Desmond McDonald, owner of the Tahitian Terrace mobile home park (just north of Temescal Canyon Road), sent a letter to his tenants on July 20 informing them of his plans to convert the park spaces from rental units to condominums.
If he's successful, residents would be able to purchase the land their homes are on and, as condo owners, would pay maintenance fees and special assessment fees that are collected when unexpected repairs exceed the cost of maintenance fees collected.
Conversion could potentially represent a good investment for Tahitian residents with the means to purchase their current piece of property. But it raises a bleak prospect for those who wouldn't be able to afford the purchase and would be forced to move out of this rent-conrolled beachside community overlooking Santa Monica Bay.
Several steps are required in a mobile home park version. After the owner sends a notice, residents have to be surveyed about whether they want a conversion, which McDonald completed on July 24. Additional steps involve an application filed with the City of Los Angeles and approved, a physical survey done and lots appraised, and finally a homeowners association formed which prepares the new CC&Rs (Covenants, Conditions and Restrictions).
McDonald's survey showed that of the 154 Tahitian households, 121 ballots were returned and 65 of those, a slim majority, opposed conversion. Although the law requires a survey be done, it does not require residents' approval in order for conversion to proceed.
'We all knew it [the survey] was an exercise in futility,' said Doris Schalk, 79, who noted that 'this has been the only affordable housing for the seniors in the area,' along with the adjoining Palisades Bowl mobile home park.
In the days before the survey vote, residents were told that a developer representing a Korean hotel chain was interested in purchasing the property and that if residents supported conversion, McDonald wouldn't sell to him. The Tahitian Terrace owner wrote in an e-mail to the Palisadian-Post, 'We have been contacted by a number of interested groups and individuals,' but did not give names.
Currently, Assembly Bill 566 is in the Senate and if passed would allow local government to use a negative majority vote on the survey to deny a conversion application. 'We're trying to make sure that people whose lives are going to be affected have a voice,' said Assemblyman Pedro Nava (D-Santa Barbara), the bill's sponsor.
When McDonald was asked by the Post why he wants to sell now, after the property had been in the family for 49 years, he replied, 'Many of our tenants have expressed a desire to purchase their lots if they had the opportunity. Our family would like to transition out of ownership. We much prefer selling the park to the residents that want to buy rather than to a new owner.'
Mobile park owners argue that it is advantageous for residents to own the land that their homes are located on because the value will increase over time, but residents, many of whom are elderly or low-income, counter that the conversion process is done to sidestep rent control.
Once a single lot is sold as a condominium, local rent control goes away and state rent control kicks in. Those who are low-income would not see a rise in rent, but moderate-income residents (a single person who makes only marginally more than $38,800 a year) and higher-income residents would see their rents increase to market value over four years.
Twenty-year Tahititian Terrace resident Rebecca Newman, 89, wrote a letter against the conversion, noting 'Only a few wealthy residents would be able to buy their lot. Frankly though, I do not think it would be a good investment, even for those who have the money. They would probably have to pay outrageous prices, and take on an enormous legal liability for the sliding hillside.'
She referred to the hillside behind the property that continues to play a major role in the future of Tahitian Terrace and Palisades Bowl, which is owned by Eddie Biggs. A recent geological study commissioned by the hill's three owners (the City of Los Angeles, Biggs and McDonald) showed that the area below Asilomar Boulevard continues to slide, and according to one city source, it could cost as much as $40 million to remediate.
According to Doris Schalk, homes on Kontiki Way in Tahitian Terrace are already slipping towards the ocean. 'My mother and dad lived here before me and they always said 'If we live here long enough we'll be on the ocean.'' Schalk moved in to help her parents in 1990 and has continued to live there since they passed away.
'Every time we have an earthquake or a heavy rain, I look up the hillside to make sure it's not coming down on me,' said Schalk, who raised her four sons in the Palisades.
The geology report recommended that homes on the north end on Kontiki Way and the south side of North Terrace Drive be evacuated during remediation. McDonald was asked if those properties would be sold.
'No agreement has been made with the City of Los Angeles or our neighbors as to the proper repair,' he said. 'Until that time it is not practical to make predictions.'
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