City, Builder to Settle Suit Over Historic House

After the demolition of the Giese House, the last 19th century house on Bunker Hill, the feud began.

To penalize the developer for tearing down the house without a permit, the city banned building on the land for five years. In response, the developer sued the city in state and federal courts.

Now, the two sides have brokered a proposed settlement that, if approved by the Los Angeles City Council, will bring an end to this chapter of the controversy. If the city lifts the ban, the developer will pay the city in cash and amenities, such as parking spaces and street improvements in the Giese House neighborhood.

Councilman Ed Reyes, whose district includes the site, called the proposed settlement a good deal for the city.

“Their action caused us to lose an historic structure,” Reyes said Tuesday of Palmer Boston Street Properties II. “Now they’re working with us to offset those impacts.”

Attorney Ben Reznik, who represents developer Geoff Palmer, declined to discuss the terms of the proposal, which is expected to be presented to the City Council today in closed session. Reznik did say that “the city has certainly exacted its pound of flesh out of Mr. Palmer for this.”

“In the long run, everyone will be much better off and there’ll be lots more workforce-housing built, and I think downtown and the city will be all the better for it,” Reznik said.

Palmer is noted for creating suburban-style apartments downtown.

The Los Angeles city attorney’s office, which negotiated the settlement, declined to comment.

Built in 1887, the Giese House was at West Cesar Chavez Avenue and Figueroa Street in the Community Redevelopment Agency’s Chinatown Redevelopment Project Area. The property was being used last year as a staging area for workers building the Orsini, another large apartment project Palmer is constructing in phases on the northern edge of Bunker Hill. The house, however, was in disrepair.

At the time, Reznik said that the demolition might have been an accident and that a contractor thought the two-story Queen Anne-style cottage was in imminent danger of falling down when it was leveled April 19, 2003.

Preservationists, who had been trying to save the house, were angered by the demolition. Reyes said that allowing Palmer to “get away with this” would send the wrong signal to developers.

In June 2003, the city attorney filed two misdemeanor counts against Palmer alleging that he demolished the house without a permit and failed to obey a Department of Building and Safety order. Under an agreement, Palmer pleaded not guilty and this year entered a diversion program.

He also paid $50,000 to the Southern California Chinese Cultural Historical Society and agreed to get required permits for all projects; he will spend a year on probation. If he abides by the terms, the case will be dropped, said Eric Moses of the city attorney’s office.

City officials invoked the “scorched-earth ordinance,” which -- by prohibiting construction on the land for five years -- is designed to penalize whoever demolishes a historic property.

Palmer sued, challenging the constitutionality of the ordinance and alleging that the CRA and the city violated his rights to due process and equal protection. He also said he was in a Catch-22 with the CRA and the Department of Building and Safety because they had made conflicting demands on him.

Without the proposed settlement, the lot would sit empty for five years, Reyes said. Instead, there is now the possibility of a community benefit.

The pact calls for Palmer to pay the city $200,000, which will be used to create a fund for low- and moderate-income families living in historic houses, Reyes said. The fund, which will be augmented by other money, can assist families in making repairs to preserve the historic nature of their property.

In addition, Palmer would allow 100 parking spaces to be used by the Evans Learning Center, which is across the street from Orsini. The Los Angeles Unified School District center serves 6,000 to 7,000 students each day.

“We’ve had problems for years with inadequate parking; as a result we’ve lost some of our students,” said Jean Batey, Evans’ principal. “So this wonderful thing is going to mean that our students will be much happier, and they’ll be able to attend much more regularly.”

Under the proposed settlement, Palmer would offer enhancements, such as a plaza and fountain at Figueroa and Cesar Chavez, street lighting and trees. He would also agree not to remove any affordable housing units in the second and third phases of Orsini.

In addition, Palmer would dismiss the state lawsuit, provided he received approval for elements of the phase known as Orsini IIA. For its part, the city would lift the building ban and expedite the issuing of permits for Orsini IIA.