The drab western fringe of downtown Los Angeles has become center stage in a battle between a successful apartment developer and advocates of affordable housing.
Here, amid the empty lots and narrow streets that front the Harbor Freeway, Geoff Palmer's plans to build luxury apartments renting for $1,100 and up have been stalled by housing activists and city officials.
Palmer's opponents say he is shirking his legal--if not moral--responsibility to provide housing for poor and working-class residents.
The Brentwood developer says he has followed the letter of the law. He is threatening to abandon his multimillion-dollar project over the dispute, a move that could dampen interest in building more downtown housing, Palmer's supporters say.
The Los Angeles City Council is expected to weigh in on the issue soon, and the outcome could have ramifications far beyond downtown. The decision could signal how far city officials are willing to push developers and businesses to pay for badly needed low-cost housing citywide.
"Most affordable housing groups are watching closely to see what the council does," said Tim O'Connel, director of legislation and policy for nonprofit developer Century Housing. "There will be a lot of jockeying and lobbying. Until the City Council acts and disposes of the issue, then there is going to be uncertainty."
The downtown battle features one of city's most successful apartment developers, Palmer, whose G.H. Palmer & Associates has reaped praise and profit from his 658-unit Medici apartment complex near 8th Street and the Harbor Freeway.
His proposal for a second, 300-unit downtown project--the Visconti at 3rd and Bixel streets--has been stuck in the city approval process under the assault of affordable housing proponents. Despite the opposition, Palmer recently acquired land for a third luxury apartment house, the Orsini, near Chinatown.
"He played pioneer and proved that there was an economical demand for [high-end rental housing]," said downtown real estate expert David Zoraster. "But what's he getting for it? He's getting picketed and people chained to his bulldozers."
Palmer has not been shy about his distaste for government regulation and the notion that the private sector should be enlisted to help pay to solve the city's affordable-housing problem. He has called some of his opponents "poverty pimps" who "want to keep downtown for the poor" and has resisted efforts to build low-income housing.
"Why should one developer be responsible for all of society's ills?" Palmer said. "I'm a businessman. I want to build what the market dictates. Don't tell me who we should build for."
While the city quickly approved the Medici apartments, Palmer's plans for the Visconti have come under fire by affordable-housing proponents spearheaded by the Los Angeles chapter of the Assn. of Community Organizations for Reform Now, or ACORN.
The nationwide organization has a reputation for generating publicity with in-your-face tactics in support of their economic and civil rights causes. In Los Angeles, ACORN members in their red T-shirts have blocked the streets in front of the Medici and have been arrested for staging sit-ins in Palmer's Brentwood offices.
"I'm sure he's a nice guy, but I think he's shortsighted," said ACORN leader Alvivon Hurd. "We don't care if you want to build luxury apartments. But why not just give up the 15% [of the total units] for affordable housing?"
The 15% figure Hurd refers to is part of the package of affordable housing requirements and fees that apply to nearly 500 acres located to the west and across the Harbor Freeway from downtown Los Angeles.
The affordable housing rules of Central City West were adopted by the city nearly a decade ago. They were pioneering for their time and were accepted by property owners in return for the right to build a massive redevelopment complex of skyscrapers and high-rise apartments. The skyscrapers of Central City West were never built, but the housing requirements for low-income still apply to the land.
After Palmer purchased land in 1998 in Central City West for the Medici and negotiated with city officials, he agreed to build housing nearby for moderate-income residents. Many housing advocates were angered by the agreement, saying Palmer was given too much flexibility. For example, the affordable housing he will build will focus on moderate-income residents, who will not need as big a rental subsidy as low- and very-low-income tenants.
So when Palmer announced plans for the Visconti a few blocks to the north of the Medici, activists were ready with an organized campaign.
"We best stop it now and make it an issue," said Hurd of ACORN. "I'm ready to fight tooth and nail."
Activists have the support of City Councilman Mike Hernandez, whose district includes the portion of Central City West in which the Visconti site is located. (The Medici is in another council district.) Hernandez has pushed for a more stringent interpretation of the Central City West housing rules and wants Palmer to build the affordable-housing units in the immediate neighborhood and before any residents can move into the Visconti.
Hernandez said that Palmer is undermining the Central City West plans to provide mixed income housing for the downtown work force.
"I'm making sure that he complies with that component of the plan," Hernandez said. "The concept of housing balance applies to everyone."
Local planning board officials have sided with Hernandez and ACORN, but the decision is being appealed by Palmer. He says that city officials have incorrectly interpreted the affordable-housing rules and that the rules do not apply to new residential construction that replaces commercial development. A City Council subcommittee is scheduled to review the issue next week before making a recommendation to the full council.
"The city is not following the rules," Palmer said. "I'm looking for consistency or predictability. We will not build Visconti if the requirements are imposed. We're holding firm."
Palmer's third proposed downtown apartment site, the Orsini, is outside Central City West.
Some downtown leaders are concerned that if Palmer loses, it might undermine efforts to build more central city housing.
"Other developers are watching," said Carol Schatz, president of the Central City Assn., a nonprofit organization serving the business community. "Is it better that this property just be vacant?"
The decision on the Visconti may indicate how receptive elected officials will be to new proposals to deal with the city's affordable-housing shortage, say housing activists. Some of the proposals include rules and fees similar to those that now apply to Central City West. For example, the city is preparing to look at the effect of imposing fees on new development to pay for low- and moderate-income housing.
"If [council members] are willing to do it in one area . . . it shows an interest in what they might vote for citywide," said Jan Breidenbach, executive director of the Southern California Assn. of Nonprofit Housing. "No matter which way they go they set a precedent."