Councilman to Sell Trailer Park Bought by ‘Mistake’

Councilman Steve Andersen has announced that a mobile home park he recently purchased is located in a redevelopment area, which he termed “an honest mistake” that he intends to try to rectify by selling his share to his partner without profit.

State laws prohibit officials such as Andersen from buying property in redevelopment areas in their cities.

“When I acquired my interest in this property on July 11 . . . I was unaware that this property was located in a redevelopment area,” Andersen said at a special meeting of the City Council on Saturday. “During my time on the council, I thought I had come to know every boundary of the 960 or so acres in Project Area No. 2, but in this case, I was wrong and I should have been more careful.”

Andersen, who is a lawyer specializing in real estate, said city officials informed him last Thursday that the property is in a redevelopment area.

Despite Andersen’s announcement, the Los Angeles County district attorney’s office said this week it had begun a review of the situation.

“It looks like something that could be resolved quickly,” Deputy Dist. Atty. Candace Beason said. “The divestiture should be complete this week.” She said she will examine documents to be sure that Andersen does not retain any financial interest in the property.

Beason said that violations of the state law, depending on circumstances, could be either a felony or a misdemeanor. Andersen’s disclosure and divestiture of the property could weigh against prosecution, she said.

Andersen said, “I think they would have a hell of a time showing criminal intent on my part.”

Even before Andersen’s announcement, the purchase of the Caravan Trailer Lodge by Andersen and attorney Jim Sloey was generating controversy in connection with rent increases Andersen imposed and a petition for a rent-control ordinance that is expected to come before the council.

Andersen, who purchased the property for $390,000 on July 11, has acknowledged that he raised rents July 29, in some cases more than 40%. Andersen’s increases came on top of a rent increase imposed by the former owner on July 1 while the property was in escrow, according to tenant Joe Pelletier.

Pelletier, who with some other tenants filed a complaint against Andersen before the city’s Rent Mediation Board, said the two increases raised his rent from $155 to $250--or 61%.

Andersen said his increases were based on fair market value and the need to make his mortgage payments. According to information provided by Andersen and Sloey, the mortgage payments on the loan are about $3,900 a month. (The two partners said they paid $25,000 in cash as a down payment for the property and that the former owner lent them the $365,000 balance in a 15-year loan with interest at 10%.)

In addition to the tenant complaints about the rent increases, rent-control advocate Eleanor Carlson said the councilman’s ownership of the mobile home park and the size of his increases would create a conflict of interest for him in connection with pending council action on a petition for a rent-control ordinance.

A third issue involving the mobile home park centered on uncertainty among tenants about Andersen’s plans for the property. In a recent interview, Andersen said he was considering it for development as a senior citizen housing project.

He acknowledged, however, that any special incentives the city would provide, such as waiving customary building fees or refunding part of the property taxes, might violate the state law prohibiting city officials from entering into contracts with the city.

“It looks like any city incentives would have been impossible. The safest thing, I guess, is not to buy anything in Hawthorne.”