MHP EMINENT DOMAIN – ROUND TWO
A lot of CA resident groups living in problem MH parks have viewed Eminent Domain as sort of a ‘Holy Grail‘ — their vision: the local City Fathers, aware of the resident’s plight, acquire the park and transfer it to the group.
Sweet . . . . . , but seldom, if ever, used.
However, the Eminent Domain concept has some new life when a Bay Area Housing Authority announced that they were considering the use of Eminent Domain to acquire a park in Silicon Valley.
A fight between the good guys and the park owner (and his attorney) has ensued and is on-going.
But the fact that a reputable agency is considering Eminent Domain lends the concept new credibility.
PROBLEMS
But . . . . . there are problems that must be considered by ANY group trying to use Eminent Domain. (Note that I am not an attorney. I’m a financial consultant that works on this stuff. But I hang around with lots of attorneys, so take this advice for what it’s worth.)
1) Remember that your group HAS to make the use of Eminent Domain politically palatable to the City Fathers. They are not going to take the political risk and political heat unless the local public support is obvious.
2) Remember that your group HAS to make sure the City Fathers have a reasonable plan to achieve the goal – the available money (probably someone else’s money, not the City’s (they don’t have any)), a unified, supportive resident group, and professional help for the group to facilitate the transaction, among other things.
3) Remember the City Fathers’ don’t necessarily want to purchase the park for YOU. They may have a plan to purchase it for SOMEONE ELSE – a local nonprofit corporation, the City itself, the County Housing Authority, whomever. You HAVE to make your group the BEST ALTERNATIVE, and not just swap your current park owner for a new landlord.
4) Remember that the price to be paid for the park is, in the final analysis, determined by the Court, or negotiation with the owner. The value will be based upon the value of the park “as is”. If your park is zoned for a mobile home park and is under rent control – good news. The value will be relatively low. On the other hand, if your park is zoned for multifamily housing or commercial development, your price may likely be based on the value as a development site – not good news. The value will be relatively high.
Bottom Line:
Don’t view Eminent Domain as a solution to all your problems. But it may be helpful in getting your owner to sell you the park.
If you would like to talk about any of this stuff, contact me (Deane Sargent – deane.f.sargent@gmail.com, phone 415-271-3919.
Deane Sargent and PMC Financial Services have been helping mobile home park resident groups and cooperatives to organize and find financing to buy their parks for over 20 years.