Warren is a commercial building that houses a small bookstore on Del Paso Boulevard, which is in Warren’s district.

Sacramento City Code requires that City Council members live in the districts that they represent.

In an email, Warren’s campaign manager said the councilman continues to reside in his childhood home in Del Paso Heights, where he is also registered to vote.

The full scope of Warren’s real estate assets span 17 separate limited liability companies, an investment fund and two rental properties, according to the economic interest statement he filed in December.

Warren’s resilient popularity in his district is partially due to his reputation as Del Paso Heights’ prodigal son, who returned after a Major League Baseball career never materialized to uplift his neighborhood, both as a developer and as a council member.

But he’s recently exhibited loftier ambitions.

Warren told SN&R last month that he is considering a future run for mayor. But the 55-year-old incumbent will first need to secure his third term on the council—and he’s in the unusual position of getting outspent heading into the March 3 primary.

Campaign disclosures show that Warren has raised $163,172 from 2019 to Feb. 14. Aside from the $10,000 he gave himself this month, he has also loaned his campaign $70,000 through his New Faze Holdings LLC. He had $22,394 left as of Feb. 15.

Challenger Sean Loloee, who owns two Viva Supermarkets in Sacramento, reported $190,900 in campaign contributions through Feb. 15, including $141,750 of his own money. He still had $42,599 in his campaign coffers, giving him a financial edge over Warren.

But Loloee is also mired in controversy. Two former employees filed a lawsuit accusing Loloee’s grocery stores of exploiting undocumented workers. Labor organizer Maria Grijalva said she’s spoken with the plaintiffs and five other employees who described being worked past exhaustion and sometimes to injury under the threat of deportation.

“They are threatened to be deported if they don’t keep silent,” Grijalva said. “That’s called forced labor.”

Loloee’s campaign didn’t respond to an interview request prior to the story’s publication. On Feb. 27, after the story was already published, the campaign issued the following statement from Loloee:

“The allegations made by Maria Grijalva are completely baseless and without merit. As such, a character defamation lawsuit has been filed against Ms. Grijalana in Sacramento Superior Court. As a Sacramento small business owner for over 10 years, I’ve always taken great pride in creating a familial environment within my stores where every team member is paid a living wage and has access to great opportunities and advancement. I take my reputation seriously and will defend it at all costs.”

The only District 2 candidate not facing scandal is also the one with the least money and zero endorsements: Twin Rivers Unified School District trustee Ramona Landeros has raised only $8,841 since the beginning of 2019, and was down to a paltry $606 as of Feb. 15.

While Dias doesn’t live in District 2, he has strong opinions about reelecting the incumbent.

“He ripped off poor people. What kind of man is that?” Dias said of Warren. “Don’t vote for this clown. He’s nothing but a thief in my eyes.”