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Home My WebLink About09- Development Department OFFICE OF THE MAYOR OF THE CITY OF SAN BERNARDINO REQUEST FOR COMMISSION/COUNCIL ACTION FROM: TOM MINOR SUBJECT: MOBILE HOME PARK Mayor CONVERSION PROGRAM DATE: March 1, 1994 --------------------------------------------------------------------------------------------------------------------------------------------- Synopsis of Previous Commission/Council/Committee Action(s): On November 9, 1993, the Housing Committee received and filed the City of San Bernardino Mobile Home Park Feasibility Study and recommended to the Community Development Commission a date and time certain for a Mobile Home Conversion Workshop. On November 15, 1993, the Community Development Commission established December 6, 1993 at 12:00 noon as the date and time certain for conducting a workshop regarding the City's Mobile Home Conversion Program. (SYNOPSIS CONTINUED TO NEXT PAGE...) --------------------------------------------------------------------------------------------------------------------------------------------- Recommended Motion(s): (Community Development Commission) MOTION A: That the Mobilehome Park Conversion Report from DeAnza-London dated March 2, 1994,be received and filed. AND (Motions Continued to Next Page) TOM MINOR MAYOR --------------------------------------------------------------------------------------------------------------------------------------------- Contact Person(s):Kenneth J. Henderson/David R. Edgar Phone: 5081 Project Area(s):All Ward(s): 1 - 7 Supporting Data Attached:Staff Report; Attachments FUNDING REQUIREMENTS: Amount:$ 120,000 Source: Twenty Percent Set-Aside Budget Authority: Requested --------------------------------------------------------------------------------------------------------------------------------------------- Commission/Council Notes: ----------------------------------------------------------------------- KJH:DRE:GWB:paw:mb1hmcon.cdc COMMISSION MEETING AGENDA Meeting Date: 03/07/1994 Agenda Item No: �� _ OFFICE OF THE MAYO REQUEST FOR COMMISSION/COt AIL ACTION Mobile Home Park Conversion Feasibility Study March 1, 1994 Page - 2 - --------------------------------------------------------------------------------------------------------------•-------- Synopsis of Previous Commission/Council/Committee Action(s) Continued... On December 6, 1993, the Community Development Commission conducted a luncheon Workshop on the City's Mobile Home Conversion Program. On December 20, 1993, the Community Development Commission authorized Phase II of the existing Consultant Agreement with the De Anza/London Group pertaining to the development and implementation of a Mobile Home Park Conversion Program. Recommended Motions (Continued): MOTION B: That the Community Development Commission approve implementation of the Mobilehome Park Conversion Program for selected Category I Parks, and authorize the utilization of approximately $120,000, in housing set-aside funds, for said purpose. AND MOTION C: That the Community Development Commission authorize the Chairman and the Executive Director to execute any documents necessary to effectuate said implementation. AND MOTION D: That the issue of review of strategy implementation and funding for Categories 11 and III be referred to the Housing Committee for review and input. ---------------------------------------------------------------------- KJH:DRE:GWB:paw:mblhmcon.cdc COMMISSION MEETING AGENDA Meeting Date: 03/07/1994 Agenda Item No: �` _ OFFICE OF THE MAYOR STAFF REPORT ---------------------------------------------------------------------------------------------------------------------- MOBILE HOME PARK CONVERSION PROGRAM On 1993 the De Anza/London group completed the City of San Bernardino Mobile Home Park Conversion Feasibility Study, copies of which were disseminated to the Commission on December 1, 1993. This document included a number of Mobile Home Park policy recommendations based on the significant findings and conclusions gathered over the previous nine (9) months. De Anza/London Group concluded that existing Mobile Home Parks fall within three (3) distinct categories, including: • Category I Parks (Twenty-nine (29) Parks) - Those mobile home parks which are most likely/feasible for some form of resident ownership. In addition, once converted, these parks will most likely offer stabilized housing costs which are affordable, thereby eliminating the need for City regulation. • Category II Parks (Eight (8) Parks) - Those mobile home parks which currently operate within reasonable parameters as mobile home park rental facilities. However, it is also evident that a number of these facilities require both short and long-term strategies for maintenance and operation to continue as a viable affordable rental pool. • Category III Parks (Seven (7) Parks) - Those mobile home parks which have reached, or soon will reach the end of their "useful life" as viable mobile home park housing facilities. In addition, development and construction of a new mobile home park facility had also been discussed as a potential component of the City's Comprehensive Housing Strategy. However, based upon the results of the mobile home park feasibility study, there is currently not an identifiable "need" or purpose for development of such a mobile home park facility at this time. For this reason, mobile home park development is not a component of the Mobile Home Park Conversion Implementation Program. ---------------------------------------------------------------•------- KJH:DRE:GWB:paw:mblhmcon.cdc COMMISSION MEETING AGENDA Meeting Date: 03/07/1994 i Agenda Item No: _ OFFICE OF THE MAYO. STAFF REPORT Mobile Home Park Conversion Feasibility Study March 1, 1994 Page Number -2- ---------------------------------------------------------------------------------------------------------------•------- In order to address the City's stated goals of increasing home ownership opportunities and maintaining/preserving existing affordable mobile home park facilities, on December 20, 1993, the Community Development Commission adopted a number of policy recommendations, including the following: • In order to pursue conversion of Category I Mobile Home Parks, that a formal Mobile Home Park Resident Ownership Conversion Program be developed. • In order to maintain and improve the quality of Category II Mobile Home Parks slated to remain as rental facilities, that a formal mobile home park infrastructure and Mobile Home Rehabilitation Program be developed. • In order to address those mobile home parks identified within Category III which currently do not meet existing mobile home park industry and community standards, that a formal site Reuse and Resident Relocation Program be developed. Based upon direction from the Commission, De Anza/London Group has now completed development of a Mobile Home Park Conversion Program for Category I, Category II and Category III Mobile Home Parks (Please see attached document). This document outlines the various elements and steps necessary within each mobile home park category, the timeframes anticipated for program implementation and the costs associated with that implementation. The De Anza/London Group is now prepared to immediately implement the proposed Mobile Home Park Conversion Program