CAPITOLA -- Full-time residents of Surf and Sand Mobile Home Park would be paid up to $133,000 to leave the 73-space oceanview property on 47th Avenue and those with second homes $2,000 if a formula developed by an ad hoc subcommittee is approved by the City Council tonight.
Park owner Ron Reed, who wants to close the park his parents opened 52 years ago by December, had offered $3,000 to most residents, $28,000 to very low-income residents and $46,000 to extremely low-income residents.
His attorney calls the city's formula flawed and claims the city violated open meeting laws in developing its recommendations.
Geni Calande, 65, who has lived at Surf and Sand for 13 years, questions the accuracy of the appraisal that was the basis of the city formula.
Tonight it's up to the City Council to decide "the reasonable costs of relocation," as state law requires. The special meeting begins at 7 p.m. in City Hall, 420 Capitola Ave.
"People are frightened," said Margaret Dixon, president of the Surf and Sand homeowners association. "They think they'll be homeless in December.
Surf and Sand residents, who enjoy rent control, see few affordable options with the median home price at $500,000, condos costing more than $300,000 on average, and no vacant space in local mobile home parks. They wish they could buy their park, like residents at Turner Lane Estates did, paying $74,500 each in 2008 for the park at 920 Capitola Ave.
Santa Ana attorney Mark Alpert, who represents Reed, says the recommended payments exceed reasonable costs. He calls the city proposal a "bailout" and "thinly veiled wealth transfer" and contends the recommendation goes overboard in mitigating the impact of residents being forced to move out.
"This is a very difficult issue -- it's a lot of money -- people's lives, people's homes are affected," said Jamie Goldstein, the city's community development director. "We've done our best to come up with a reasonable solution."
Goldstein served on the subcommittee with Councilmen Sam Storey and Kirby Nicol, City Attorney John Barisone and City Manager Richard Hill.
Goldstein sees no violation of open meeting laws, saying the subcommittee considered facts submitted by both sides before recommending a payment formula and noting all of the information is part of the record.
The formula has four parts, a key component being a payment to the coach owner based on the market value of the home and land set by longtime local appraiser Frank May.
May said he has appraised hundreds of coaches, taking into account age, whether financing is available and space rent.
Calande says the values are inconsistent.
Her two-bedroom home, which has a new roof and windows, was valued at $50,000 while a newer manufactured one-bedroom home owned by her 82-year-old neighbor was valued at $5,000.
"Now that's unreasonable," Calande said. "She would lose everything."
Calande claims that capping payments at $2,000 for second-home owners is discriminatory. Some coaches were appraised at $150,000 but without a place to relocate their coach, they are left with "virtually nothing," she said.
The formula doesn't look good to Tim Brackett, 50, who bought a two-bedroom mobile home at Surf and Sand three years ago for his family of four. He paid $275,000 and invested $25,000 in improvements. With $145,000 left on his mortgage, he would be shortchanged by a payment capped at $133,000.
When Brackett moved in, park owner Reed was interested in selling to the residents for $100,000 to $150,000 per space but he has since changed his mind.
"The only way both parties would win would be if Reed agrees to sell based on a fair market value price as a mobile home park," Brackett said, suggesting a second appraisal.
Residents say they were willing to pay $7.3 million, then $10 million, for the park, but Reed halted talks in mid-2007 and proposed subdividing the property instead.
Two months before, attorneys at a conference in Napa laid out a strategy for mobile home park owners to maximize the value of their properties by subdividing and selling the lots to the residents for $200,000 to $250,000, replacing local rent control with state rules.
"I got a copy of the speech," Calande said. "I figure they did too."
The homeowners association has agreed to survey residents to ask if they are interested in a subdivision.
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