L.A. landlord sues over eviction law, seeking $100 million

One of the area’s most prolific condominium builders has sued the town of Los Angeles over its COVID-19 eviction moratorium, saying his corporations have skilled “astronomical” monetary losses and are legally entitled to compensation from the town.GHP Management Corp., which is owned by actual property developer Geoffrey Palmer, mentioned in its lawsuit that 12 buildings that it manages have skilled greater than $20 million in misplaced rental earnings on account of the measure. GHP, which filed the lawsuit together with a number of different Palmer corporations, expects that quantity to triple by the point the provisions of the moratorium have expired.The metropolis enacted its short-term eviction limits in March 2020, simply as COVID-19 was triggering the shutdown of companies and throwing individuals out of labor, barring constructing house owners from forcing out tenants who may present their lack of ability to pay was attributable to the pandemic.Palmer’s corporations allege that the moratorium — first put in place by Mayor Eric Garcetti as an emergency order, then authorized as an ordinance by the City Council — violated the “takings clause” established within the fifth Amendment, which says personal property shall not be taken for public use with out “simply compensation.”

Palmer’s corporations mentioned they’re entitled to compensation of greater than $100 million. “While the eviction moratorium ostensibly protects tenants who’re unable to pay lease on account of circumstances associated to the COVID-19 pandemic, it arbitrarily shifts the monetary burden onto property house owners, lots of whom have been already struggling monetary hardship on account of the pandemic and haven’t any equal treatment at regulation,” mentioned the lawsuit, which was filed final week.GHP Management, a property administration firm, is a subsidiary of G.H. Palmer Associates, which owns greater than 15,000 residences in Southern California, in keeping with the corporate’s web site. G.H. Palmer Associates is owned in flip by Palmer, a businessman recognized for growing beige condominium blocks in and round downtown Los Angeles with Mediterranean options and Italian names — Medici, Lorenzo, Piero.
Asked in regards to the submitting, City Atty. Mike Feuer defended the town’s dealing with of the moratorium, saying his workplace wrote a “sound and lawful ordinance” that has saved tenants from changing into homeless through the pandemic.“We defeated a earlier assault on these essential protections and can vigorously defend the ordinance once more,” Feuer mentioned in a press release.Palmer’s submitting comes lower than two months after Gov. Gavin Newsom prolonged the state’s personal eviction moratorium till Sept. 30, providing to cowl 100% of the again lease and utilities owed by many low-income residents whose funds have been harm by the COVID-19 pandemic.Under this system, each renters and landlords could search aid. Landlords seeking assist should present verification from their tenants that their earnings is low sufficient to qualify for monetary assist, in keeping with the state’s web site.
In February, the town’s Housing and Community Investment Department reported that it distributed greater than $98 million in subsidies to renters whose households have been affected by the COVID-19 pandemic in 2020. Of that whole, 56% was paid to landlords and the opposite 44% went on to tenants.Tracy Jeanne Rosenthal, who’s a member of the Los Angeles Tenants Union, mentioned the state’s aid program exhibits that Palmer will “obtain each greenback that he’s owed.” Still, Rosenthal mentioned she doesn’t consider he’s entitled to that cash.“I’m not in any respect satisfied that his proper to revenue via passive earnings ought to take priority over the very lives of tenants in Los Angeles whose incomes have been severed by the pandemic and by public well being orders that directed them to isolate and quarantine,” she mentioned.Rosenthal and different organizers for renters’ rights have argued that the town’s regulation was not a real moratorium, because it didn’t prohibit constructing house owners from submitting eviction instances in court docket. In many instances, she mentioned, tenants merely moved out of worry as an alternative of preventing these instances, or misplaced in court docket after failing to make a protection.
Palmer is a significant donor to the Republican Party and a participant in native, state and nationwide politics. So far this yr, he has put at the very least $200,000 into the recall committee concentrating on Newsom and at the very least $110,000 into the hassle to recall Los Angeles County Dist. Atty. George Gascon, in keeping with state information.Palmer hosted a fundraiser for President Trump in 2019 and, a yr later, was recognized by The Times as considered one of Trump’s high donors in California.Larry Gross, government director of the Coalition for Economic Survival, mentioned Palmer’s lawsuit, if profitable, would “wreak havoc” on the town, siphoning away cash from primary metropolis companies and throwing into query efforts to maintain each COVID-19 and homelessness beneath management.“This is each an financial and a well being concern to make sure that individuals can preserve the roofs over their heads proper now,” mentioned Gross, whose group advocates for tenants’ rights.
Attorneys for GHP and Palmer’s different corporations didn’t reply to an inquiry from The Times. In their submitting, these legal professionals mentioned the eviction moratorium had led to greater than $2.7 million in lease losses at Palmer’s Medici mission, a 627-unit condominium in downtown Los Angeles; practically $2.8 million on the Da Vinci, a 526-unit advanced alongside the 101/110 Freeway interchange; and practically $3.9 million at Summit at Warner Center, a 760-unit condominium property in Woodland Hills.Because of the town’s restrictions, lenders have refused to finance or refinance the loans on the properties managed by GHP, inflicting further financial hurt, the plaintiffs mentioned of their lawsuit. In addition, constructing house owners have been required to pay for electrical energy and different utilities in items the place they don’t seem to be receiving rental earnings, the submitting mentioned.
Palmer’s corporations contend that they’ll have little success in recouping their losses from their tenants after the one-year grace interval that follows the top of the town’s COVID-19 emergency.
“The metropolis orchestrated a regulatory regime designed to offer a obligatory and de facto lease forgiveness to be foisted on landlords all through the town,” the lawsuit states.A Garcetti spokesman didn’t instantly have a touch upon the case.Palmer has tangled with the town in court docket earlier than. More than a decade in the past, he persuaded a Superior Court decide to overturn the town’s “inclusionary housing” guidelines, which required that builders close to downtown provide a specified share of inexpensive housing as a part of their residential initiatives.Palmer’s authorized victory halted the town’s momentum in attempting to construct inexpensive housing within the space, mentioned Gross, the tenants’ rights advocate.
“His palms usually are not clear regarding the housing disaster we are actually going through,” Gross mentioned.

https://www.latimes.com/california/story/2021-08-09/apartment-building-owner-geoffrey-palmer-sues-los-angeles-saying-anti-eviction-law-caused-astronomical-losses

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