for selected Category I Parks. Based upon the De Anza/London Group analysis, there are approximately eleven (11) Category I mobile home parks with significant interest in participating in the Resident Ownership Conversion Program. It is the opinion of the De Anza/London Group that conversion of mobile home parks identified within this sub-group needs to occur as expeditiously as possible or these mobile home park owners and residents will quickly become disinterested in the process. ----------------------------------------------------------------------- KJH:DRE:GWB:paw:mblhmcon.cdc COMMISSION MEETING AGENDA Meeting Date: 03/07/1994 Agenda Item No: _ OFFICE OF THE MAYO. STAFF REPORT Mobile Home Park Conversion Feasibility Study March 1, 1994 Page Number -3- ---------------------------------------------------------------------------------------------------------------------- In order to expeditiously implement the process of converting to resident ownership selected Category I mobile home parks, De Anza/London is recommending that parks be converted in sub-groups of approximately four (4). In conjunction with this implementation, however, De Anza/London Group is also requesting that the Agency provide approximately $120,000 in necessary pre-conversion monies ($30,000/Park). These funds would facilitate conversion of four (4) mobile home parks and would be fully recaptured, if and when these parks are ultimately converted. Fronting these pre-development monies will enable Category I Mobile Home Park Implementation to proceed, independent of Category II and Category III programs. Program development and implementation of Category II and Category III mobile home parks will be presented to the Commission for their consideration some time in the near future. I recommend adoption of the form motions. TOM MINOR, Mayor City of San Bernardino ----------------------------------------------------------------------- KJH:DRE:GWB:paw:mblhmcon.cdc COMMISSION MEETING AGENDA Meeting Date: 03/07/1994 Agenda Item No: _ DEANZA•LONDON CITY OF SAN BERNARDINO MOBILEHOME PARK CONVERSION PROGRAM FEBRUARY 23,1994 TABLE OF CONTENTS INTRODUCTION..........................................................................................................................................3 SECTION ONE- CONVERSION PROGRAM SECTION1.1.......................................................................................................................................................4 CATEGORYI OVERVIEW............................................................................................................................. 4 SECTION1.2.......................................................................................................................................................6 PROGRAMELEMENTS................................................................................................................................. 6 SECTION1.3..................................................................................................................................................... 14 PRIORITIZATIONCRITERIA...................................................................................................................... 14 SECTION1.4..................................................................................................................................................... 15 PROJECTEDGOALS AND TIMELINE....................................................................................................... 15 SECTION1.5..................................................................................................................................................... 16 INITIAL COST OF IMPLEMENTA TION.................................................................................................... 16 SECTION1.6..................................................................................................................................................... 17 RECOMMENDATIONS................................................................................................................................. 17 SECTION1.7..................................................................................................................................................... 18 BENEFITS..................................................................................................................................................... 18 SECTION TWO- REHABILITATION PROGRAM SECTION2.1..................................................................................................................................................... 19 CATEGORYIf OVERVIEW.......................................................................................................................... 19 SECTION2.2..................................................................................................................................................... 21 PROGRAMELEMENTS............................................................................................................................... 21 SECTION2.3..................................................................................................................................................... 25 PRIORITIZATIONCRITERIA...................................................................................................................... 25 SECTION2.4..................................................................................................................................................... 26 PROJECTEDGOALS AND TIMELINE....................................................................................................... 26 SECTION2.5..................................................................................................................................................... 27 INITIALCOST OF IMPLEMENTATION..................................................................................................... 27 SECTION2.6..................................................................................................................................................... 28 RECOMMENDATIONS................................................................................................................................. 28 SECTION2.7..................................................................................................................................................... 29 BENEFITS..................................................................................................................................................... 29 SECTION THREE- REUSE PROGRAM SECTION3.1..................................................................................................................................................... 30 CATEGORYIII OVERVIEW......................................................................................................................... 30 SECTION3.2..................................................................................................................................................... 32 PROGRAMELEMENTS............................................................................................................................... 