Earl Phelps has lived at the Village Mobilehome Park, a small park hemmed in on three sides by industry, for 21 years, and he doesn't want to move.
The 83-year-old retired employee of a railroad and a can manufacturer says much of his life revolves around the park and his neighbors, many of whom have also lived in the same location and coaches for years.
Now, however, Phelps and his 50 or so neighbors wonder if their close-knit community on Gramercy Place is about to unravel.
Last November, with no warning, they were issued eviction notices informing them that they would have to move from the park within 12 months to make way for a medical clinic.
"I've got $13,800 sunk into my home," Phelps said, explaining that many mobile home parks will not accept his 27-year-old coach because it is considered too old. "And if I sold it to a dealer, I probably couldn't get more than $5,000."
Phelps and other park tenants hope that the city will come to the rescue with a plan that would allow them to not only stay where they are, but avoid any future rent increases because they would ultimately become the owners of the park.
The proposal, similar in many respects to one now under consideration by Escondido officials, calls for the city to issue revenue bonds to buy the park from its owners. The city would then transfer ownership of the park to the tenants, who would pay off the bonds through their monthly payments.
"The idea is fine if the price isn't too high," Phelps said, echoing the sentiments of many of his neighbors. "All we can do now is wait and see how the whole situation turns out and what it is going to cost us."
The plight of the Village Mobilehome Park tenants is not unique. As urban land values have leaped in recent years, a number of mobile home park owners throughout Southern California and elsewhere have found it more profitable to convert their land to other uses.
As is the case in many such conversions, Village Mobilehome Park tenants face problems other than just finding another space in another park. The majority of them are elderly, and many are on fixed incomes. Many are confronted with the same situation as Phelps--a scarcity of parks willing to accept their aging coaches.
"Most of the modern parks won't accept the older mobile homes," said Fred Kahane, housing program manager for the Southern California Assn. of Governments. "So the owners of these coaches are left in the unique position of being a property owner with no place to put their property."
City Council Action
It was largely because of these problems that the Gardena City Council voted recently to pursue the possibility of issuing the revenue bonds. Unlike the plan in Escondido, which city officials say came about in response to friction in recent years between owners and tenants over rent increases, the plan in Gardena is viewed by most officials as an immediate solution to a single problem.
But Gardena officials admit that there are a number of obstacles to overcome before the bond proposal, which still must gain final approval from the council, can become a reality. One obstacle is persuading the owners of the park, a group of South Bay businessmen composed primarily of doctors, to sell the three-acre parcel to the city.
Ronald Wasserman, an attorney representing the owners, said last week that his clients are holding discussions with city officials over the property. He declined to divulge the nature of the talks, or whether an agreement is imminent.
Gardena officials have publicly expressed confidence that a deal can be struck for the land, which apparently was bought by the present owners last year for about $1.3 million. "The owners have indicated a willingness to work with the city and sell the parcel if a comparable site can be found in Gardena," said Ken Landau, Gardena's assistant city manager.
Other city officials have said privately that the owners have indicated they would sell the park in exchange for a piece of the prime real estate along Artesia Boulevard that the city is purchasing from the California Department of Transportation. However, it is not known when the city, which has earmarked the land for commercial purposes, and Caltrans will complete negotiations over the 26-acre parcel.
Besides purchasing the park, Gardena must obtain a bond rating before it can proceed with the proposal. The city has never issued any bonds. And it must determine if issuing revenue bonds to purchase a mobile home park is legal under state law. Landau said bond counsels contacted by the city have so far indicated that it is probably legal to issue the bonds.
Even if it is legal, at least one council member, Gwen Duffy, has expressed concern that the city would be forced to pay off the bonds if the tenants default on their monthly payments. Under the proposal, the city would be reimbursed for its expenses but would ultimately be responsible for guaranteeing the bonds through its general fund.
Councilman Mas Fukai, who first asked city officials to explore the possibility of selling revenue bonds, said he believes the city's risk is small. "If there is a default by a tenant, the property can be sold; that's your biggest collateral," Fukai said. "And as I see it right now, there are going to be other trailer parks facing similar situations, so there would probably be a waiting list to get in to this park."
Fukai said he does not believe the bond proposal would set a bad precedent. He said tenants in the city's 27 other parks are protected by an ordinance the city passed in mid-December requiring park owners who plan to convert their land to other uses to file a relocation impact report with city's Planning and Environmental Commission. Under the ordinance, which was passed in response to the problem at the Village Mobilehome Park, the city could force park owners to provide some financial or other relief to tenants.
Perhaps the biggest issue still unresolved is just how much each tenant would be required to pay. The city, which is expected to sign a contract with Security Pacific Bank within the next several weeks to package the bond sale, says that the rents the city receives from the tenants must equal 125% of the yearly debt service of the bonds.
Landau has estimated that tenants would pay $275 to $300 a month. Tenants now pay an average of about $250 a month.
"The difficulty is that you have got to keep the price of the individual's payment down after the park is purchased in order to make it affordable," said Charles Elsesser, a real estate attorney who has worked with mobile home tenants who have purchased parks from owners. "In most mobile home parks, you have 30% of the people who are in a very low income situation. Any increase in their rent is going to force them to leave."
"I think the way you have got to look at it is to have no displacement, zero displacement," Elsesser added. "No one should be forced to leave because of the cost. Basically, if you can't do that, (the proposal) is not a go."
Elsesser said a number of subsidies, such as federal community block grant funds, are often tapped to assist tenants seeking to buy a stake in a park. "There are a myriad of ways you could handle it," he said. "What you have to do is keep thinking up new ways."
'A Lot of Widows'
Despite all the uncertainties, tenants interviewed say they are in favor of the plan. And they say that even though they might be forced to pay a higher monthly rent, they would ultimately be gaining security and equity in the land.
"It would hurt, let's face it; any increase would hurt," said 60-year-old Jean Mayo, who has lived in the park for about three years. "My husband and I feel that if (the bonds are sold), our rent is going to go up, but we certainly are going to be better off."
Mayo admits that she and her 70-year-old husband, Francis, are in a better situation than many of their neighbors. Both still work, she said, and could absorb a small rent increase without any aid.
That is not the case for others. "We have a lot of widows here who would be up against the wall if their rents went up too much," Phelps said. "We have ladies in here who only get $400 or $500 a month and are paying $300 in rent and utilities."
One such person is 70-year-old Ann Wells, who was widowed last June and relies on Social Security as her sole means of support. She now pays $225 a month in rent and pays her utilities separately. She said she figures she could afford a rent increase to $300 a month, but only if that amount included her utilities.
Nevertheless, Wells said she believes city officials should pursue the plan to sell bonds. "It's our last chance to stay where we are," she said. "Frankly, I don't know where I would go if I had to move. Sure, I have kids, but I don't want to depend on them. I would lose all my independence if I am forced to move."