Trump Mega-Donor Geoff Palmer Is Also LA’s Most Controversial Developer

Trump Mega-Donor Geoff Palmer Is Also LA’s Most Controversial Developer

Real-estate developer Geoff Palmer has a lot in common with Donald Trump, including a controversial record of lawsuits and real estate dealings that invariably put the wealthy first.

September 19, 2016

Los Angeles real estate developer Geoff Palmer has emerged as one of Donald Trump’s biggest sugar daddies. Well known in Los Angeles for his ostentatious luxury apartment complexes, as well as his opposition to affordable housing, Palmer contributed $2 million in June to the pro-Trump super PAC, Rebuilding America Now.

Palmer and Trump have much in common. Both grew up in wealthy families. Trump’s father, Fred Trump, was a big-time developer of middle-class apartment complexes in New York. Palmer’s dad, Daniel Saxon Palmer, was a prominent Los Angeles architect who designed modernist tract homes for the region’s booming postwar suburbs. Both sons have family secrets that shaped their careers and their identities. The elder Trump was once arrested at a Ku Klux Klan rally in 1927. (He and Donald were later charged by the federal government for violating anti-discrimination laws for banning black tenants in his apartments). The elder Palmer was born Dan Weissinger in Hungary in 1920, but gave himself as more WASPish-sounding name, apparently to avoid the stigma of being identified as Jewish.

Both sons used their fathers’ wealth to go into business, but veered in a new direction by making their fortunes building high-profile but often tacky luxury housing projects (and, in Trump’s case, hotels and casinos as well). Both have lavish, opulent lifestyles and married younger women whom some have called “trophy” wives. Both have been frequently sued amid questionable business practices, and both have consistently responded to critics with belligerence. Both have used their wealth to seek favors from politicians in a bid to gain even more riches. Both have demonstrated callous disregard and hostility toward the poor and the disadvantaged.

At a rally on September 13 outside the Medici, one of Palmer’s luxury apartment buildings, Build Better LA, a coalition of housing activist groups, protested the real-estate mogul’s mega-donation to Trump. Demonstrators objected that Palmer made the money by gentrifying downtown Los Angeles, displacing low-income residents, and resisting mandates to build affordable housing.

“We don’t need more luxury housing built on the cheap,” said Socorro Aranda, a member of the Alliance of Californians for Community Empowerment (ACCE), who lives in a rent-controlled building down the street from the Medici apartment complex and who works cleaning wealthy people’s homes. “We need housing for people like me, hardworking Angelenos who have lived here for decades. It’s time for the city to put the brakes on Palmer and ramp up its requirements to build quality housing that low-income residents can actually afford.”

Mike Dennis

Members of Build Better LA, a coalition of housing activist groups, protest the Geoff Palmer’s mega-donation to Trump outside the Medici, one of Palmer's luxury apartment buildings on September 13. 

The protest coincided with the release of a new report by Hedge Clippers, a watchdog group focused on hedge fund managers and other financiers, that examined how Palmer made his fortune by flouting government rules and bribing politicians with campaign donations. The report also spotlights two other California plutocrats who are among Trump’s biggest donors, and who also stand accused of exacerbating the state’s housing crisis. One is Steve Mnuchin, a Wall Street hedge fund and banking mogul, now Trump’s national finance chair. Mnuchin is CEO of Dune Capital Management and former CEO of OneWest Bank, an LA-based institution under fire for engaging in aggressive foreclosures and predatory lending practices. The other is Thomas Barrack, founder of Colony Capital, a private equity firm. Its subsidiary, Colony Starwood Homes, purchases foreclosed houses and turns them into rental units. With 30,677 housing units across the country, at least 2,819 of them in California, Colony Starwood is one of the nation’s largest absentee landlords. Barrack is a well-connected Republican donor who served in the Reagan administration and who spoke at this year’s GOP convention. A longtime Trump friend, he founded the Rebuilding America Now super PAC to which Palmer contributed $2 million.