32 SECTION3.3..................................................................................................................................................... 35 PRIORITIZATIONCRITERIA...................................................................................................................... 35 SECTION3.4..................................................................................................................................................... 37 PROJECTEDGOALS AND TIMELINE....................................................................................................... 37 SECTION3.5..................................................................................................................................................... 39 INITIAL. COST OF IMPLEMENTA TION.................................................................................................... 39 SECTION3.6.....................................................................................................................................................40 RECOMMENDATIONS................................................................................................................................. 40 SECTION3.7..................................................................................................................................................... 41 BENEFITS..................................................................................................................................................... 41 2 INTRODUCTION DeAnza Group, Inc. in association with The London Group, (hereinafter referred to as "DeAnza•London") was retained by the Economic Development Department of the City of San Bernardino to analyze the feasibility of converting the City's forty-four (44) mobilehome parks to resident ownership. DeAnza•Lon.don presented its recommendations to the San Bernardino City Council on December 20, 1993. In it's analysis of the parks, DeAnza•London determined that the mobilehome parks within the City fell within three distinct categories. The City Council authorized action for those three categories as follows: CATEGORY I PARKS • To take all actions necessary for the formal development and implementation of a mobilehome park resident ownership conversion program. CATEGORY II PARKS • To develop a program with both long and short-term strategies that improve and preserve the Category II mobilehome parks and the homes situated therein as a long-term source of quality, affordable rental housing. CATEGORY III PARKS • To develop a re-use program for those Category III mobilehome parks that have reached the end of their useful life. It should be noted that the initial classification of parks is somewhat dynamic in nature and scope in that final investigation and analysis may result in some of these facilities being re-categorized based upon factors such as, location within project areas, costs associated with program criteria, economic realities attendant to the residents abilities and park owners needs, and the like. All forty-four (44) parks within the City are classified within the three categories. Thus, although DeAnza•London was engaged to merely determine which parks are feasible for resident ownership, it has developed programs which attempt to meet the needs of all of the parks residents and owners. 3 SECTION 1.1 CONVERSION PROGRAM CATEGORY I OVERVIEW Category I parks are those which are most likely feasible for resident ownership or control and, if converted, will most likely result in, among other things, stabilized housing costs within the range of current rents, preservation of affordable housing, elimination of potential deterioration, long-term overall park infrastructure improvement, as well as reduce the City's need to further regulate this section of the housing element. The following is a summary* of Category I parks: NUMBER OF PARKS: 29 NUMBER OF SPACES: 3,672 VACANT LOTS: 149 VACANT HOMES: 80 HOMES FOR SALE: 294 NUMBER OF RESIDENTS: 7,230 (Estimated) PARK SIZE RANGE: 45-403 Homesites *Note: Based upon available data as of November 30, 1993, and subject to change. 4 CATEGORY I PARKS CONVERSION PROGRAM Park Name Number of spaces Vacant Lots Vacant Homes Homes For Salle Acacia Villa 82 3 3 8 Arrowlane 68 1 2 0 Bonanza Trailer Park 52 8 0 1 Country Club 58 1 0 0 Fiesta Hills 141 0 0 14 Friendly Village 85 9 11 7 Glen Aire 131 1 0 6 Herkelrath 67 0 0 4 Lytle Creek 55 4 3 6 Manor MHP 2 69 4 4 4 Mediterranean 81 1 1 3 Meridian Terrace 266 41 15 53 Mountain Shadows 403 0 0 0 Ninth Street 108 7 1 3 Oasis Palms 139 20 11 12 Orangewood 155 15 2 14 Pacific Palms Trailer Park 142 0 0 8 Pepper Villa 51 1 0 4 Petite Chateaux 69 3 1 6 Rancho Meridian 143 6 7 31 Royal Coach 45 2 0 8 Royal York Estates 93 2 3 8 Second Meridian 96 0 0 2 Sequoia Plaza 242 3 3 27 Spa 181 9 9 19 Terra Alta 62 1 0 6 Thunderbird 161 2 0 11 Tropicana 146 5 4 5 Valencia Lea 281 0 0 24 TOTAL 3672 1491 801 294 5 SECTION 1.2 CONVERSION PROGRAM PROGRAM ELEMENTS The Category I conversion program consists of nine (9) component elements as follows: Element 1 Initial Prioritization. Due to the number of parks potentially feasible for conversion, DeAnza•London identified specific factors which would identify those parks most appropriate for conversion first. These factors are (a) Resident desires to own and/or control their park; (b) Owners indicated willingness to sell; (c) Likelihood that resident ownership or control will benefit the physical infrastructure and market conditions of the park; (d) The parks meet the criteria for resident ownership or control detailed in the MHP Feasibility Study submitted by DeAnza•London dated January 13, 1994. Conversion to resident ownership or control is a dynamic process and depending upon a number of factors the parks may be re-prioritized. Thus while it is initially contemplated that those parks listed as the first to undergo the conversion process some of those parks may be converted in the second grouping and vice-versa. Further, some of the parks may never be converted. Moreover we believe it likely that as the process is underway some of those parks currently found within the second group will move up in the priority due to a combination of factors including the desires of residents or owners of the park, physical needs within the park that can best be addressed through ownership or control by the residents. In most cases we believe that the reordering of the priority of conversion or the determination that a park is not currently feasible for conversion, should occur in most cases before significant sums of money are spent pursuing the conversion. This group consists of eleven (11) mobilehome parks where significant interest of participation in the conversion program has been obtained. These parks are as follows: PARK SPACES Acacia Village 82 *Friendly Village 85 Glen Aire 131 Lytle Creek 55 Ninth Street 108 *Oasis Palms 139 6 Orangewood 160 'Pacific Palms 142 Pepper Villa 51 `Rancho Meridian 143 Tropicana 148 *Based on current level of analysis these parks have been identified as potentially viable for a condominium form of ownership This group of mobilehome parks consists of those parks which have been identified as appropriate for conversion to resident ownership or control but are more likely to be converted once the program has been fully established and implemented. This group consists