Laguna Mayor Backs City Purchase of Park : Acquisition: Robert F. Gentry will ask staff to consider feasibility of a buyout as a way to preserve the Treasure Island Mobilehome oceanfront facility.

The city of Laguna Beach would become landlord of an oceanfront mobile home complex and ultimately owner of a new city park under a plan being championed by Mayor Robert F. Gentry.

After the defeat last November of a city-supported ballot measure that would have placed rent controls on mobile home parks, Gentry is urging the city to consider taking an alternative step to preserve Treasure Island Mobilehome Park by buying it outright.

Gentry said he will ask the City Council at its Tuesday meeting to instruct city staff to study the feasibility of the plan, which was put together by residents of the 266-space mobile home park. It is the tenants’ latest attempt to harness what they consider exorbitant rent hikes and to ward off efforts by the park’s owners to convert the prime acreage to more profitable uses.

Laguna would be the first city in Orange County to take such action to protect mobile home tenants, although several other cities in the state, including Poway and Escondido in San Diego County, have used the technique successfully in recent years.

Under the plan, the city would buy the 29-acre mobile home park from the owner, an investment partnership headed by Costa Mesa businessman Richard Hall and the firm of Merrill Lynch Hubbard. The city probably would float a low-interest bond to pay for the property, which would be retired with the rent the mobile home owners would continue to pay for their spaces over the next 20 to 25 years.

Moreover, the plan says enough surplus rent money would be accumulated to finance the construction of condominiums on a portion of the property that today’s mobile home owners or their heirs could occupy as owners. The remainder of the acreage would become an ocean-view public park.

“I’m excited about the idea. The excitement comes from the fact that the residents of Laugna Beach could have another oceanfront park and the residents of Treasure Island could have secure housing,” Gentry said. The plan, he said, would include a rent subsidy for low-income tenants. However, the concept was developed without approval of the park’s owners, Hall said. He contended that the rents simply would not generate enough money to pay fair market value for the property.

The buyout plan does not state an acquisition price, and Hall would not say what price would interest the investment partnership. But he did indicate that they would not accept less than the $43 million they spent to buy the park in 1989.

“It all sounds marvelous, except that we won’t sell (the park) to the city,” Hall said.

In retort, the plan’s drafters said they are willing to negotiate a fair price for the park and that their own analysis shows that the park rents will generate enough cash to finance the park purchase.

K.P. Rice, president of the Treasure Island Residents and Owners Assn., said his group’s offer would be acceptable “to any sane person representing the interests of investors.” But he added that the offer would be tempered by factors including the depressed real estate market and the difficulty that the owners would face trying to develop the mobile home park for any other purpose.

In 1989, a year after Laguna Beach annexed the South Laguna area that included Treasure Island, the city rezoned the park acreage for mobile homes only, effectively quashing the owners’ plans to develop it with condominiums and single-family homes. Although the park owners have bought and demolished some of the mobile homes and continue to warn prospective mobile home buyers that they intend to close the park, Hall concedes that for the foreseeable future all development plans are on hold.

Rice said he appreciates the city’s role in helping the tenants. He said he believes the county Board of Supervisors, which formerly governed South Laguna, were developer-oriented. By contrast, he said, the city is a “humanistic organization. We are dealing with people who care about people.”

Hall contended that the park purchase plan will not provide affordable housing in Laguna Beach, as its proponents claim. He noted that spaces in the park now rent from about $600 to $2,000 a month. However, Gentry said the income level of the tenants is not important to him.

“I want to help them secure their home whether or not they have money,” he said. “I think it is the business of government, especially local government.”

While noting that the plan is “conceptual” with no numbers attached, he said, “that is how we do it in Laguna. We have a dream and follow the dream.”

Gentry said that, on the advice of City Manager Kenneth C. Frank, he will propose that the city staff work with the tenants’ group to further define the offer and discuss it with the property owners. After reviewing the staff’s report, the City Council could hire consultants to do more detailed financial studies, which would include an appraisal of the park property, he said. Sue Loftin, the attorney representing the tenants, contends their proposal is rooted in reality.

“It is the genesis of three years of talking and trying to come up with a plan that would accommodate the park owners’ needs, the residents’ needs and the city’s needs,” she said.

While acknowledging that Treasure Island is a “very expensive park,” she said, “we have done detailed financial analysis on it that shows it is feasible.” To raise more money, she added, some of the park could be sold for development. If the owners are intractable, she added, the city could acquire the park through eminent domain.

Hall objected. “These are the same people who last November wanted rent control because they couldn’t afford to pay the rents,” he said. “So how could they afford to buy it?”

While city buyouts of mobile home parks worked in Poway and Escondido, he said, those properties were far less expensive.

Hall said he will be sure to attend Tuesday’s council meeting. He said he intends to forewarn the city that if it tries to condemn the park, “it won’t be a friendly condemnation.”

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