http://www.latimes.com/news/local/la-me-parsons1dec01,1,5376305.column?coll=la-util-news-local

 
  No snug harbour for mobile home residents  Developer says it doesn't intend to redevelop a park in Huntington Beach, but elderly residents fear otherwise.
  December 1, 2007
  
 
  If it wasn't paradise, it was close enough. Tucked into 15 1/2 
 
acres in west Huntington Beach, within hailing distance of 
 
Huntington Harbour and the Pacific Ocean, and graced by Southern 
California weather, the mobile home park residents generally 
 
considered themselves lucky to be where they were.
 
But there was something even better than geography and weather for
 
the senior citizens who lived in Huntington Harbour Mobile Estates:
 
a 1971 lease with a 55-year life span that became a financial 
 
security blanket.
 
Under the lease, rents could be raised only at five-year intervals
 
and the land under them was zoned for mobile homes, greatly 
 
mitigating potential rent increases that would have resulted if it were zoned for other purposes.
 
A sweet deal for the residents? You bet. 
 
At least, it was.
 
Now the 180 residents are finding that even the cost of paradise 
 
is negotiable.
 
Last December, Burnham USA, a commercial real estate investment 
 
firm in Newport Beach, bought the land for $19 million.
 
And in the year since, residents say, the company has made their 
 
lives miserable. 
 
After hiring inspectors, it has cited the residents for more than 
 
400 violations of state code, according to Howard Cook, a board
 
member of the residents' corporation that essentially manages the 
 
property. 
 
Most of them were frivolous, Cook says, but some came with threats
 
to cancel the lease if there was noncompliance.
 
But even the frivolous ones, he says, sometimes require money to 
 
fix.But those were mere sidelights, Cook says. 
 
Burnham's most serious challenge is to the lease itself. The 
 
company contends it shouldn't be interpreted to mean that appraisals
 
should be based on mobile home zoning. 
 
Rather, its attorneys say in an Orange County Superior Court suit
 
against the residents, the lease language specifies for "fair 
 
market value" appraisals of the premises "based on their highest
 
and best use exclusive of buildings and improvements. . . ."
 
The sentence concludes, however, with these words: ". . . and 
 
consistent with the zoning classification existing or obtainable" 
 
when the appraisal is made.
 
To the layman, the sentence seems to say conflicting things. Is 
 
the land to be appraised as vacant land and at its highest possible use or on its current status as a mobile home park?
 
That's why it's going to court.
 
If the residents lose, Cook says, many won't be able to afford the potential rent increases. 
 
In a meeting Tuesday night, he says, the company suggested a monthly hike from their current payment of $370 to around $1,650 per unit. 
 
But it's not just the proposed increase, he says. Many residents 
 
believe Burnham's strategy is to harass them -- through the lawsuit
 
and the inspections-into moving out so the company can redevelop 
 
the property.
  
A large rent increase alone might accomplish that, Cook says, but
 
residents also are being hit hard by the protracted pace of the 
 
legal case. Since July, he says, residents have been paying an 
 
extra $500 a month in anticipation of having to make a large 
 
payment to Burnham when the issue is resolved.
 
There's a final whammy: even if residents wanted to sell their 
 
units
 now, Cook says, they can't because potential buyers likely would 
 
be scared off by the lawsuit. Still, about 25 of the 130 units are
 
for sale, he says. 
 
Burnham President Therese Hotvedt says the residents have it all 
 
wrong.
 
"We have no intention to break the lease," she says. "We have no 
 
intention to redevelop the property. We have met with the 
 
[residents'] board and made it clear that we're amenable to a 
 
proposal from them. We're not in the business of suing people; 
 
we just want them to adhere to the terms of the lease and [for 
 
the two sides] to get clarification on the lease language. We 
 
couldn't get their attention, so we had to move forward on this 
 
basis."
 
The company acquires and develops commercial real estate 
 
properties in California and Arizona, Hotvedt says. The company 
 
does not own any other mobile home park properties, she says, 
 
adding that properties usually are bought as long-term investments.
She doesn't apologize for the company's legal position on the 
 
lease. The language specifies "best use," she says, noting that the residents have had "a very nice long-term rent that's been low."
 
She concedes she doesn't know the financial situation of "each and 
 
every person in the park. We understand the rent is going to 
 
increase. What kind of impact, no, we weren't aware of that. But,
 
yes, the rent is going to increase."
 
That's where things stand: residents convinced the property owner 
 
wants to squeeze them out and the company saying it's merely 
 
setting fair rents in accordance with the existing lease.
 
Here's what I don't get: Burnham didn't get blindsided when it 
 
bought the property. It knew it was buying land under a mobile 
 
home community. It knew the property had been zoned for mobile 
 
homes since 1971 and had provided low-rent security for senior 
 
citizens. It knew a successful challenge of the appraisal method 
 
in the lease would jack up the rents.
 
From there, it surely could have imagined the consequences of a 
 
significant bump in rent for senior citizens. And if some were 
 
forced to move out because of that, it surely knew that a reduced
 
 tenant roster would require those who remained to pay more each 
 
month to make up the difference for those left in the residents' 
 
corporation. 
 
In short, I don't see how it possibly could have foreseen a benign 
 
outcome.
 
Among the 180 residents in the community, Cook says, 10 were born 
 
between 1910 and 1920. Another 35 were born in the 1920s, another 
 
80 in the 1930s.
 
In other words, this is an aging community, largely populated by 
 
people on fixed incomes and hoping to stay where they are at a 
 
price they can afford. They thought the lease, now 36years into
 
its natural life, granted them that security.
 
I find myself asking what would motivate a company, mindful of all
 
that, to target the property and then immediately set out to put 
 
those likely effects in motion.
 
I think I know the answer, but I don't want to type in the words.
 
Dana Parsons' column appears Tuesdays, Thursdays and Saturdays. 
 
He can be reached at (714) 966-7821 or at dana.parsons@latimes.com.
 
An archive of his recent columns is at www.latimes.com/parsons.
 
 
 

Years ago trailers were something

You could hook on your car and

Haul around the country. Hook on

In the morning and move down

The road. By the next morning be

In another trailer park. Cheap and

Easy.

Now cost to move may be twenty

Thousand. If you live in a

Metropolitan area, there may be

No place to move your older unit.

You are now trapped when the

Park owner raises the rent.

What do you do? The park owner

Knows you are trapped. You pay

Up or leave. In some cases.

Abandoning your home that may

Be worth many thousands of

Dollars.

If you stay and pay the rent

Increase. The value of your home

Goes down in value as the rent

Increases.

When the rent is stable with

Guarantees by contract or rent

Controls. Your mobile home goes

Up in value. What will you do? Sit

And do nothing! Or join us to fight

For stability on all rents.