of nineteen (19) mobilehome parks as follows: PARK SPACES Arrowlane 68 Bonanza 52 Country Club 58 Fiesta Hills 141 Friendly Village 85 Herkelrath 67 Manor#2 69 Meridian Terrace 266 Mountain Shadows 403 Oasis Palms 139 Petite Chateaux 69 Royal Coach 45 Royal York Estates 93 Second Meridian 96 Sequoia Plaza 242 Spa 181 Terra Alta 62 Thunderbird 161 Valencia Lea 281 Accordingly, the following elements of this Category I program reference, unless otherwise noted, the first group of mobilehome parks listed: Element 2 Mobilehome Park Owners. Based upon our prior contacts with park owners, this element includes the following: • Re-initiate park owner contact • Obtain current park operating information 7 • Preliminary identification of owners estimation of park value Element 3 The Residents. Based upon our prior contacts with park residents, this element includes the following: • Re-evaluate resident demographics for purposes of re-certification and updating of relevant financial information. • Determine the potential eligibility and qualification of each household with respect to existing governmentally sponsored financing assistance programs. • Develop requirements for an in-park facility upgrade and/or common area amenity package consistent with the resident demographics of the park. Element 4 Conversion Viability Analysis. Conversion viability analysis encompasses the following: Review and Analysis Existing ordinances • Land use regulations • Pending rent control litigation Funding sources: RDA MPROP CDBG HOME HOPE Tax Exempt Mortgage Revenue Bonds Existing low-income programs Establish preliminary park value • Property tax exemption confirmation Prepare conversion budget Provide City recommendation for amendment of regulations and ordinances • Develop governmental low-income and credit enhanced loan programs Develop conventional interim and long-term financing programs Preliminary negotiation of terms of purchase Organization of Resident Association • Resident meetings: Introductory seminars Confidential resident survey Supervise formation of acquisition association Organize structure of committees Introduce conversion team roles Assign tenants to various committees; delegate tasks 8 Physical Any park drawings including site plans and utility systems Plans and specifications for all improvements. Detailed description of all improvements All engineering and inspection reports Conduct an appraisal Flood zone information Soils and seismic Electrical Utility system distribution analysis to include electrical, water, sewer, gas, telephone, and cable. Storm drainage Sewer Water Health reports Level I site assessment Termite report HCD inspection report Any other engineering and inspection reports in Seller's possession Inventory of all personal property including park owned coaches, equipment, and furnishings, etc. Governmental Approvals Copy of all permits and licenses Evidence of zoning Utility franchise agreements, if applicable Copy of any rent control ordinances affecting the Property Any other governmental information pertaining to the Property Title and Survey Copy of the last title policy issued including a legal description of the Property and a plot plan • Copy of ALTA survey, certified to Buyer, showing all roads, encroachments, boundaries, permanent improvements and easements Preliminary title report issued within the last 30 days to Buyer from a title company designated by Buyer, with readable copies of all underlying documents Agreements Copy of all leases Copy of any loan documents and other loan information, if applicable to the transaction Copy of all service and other agreements Copy of rules and regulations 9 Information on any tenant government litigation affecting the Property during the prior 5 years Financial Monthly operating statement for the prior 3 calendar years and the current year-to-date, including detail on all capital expenditures Copy of the last 2 years' tax returns Copy of prior 3 years' balance sheets Detailed general ledger for the prior year and current year-to- date Current rent roll showing all charges and listing all security deposits Description and calculation of all tenant charges, where applicable Rent history for the prior 4 years Copy of the last 3 months income receipts journal with corresponding deposit slips and bank statements Copy of the latest delinquency report or accounts receivable report Supporting documentation for any miscellaneous income (storage, laundry, vending machines, late charges, etc.) Availability of original invoice files • Copy of all electric, gas, sewer, trash, and water bill for the prior 3 calendar years and the current year-to-date Copy of the last 3 years' tax bills Copy of the last 3 years insurance bills and coverage Description of all advertising and marketing programs and their associated costs • Copy of all maintenance and repair bills over $500 for the prior 3 calendar years and the current year-to-date • Summary of the current employee payroll including all benefits provided (space, home, utilities, insurance, etc.) - a copy of the payroll register with detail Assessments • Conduct an appraisal Review if available, park drawings including site plans and utility system layouts • Obtain engineering inspection reports, to the extent applicable. Flood plane analysis. Soils and seismic tests. • Utility system distribution analysis to include electrical, water, sewer, gas, telephone, and cable. Storm drainage. Level I site assessment. 10 Site work improvements to include hardscape areas, fencing, lighting, all buildings such as the clubhouse, laundry rooms, storage/maintenance, recreational facilities and amenities such as playgrounds, tennis courts, pool, spa and shuffleboard courts. Termite report. Mobilehome park Title 25 compliance analysis - health and safety status reports. Consistency with original Conditional Use Permits, General Plan, Variance requirements, density and zoning issues. Element 5 Structure of Resident Ownership or Control. The form and structure of the vehicle utilized to achieve resident ownership or control will vary depending upon the factors obtained pursuant to elements 2 and 3 above. The alternative structures available include: Condominium. Each participating resident owns an undivided interest in the land including the common areas, has an exclusive easement to use the lot, owns the airspace above the lot and is a member of the homeowner's association. In effect, each participating resident has purchased the space upon which his home sits. Planned Unit Development. Each participating resident owns his or her lot in fee simple and is a member of a homeowner's association which owns the common areas. Corporate. A resident owned corporation is formed as a non-profit mutual benefit corporation whose shareholders (or members) are the residents. Each participating resident owns an interest (often a share) in the corporation and leases his space from the corporation. • 501 (c J3 . Acquisition of the mobilehome park by a qualified 501 (c)(3). The relationship of the residents and the 501(c)(3) will vary depending on numerous certain economic and practical factors. Selection of the structure of ownership or control is a critical element with respect to identifying the most readily available funding sources. Element 6 Financing. Identification and selection of alternative financing sources such as: Interim financing. Some mobilehome parks may require interim acquisition financing as a first step to the conversion process in order to accommodate the timing requirements of the residents and the mobilehome park owners. Interim financing sources may include: Conventional institutional interim financing. • Short-term bond acquisition financing. Seller assisted financing. 