Blog, News

The City of Santa Monica Ponders Spending a Bundle to Save a Mobile Home Park

By Ashley Archibald

CITY HALL — The City Council voted Tuesday to ask the owner of an embattled trailer park to sell his property, a potentially expensive proposition that would kill off planned city projects and that the trailer park ownership team has not considered in the past.

The request comes at the end of over six years of negotiations between City Hall and co-owner Marc Luzzatto to keep residents in their homes until details could be hammered out on a mixed-use condominium project proposed for the site.

That included a tenant relocation plan that would move residents into deed-restricted low-income apartments included in his project, or into the-city owned Mountain View Mobile Home Park.

In the meantime, the company has spent a lot of money maintaining the park, Luzzatto told council members.

“No good deed goes unpunished,” he said Tuesday.

It’s the first time aggressive action like purchase or eminent domain has come up with the council, but Luzzatto couldn’t say he was surprised.

“Nothing in this process has surprised me, nor will surprise me,” he said.

Luzzatto would not comment on whether or not he and his partners would consider the offer to sell for city staff’s estimated $22 to $30 million, or at all.

The direction came as a result of Councilmember Kevin McKeown’s urging that the council do something to preserve Village Trailer Park and allow its 51 elderly and disabled residents to live out their lives in place.

A request to sell fell far short of McKeown’s hope that city staff would explore “all options to protect the Village Trailer Park and its residents, including acquisition,” phrasing that would open the door to seizure through an eminent domain process.

Eminent domain is the seizure of private property by a government entity at or above market rate. It was characterized by City Manager Rod Gould as “the most extreme use of a city’s police powers.”

Using eminent domain to acquire the property could result in a sale price that exceeds the market rate by 50 to 100 percent of the cost, which would restrict City Hall’s ability to provide services or complete other approved projects by cutting into the General Fund.

The total impact of such a sale was hotly debated by local attorney Rosario Perry, who argued that the property could not be worth more than $8 million, and required an “honest appraisal.”

The $22 to $30 million figure given by staff was evaluated by looking at what 167,664 square feet of property would cost, per square foot, in other locations on the northeast side of the city, including airport property and property on Exposition and Olympic boulevards.

There’s a lot of information missing, Perry said.

“There’s no explanation of where these are, how big they are or what use is allowed on these properties,” he said.

Use, in particular, is important to any valuation because commercial is worth more than residential, and density also factors into the equation.

If the Village Trailer Park was valued like the properties around it, which are all low-density residential, it would only be worth $8 million, Perry estimated.

The question of zoning is an important one in what City Attorney Marsha Moutrie called “an unusual situation.”

The Planning Department is negotiating a development agreement with owners of the park to guide the potential condominium project they wish to build. That would change the zoning, and therefore the value, of the land on which the mobile home park sits.

“Whether the park would be valued as presently zoned, or valued at what the value might be with a development agreement, I can’t tell you I know that answer,” Moutrie said.

The council remained divided between what should be done to help the elderly residents and what kind of precedent City Hall should set in terms of considering the seizure of private property.

The council has seen many properties removed from the rental market and residents displaced, said Councilmember Pam O’Connor.

“If we want to go down the path to protect all renters, let’s take this up as a policy,” O’Connor said.

A flurry of three motions followed, including McKeown’s original — which was voted down — and one to simply study the question of the appraisal value as raised by Perry.

McKeown was disappointed by the outcome.

“The intent tonight was to look at how we might purchase the property,” McKeown said as he voted against the motion. “This and other substitutes that were made tonight looked for reasons not to.”