Gardena May Issue First Bonds to Buy Mobile Home Park

GARDENA —  Under pressure to come to the aid of a group of mobile home dwellers who face eviction from their park, the City Council has voted to move forward with a plan to purchase it.

Council members, by a unanimous vote, instructed city officials to pursue a proposal whereby the city would issue revenue bonds to buy the Village Mobile Home Park at 17100 Gramercy Place. The city would then transfer ownership of the park to its 50 tenants who, in turn, would pay off the bonds.

The plan, which still must overcome several large hurdles and then gain final approval from the council, would mark the first time the city has attempted to sell revenue bonds, according to city officials.

Tuesday’s vote came despite the concern of some council members that the plan may set a bad precedent.

Councilwoman Gwen Duffy moved to explore the possibility of putting the matter before the city’s residents this spring for an advisory vote. The motion was rejected.

“I don’t want to dilly-dally around with this,” said Councilman Mas Fukai, who first asked city officials to explore the idea of selling revenue bonds. “ . . . We are talking about a critical situation here. We are talking about human lives. I really think it is time for action.”

The council’s vote came about two months after the park’s tenants were informed that they would have to move within 12 months. The park owners, a group of South Bay businessmen composed primarily of doctors, told the tenants and the city that they planned to build a medical building on the site.

The planned evictions surprised the tenants, the majority of whom are senior citizens and have lived at the park for years. In recent weeks, many of them have made emotional pleas before council members, saying they would find it difficult to either pay to relocate their homes or find another site within a reasonable distance.

As a result, the council in mid-December passed an ordinance requiring mobile home park owners who plan to convert their land to other uses to file a relocation impact report with the city’s Planning and Environmental Commission. Under the ordinance, the city could force park owners to provide financial or other forms of relief to tenants.

Under the plan discussed Tuesday, the city would acquire the money to buy the park by selling tax-exempt revenue bonds to institutional purchasers. It would then transfer the ownership of the park to the mobile home residents, either through a cooperative or a homeowners association.

The city’s expenses would be recovered through the bond sale. However, it would ultimately be responsible for guaranteeing the bonds should the park’s tenants fail to pay.

Ken Landau, the city’s assistant city manager, estimated that if the bond sale becomes a reality, tenants would pay an estimated $275 to $300 a month. Tenants now pay an average of $250 a month in rent, he said.

Before the plan can move forward, the city must obtain a bond rating and determine whether the proposal is legal under state law.

In addition, the city would have to successfully negotiate the purchase of the three-acre park. Landau said preliminary discussions with the owners have indicated that they would be willing to sell the land. The owners apparently purchased the land last year for about $1.3 million.

Victor Mormile, the spokesman for the Village Mobile Home Park tenants, expressed confidence that the plan could work. Even though the tenants, many of whom are on fixed incomes, would pay a slightly higher monthly rent, they would be gaining equity in the land, he said.

“I think it is a marvelous idea, and I think the tenants are in favor of it,” he said. “They stand to lose so much if something of this nature is not done.”

According to Landau, other cities throughout California are considering programs similar to the sale of revenue bonds to purchase mobile home parks. Although the City of Escondido is considering a proposal to use redevelopment agency bonds to purchase a mobile home park, the sale of revenue bonds for such a purpose has apparently never been attempted, he said.