11 Long-term financing. Long-term or "permanent financing" depends on the type of structure of ownership selected, as follows: Planned development/Condominium form of ownership. This form of ownership requires individual financing. In essence, each participating household shall obtain his or her financing based on traditionally accepted loan qualification standards and, to the extent available, standards and guidelines established by state, federal and locally available low and moderate income assistance programs. Funding sources are available as follows: • Conventionally available loans • The Mobilehome Park Resident Ownership Program (M.P.R.O.P.) • C.H.A.F.A. • H.O.M.E. • Utilization of 20% set aside to assist low and moderate income households • Corporate form of ownership. The corporate form of ownership involves two types of financing, as follows: • Conventionally available first trust deed secured financing from local institutional lenders based upon traditional lending criteria • Cash participation from the residents which in the aggregate constitutes the "downpayment" portion of the purchase price. • 501 (c)(3) financing. 501(c)(3) financing is generally available through issuance of bonds which may be in the form of the following: • Tax exempt bond In order to take advantage of historically low interest rates and to accommodate the fact that the first group of mobilehome parks includes a variety of methods of ownership. We recommend the following: • Creation of a uniform interim financing mechanism with which to acquire a number of parks without regard to their ultimate structure of ownership. This interim financing may be in the form of a bond issue which (i) permits acquisition of a number of mobilehome park facilities concurrently with the debt service of the bond being paid by the rental income of the mobilehome parks and (ii) the debt represented by the bond being paid off as each mobilehome park goes through the second stage of conversion to its ultimate form of ownership. 12 Element 7 Mobilehome Housing Source Pool. In the event the City elects to implement a reuse program for some or all of the Category III parks then the vacant lots, vacant homes, and homes for sale within Category I parks represents a portion of the Housing Source Pool available to accommodate those potentially affected residents living in such Category III parks. Element 8 Mobilehomes in Place. Title 25 Health and Safety analysis of each home in order to identify and prioritize those homes requiring rehabilitation assistance. • Potential upgrade or replacement of existing homes consistent with resident demographics. Element 9 Inter-departmental liaison. An essential ingredient to the conversion program which draws upon the resources of different departments within the City, is the creation of an inter-departmental liaison committee to assist J expediting approvals, the sharing of information and the like. 13 - SECTION 1.3 CONVERSION PROGRAM PRIORITIZATION CRITERIA While the residents and the owners of the first group of mobilehome parks have indicated a willingness and desire to participate in the conversion program, the following prioritization criteria will result in the natural selection of the first group of parks to undergo the conversion process: • Owners willingness and desire to sell his or her mobilehome park at a fair and reasonable price. • Residents ability to participate in the acquisition of the mobilehome park with monthly housing costs at generally acceptable, affordable levels, and for those who qualify as low and moderate income households, at monthly housing costs not exceeding applicable standards. • Mobilehome parks which, after completion of the Conversion Viability Analysis as set forth in element 3 above, have not been re-categorized as a result of such analysis and inspections. 14 SECTION 1.4 CONVERSION PROGRAM PROJECTED GOALS AND TIMELINE As previously stated some of the parks currently listed for conversion first may be converted at a later time and not as a part of the initial process. Conversely the balance of the parks listed for conversion, may step up in priority. Thus the number of parks listed for initial conversion is subject to change. The following denotes our recommended goals and timelines attendant thereto: MONTHS 1-3 • Re-commence negotiations with park owners. • Commence Second Stage Analysis of residents. • Final selection of prototypical models. • Commence Conversion Viability Analysis. • Selection of mode of resident ownership or control. • Funding source selection and finalization. • Continue contact with remaining mobilehome park residents and owners MONTHS 4-6 • Final park acquisition due diligence. MONTHS 7-12 • Breakout of parks to initially selected form of ownership or control. MONTHS 13-24 • Commence steps outlined in months 1-12 for the balance of the mobilehome parks. 15 SECTION 1.5 CONVERSION PROGRAM INITIAL COSTS OF IMPLEMENTATION Once the purchase and sales agreement has been negotiated with the owner the following independent investigations will be initiated. Thus the likelihood of expanding sums by the City which are not recoupable, as hereinafter discussed, is minimized. The following budget is an estimation of those costs and expenses likely to be incurred for each park during the escrow due diligence stage. ANTICIPATED PRELIMINARY INVESTIGATORY COSTS TYPICAL PARK DESCRIPTION ESTIMATED COST APPRAISAL $ 7,500 *HCD TITLE 25 INSPECTION (PARK) $ -0- *HCD>TITLE 25 INSPECTION (HOMES) $ -0- LEVEL I SITE ASSESSMENT $ 5,000 SITE INSPECTION $10,000 POSTAGE AND COPYING $ 500 **PRELIMINARY CIVIL ENGINEERING STUDY $ 1,000 MISCELLANEOUS $ 5,000 TOTAL $29,000 * It is anticipated that such costs and expenses will be advanced by the City and fully included as part of the cost of acquisition thus the city will be fully reimbursed for any such outlay. The total estimated costs assuming eleven (11) parks proceed is $319,000. ** For those parks identified as appropriate for condominium conversion there will be an additional civil engineering cost in connection with the mapping process. 