The 66-year-old Palmer, who owns 10,400 rental units in Southern California worth more than $3 billion, has been an unrelenting critic of mandatory affordable housing policies, calling California’s affordable housing requirements “immoral” and “not American.” He successfully sued Los Angeles to avoid having to incorporate affordable units in his luxury housing developments—winning a court ruling that had statewide housing impact because it made cities reluctant to adopt “inclusionary zoning” laws.

Palmer’s company, GH Palmer Associates, has done more to gentrify downtown Los Angeles than any other developer. Palmer owns 4,198 units in the area, making him its biggest residential builder. His properties include the Orsini (1,072 units), the Medici (632 units), the Piero (560 units), the Visconti (297 units), the Lorenzo (913 units), the Da Vinci (526 units), and the Skyline Terrace (198 units), which together Palmer has dubbed “the Renaissance Collection.” (As Los Angeles Times columnist Steve Lopez quipped: “Can the Biscotti be too far off?”)

Palmer displayed his ignorance of local history in a letter last year to Los Angeles magazine explaining why he gives his projects Italian names. “The Italians actually settled L.A. before the Spanish and Chinese,” Palmer incorrectly claimed.

Palmer’s properties are widely derided as faux-Italian fortresses that clash architecturally with the neighborhoods in which they are built. The blog LA Curbed called the buildings “vacuums designed to suck the life out of a neighborhood that has worked so hard to become lively in the past decade.” These short, squat, stucco edifices face inward and are walled off from a city that is seeking to become more pedestrian-friendly. Several of them have pedestrian bridges and skyways that allow residents to avoid contact with poor and homeless people on the street. In response to the near-universal denunciation of his projects from architects and preservationists, Palmer has insisted that each of his buildings reflects “timeless beauty.”

Tenants in Palmer’s properties—who pay between about $2,000 and $5,000 a month—consistently complain about trash, noise, property damage, and lax security. Palmer’s buildings also have high crime rates, marked by break-ins and car-jackings, according to the Los Angeles Police Department. But according to LA’s Downtown News, local police have met with “resistance in the past when they urged the property management company, GH Palmer and Associates, to add security personnel and more cameras.”

In 2014, Palmer’s Da Vinci development was destroyed by a massive fire. He is currently rebuilding the project with proceeds from his insurance policy. But earlier this year, the City of Los Angeles filed a lawsuit against Palmer for $20 million for his failure to secure an adequate fire protection plan at the Da Vinci, which was constructed with a wood frame cheaper than the traditional steel and concrete used in most large downtown buildings.

Palmer is regarded as a pioneer in gentrifying low-income Los Angeles neighborhoods, but he lives far from those areas himself. Palmer and his wife live in a $21 million Beverly Hills estate built in 1913 by the city’s founder, Burton Green, and later occupied by a string of celebrities that includes W.C. Fields. The 16,400-square-foot house is outfitted with a tennis court, swimming pool, and outdoor sculpture garden, and is decorated with original impressionist paintings by the likes of Matisse, Monet, and Picasso. The 18th century furniture collection includes (perhaps fittingly) antiques from the home of Marie (“let them eat cake”) Antoinette.

Palmer also owns a $17 million beachfront house in Malibu with, according to the LA Times, “solid bronze doors, teak cabinets and his-and-hers bathrooms,” an estate in St. Tropez, a $12.7 million mountaintop mansion in Aspen, Colorado, and a Boeing 727 to jet between them all. In his spare time he plays polo—he is an internationally ranked player and sponsors several teams—and, like many wealthy Angelinos dogged by controversy, engages in philanthropy. His reputation-burnishing causes include the Los Angeles County Museum of Art (which has appointed his wife to its board of trustees), the Los Angeles Music Center, and his alma mater, the Pepperdine School of Law.

Palmer has called his Beverly Hills estate a “trophy property,” but the city has called it one of its biggest “water wasters.” That’s because Palmer was using over 12,000 gallons daily to water his grounds—about the same amount the typical American family of four uses in a month. Last year, Governor Jerry Brown called for a 25 percent cut in statewide water consumption. Not surprisingly, given the consumption habits of wealthy homeowners like Palmer, Beverly Hills has consistently failed to meet this conservation goal.

