LAGUNA BEACH : Mobile Home Park Deal to Be Studied

A divided City Council voted Tuesday to continue exploring a proposal that could result in Laguna Beach buying the city’s largest mobile home park.

The 3-2 vote came on the heels of a report from City Manager Kenneth C. Frank suggesting that the innovative purchase plan is risky but possible under certain conditions, including the owners’ willingness to sell the land for no more than $50 million.

One of the Treasure Island Mobilehome Park owners has already said the price is too low.

Of particular concern, according to the report, is the expectation that city purchase of the park would mean losing $80,000 annually in property taxes. The Laguna Beach Unified School District, meanwhile, would lose a total of $184,000.

While proponents say those losses could be offset, detractors said the deal is a bad one for the city.

“We’re essentially being asked to subsidize oceanfront living,” said Councilman Neil G. Fitzpatrick, who along with Councilwoman Martha Collison voted against the measure.

The plan, still sketchy at this time, calls for the city to explore various financing options that would allow Laguna Beach to buy the 29-acre oceanfront parcel in South Laguna.

As the scenario goes, park tenants would pay off the debt with their rents over about 30 years. Once the debt is retired, part of the land would be converted into a public park.

Proponents say the proposal would give the city a “free” park while aiding park tenants, who say the future has been clouded because of rising rents and the park owners’ plan to eventually redevelop the land.

“I think it’s clear there’s a wonderful opportunity here, not only for the residents of Treasure Island but for the citizens of Laguna Beach as well,” Councilwoman Lida Lenney said.

While most who spoke on the subject Tuesday seemed to favor investing more time in exploring the plan, there was a general consensus that many serious and complicated issues must be ironed out before the city could move forward to buy the park.

The cautionary report from Frank said the purchase would require a “formidable program” that would put the city general fund “at some risk.”

Opponents say the city should not have to take such a chance. Bob Mosier, president of the Laguna Beach Taxpayers Assn., said the city should stay out of “the real estate business” because such a project “could fall back on the taxpayers.”

The mobile home park is owned by a partnership led by Costa Mesa businessman Richard Hall and the firm of Merrill Lynch Hubbard. The group bought the park in 1989 for $43 million.

While Hall said Tuesday he will cooperate with the city during the discussions, he dismissed the proposed new purchase price as unreasonable.

“We don’t have a problem with the concept, we just have a big problem with the price,” he said. “It’s hard to come up with 29 acres on the ocean by the beach and my partners and I treat that like owning a Rembrandt. It’s very valuable. It cannot be replaced.”

The City Council has taken several steps to help park tenants in recent years, but their attempt last year to impose rent control on the city’s three mobile home parks failed when opponents launched a successful referendum drive against the measure.