16 SECTION 1.6 CONVERSION PROGRAM RECOMMENDATIONS • Implement Category I program as set forth above. • Authorize expenditures to initiate implementation of program in accordance with the budget set forth in section 1.5. • Commence bond acquisition financing programs both for long term acquisition financing by a 501(c)(3) where appropriate and for interim acquisition financing as needed the final details and implementation are subject to approval by the City. 17 SECTION 1.7 BENEFITS It is in the City's best interest to pursue the program identified in Category I for the following reasons: • the successful completion of the Category I program lessens the role of the City as an administrator of rent control. • City becomes facilitator of home ownership for a significant number of its' citizens, many of whom are in the very low to moderate income levels, particularly families and senior citizens. • helps meet a primary goal of the housing element of the City's general plan "preservation and improvement of existing housing and neighborhoods". • a vehicle to stabilize housing costs for those residents who are currently faced with the uncertainty of ever increasing rents. • pride of ownership helps create a greater sense of community within the mobilehome parks, and this is reflected in the overall upkeep of the park, as well as the individual homes in the park. 18 SECTION 2.1 REHABILITATION PROGRAM CATEGORY II OVERVIEW Category II parks are comprised of those mobilehome parks which, in our opinion, operate within reasonable parameters as rental mobilehome park facilities. While these mobilehome park facilities do not have the traditional attributes important to conversion to resident ownership, they, nonetheless, should be supported as continued rental operations to help maintain that portion of the affordable housing stock represented by mobilehome parks. In identifying those attributes important to conversion, consideration is given to the overall physical conditions, both structural and cosmetic, of the property and the individual homes and sites. The combined factors of size, age, location and physical conditions led us to categorize these parks as Category II. During the course of our analysis and investigation it became apparent that a number of these facilities, as well as the homes situated therein, require both short and long-term strategies with regard to their maintenance and operation to sustain long-term economic viability of the parks. The primary focus of such strategies is development of a program for rehabilitation of the parks and homes in conjunction with a program for long-term stabilization of rents. The following is a summary* of Category II parks: NUMBER OF PARKS: 8 NUMBER OF SPACES: 358 VACANT LOTS: 40 HOMES FOR SALE: 4 VACANT HOMES: 2 NUMBER OF RESIDENTS: 663 (Estimated) PARK SIZE RANGE: 13-72 Homesites *Note: Based upon available data as of November 30, 1993, and subject to change. 19 CATEGORY II PARK REHABILITATION PROGRAM Park Name Number of spaces Vacant Lots Vacant Homes Homes For Sale Crestview 38 4 0 0 Cypress Inn 72 14 0 3 Hi-U Trailer Park 71 4 2 0 Highland 62 11 0 0 Manor MHP 1 60 7 0 1 Rancho Trailer Park 27 0 0 0 Sunset 13 0 0 0 Valley Vista RV Park 15 0 0 0 TOTAL 358 40 2 4 20 SECTION 2.2 REHABILITATION PROGRAM PROGRAM ELEMENTS The Category II Rehabilitation Program consists of nine component elements as follows: Element 1 Agency's Long-term Housing Strategies. Each mobilehome park should be examined within the framework of the following issues: • Is the mobilehome park's continued operation consistent with: • current and long-term land use strategies for the immediate and surrounding areas; • anticipated demographic changes in the immediate and surrounding areas which may impact continued use and operation. • Does continued operation and potential investment promote and assist in furthering the Agency's housing goals? Element 2 Mobilehome Park Owners. In order to implement an appropriate rehabilitation program it is necessary to initiate preliminary discussions with the Category II mobilehome park owners to ascertain the following: The owner's desire and willingness to participate in a rehabilitation program. • The owner's ability to financially participate in an Agency-sponsored mobilehome park capital investment program. Element 3 The Residents. Conduct Confidential Resident Survey analysis to: • Determine the potential eligibility and qualification of each household with respect to existing governmentally sponsored rent and home rehabilitation assistance programs. 21 • Develop requirements for an in-park facility upgrade and/or common area amenity package consistent with the resident demographics of the park. Element 4 Mobilehomes in Place. • Title 25 Health and Safety analysis of each home in order to identify and prioritize those homes requiring rehabilitation assistance. • Potential upgrade or replacement of existing homes consistent with resident demographics. Element 5 Mobilehome Parh Physical Plant Assessment. Physical plant analysis encompasses the following: • Conduct an appraisal • Review if available, park drawings including site plans and utility system layouts. • Obtain engineering inspection reports, to the extent applicable. • Flood plane analysis. • Soils and seismic tests. • Utility system distribution analysis to include electrical, water, sewer, gas, telephone, and cable. • Storm drainage. • Level I site assessment. • Site work improvements to include hardscape areas, fencing, lighting, all buildings such as the clubhouse, laundry rooms, storage/maintenance, recreational facilities and amenities such as playgrounds, tennis courts, pool, spa and shuffleboard courts. • Termite report. • Mobilehome park Title 25 compliance analysis - health and safety status reports. • Consistency with original Conditional Use Permits, General Plan, Variance requirements, density and zoning issues. Element 6 Funding Source Availability. Category II parks encompass two main elements of potential financial expenditures. The first is expenditures in connection with rehabilitation of the mobilehome park infrastructure and the second is rehabilitation of individual homes situated thereon. Early identification of alternative methods and sources of financing is critical. Potential sources of funds may well include: C.D.B.G. • H.O.M.E. 22 • C.H.A.F.A. • Expansion of currently implemented existing Agency-wide programs such as: • Space rent subsidy program. • State inspection/rehabilitation program. • Seismic retrofitting program. • Single family rehabilitation program - an element of the neighborhood "Spirit" program. • Conventional institutional direct-to-borrower loan programs guaranteed by the Agency. Element 7 Accords and Covenants. Critical to this process is the development of accords and covenants to be implemented between Category II park owners and the Agency to safeguard the Agency's capital investment as well as to assure the preservation of mobilehome parks as affordable rental housing stock. Such accords, though ultimately tailored to suit the specifics of any given Category II park, at a minimum, would include the following: • Basic standards for general park operations, long-term maintenance and the providing of park services; • Intra-park rent stabilization guidelines to insure long-term affordability; • First right of refusal to acquire the mobilehome park in the event that the park owner decides to sell at some later date, including the ability of the Agency to recapture its expenditures, and the like; and, • Establishment of park rules and regulations subject to modification and change only with the consent of the park owner, a majority of the residents and the Agency. • Master 501(c)(3) organization providing oversight and operation to and for each mobilehome park participating in the rehabilitation program. It is contemplated that one of the conditions of the City's economic participation in park rehabilitation will be the obligation of that park to join in and be regulated by a 501(c)(3) organization so that the City may create uniformity of operation and rent stabilization among those facilities. In addition, this