Eminent Domain – The Attorneys

OK gang, we now have the City Fathers flirting with using their eminent domain powers to acquire your park.  And to facilitate this process, your group is putting together an ACQUISITION PLAN.  One of your first tasks is to assemble the TEAM, and a critical component of the TEAM is the ATTORNEYS.

As I mentioned before, the TEAM has to have a ‘critical mass’ of ATTORNEYS, not too many and not too few.  (And you have to make sure they all get paid by someone for their contribution.)

In an eminent domain action, you are likely to have a bunch of attorneys.  Your deal may not have all of them, but they are:

• The Lead Attorney – he/she is likely the person who got you to this point.  He may be a mobilehome resident advocate and/or a litigator.  He may also work with . . .

• The Failure-To-Maintain Attorney – These guys work with parks that have maintenance issues so bad that the owner is in violation of the Mobilehome Park Residency Law.  They may act as the ‘gun to the head’ of the owner to persuade him that selling the park to the group is his best deal and the least amount of owner brain damage.

• The City Attorney – these guys are usually pretty good guys.  They are typically underpaid and overworked, and they may or may not have any prior experience with eminent domain, particularly adversarial eminent domain with deep-pocketed mobilehome park owners.  They may likely have to hire, at your ultimate cost, . . .

• The Eminent Domain Specialist – these attorneys typically have special expertise in the area of eminent domain and will render an opinion to the City Fathers that what the City Fathers are doing is legal, proper and defensible.

• The Owners Attorney – these guys are usually smart, well paid, and experienced.  While they get their instructions from the owner, they also render guidance and advice about the deal.  Things go smoothest if they determine that your deal is the best available alternative for their client, and if they also are working to get it done.  During the valuation and negotiation stage of the deal, they will probably act a ‘junk yard dogs’ trying to get the Owner the best possible price and terms.

• The Park Conversion Attorney – This guy is a specialist in organizing your group for the resident purchase.  (The Lead Attorney may not want to do this work since it is very specialized and time consuming.)  The conversion attorney will, on behalf of the  group:

•  Incorporate the group as a California Non-Profit Mutual Benefit Corporation,

• Obtain securities permits from the State of California Department of Corporations (because the resident owned corporation will be issuing shares to park members which shares are subject to the securities law),

• Prepare all the disclosure and offering documents for each resident,

• Meet with the group and individual park residents to facilitate resident understanding of the deal such that the residents are willing to participate as members, and,

• Review all the lender documents on behalf of the group and render his opinion to the lender that the resident corporation is legal and has the authority to enter into the loan transaction.

• The Lender(s) Attorney – Lenders typically use the same attorneys for most of their transactions in a given geographical area.  They often prepare the loan documents for the lender and coordinate the actual loan closing.  There may be several of these guys if there are multiple lenders.

• The Bond Attorney – If the City Fathers decide to fund the deal using taxable or tax-exempt bonds, the bond attorney organizes that function and ultimately renders his opinion that the transaction is legal and proper under Federal and State law.  

• Some Other Attorneys that I can’t think of now.

Wow, that’s a lot. 

But they all pretty much know what they are doing and their presence in a transaction is normal.

Note that none of the stuff is new or overwhelming.  There are just a lot of complex moving parts to these deals.

However, YOU CAN DO IT!

I’ll be in touch,

Deane