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Mobile home residents fight park sale

They have filed lawsuits against the park's owner; they also want to change the formula for determining the compensation for displaced mobile home residents.

By PAUL SWIDER
Published August 3, 2005

SOUTH PASADENA - As another mobile home park sits ready for sale to developers, the residents are ready to make a stand. Armed with extensive research and long memories, the residents of Causeway Village have filed lawsuits against the park's owner and are girded for battle with elected officials in an effort to preserve their investment.

"We become the cost of doing business," said Dianne Miller, the president of the homeowners association for the 227-site mobile home park on Boca Ciega Bay in South Pasadena. "We wouldn't say a word about (the sale) if we could get our money back."

Miller said the park's owner, Randy Russell, always told residents that no amount of money could tempt him into selling a park that had been in his family for decades. But, Miller said, Russell promised residents a chance to buy the park if someone ever made an offer. Residents invested on that guarantee. Last year, a $28-million offer came and Russell, true to his word, let the residents consider buying the park. The residents could muster only $18-million, but the greater offer never materialized.

Then in March, residents faced another offer: $30-million from CKT Development in Tampa. The residents couldn't match that offer, which has yet to close, but after the first scare they had readied themselves through homework and gumption.

"We consider it our fiduciary responsibility," Miller said. "That way we can look back and say we did everything we could."

After the first offer came to light, one owner filed a lawsuit against Russell claiming the owner facilitated placing a new home even though the park sale was pending. While the park would be sold as a park, the residents say everyone knows they'll have to leave, so placing a new home was helping someone throw away their money. Mobile home owners evicted from a sold park can qualify for state buyouts or relocation assistance, but the money involved is a fraction of actual costs, residents say.

A second lawsuit says Russell raised rents unjustly in April. The residents say Russell boosted rents by a third, from about $300 a month to more than $400. They say he said he needed higher rents to increase his return on investment, even though he was about to sell and even though the law doesn't allow investment return as a rationale for raising rents.

A third lawsuit claims Russell didn't provide a prospectus to new residents outlining the terms of their rental. The residents point to the law that says penalty for this failure could mean residents receive market value for their mobile homes. That's what they consider the cost of doing business.

"We have $6- to $7-million in assets here," said Roger Davignon, a 30-year resident of the park and member of the homeowners board, "and with the stroke of a pen, it will go to $600,000."

Russell says the lawsuits were "filed at the last minute to try to clutter up the closing."

"From their perspective they have merit because they filed the lawsuits," he said. But he disagreed. And as for selling a family business, Russell said he and his siblings disagree about the deal but by vote decided to go ahead because "there's a lot more value in this than we thought."

The residents know the value because they talked to developers about what could become of a 17-acre waterfront parcel with condominiums or townhomes. They were told it would cost $100-million to build the development, but that after construction, the property would be worth between $300-million and $400-million. So they consider recouping their investments to be within reason as part of that package.

"We don't want to whine," said Arleene Doney, another member of the homeowners board, "but we feel like $5- to $6-million for us is peanuts."

Residents are also considering their lobbying clout. They want to contest a city rezoning that could force their eviction, and they want to change the compensation formulas for displaced mobile home residents. Miller said the law changed in the mid 1990s, before which residents received a portion of a park's sale price.

"There was more fairness in it then," she said. "It's such a simple solution."

Davignon, who has known the owners for years and remains on good terms with them, said that he understands how big money can drive decisions but that the way the family has gone about the transactions has created an insurgency.

"The Russell family has rights," he said, "but they also have responsibilities. They're dealing with multiple millions of dollars here, but it's not right to take away everything these people have."

[Last modified August 3, 2005, 00:36:17]