should lead to greater security for the City's rehabilitation funds. Element 8 Mobilehome Housing Source Pool. The vacant lots, vacant homes and homes for sale within Category II mobilehome parks represent a portion of the housing source available to accommodate Element 5 of section 3.2 of this program. Element 9 Inter-departmental Liaison. An essential ingredient to a program which draws upon the resources of different departments within the City, is the 23 creation of an inter-department liaison committee to assist in expediting approval, the sharing of information and the like. 24 SECTION 2.3 REHABILITATION PROGRAM PRIORITIZATION CRITERIA One of the most difficult tasks is the prioritization of the Category II parks. While each identified park is in clear need of varying degrees and forms of rehabilitation, logic dictates two directives: 1. Mere home rehabilitation in a park undergoing decay absent park rehabilitation, may not be the most effective use of available economic resources; and, 2. Absent a park owners willingness to participate in a park rehabilitation program, expenditure of economic resources in the Analysis Phase (for instance Element 5 of section 2.2 above) seems fruitless. Accordingly, Category II parks should be prioritized for rehabilitation in accordance with the following: • Desire, willingness and ability of the park owner to participate in the program. • Desire and willingness of the residents to participate in the program. • Commencement of the Section 2.2 elements. • Selection of prototypical models. • Analysis of the projected costs associated with implementation of the park and home rehabilitation. • Selection of method of park and home rehabilitation funding. • Finalization of accords and covenants. 25 SECTION 2.4 REHABILITATION PROGRAM PROJECTED GOALS AND TIMELINE The following denotes our recommended goals and timelines attendant thereto: MONTHS 1-2 • Initiate contact with all Category II mobilehome park owners to ascertain their desire and willingness to participate in the program. • Preliminary park designation. MONTH 2-3 • Commence resident survey and demographic studies. • Final selection of two prototypical models for Agency sponsored rehabilitation program. MONTHS 4-6 • Commence and complete analysis. • Prepare final rehabilitation budget for approval. MONTHS 7-12 • Implementation of rehabilitation program with respect to two Category II mobilehome parks. MONTHS 13-24 • Commence the above noted process and program implementation with respect to two additional Category II mobilehome parks. MONTHS 25-36 • Commence the above noted process and program implementation with respect to the remaining Category II mobilehome parks. 26 SECTION 2.5 REHABILITATION PROGRAM INITIAL COST OF IMPLEMENTATION The following budget is an estimation of those costs and expenses likely to be incurred for each park at the analysis stage, based on the assumption that six of the eight owners of Category II parks would participate in such a program. Budget requirements are anticipated not to exceed $138,000 for analysis of all six parks. Agency may elect to initiate analysis of the parks concurrently and implement the program in accordance with Section 2.4 Projected Goals and Timelines or initiate analysis only of those parks undergoing rehabilitation at any given time. The costs of implementation of the actual rehabilitation program is the outgrowth of the analysis. This final budget shall be brought back to the housing committee for final approval. ANTICIPATED PRELIMINARY INVESTIGATORY COSTS TYPICAL PARK DESCRIPTION ESTIMATED COST ASSESSMENT APPRAISAL $ 5,000 *HCD TITLE 25 INSPECTION (PARK) $ -0- *HCD TITLE 25 INSPECTION (HOMES) $ -0- LEVEL I SITE ASSESSMENT $ 5,000 SITE INSPECTION $10,000 POSTAGE AND COPYING $ 500 MISCELLANEOUS $ 2,500 TOTAL $23,000 * City Inspection. 27 SECTION 2.6 REHABILITATION PROGRAM RECOMMENDATIONS • Implement Category II program as set forth above. • Authorize expenditures to initiate implementation of program in accordance with the budget set forth in section 2.5. 28 SECTION 2.7 BENEFITS • Stops the deterioration of the parks and homes within the parks. Thereby both improving the quality of life within the park and having a positive effect on the overall neighborhood conditions. • Through the accord between the residents, the City, and park owners there will be a vehicle to ensure that the quality of the newly improved homes and property will be maintained as well as providing for stabilization of housing costs including rent. 29 SECTION 3.1 REUSE PROGRAM CATEGORY III OVERVIEW Category III mobilehome parks consist of those mobilehome parks best suited for the development and implementation of a re-use program. In many instances, the facilities that fall into this category may have exceeded their useful life as rental mobilehome parks and increasingly provide challenges for both park owners and park residents. The following is a summary* of Category III parks: NUMBER OF PARKS: 7 NUMBER OF SPACES: 201 VACANT LOTS: 46 VACANT HOMES 3 NUMBER OF RESIDENTS: 319 (Estimated) PARK SIZE RANGE: 11-63 (Homesites) *Note: Based upon available data as of November 30, 1993, and subject to change. 30 CATEGORY III PARKS RE-USE PROGRAM Park Name Number of spaces Vacant Lots Vacant Homes Homes For Sale Brown's Trailer Park 17 1 1 0 Meadowbrook Trailer Park 21 12 0 0 Shady Nook 27 19 0 0 Trails End 20 0 0 0 Turnbull's Trailer Park 11 0 0 0 Vogue 63 7 2 12 Welcome Inn 42 7 0 0 TOTAL 201 46 3 12 31 SECTION 3.2 REUSE PROGRAM PROGRAM ELEMENTS The Category III re-use program consists of seven component elements as follows: Element 1 Title 25 Compliance. A detailed regulatory review of the mobilehome park to determine compliance or lack of compliance with Title 25 Health and Safety requirements is the primary initial focus of analysis. Element 2 Land-Use Analysis. An alternative land-use analysis shall be conducted in order to determine whether or not it is either appropriate or feasible for the Agency to acquire the land, either directly or via an OPA and/or a DDA for purposes of integration into an existing or projected redevelopment strategy. Such a preliminary determination will dictate the course of action to be taken with the park owner. If at the end of this analysis the determination to acquire the land is made, commence element 3A as indicated below. If at the end of this analysis the determination not to acquire the land is made, commence element 3B as indicated below. Element 3 The Mobilehome Park Owners and/or Developer. Initiation of contact with the mobilehome park owner is predicated upon the findings in the land-use analysis. Those findings will result in one of two prescribed courses of action for each park with respect to timing of owner contact and the nature of negotiations with the owner. 3A. Where a determination has been made to acquire the land, proceed as follows: • Initiate negotiations for acquisition with park owner. Appraisal of the land. • Physical plant inspection and analysis limited to the following: • ALTA survey. • Level I Site Assessment. Cost of land and infrastructure clearance. • Finalize acquisition with park owner. 3B. Where a determination has been made not to acquire the land, proceed as follows: • Commencement of preliminary meetings with the park owners to address the degree of health and safety violations. 