 

Charlie Kaijo/Flickr/Creative Commons

Led by City Councilmember Jose Huizar, the city approved Palmer's controversial plan to build a private bridge between two sections of his Da Vinci apartment complex. Huizar is one of many municipal officials to receive large campaign contributions from the Palmer family. 

The Los Angeles Times summed up Palmer’s development formula this way: “Purchase comparatively inexpensive land next to freeways or on lower-income streets, then construct luxury apartments on a large scale, with hundreds of units in a complex.” 

In 2014, Palmer sought approval to build an elevated private bridge over Temple Street to connect two sections of the 526-unit Da Vinci apartment project, then under construction. He argued that he needed the bridge so that his future tenants would not have to “use the street and interact with the homeless population” in the area.

The city’s planning staff rejected Palmer’s request, explaining that it conflicted with downtown design guidelines and could even make the sidewalk less safe by diverting pedestrians to the bridge above the street. In an interview, city planner Blake Lamb explained that the Planning Department’s policies do not support “the physical segregation of people” to address public safety and homelessness. The Central Area Planning Commission, which oversees downtown development, agreed with the planning staff. 

But at the behest of city council member Jose Huizar, who represents the area, the city council overturned these recommendations by a unanimous 11-0 vote. Huizar justified his support for Palmer by telling his colleagues that the developer had agreed to spend $25,000 on maintenance of other downtown pedestrian bridges.

For Palmer, the $25,000 was arguably not an act of charity or civic good will, but a minor business expense. Another business expense was undoubtedly the Palmer family’s $2,000 in donations to Huizar’s political campaigns.

Like many real estate developers, Palmer views campaign contributions to city council and mayoral candidates as business investments to ensure his real-estate projects are approved. Since 1999, Palmer, along with his wife Anne, his brother Dan (his one-time partner, who has now started his own development firm), and Dan’s wife, Ashley, have contributed at least $64,350 to Los Angeles municipal candidates, according to data on the Los Angeles Ethics Commission website. That number is significant, since Los Angeles limits individual campaign contributions to city council candidates to $700, and caps donations to citywide mayoral, city attorney, and controller candidates to $1,400 per person. Palmer and his family have even made contributions to candidates competing for the same office.

Indeed, Palmer has a long and questionable record when it comes to political contributions. After starting his real-estate company in 1978, Palmer pursued his first major development in the then-remote exurb of Santa Clarita, on the northern border of Los Angeles County. At the time, local residents were mounting a campaign to incorporate Santa Clarita as a separate city. Palmer’s company wanted to exchange some infrastructure improvements for the right to build 1,452 condominiums, a plan bound to face stiffer regulations should Santa Clarita win new status as an incorporated city. 

Palmer was caught reimbursing his employees through his company for their contributions to the anti-cityhood committee. In 1991 the California Fair Political Practices Commission (CFPPC) charged Palmer with 15 campaign-finance violations for illegally obscuring the source of contributions to the Southern California Caucus, a PAC opposed to Santa Clarita cityhood. The CFPPC slapped Palmer with a $30,000 fine, the maximum allowed. Palmer has built ten projects totaling 4,525 units in Santa Clarita, according to his company’s website.

The CFPPC also found that six Palmer employees and the mother of one employee each gave checks totaling $500 apiece—then the maximum that council candidates were allowed to accept from one source under city law—to Los Angeles City Councilwoman Joy Picus. All of the “donors” were later reimbursed by the company in violation of state law that requires the actual source of campaign contributions to be publicly disclosed. According to a 1992 Los Angeles Times story: “At the time, the company was building a large condominium complex in Woodland Hills, which is part of Picus's council district.” 

Hedge Clippers

The watchdog group Hedge Clippers included Palmer among the three largest Donald Trump donors in California in a recent report. 

But Palmer apparently gives out money not just to win approval for his real-estate projects, but to advance his ideological agenda, as reflected in his extensive donations in national politics.

