AIDS Healthcare Foundation has filed a lawsuit in Los Angeles Superior Court against the city of Los Angeles to stop it from foreclosing a former AIDS hospice that now serves as an office for the organization's case managers, the Los Angeles Times reports.

AHF opened the hospice, called the Linn House, in 1995 on donated property near West Hollywood, Calif. The city granted AHF a $1.1 million, 40-year loan to build the hospice. In 1999, as antiretroviral drugs changed the course of the epidemic, AHF converted the building into offices for staff and meeting rooms for support groups.

According to the Times, the city now says that AHF is violating the terms of the loan contract by using the building for offices and not housing. AHF in its lawsuit filed earlier this month argues that Los Angeles waived its right to enforce the terms of the loan because the city had been aware of the facility's new use since 2000. The two groups conceded that they have failed to reach a compromise in their negotiations during the last year, the Times reports.

When AHF "conceived the [Linn House] and built it, people were dying within 30 months of being diagnosed with AIDS," AHF President Michael Weinstein said, adding, "We should be celebrating that this change took place, not punishing the organization that came to the rescue."

Mercedes Marquez, general manager of the city Housing Department, said the "law very clearly requires that the money that was lent to the foundation be used for housing." Marquez noted that AHF could convert the building into a nursing facility or transitional housing and remain eligible for the housing loan. Weinstein said that without county funding, the state's Medicaid care program, Medi-Cal, pays too little to keep such a facility in operation.

This is the second time AHF has challenged the city of Los Angeles over an AIDS hospice, the Times reports. The foundation closed the Carl Bean House in 2006 after the Los Angeles County Board of Supervisors reduced funding for patient care. The county said that AHF was overcharging for the care of indigent patients. The foundation argued that the facility was needed to provide skilled nursing services.

According to a study released in December 2007, 46% of the Los Angeles County nursing homes surveyed refused to accept a person living with HIV/AIDS. Brad Sears, University of California-Los Angeles law professor and director of a think tank on sexual orientation law, and two law students conducted the study. The law students posed as hospital discharge planners and called 131 Los Angeles County nursing homes. They found that 36% of the nursing homes responded with an unqualified yes to the question about accepting HIV-positive patients (Engel, Los Angeles Times, 2/24).