The Frog on the stove

Many of you may remember the old story (a science class experiment maybe?) about the frog in the pot on the stove. 

If you put a frog in a pot and slowly turn up the heat, the frog won’t notice and you will end up with frog legs (if you like that sort of menu item) for dinner.

However, if the pot is already hot or boiling, and you put the frog into it, the frog (naturally) will jump out.

Some manufactured home park resident groups are like the frog.  They don’t recognize that the heat is about to be turned up.  As a result, they just sit there and maybe miss a real opportunity (to buy their park). 

And, sometimes they get thrown into the hot pot.

I write this because recently I had an interesting experience along those lines.

I was asked by a park owner to talk with the residents in his park about the group buying the park.  I don’t work for park owners and am leery about such situations since the owner usually has ulterior motives.

But the opportunity of an owner being willing to sell to the group is so rare, I could not avoid the process.  This was despite the fact the owner wanted a very premium price for the park, which would make the purchase both hard to swallow for the park group and difficult to accomplish.

So, pure of heart, noble of purpose, I participated in a group meeting of about 120 residents.  The owner was supposed to leave the meeting after a brief introduction but stayed throughout.  (The owner believes that he and his family are loved and revered by the group.) 

The goal of the meeting (at least, MY goal) was to see if we could get a committee of 10-15 residents to explore the purchase.  After about a hour & 1/2, we had folks sign up and got about 34 ‘committee’ members, who were to meet with me the next day, which we did.

WHAT I LEARNED:

1. When you have that many folks sign up for a Park Purchase Committee, many do not really want to be on the committee.  They want to ‘vent’ their frustrations and animosity toward the park owner and the situation, and, by extension, toward me.

2. The owner and his family are NOT loved and revered by the residents.  Surprise, Surprise.

3. When residents have lived in a family owned park for 18 years and get a bomb dropped on them (the notice of sale) shortly before a park wide meeting, it is probably not a good idea for Deane to be in the meeting.  This was the equivalent of  throwing the frog into the boiling water.  The frog does not like it and gets pissed at whomever is in the area.

4. When you have a resident group full of retired business men, they think they can extrapolate from very little information all they need to know about buying the park, and they become combative. 

5. When you have a resident group full of retired attorneys who have signed a 25 year lease, they think they are protected and don’t really care who owns the park.  They become combative.

6. When you have a group of really nice people, they cannot conceive of how bad life can be with a new owner who does not care how nice they are, and is seeking to maximize his investment return.

7. Finally, even if one is ‘pure of heart & noble of purpose’, one is not trusted by the group if one is viewed as a representative of the owner.

Interestingly, I subsequently had a conversation with the park president on a park purchase project under contract.  We are working on financing.  He asked me why I was less than my normal enthusiastic self, and I explained that I just got the crap kicked out of me in an ‘owner arranged’ resident group meeting.

His response:  “That is so COOL!” 

I was taken aback.  What is SO COOL about my getting beaten up by a group I was (at no compensation and paying my own travel expenses) trying to help.  [Turned out, he wasn’t focused on me; he was totally focused on how great it was that the OWNER was willing to talk with the group about buying the park.  Of course, he had just been through 12 years of litigation and hand-to-hand combat with the park owner.  When the owner agreed to consider the sale, it still took me about 6 months of guns and knives to come to an agreement that worked for both parties.  We will see if we can get it closed.]

SO, WHAT IS THE REALITY FOR THE PARK BEING SOLD: 

1. Retired business men have great life experiences and would be outstanding members of a park purchase finance committee.  However, they are wrong if they think they understand the financial situation now.  They have no actual information and their guesses are based upon a different skill set. 

2. Retired attorneys should read their lease form.  What they actually have is a five-year lease with five renewal options (if they chose to exercise the options).  Paragraph 5.3 of that lease says that at each renewal option, the owner can adjust the rent to ‘market’.  The owner also gets to determine ‘market’ and can use recent new rentals in the park, rentals in other parks in the area, value of convention home lots for sale in the area, and, other relevant economic data, etc., etc., etc.  The group however does not believe me that, with this language, a new owner can have his way with them and they have little recourse.

3. A small group of highly vocal residents who are upset with the situation can highjack the process.

BOTTOM LINE:
    I left the committee meeting, drove home, put my working file into storage and hoped that things will work out for the best for them.

Deane