Builder's Vision Divides

Times Staff Writer

To many in downtown L.A.'s business and real estate circles, Geoff Palmer is the urban trailblazer who helped inspire an upscale housing boom in the city's long-neglected core.

To advocates for low-income housing, however, Palmer, president of the Brentwood-based firm G.H. Palmer Associates, is the developer who fights tooth and nail to keep the poor from settling in his elegant, suburban-style developments. "Why should one developer be responsible for all of society's ills?" he once asked.

And to preservationists, he's the guy who recently demolished the Giese house, the last 19th century home in Bunker Hill.

On Monday, the Los Angeles city attorney filed two misdemeanor counts against Palmer for demolishing the house without a permit and failing to obey an order by the Department of Building and Safety, said Frank Mateljan, a spokesman for the city attorney.

The department has also scheduled a hearing Thursday to consider whether to invoke the "scorched-earth ordinance," which would bar construction on the site for five years, said David Keim, head of the department's code enforcement bureau.

The Giese house, built in 1887, stood across the street from Palmer's Orsini development, a 297-unit apartment complex under construction at West Cesar E. Chavez Avenue and Figueroa Street.

His best-known downtown development, the Medici, has more than 600 units at 7th Street and the Harbor Freeway. A 481-square-foot studio apartment there was recently advertised for $1,479 a month.

Fans credit the Medici with demonstrating to the investment and development community the fresh demand for downtown living.

The Medici "was one of the first residential projects to be built [downtown] without a nickel of subsidy," said Carl Muhlstein, a senior vice president at Cushman Realty Corp. "Now there's nothing short of a building boom that has followed right behind it."

Palmer "deserves a tremendous amount of credit for helping to turn downtown around," said David Zoraster, a downtown real estate specialist.

Palmer, who grew up in Mar Vista and graduated from the University of Colorado and Pepperdine University School of Law, declined requests by The Times for an interview.

In some ways, Palmer, known as a methodical, hands-on developer with an analytical bent, is a fish out of water as a Republican dealing with a city government dominated by Democrats. The 53-year-old developer has chafed at social housing rules imposed on builders by City Hall and has described some supporters of such measures as "poverty pimps."

"I'm a businessman. I want to build what the market dictates," Palmer said in a 2001 interview with The Times. "Don't tell me who we should build for."

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A Conundrum for City

His unyielding position has given rise to a growing number of detractors and created a conundrum for housing-hungry Los Angeles officials.

"If you look at where his parcels are located and look at the view from them into downtown, it's a tremendous view," said Councilman Ed Reyes, who has wrangled with Palmer over low-income housing rules. "Whoever is behind them is going to be blocked. He's maximized heights and he's maximized density, but he doesn't want to allow affordable housing."

"If [Palmer] has to house people at less income than market rate, he's going to get less rent," said Tony Salazar, president of the West Coast office of McCormack Baron Salazar, a real estate development firm that specializes in redeveloping urban neighborhoods. "Is that detrimental to the development? Probably not. If he wanted to get there, he could."

Low-income-housing activists have been Palmer's loudest critics since he opened the Medici in the summer of 2000. He attracted their attention after city officials negotiated a deal with his firm that resulted in 65 of the Medici's 658 units being set aside for moderate-income tenants.

That was a departure from the area's so-called "inclusionary-housing" rules that require 15% of new housing to be earmarked for low-income tenants in lieu of paying a hefty fee.

The deal upset activists, who picketed outside the Medici in 2001 -- the same year Palmer bought a $21-million spread in Beverly Hills. They pushed city officials to apply the more stringent standard to the Visconti, a 300-unit apartment complex proposed by Palmer's company for 3rd and Bixel streets just west of downtown.

The firm challenged in court a city decision to enforce the housing rules, prompting settlement talks that appear to be wrapping up.

Palmer will soon expand his collection of Italian Renaissance-themed downtown developments with groundbreaking for the Piero, a 220-unit, market-rate apartment complex on St. Paul Avenue near the Medici.

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House Demolished

Palmer, whose company owns and operates more than 6,000 apartments in Southern California -- the majority of them in the Santa Clarita Valley -- recently landed back in the hot seat.

He provoked preservationists and city officials in April when a contractor hired by his firm demolished the Giese house. Palmer is scheduled to be arraigned June 26 on the misdemeanor counts, which carry a maximum penalty of six months in jail and/or a $1,000 fine, Mateljan said.

Ben Reznik, an attorney for Palmer, contends that the house, which the city's Board of Building and Safety Commissioners declared a public nuisance in December, had become a safety hazard and that his client received conflicting messages from city officials about demolition or preservation. Reznik also said applying the "scorched-earth" ordinance would be inappropriate because the demolition was an accident that Palmer regrets.

Reznik denied the contention of housing activists that in building the Medici, Palmer undermined inclusionary-housing rules with the deal he negotiated with the city.

"We got away with nothing," Reznik said. "It was what the city accepted to get him to build" the Medici.

The housing rules are part of the Central City West plan, which property owners in an area west of downtown agreed to more than a decade ago amid visions of new skyscrapers and high-rise apartments that never materialized after the real estate market fell.

"Everyone thought we'd have 25 million square feet of commercial office space. Then you would have to have safeguards for housing for all income levels," said Carol Schatz, president and chief executive of the Central City Assn. "But here we are in 2003 and not one square foot of high-rise commercial space has been built.

"Just from a practical point of view -- forgetting about the personalities involved -- is it fair to impose these housing restrictions when the development it was based on never took place?"

An irony, according to Reznik, is that Palmer envisioned the Medici where others saw only a patch of land worthy of commercial development.

"Basically, he sees things that others don't," Reznik said.

Affordable housing proponents led by the Assn. of Community Organizations for Reform Now -- or ACORN -- say the city has an obligation to provide housing opportunities for all of its residents and that developers who build in Los Angeles should help fill the need.

They used the Medici as the backdrop for a recent news conference at which they called for a mandatory, citywide inclusionary housing law. The idea is expected to be debated at City Hall in coming weeks.

"We have all these rich developers coming in doing these luxurious apartments, condos and lofts all downtown, but they're building nothing for affordable housing," said Alvivon Hurd, who heads the housing committee for the Los Angeles chapter of ACORN.

In Sacramento, meanwhile, a measure that would clarify a state law that bars cities and counties from enforcing certain rent-control restrictions cleared the Senate on Wednesday. Supporters say the measure was inspired in part by Palmer and his legal wranglings with the city.

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