Owners of the Paradise Cove mobile home park in Malibu have begun taking steps to close the park as part of a plan to sell half of the property to tenants and turn the other half into a mixed-use commercial development.
In a U.S. Bankruptcy Court hearing last month, Kissel Co., owner of Paradise Cove, requested the use of $200,000 to hire consultants to assist in closing the park. The company, which filed for Chapter 11 protection in September, 1993, must seek approval from the court when making financial moves.
Steve Dahlberg, president of Kissel Co., said that about six consultant groups will be hired to prepare a formal relocation impact report as is required by state and city laws. The report will address, among other issues, the availability of adequate replacement housing and the relocation costs for the 90 tenants who live in the lower portion of the park, where a hotel and multifamily housing would be built.
Dahlberg said that the company has 15 acres of land to the west of the park and 10 acres to the east that are being considered as relocation sites. He added that Kissel's bank, Wells Fargo, has "confidence" in the plan.
The move by Kissel Co. comes amid a long legal battle between the city of Malibu and the owners of the city's only two mobile home parks. Kissel Co. and Adamson Cos., which owns the Point Dume Club mobile home park, sued the city over its mobile home rent control ordinance, overturning key provisions of the law in federal court in August.
Kissel Co. claimed in bankruptcy proceedings last year that the rent control law of 1991, which rolled rental rates back to 1984 levels and required they remain at that level for two years, forced the company to file Chapter 11.
After the city lost its battle to defend the law in its entirety in federal court, City Atty. Christi Hogin initiated settlement negotiations with the two companies, which are now suing the city for over $3 million in back rent and attorneys' fees. The damages trial is scheduled for Dec. 6.
"We're working with the city toward a settlement, but if the settlement doesn't happen, we'll continue with the closure," Dahlberg said.
Under the settlement proposal being discussed by the two parties, Kissel Co. would sell the upper portion of the park to the tenants, relocate residents of the park's lower section, and receive city support for its plan to develop the lower park into a multiuse commercial development.