Cut in Relocation Aid Upheld for Now

An Orange County judge has tentatively upheld a revised city ordinance that drastically cuts relocation benefits for residents who are being forced out of Treasure Island Mobilhome Park.

With the park slated for redevelopment, the city and tenants have battled over whether the current City Council had the right to change relocation benefits approved by a previous council in 1994.

The latest resolution cuts the average amount that each of 60 coach owners would receive to $20,000 from the previous benefit of $130,000, an attorney for the tenants said. But the city’s attorney said residents would not necessarily have received the higher amount anyway.

Superior Court Judge Tully H. Seymour’s ruling Wednesday is tentative because it allows attorneys time to argue further.

Coach owners’ attorney Stuart Parker said Friday he will present further arguments. If the judge’s ruling becomes final, Parker said he will file an appeal.

“We’re obviously disappointed because we think that, in addition to legal errors, there’s just really misunderstandings of the factual events,” Parker said.

Residents have long maintained they should be reimbursed for the “fair market value” of the homes at their oceanfront location, while landowners have said that state law requires only that they pay the “reasonable cost of relocation.”

The original 1994 ordinance included an option that might have allowed residents to receive a total of $23 million in benefits. Park owners sued the city. Later that year, a Superior Court judge ruled that the city could demand relocation benefits, but only for the park’s permanent residents.

While that ruling reduced the potential benefit for park residents to about $13.5 million, park owners--a partnership headed by Merrill Lynch Hubbard and Costa Mesa businessman Richard Hall--appealed it.

Trying to disengage the city from the legal mess, the City Council voted last year to revise the benefits package, an action that infuriated coach owners and prompted another lawsuit.

In June 1995, the landowners struck an agreement with most of the park’s tenants guaranteeing them 27.5% of their coaches’ value if they moved with a year.