Home Builder Settles Lawsuit With City
Geoff Palmer drew fire last year after his firm razed this 1887 Victorian home on Bunker Hill. Photo by Gary Leonard.

A Downtown housing developer who razed an 1887 Victorian home on Bunker Hill last year to make way for new housing has settled a lawsuit with the city requiring him to provide community amenities and start-up money for a housing trust fund.

The settlement, which was reached last Wednesday, ends a yearlong litigation between the city and the developer, Palmer Boston Street Properties II. As part of the agreement, Palmer must pay $200,000 to create a trust fund providing low- and middle-income residents loans to preserve historical homes.

"This is a landmark settlement," said Councilman Ed Reyes, who led negotiations. "It triggers the ability for the city, developer and the community to improve corridors where future projects are proposed. We have established both long-term and short-term benefits for our community."

Ben Reznik, an attorney for Palmer, could not be reached for comment.

In April 2003, developer Geoff Palmer was criticized for demolishing the last Victorian home on Bunker Hill during construction of a $40 million high-end housing development at Figueroa Street and Cesar Chavez called the Orsini. Officials at GH Palmer said a bulldozer at a construction staging area across the street accidentally bumped into the abandoned Queen Anne-style home, causing it to tilt. The firm said the house posed an imminent danger, so the crew took it down without a permit.

Officials at GH Palmer, which had already built a luxury complex called the Medici at Seventh and Bixel streets, argued at the time that the graffiti-ridden property, known as the Geise House, was a blight on the neighborhood and a magnet for drug dealing and other illegal activity and should have been torn down anyway.

The incident caused an uproar among city and preservation officials, who called for Palmer to be punished. In May 2003, Reyes invoked the city's scorched earth ordinance, an obscure measure that blocks development for five years on a property where a structure has been illegally razed. It was the first time the ordinance had been applied.

Palmer, however, contended that he should not be punished for razing the eyesore property and filed suit against the city, claiming that the ordinance was unconstitutional and that the city had improperly imposed the ban. He sought $10 million in damages.

Only recently did both parties agree to negotiate a settlement to resolve the matter.

As part of the new agreement, Palmer will set up a housing trust fund for a revolving loan pilot project in the First District.

"The fact is that the city has never provided this type of fund for families of this income group so we are talking about more than just historical preservation, we are talking about the preservation of affordability," Reyes said.

The development firm will also provide several community amenities in addition to the trust fund:

  • 100 permanent parking spaces for the Evans Community Adult School across the street, which suffers from a shortage of student parking.
  • An open plaza at the southeast corner of Figueroa Street and Cesar Chavez Avenue with a fountain commemorating the early settlers of Chinatown.
  • A gateway bridge linking the Orsini I to the Orsini IIA, the housing project's second phase.
  • Agree not to remove any affordable housing units in the development of the Orsini, or replace lost units in a location acceptable to Council District 1.
  • Work with city officials and community groups to design and fund a streetscape project along Cesar Chavez Avenue, Figueroa Street and Grand Avenue that will include lighting, trees, crosswalks and furniture.

The agreement allows Palmer to move forward with plans to build two additional phases of the Orsini, the first of which opened earlier this year with 297 apartments. In total, the project will bring a total of 1,400 housing units to the area by 2007.

The agreement is seen as a victory not only for future preservation, but for the nearby communities of Chinatown, Angelino Heights and Temple Beaudry that have seen little new residential development.

page 1, 7/19/04

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