In addition to his $2 million contribution to the pro-Trump PAC, his donations in the current election cycle have included $200,000 to a national security-focused super PAC founded by John Bolton (the United Nations ambassador under George W. Bush and a frequent Fox News commentator), $89,600 to the National Republican Congressional Committee, and a maximum individual donation to House Speaker Paul Ryan, of Wisconsin, according to the nonpartisan Center for Responsive Politics.

On top of his $2 million contribution to Trump, Palmer has contributed $1.4 million since 2000 to Republican congressional and presidential candidates, as well as to such conservative PACs as Tea Party Express and FreedomWorks. In 2012, he donated $500,000 to the pro-Mitt Romney super PAC Restore Our Future, and in 2014 he gave $100,000 to American Crossroads, the Republican PAC masterminded by GOP strategist Karl Rove.

Since 2000, Palmer’s wife Anne has contributed $179,400 to GOP candidates and organizations. In 2004 and 2008 the couple also contributed $25,800 to Ralph Nader’s independent presidential campaign. This was arguably less a reflection of the Palmers’ support for Nader than it was a calculated bid to help George W. Bush and Arizona Senator John McCain by slicing votes away from Democrats in key swing states.

In 2012, Palmer also donated $100,000 to Americans for Job Security, which the Los Angeles Times described as a “dark-money” group that funneled massive sums into efforts to oppose Proposition 30, a millionaires’ tax designed to raise funds for public schools.

 

Palmer’s Tea Party proclivities reflect his strong opposition to government regulation of his development projects. For more than a decade, Palmer has been a divisive force in LA politics, using his political muscle to thwart efforts to create more affordable housing in a city that faces a severe affordable housing shortage and that has the nation's second-largest homeless population.

In 2003, the city’s chief code enforcement officer found Palmer guilty of illegally demolishing the Giese House, the last 19th century home on Bunker Hill, a downtown neighborhood, without a permit. Palmer had been using the Queen Anne-style cottage—built in 1887 at what is now West Cesar Chavez Avenue and Figueroa Street—as a staging area for his Orsini apartment complex. Then one day, a bulldozer “accidentally” knocked the home down. Ken Bernstein, then the preservation director for the Los Angeles Conservancy, called Palmer’s act a “willful and egregious demolition.” As punishment, city officials barred Palmer from building on the site for five years.

Palmer sued the city, claiming that the ban was illegal. In what many decried as a display of cowardice, the city council agreed to settle the case by requiring Palmer to create a $200,000 trust to loan low- and middle-income residents money to preserve their historic homes. In return, the city gave Palmer the green light to build the second and third phases of the Orsini project, which now includes 1,072 units, and which advertises its “world class amenities, such as state-of-the-art fitness facilities, full-size indoor basketball courts, and a sparkling rooftop pool with panoramic city views.”

Although Palmer claims that each of his Los Angeles projects is unique, they are all overly large, cookie-cutter apartment complexes with Italian names. In addition to Palmer’s so-called Renaissance Collection (the Orsini, the Medici, etc.), the city has already approved Broadway Place—a duo of mid-rise apartment buildings with 686 units between them—at Olympic Boulevard and Broadway, one of the city’s hottest neighborhoods. Palmer has proposed another mega-project with an Italian name, the Ferrante, on a 9.6-acre site at 1000 W. Temple Street in downtown LA that would feature 1,500 high-end residential units, larger than any other Palmer development.

Palmer has benefited from the taxpayer-funded public transportation stops and public freeway onramps where he likes to situate his buildings. At the same time, he’s an openly hostile critic of government programs that set out to balance private profit and public good.

The story of how Palmer sued Los Angeles to avoid having to include affordable units in his luxury apartments has made him notorious in the city’s real estate political circles. It all started in 1998, when Palmer purchased land for his first downtown project, the Medici. Palmer objected to a plan specific to the Central City West area requiring that 15 percent of the units be made affordable to low-income households. Palmer wrangled his way out of the requirement by negotiating with city officials, reluctantly agreeing to put 60 (9 percent) below-market units in the project, but he balked at setting rents affordable to the poor. Instead, the city allowed him to market the 60 units to moderate-income residents, in violation of both the spirit and substance of the set-aside rule.

