Builder’s Letter War With City Heats Up : Santa Clarita: Denial of Dan Palmer’s condo project two years ago is behind the tiff, some say. Lately the focus has been a proposed road extension.

A long-raging battle between a Brentwood developer and the city of Santa Clarita has reached new highs, or lows.

In unusually blunt letters, developer Dan Palmer of G.H. Palmer Associates and Santa Clarita Assistant City Manager Kenneth Pulskamp have demonstrated that the often dry, technical world of development can sometimes get hot, awfully hot.

The letters, written as the builder and city haggle over the financing of a proposed road project, make up the latest tiff in a rocky relationship that has become a familiar part of City Hall life. In fact, even before Santa Clarita became a city in 1987--largely as a backlash against development--Palmer worked to prevent its incorporation.

Now, for many City Hall watchers, just the mention of Palmer and the City Council brings to mind memories of contentious public hearings, stinging letters to the editor and general bad will.

If the recent letters are any indication, that won’t change anytime soon.

“In addition to not knowing what you are doing,” Palmer wrote recently, “you just do not like the Palmers, and you intend to continue your obvious pattern of discrimination and attempts to run us into financial ruin.”

Pulskamp shot back: “Your antagonistic approach is extremely disconcerting to the City.”

The dispute centers on a road that Palmer and four developers want to build for some proposed subdivisions along Golden Valley Road in Canyon Country.

The city complains that Palmer and the other developers repeatedly missed deadlines for posting surety bonds that would guarantee that the roads would be built.

Meanwhile, the developers have accused the city of delaying the process unreasonably with directions they say have been vague, confusing and contradictory.

Even so, a compromise nears. Palmer and one other developer have put up surety guarantees of $1 million and $600,000, respectively, Pulskamp said in an interview. He added that he’s “cautiously optimistic” that the three other developers will post their guarantees and that the City Council will approve bond sales to finance the road extension, possibly in October.

“If I had to bet, I’d bet it’s going to happen,” Pulskamp said.

The city projects costs of $13 million for grading, paving and other work needed to extend Golden Valley Road about one mile from Green Mountain Drive to Sierra Highway. The new road would provide easier access from Sierra Highway to the Antelope Valley Freeway, relieving chronic traffic congestion in the area.

It’s not unusual for developers and municipalities to clash. Typically, correspondence with government agencies tends to be formal, cordial and pedestrian. Not so the letters between Palmer and two city administrators.

As Pulskamp pointed out after receiving one of Palmer’s barbed letters, “What we’re seeing is someone who’s been acting in a totally unprofessional manner.”

Councilwoman Jan Heidt chose stronger words: “He needs to grow up.”

For his part, Palmer declined to discuss publicly the road extension or his latest quarrel with City Hall--a quarrel in which his pique surfaced in letters to Lynn Harris, the city’s director of community development.

“Dear Lynn,” Palmer wrote on July 2. “Catch-22. It’s the City of Santa Clarita’s favorite game, and you are at it again. The City has demanded that we post a cash-flow surety bond by July 2, 1992; however, it still remains a mystery as to what the amount of the surety bond is supposed to be.”

Harris was out of town and could not be reached for comment.

Then Palmer wrote to Pulskamp on Aug. 14, insisting that the developers had met all the city’s requirements in good faith, only to face “additional stumbling blocks.” He was upset that his company was being asked to post its surety bond before the city began selling the bonds that would actually finance the project.

“Requiring us to post a surety bond before the sale of the bonds is putting the cart before the horse. . . .,” Palmer wrote. “Requiring the sale of the bonds nine to 12 months before the construction of the improvements to be financed is even ready to commence, is crushing the horse with the cart!”

Pulskamp fired back: “This is the latest in a series of distasteful, unprofessional and inaccurate diatribes by you.”

It’s not the first time Palmer Associates has made headlines in the Santa Clarita Valley. In January, the development firm agreed to pay $30,000 in fines for illegally laundering campaign contributions in 1987 to a group that opposed cityhood for Santa Clarita and to Los Angeles City Councilwoman Joy Picus, investigators for the state Fair Political Practices Commission said.

The Palmer firm received the maximum penalties allowed under state law after it schemed to disguise that it was the source of $7,000 given to a developer-backed political action committee that opposed an initiative aimed at incorporating Santa Clarita.

Two years ago, the Santa Clarita City Council voted to kill a Palmer condominium project called Santa Catarina, ending months of controversy and the most explosive dispute in the city’s short history. The council had asked Palmer to provide millions of dollars in road improvements in exchange for the city’s approval of the project, but the proposed swap became too complex and fell apart.

At that time, too, both sides exchanged heated letters, each accusing the other of negotiating in bad faith.

Also in 1990, an attorney for Palmer Associates raised conflict-of-interest charges against Heidt, asking the FPPC if she should be allowed to vote on two controversial housing developments proposed by Palmer Associates. The attorney contended that Heidt’s husband had options to buy land near the projects.

But the FPPC ruled that the Heidt property was not close enough to the Palmer property to create a conflict.

Of Palmer’s latest salvos against City Hall, Heidt said: “It’s all a little bit of revenge because of what happened to the Santa Catarina project.”

Even as both sides hurl invective, they continue to work together, partly out of necessity. Palmer owns substantial undeveloped acreage in the city. The city, meanwhile, needs to unclog its traffic arteries and is hoping new developments such as Palmer’s will provide some new roads.

So they continue to talk.

“Our city has proved itself when it comes to resolving problems of congestion,” Heidt said. But she added: “It’s been a nightmare bringing these five developers together for the construction of a road. I don’t ever want to go through this again.”

Exchange of Angry Letters

The already rocky relationship between Santa Clarita and Dan Palmer, a Los Angeles developer, got a lot rockier recently with the exchange of venomous letters. Palmer complained that an uncooperative, foot-dragging city government had stalled one of his projects. The city said Palmer was the uncooperative one. Some excerpts:

Aug. 14 / Dan Palmer to Santa Clarita:

. . . The-City-of-Santa-Clarita. What a misnomer! It is more appropriately named the City of Santa UN-Clarita, for the City is UNclear on all of the important issues. For those running the City to be so unsophisticated as to invite the City’s hairdressers to a City Council meeting in order to get their fingers on the ‘pulse’ of the community, they must have been left under the hair dryer too long, had their hair braided too tightly, or inhaled permanent wave fumes . . .

Just admit it! In addition to not knowing what you are doing, you just do not like the Palmers, and you intend to continue your obvious pattern of discrimination and attempts to run us into financial ruin.

Aug. 19 / Santa Clarita Assistant City Manager Kenneth Pulskamp to Palmer:

. . . This is the latest in a series of distasteful, unprofessional and inaccurate diatribes from you. Your antagonistic approach is extremely disconcerting to the City.. . . I have received other cocky letters from your group’s attorney . . .

I do not care to put the citizens of Santa Clarita in a position of having to work on a long-term partnership with you or being sued by you. Furthermore, I do not care to put my employees or myself in the position of having to take further abuse from you.