W. Covina Aids Tenants in Bid for Mobile Park

Tenants of one of the city’s two mobile home parks have received a boost from the City Council in their efforts to own the park.

The council has asked the federal Department of Housing and Urban Development to approve a plan that would allow the city to lend the residents $250,000 as a down payment on the 157-unit Friendly Village Mobile Home Park.

If HUD approves, West Covina would become one of the first municipalities in California to set aside federal funds to help mobile home residents buy their park.

The request was included in a $767,000 grant proposal submitted to HUD by the city’s Human Resources Commission. A decision on the request is expected by year-end.

Possible 7% Interest

Gus Salazar, program director for the commission, which would administer the loan, said it has not decided terms but that interest on the loans could range from 1% to 7%.

Clark Hagstrom, a Friendly Village tenant and a member of the tenants purchasing committee, said that a study contracted by the tenants found that 54% of the 225 residents would qualify for federal financial assistance and that such assistance would make tenant ownership economically feasible.

Salazar said the $250,000 loan figure is based on the percentage of tenants who are eligible for federal assistance. He said tenants who do not qualify for federal assistance may contribute personal funds toward a down payment and that his agency could request additional HUD money for the 1986-87 fiscal year if the tenants’ offer falls short.

No purchase price has been established, and Joseph Austin, the attorney representing the limited partnership that owns the 17-acre park, said the owners have not told him of a desire to sell to the tenants. Bill Schweinfurth, general manager of a chain of 24 mobile home parks that includes Friendly Village, did not return telephone calls from The Times.

‘Everything for Sale’

But Hagstrom said he is confident the owners will not ignore an attractive offer.

“Everything on the face of the earth is for sale, if the price is right,” the 68-year-old tenant said, adding that both tenants and the property owners are keeping their offering and asking prices secret until negotiations begin.

Despite the park’s name, landlord-tenant relations have not been friendly in recent years. Hagstrom said most of the residents began their five-year battle with the landlords after several years of what they claimed were exorbitant rent increases that averaged 12% a year.

Tenant complaints led the City Council to enact a rent-control ordinance last year that rolled back rents of tenants without leases to the rates of December, 1983, and permitted a 6.6% increase for 1984. However, the ordinance offered little relief to the tenants, mostly senior citizens.

80% Had Leases

Schweinfurth previously said 80% of the tenants had signed leases specifying annual rent increases of 12%. As a result, he said the ordinance rolled back rents for only about 15 tenants.

Nevertheless, soon after the ordinance was passed, Friendly Village’s owners filed a lawsuit against the city, winning a preliminary injunction that halted enforcement of the ordinance. The injunction remains in effect and a trial date has not been set.

A study done by the Los Angeles Community Design Center--a nonprofit organization that helps low-income tenants buy apartments or mobile home parks by forming tenant cooperatives--has shown that more than 97% of the tenants favored buying the mobile home park, said center director Anita Landecker.

The organization, which is advising Friendly Village tenants, will represent them in any purchasing negotiations, Landecker said.

Before the tenants can qualify for federal funds and make an offer for the park, they must form a nonprofit corporation, Landecker said. Hagstrom said the tenants plan to file their corporate application within 30 days.

Precedent in San Diego

HUD first helped mobile home tenants in California become property owners when it provided a $1-million community development grant to San Diego County’s Community Development Department last year, a HUD spokesman said. As a result, two tenant-run nonprofit cooperatives are paying mortgages on parks they own and operate, the spokesman said.

Friendly Village residents, like their San Diego counterparts, are at the forefront of a mobile home tenants movement that has grown over the last five years among the state’s more 1 million mobile home tenants, Landecker said. The movement has grown out of a desire by tenants to protect themselves from skyrocketing rents, she said.

After Friendly Village tenants informed West Covina officials of the successful efforts in San Diego, the city began to give serious consideration to a tenant buy-out as a means of resolving its legal battle with the owners of the park.

Officials say the city is not taking risks by attempting to secure financing for Friendly Village tenants.

Funds Could Be Diverted

If negotiations break down between the tenants and the park owners, Salazar said, any HUD money allocated to the buy-out effort could be diverted to other community development projects in the city.

And the tenants may be able to strengthen their bidding power by applying for financial assistance to the state-funded Mobile Home Park Assistance Program, said program manager Gerald L. Rioux.

By year-end, Friendly Village tenants may begin to apply for 7% loans on as much as 50% of the purchase price from the program’s $3-million fund, Rioux said. The program was created by legislation authored by state Sen. John Seymour (R-Anaheim) and was signed into law last year.

Rioux said the Friendly Village tenants will have a better chance at receiving state funds if the city succeeds in securing federal monies for their effort. Still, he said, state and federal funding will not guarantee success for the tenants because private lending institutions are taking a cautious approach to financing mobile home purchases by tenant cooperatives.