Trailer Park Takeover Plan Studied : Planning: City could become the landlord of the oceanfront Treasure Island Mobilehome Park.

In an ongoing, and some say misguided, effort to rescue Treasure Island Mobilehome Park tenants from an uncertain future, the City Council has voted to conduct a preliminary study of a plan that could make the city the landlord of the oceanfront complex.

The plan calls for the 29-acre park to be redesigned eventually, partly with condominiums where current tenants or their heirs would live. The rest of the park would be converted into a new city park.

Should Laguna Beach undertake such a project to secure the park residents’ future, it would be the first city in the county to do so.

“It’s a complex, unusual and, I might say, very, very creative idea,” Mayor Robert F. Gentry said of the plan, which was proposed by tenants who say their futures have been jeopardized by rising rents and by the park owners’ plans to redevelop the park eventually.

Gentry said eliminating the residents’ fears about losing their homes would be a feat comparable in importance to preserving open space in Laguna Canyon.

But council members Neil G. Fitzpatrick and Martha Collison balked at the proposal, which they said would cost the city too much time and money and be unfair to the park’s owner, an investment partnership led by the firm of Merrill Lynch Hubbard and Costa Mesa businessman Richard Hall.

“To me, if someone is going to develop the property, why don’t we let the owner develop the property?” said Collison, a realtor who said the appraisal alone would cost the city $40,000.

Hall has said he has no plans to sell the park, so the city might have to resort to eminent domain to acquire the land, Collison said.

“I’ve got a million questions about this, folks. I think it’s a bad proposal,” she said.

The council has taken steps to help park tenants in recent years, including rezoning the land for mobile home use only. But last year, foes defeated a bid to impose rent control on the city’s three mobile home parks.

Treasure Island residents responded by creating this new plan, which would probably call for the city to float a low-interest bond to pay for the property and for the residents to pay off the loan with their rents over the next 20 to 25 years. Surplus rent money would be used to build condominiums for residents.

But Fitzpatrick said that the plan relies on “warm fuzzy generalities” and that the city has already spent “thousands of hours” of staff time on Treasure Island proposals.

“First of all, there is no free lunch,” Fitzpatrick said. “Actually, it’s a pro-development project. As proposed, it will increase the number of units that are there today.”

While acknowledging that many issues must still be worked out, the council voted, 3-2, to have city staff members prepare a preliminary report examining the possibility of the city buying the park.

“Let’s just take the first step and see what happens,” Councilwoman Lida Lenney said.