5/23/2005

Agency may buy Monte del Lago: Monterey (CA) Herald, 5/21/05

The Housing Authority has researched seeking a court order to declare eminent domain

By Joe Livernois

Residents in a North County mobile home park heard encouraging news Friday night in their fight against the corporate owner of their park.

Officials from the Monterey County Housing Authority told tenants of the Monte del Lago park that declaring eminent domain on the property might be possible, depending on how it's appraised. The appraisal is expected to be completed within two months.

"The appraisal will be a huge factor," said Starla Warren, a Housing Authority official who has been investigating numerous scenarios that could help residents fend off steadily escalating rents.

Residents first came to county officials two years ago, after the owner of Monte del Lago started terminating leases and ratcheting up rents on the spaces. Tenants own and make mortgage payments on their mobile homes, but must lease the ground on which the homes sit at Monte del Lago.

The 310-home park is owned by Equity Lifestyle Properties of Chicago, a public company that specializes in buying up undervalued properties.

Resident Bill Hellam on Thursday received notice from Equity Lifestyle that his rent will increase soon to $875, an increase of $350. Hellam is 87 and has lived at Monte del Lago for 24 years.

After determining that it will not pursue a rent control ordinance that would stanch the rent increases, the Board of Supervisors asked the Housing Authority to investigate alternatives. The agency operates housing complexes for low-income and aging residents throughout Monterey County.

The Housing Authority has researched the possibility of seeking a court order to declare eminent domain on Monte del Lago and Warren presented various scenarios to the agency board Friday night. By acquiring the property, the Housing Authority could establish restrictions on rent.

With eminent domain, the agency would have to prove that its acquisition of the property is needed to advance the "public good." The agency would then pay the owner fair market value.

According to Housing Authority officials, it might be able to pull off such an acquisition if the property is not valued at more than about $30 million.

At the same time, the Housing Authority could be in for a legal battle with Equity Lifestyle Properties, which is well-known among mobile home owners as being furiously litigious.

During the past several months, Monte del Lago residents have expressed frustration with the Housing Authority because they sensed it was reticent about pursuing action on their behalf.

But residents said Friday they were impressed with Warren's presentation. And agency officials pleaded with the residents to be patient.

"The big issue for us is that we'll likely be fighting a legal battle with a huge conglomerate," said Alan Styles, chairman of the Housing Authority board. "I understand the emotion, but we need to be careful that what we do here is not going to jeopardize the clients we already have. We need to be absolutely sure what we're doing."

Residents are already starting to flee the park. Among those leaving is Joe Russo, a retired Catholic priest who led tenant efforts against Equity Lifestyle Properties. Russo said he can't afford the rent increases and is preparing to move to another park in Corning, above Chico. He said rents there are about $350 a month, about $600 less than he is paying at Monte del Lago.

But at 87, Hellam said he has no choice but to try to find a way to pay his $875 rent. He said he retains hope that the Housing Authority will find a way to ease the situation.

"I have a feeling after tonight that something is going on," he said. "There are so many people who are giving up hope, but I have a good feeling."


Monterey Herald: www.montereyherald.com