No words, no sign of a heart from developer
Based on appearances, it would seem that Los Angeles developer Geoff Palmer is doing OK. This past summer, he bought a $17-million beachfront house in Malibu, with solid bronze doors, teak cabinets and his-and-hers bathrooms.
The beach bungalow could come in handy if Palmer needs a break from the French Regency-style Beverly Hills estate he bought for $21 million in 2001. That property includes a 16,400-square-foot main house, plus two guest houses, each larger than 5,000 square feet.
Given Palmer’s obvious good fortune, some folks are surprised to see how vigorously he keeps fighting a city requirement that 15% of the units in the massive downtown apartment projects he builds be reserved for low-income renters, meaning for families that make up to about $40,000 a year. The buildings have hundreds of units each and grandiose names like the Medici, the Orsini and the Piero, and they have been multiplying in and around downtown Los Angeles like rabbits.
Palmer’s latest fight with City Hall is over a project called the Lorenzo, and as in the past, he doesn’t give up easily. His request for a waiver of the 15% requirement has been given a thumbs down by the city Planning Department, the Planning Commission and a City Council committee, but Palmer still intends to argue his case next week before the full City Council.
Los Angeles City Councilman Ed Reyes finds Palmer’s attitude stunning. In 2003, the developer demolished a house without a permit to make way for one of his projects, even as preservationists were trying to save it. And on the subject of affordable housing, Reyes recalls, Palmer once told him: “That’s not my problem. That’s your problem.”
Says Reyes: “He reminded me of Charles Dickens, with the rich people in fur coats stepping over beggars to get into their homes. That’s the whole attitude, and it just doesn’t seem to matter to him.”
Seems to me that Palmer should have a chance to defend himself against such a characterization, so I put in a call to his office. Ordinarily, he has his attorney or Peter Novak, executive vice president of G.H. Palmer Associates, do his talking for him. So I called Novak at Palmer’s office to see if he could get the big guy to talk to me.
“I doubt it very much,” said Novak. “We generally don’t comment on these issues.”
They don’t trust the press, if you can believe that. Newspapers are getting too tabloidy, Novak said, and they love controversy rather than “getting to the bottom of the facts.”
Wasn’t that the point of my call? I asked Novak to see if Palmer would take me on a tour of his properties and explain his thinking. Novak said he’d pass along the request, but I didn’t hear back.
A few days after I spoke to Novak, I watched a couple of dozen activists air their grievances against Palmer on the steps of City Hall. Alvivon Hurd, of the Assn of Community Organizations for Reform Now, bellowed into a megaphone loud enough to be heard at the builder’s Brentwood office.
“This is a housing crisis here in Los Angeles,” she said.
Everybody wants creature comforts, she said, someone to scrub the floors and trim the yards and take care of the kids. But then a guy like Palmer fights City Hall to make sure those workers can’t afford to live in the neighborhood. “It’s a shame, and we’re here to scream about it.”
Currently, the city requires a 15% set-aside only in a small part of downtown Los Angeles where gentrification is happening too rapidly for residents to keep up. Ultimately, the group wants to pressure City Hall to establish the set-aside requirement citywide. And one person who has signed on to the cause is Socorro Aranda, 66, who lives in an old apartment building between two Palmer projects just west of downtown.
Aranda, who also spoke at the City Hall rally, fears that renters like her will have to cope with soaring rents or, more likely, be displaced as land continues to be scooped up by investors. Those concerns are precisely why the city established the 15% rule in its Central City West plan.
I went to see Aranda’s apartment, where rent control has kept her monthly bill at just $270. But she said others in the building have been harassed and repairs stalled, driving some of them out to make room for renters willing to pay twice as much.
Aranda’s apartment consists of just one room and can’t be more than 200 square feet. No kitchen, no bathroom, and the shower down the hall is shared by 16 people. Aranda, who said she fled an abusive husband in Nicaragua and works here legally as a domestic, has lived in this space for 17 years. Her 40-year-old son Milton, who works at a clothing factory, joined her three years ago. He sleeps in the top bunk.
We walked outside to see the newest Palmer project, the Visconti on 3rd Street, which looms over the neighborhood. “Your invitation to an incredible lifestyle,” says the Visconti website, which lists apartments starting at $2,265. If Palmer adhered to the set-aside requirement, a lucky few would pay about one-third that in rent.
Aranda and I walked down a nearby street and checked out a couple of apartments in older buildings. One, for $500, was smaller than the one she’s in now. Another, at $450, had no windows or bathroom. Another drab room, with a leaky ceiling and a beeping smoke detector, was $550.
She looked at me as if to say, “Can you believe it?”
In its request for a waiver on the 15% set-aside, one of the Palmer company’s arguments was that it would result in “practical difficulties and hardships,” as laid out in a June 21 letter to the city. Activists refer to this as Palmer’s “it doesn’t pencil out” argument, and wonder how he could afford two luxurious manses while suffering such hardships.
Palmer’s guy barely let me get that question out. “Don’t get me started about this because I find these arguments completely appalling and basically un-American,” Novak told me. “I find nothing more appalling than economic jealousy. You think Palmer found money on the freaking street?”
Not exactly, no. Palmer, who may be setting the stage for a lawsuit, argues that apartments are, by definition, affordable housing. He builds market-rate apartments, he argues, and takes no government subsidy, so why should he be forced to reduce the rent for anyone?
I think another Palmer argument -- that it’s unconstitutional to require set-asides in one part of town but not another -- is worth debating, since so many other areas of the city have gentrified without any such set-aside requirements. On the other hand, I’m unaware of him having been kidnapped, driven to downtown Los Angeles and forced to build in an established set-aside zone.
“Whether he’s just greedy, or ideologically opposed to government regulation, I don’t know,” said Peter Dreier, who chairs the Urban and Environmental Policy Program at Occidental College. “But either way, he’s gotta live by the rules.”
I met up with Novak on the day his boss’ appeal was rejected by a City Council committee. He asked me to e-mail my questions to him, and he’d see if he could get Palmer to talk to me.
I’m still waiting.
I did, however, speak with another downtown developer. John Huskey, who owns Meta Housing, is building the 276-unit Northwest Gateway Apartments on 2nd Street. The firm opted for a 20% set-aside, he said, because that makes for a better mix of tenants and also makes additional tax advantages available to his company.
In his opinion, Huskey said, the city should have given Palmer a medal for taking a huge risk and building the Medici several years ago, but then should have taken the medal away for his comments about affordable housing.
“Philosophically, we think it’s part of what it takes to reestablish a community,” Huskey said of mixed-income dwellings.
If L.A. Live and the Grand Avenue projects succeed, he said, hundreds of new jobs will open up, but they won’t pay a fortune.
Huskey envisions some of those new employees living in his apartment building and paying $750 a month in rent instead of $2,500-$2,800. And they’ll walk to work instead of commuting from long distances, helping reduce traffic and smog.
“There were four or five times in my life when I would have qualified for the units I’m building,” Huskey said. “And I’m no different a person now than I was then.”
Any of this penciling out for you, Mr. Palmer?
It’s a measly 15%. And ‘tis the season, after all.
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