Tenants Object : Supervisors OK Leases at Marina Club
Turning aside emotional appeals from tenants of the Marina City Club, the county Board of Supervisors on Tuesday selected the J. H. Snyder Co. to take over the facility and sell off its apartments as condominium-like subleases.
The board also approved lease prices ranging from $85,000 for single units in the waterfront-view towers to $725,000 for a four-bedroom penthouse.
One of the most controversial aspects of the agreement is that tenants must prepay part of their 81-year leases, amounting to an average of $63,000, and then must pay steadily escalating monthly payments for land rental and other charges.
The board’s vote was 4 to 1, with Supervisor Kenneth Hahn criticizing the arrangement as being of doubtful value to the county and generating millions in profit for J. H. Snyder Co.
‘Mass Eviction’
Robert J. Steele, an attorney representing many of the 600 current tenants, called the decision “a mass eviction of people who have the common sense to know that in the United States of America you do not prepay your rent without owning something.”
Although a tenant who buys a sublease can then sell it to another party, he will not actually own the apartment or control the extensive common areas, as a condominium owner would. Instead, the building will be controlled by the Snyder Co. and the land will continue to be owned by the county.
Jerome Snyder, a prominent developer and head of the Snyder Co., told the board that 100 of the current tenants already have reserved apartments under the new plan, and about 100 non-tenants have reserved units.
Snyder said the arrangement offers current tenants many advantages, including fixed-rate mortgages and a 6% discount on the sublease price that will be offered on the market.
“I’ll stick my neck out and say that most of these people (protesting) are going to buy a lease,” Snyder said.
Steele challenged whether tenants have any true advantage, noting that Snyder was never able to guarantee that tenants could write off their sublease payments as mortgage payments on their income tax returns.
Snyder and county officials both have said that current opinion is that the subleases can be treated as mortgage payments. However, the Internal Revenue Service has not ruled on the issue.
Steele also questioned whether anyone will buy the subleases in the future, when current tenants decide to sell.
“When the people who live there tell a prospective buyer that it’s not a condo, it’s just a prepaid lease . . . housing values will plummet,” Steele said.
