Rebellion is abroad at the Hacienda Mobile Home Park, causing
the City Council to wait before moving ahead with a loan to a
company trying to buy the park.
Rebellion is abroad at the Hacienda Mobile Home Park, causing the City Council to wait before moving ahead with a loan to a company trying to buy the park.
At the heart of the issue is a projected rise in space rentals at the 164-space senior park at 275 Burnett Ave. next to Sobrato High School.
Council was asked Wednesday to approve the issuance of $12 million in tax-exempt bonds by a third party to allow Millenium Housing, a nonprofit firm that operates 14 affordable mobile home parks in California from Palm Springs to Rohnert Park, to buy the park.
To ease the burden of projected incremental space rental increases on residents, council included a $1.2 million loan to Millenium for a rent assistance fund. Repayment of the bonds is secured by space rents that, Millenium says will need to be raised to support the debt service.
Under the deal Millenium is offering, space rental will rise $40 each year until a cap of near $590 is reached. Current average rate is $360 per month.
Some residents don’t want Millenium to own the park and say the company and John Liegl, president of the homeowners’ association, have intimidated residents into voting yes.
“We’ve been shouted down at meetings, had votes changed and had intimidating phone calls trying to get people to vote for the buyout,” said Don Costello, a park resident.
The vote was about 75 percent in favor of the buyout, with each space getting a single vote. The vote is advisory only and not required for the city to approve the bond sale.
George Turk, Millenium president, told the council he has explained the situation to residents more than once.
“I feel we’ve tried our best to communicate with residents,” Turk said. “We have an opportunity here to preserve and affordable mobile home park.”
After hearing from irate residents before and during Wednesday’s council meeting, Councilman Larry Carr said he wanted to wait until all park residents were “comfortable” with Millenium and encouraged the company to hold more meetings to explain what would actually happen to their space rental fees.
The company held an open house all day and planned to hold a meeting in the evening on Monday to do just that. About 30 people showed up to ask questions during the afternoon.
Hacienda was built in the 1970s and has been a home to residents 55 and older since it gave up being an “adult” park. Rents have been kept low because of the city’s mobile home rent control ordidnance and a commission that rules on increases.
City Attorney Helene Leichter said Hacienda owners originally asked the city in 2000 for an increase of $200 per month per space.
“The city said no and the owners sued in federal District Court,” Leichter said.
She explained that the owners’ argument was that forbidding the increase “denies fair value on property,” or keeps a property owner from receiving the amount the income property is worth.
There was no ruling on the lawsuit because the U.S. District Court said the case must be decided in state court first. An appeal was filed and the case has ended up in front of the U.S. Supreme Court, which began its new session Monday.
The high court is asked to decide whether a decision from state court first is required.
“The state court case is on the rent control issue,” Leichter said.
Both courts are waiting to see whether the park sells before going forward with the legal actions.
City Manager Ed Tewes said the city wants assurances that the people effected were properly informed.
“It’s a question of whether they choose a new owner with assurances of rent protection or a roll of the dice with some other new owner,” Tewes said.
Hacienda is owned by a consortium of four in Arkansas: Allan and Jackie Roman, Don and Indianola Wetterstorm, Clara Boxley and Mary Casella.
The city’s role is two-fold, Tewes said.
“We are asked to allow access to a financing source of capital for the nonprofit Millenium to acquire park,” he said. The city is not loaning the money to Millenium. And, in order to ease concerns that the purchase not lead to current residents being priced out of park, the city reached the agreement of the $40 incremental increase.
Liegl said there was a total of 101 votes were in favor of the sale.
Another complaint was the way Liegl handled the balloting.
Resident Darlene Harman told the council Liegl took the ballot box home overnight and could have tampered with the votes.
“Liegl brought ballots back in two piles and in sequence,” Harman said. “Nobody saw the votes counted.”
Liegl said he took the box home because the anti-Millenium contingent had stuffed the box so there wasn’t room for yes votes.
“Every vote can be confirmed,” Liegl said. “We have signatures on them and have called to confirm.”
The city wanted to see a good majority agreeing with the sale.
Dissenters were also dismayed to find that, while the city, park owners in Arkansas and Millenium have been discussing the park’s disposition, and as a result the future of 166 families, for more than three years.
“We were notified just five weeks ago,” Costello said recently.
Council will consider approving the bond sale again at 7:30pm Wednesday, at City Hall.
