Former Boeing exec backs son's first development venture
(Crain's) — At a time when even veteran builders are struggling, a 30-year-old manager at a suburban painting company is launching his first development: a $3.5-million residential project in Lincoln Park.
But Justin Palmer has a key financial backer: his father, a former top executive with Boeing Co.
The 21,600-square-foot building would occupy a vacant, triangle-shaped lot at Lincoln and Kenmore avenues, a block south of Diversey Parkway. In addition to seven residential units, the project would include about 1,300-square-feet of first-floor retail space.
The five-story development, at 2661 N. Lincoln Ave., is scheduled to be completed in the first quarter of 2012.
There is likely to be learning curve for Mr. Palmer, a project manager at Pinnacle Decorating Inc., a Riverside-based commercial painting company who says he also has a background in construction management.
New developers never have it easy, but their challenges are even greater in a down economy, says Marc Lifshin, co-founder of Chicago-based LG Development Group, which is building an 11-unit residential project at 2750 N. Lakewood Ave., about a half-mile north of Mr. Palmer's site.
“If you have no experience, there's a lot of hurdles to climb,” he says. “It's got to be tough to be a first-time developer and get a loan.”
Mr. Palmer paid nearly $1.285 million in February 2009 for the development site, financing the purchase with a loan of about $1.1 million loan from trusts in the names of Gail and James F. Palmer, property records show.
The elder Mr. Palmer is a former senior executive at Chicago-based Boeing and now a vice-president and chief financial officer of Los Angeles-based aerospace and defense technology company Northrop Grumman Corp. He didn't return a message.
Justin Palmer declines to comment about the loan or disclose his age, which was obtained from public records.
The project still needs zoning approval from the city, says Robert M. Berg, president of Chicago-based Foster Design Build LLC, the project's general contractor.
But Mr. Palmer says he hopes to start construction this spring on the project, to be called Lincoln Park Plaza. He says he's close to obtaining a construction loan but declines to provide details.
Before the recession, several developments like the one Mr. Palmer proposes popped up along a roughly half-mile stretch of Lincoln Avenue, from Diversey Parkway to Wrightwood Avenue. But now many condos in those projects are back on the market.
Mr. Palmer says he won't try to compete with those sellers. He plans to rent out six of the units for at least five years, or until the housing market improves and he can sell them.
As for the 5,200-square-foot unit on the top floor, he says he plans to keep that one for himself, moving from a condo nearby.