Battle Over Rent Control Still Rages in East Palo Alto, Page Mill Properties' Relations With City Officials Remain Bitter

Tuesday, December 16, 2008
Community Legal Services in East Palo Alto

The battle between the City of East Palo Alto and Page Mill Properties LLC, a Palo Alto-based real estate investment group, over interpretation of the city's Rent Stabilization Ordinance (RSO) continues to rage. Community Legal Services in East Palo Alto (CLSEPA) is currently working with local law firms and legal aid organizations to defend families against eviction lawsuits being filed by Page Mill after serving these tenants with steep rent increases over the past year. Page Mill and its partners have acquired 1,789 rental units in the Woodland Park neighborhood since 2006.

In response to Page Mill's Nov 25 press release claiming victory over the City and announcing an agreement in which the City purportedly acknowledged that the rent hikes at issue were not illegal, Interim City Attorney, Valerie Armento, remarked "Page Mill's news release completely overstates the significance of the dismissal and agreement. All the City determined to do was forgo trying to obtain a permanent injunction against the rent increases. The numerous litigation matters Page Mill continues to file against the City are rapidly consuming its financial resources." Attorney Rick Jarvis, who represented the city against Page Mill, added, "This doesn't mean the city agreed that the rent agreements were lawful."

Regarding Page Mill's current relations with the city, Armento went on to say, "While they claim to want to work cooperatively with the City, they clearly have not tried to do so. A perfect example is their current construction in the City right-of-way without permits, contrary to stop work orders, and on weekends when City offices are closed."

After reading the Nov 25 release, Court Skinner, Chair of the City's Planning Commission, added, "It paints a rosy picture for Page Mill at the expense of the city and its citizens. That seems to be the way Page Mill operates. They consider themselves above the law."

In response to Page Mill's actions, Mayor Ruben Abrica will introduce a resolution at the Dec 16 City Council meeting condemning what he calls Page Mill's "unconscionable and underhanded tactics" towards the City and its tenants, and protesting CalPERS' investment in Page Mill's East Palo Alto portfolio.

According to Juliet Brodie, Director of the Stanford Community Law Clinic, "What we're seeing is a frontal attack on rent control in East Palo Alto." Brodie represents 136 tenants who have filed petitions claiming the rent increases violate the City's rent control law.

Matthew Fremont, a plaintiff in a class action against Page Mill being handled on behalf of tenants by Washington DC-based Hogan & Hartson, added, "In addition to the litigation the City may pursue, we have filed a complaint that alleges Page Mill is using sham LLCs to hide true ownership of its properties. We believe it has done so in an attempt to evade the rent control provisions of the RSO by exploiting the "mom and pop" exemption."

Word is currently circulating in the marketplace that Page Mill is entertaining offers on its East Palo Alto holdings. When asked about Page Mill's attempts to quietly market the portfolio, Christopher Lund, a community organizer, remarked, "Given the substantial amount of pending litigation and current state of Page Mill's relations with the city, buyers need to be aware of what they are stepping into."

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