In 2001, Palmer sought approvals for another downtown project—the Visconti at Third and Bixel Streets—but still refused to comply with the affordable housing mandate.

“Why should one developer be responsible for all of society's ills?” Palmer told The Los Angeles Times at the time. “I'm a businessman. I want to build what the market dictates. Don't tell me who we should build for.”

Mike Dennis

At the September 13 protest outside the Medici complex, demonstrators objected that Palmer made the money by gentrifying downtown Los Angeles, displacing low-income residents, and resisting mandates to build affordable housing. 

Objections from housing activists slowed the project down, but eventually the city again let Palmer off the hook. In 2004, he agreed to pay the city $2.8 million—not only to avoid having to include any low-income units in the Visconti but also to convert the moderate-income apartments in the Medici to market-rate units.

In 2006, apparently rankled by what he viewed as unwarranted government interference with his property rights, Palmer dug in his heels. When city officials insisted that he comply with the affordable housing set-aside for his next project—the Piero at Sixth and Bixel Streets—Palmer refused. Instead, he took the city to court.

Around the time Palmer launched his lawsuit, then-Councilmember Ed Reyes tried to talk to the developer about affordable housing. Reyes told Lopez, the Times columnist, that Palmer “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.” Palmer told Reyes: “That's not my problem. That's your problem.”

In his lawsuit, Palmer argued that the affordable housing rule gave the city power over setting the rent for his units. Palmer’s suit revolved around an interpretation of the Costa-Hawkins Act—a state law enacted in 1995 after heavy lobbying by the real-estate industry, which wanted to end rent control in California cities. The law didn’t entirely do away with rent regulations, but it allowed landlords to raise rents to market levels once a tenant vacated an apartment. This time, city officials would not negotiate a settlement, but set out to defeat Palmer in court.

In a 2006 editorial about downtown development, The Los Angeles Times criticized Palmer’s resistance to complying with the city law. “Builders who invested in the land, such as Palmer, did so with their eyes open. They can't now credibly claim that the area's development template is government regulation run amok.”

But the courts disagreed. In 2007, a trial court and then the Second District Court of Appeals ruled in Palmer’s favor, claiming that LA’s affordable housing set-aside rule violated the Costa-Hawkins law. The court decision put “inclusionary zoning” laws in 170 California cities in legal limbo. 

The ruling made Palmer a hero to real-estate developers and landlords throughout the state, but anathema to housing advocates and city officials, who had lost one of the few tools available to them to address the severe shortage of affordable rental housing. In 2013, those advocates sought to narrowly amend the Costa-Hawkins law to allow cities to adopt inclusionary zoning ordinances. The legislature approved the bill. But under heavy pressure from the real-estate lobby, Brown vetoed the measure, thus keeping the “Palmer decision” in place.

The court ruling and Brown’s veto mean that the ongoing gentrification of downtown Los Angeles, including Skid Row, will continue unabated.

Last year, the Supreme Court of California upheld a San Jose law requiring developers of large, for-sale residential projects to include some units at below-market rates or pay into a city fund to build affordable housing. That decision gave cities and counties the power to address the affordable housing crisis through inclusionary zoning of for-sale properties. But the Palmer decision still bars inclusionary zoning for rental properties, presenting an enormous obstacle to policymakers struggling to make California’s rental housing affordable.

Brown and state lawmakers face growing pressure to enact legislation that would allow cities to require affordable housing in new for-sale and rental developments, but Palmer has no plans to soften his stance. At a session organized by the Urban Land Institute last fall, Palmer branded the very concept of affordable housing as “immoral” and called affordable housing advocates, “poverty advocates.”

“We don’t need social engineering,” Palmer said. “Why is it that these people think that real-estate developers should give 15 percent of their profits away? They’re not asking [the same] from grocery stores, gas stations, haberdasheries. They only ask real-estate developers. Why is that? Private individuals should be subsidizing these people? It’s not American.”

Sound familiar?

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