32 Identification of owner's desires and needs with respect to his ability to "reuse the existing site". Consistency of owners desired alternative use with zoning, density, general plan, long-term housing strategies for the site and the existing adjacent community development. Assessment of economic benefits available to park owner by designation of the mobilehome park as a blighted area. Element 4 The Residents. Conduct Confidential Resident Survey analysis to determine the following: • degree of desire and willingness on the part of the residents to relocate to the following: • Category I mobilehome parks. • Category II mobilehome parks. • Alternative existing vacant housing situated within the City of San Bernardino. Special needs and circumstances with regard to integrated socialization must be addressed as part of the resident confidential survey analysis. For instance, special attention needs to be given to the long-term impact of moving families which may result in such issues as: Transportation to services and employment. • Changes in schools for children. • Overcoming the fear of government interaction. • Analysis of the "costs-in-context". Costs in context analysis will permit us to analyze the ultimate cost of relocation and new home purchase "in-context" with existing housing costs for each of the potentially affected families. Element 5 Mobilehome Housing Source Pool. The mobilehome housing source pool consists of the following: • All vacant lots in Category I and Category II parks. • All vacant homes in Category I and Category II parks. • Direct liaison with REO directors of the following lenders such as Bank of America (including Sec Pac Housing) and Greentree Financial. Private housing exchange program whereby current owners of Category I and Category II parks affected by significant vacancies can provide, economic incentives, such as long-term rent reductions or direct sale of park owned homes to relocating residents from Category III facilities. 33 Element 6 Funding Source Availability. Category III parks encompass two potential elements of financial expenditure. The first is expenditures with respect to those Category III parks wherein the Agency has made a determination that it is in its best interest to acquire the land, these expenditures may not be applicable with respect to all Category III facilities. The second element is the cost associated with the relocation of the residents consistent with the above noted elements. Early idenE'Ication of alternative methods and sources of financing is critical. Potential sources of relocation funds may well include: • C.D.B.G. • H.O.M.E. • C.H.A.F.A. • Expansion of currently implemented existing City-wide programs such as: • Space rent subsidy program. • Conventional institutional direct-to-borrower loan programs potentially guaranteed by the Agency (such as sponsored first time home buyer programs and the like). Element 7 Inter-departmental Liaison. An essential ingredient to a program which draws upon the resources of different departments within the City, is the creation of an inter-departmental liaison committee to assist in expediting approval, the sharing of information and the like. 34 SECTION 3.3 REUSE PROGRAM PRIORITIZATION CRITERIA Clearly the most sensitive issues presented by Category III parks are: • Enforcement of the detected Title 25 Health and Safety violations; and, • Relocation of the residents. In view of the above, the following directives are imperative: 1. Absent consensual agreement by a park owner to either (i) sell the land to the Agency (wherein the Agency has made a determination that purchasing is in it's best interest) or (ii) Owner desires to "reuse" his or her own property. The only remaining alternative, to wit, a non- consensual approach places the Agency in the position of potential owner/Agency disputes, such as owner initiated litigation over the contemplated plans of the Agency, or Agency initiated litigation over code enforcement. 2. Absent resident willingness to participate in a relocation program the Agency is likewise faced with attempting to implement a program in and for the best interests of its residents but in opposition to their desires. Both of these alternatives appear counter productive to a long-term housing strategy which needs to blend traditional economic realities with a need to assure the health and safety of its inhabitants, thus, it is recommended that the initial prototypical Category III models be prioritized and selected based on the following: • With respect to those parks where the Agency has determined that it is in its best interest to acquire the land: • Consensual agreement has been achieved between the Agency and park owner with regard to price; and, • Residents are willing and desirous of participating in a relocation program. • With respect to those parks where the Agency has determined that land acquisition is not in its best interest: 35 • Owner wishes to consensually reuse his own property and an agreement of reuse and development has been negotiated between the Agency and the Owner; and, • The residents are willing and desirous of participating in a relocation program. 36 SECTION 3.4 REUSE PROGRAM PROJECTED GOALS AND TIMELINE The following denotes our recommended goals and timelines attendant thereto: MONTHS 1-2 • Conduct a Title 25 review of each park. MONTH 2-3 • Complete a land-use analysis for each park. Where a determination has been made to acquire the land, the timeline and goals are as follows: MONTH 4 • Set a schedule for acquisition of the parks based upon findings in the land-use analysis. MONTHS 5-9 • Obtain an appraisal. Conduct a physical plant inspection and analysis. • Investigate funding source availability for land acquisition and resident relocation related costs. • Initiate negotiations for acquisition of the land with the park owner. • Conduct Confidential Resident Survey analysis to determine (a) degree and willingness on the part of the residents to relocate and (b) the impact of such a move upon the residents with regard to requirements for proper integration into a new neighborhood. MONTHS 10-12 • Develop resident relocation programs for each park. • Finalization and presentation for approval of cost budget in connection with relocation program. • Initiate acquisition of land. 37 • Initiate relocation program. MONTHS 13-24 • Future goals and timelines are fully dependent upon the schedule for acquisition of the parks determined as a result of the land-use analysis and the resident relocation program requirements. Those goals and timelines should be developed at this time to budget costs for these programs in the upcoming year. Where a determination has been made not to acquire the land, the timeline and goals are as follows: MONTH 4 • Initiate contact with park owners regarding Title 25 inspections and their ability to re-use the existing site. • Specific program elements will be developed in response to the issues presented as a result of meetings with the park owner. Future timelines and goals for these parks are fully dependent upon the potential re-use negotiated with the park owner. It is recommended that such negotiations be resolved within this calendar year to provide for development of a budget for these programs in the upcoming year. 38 SECTION 3.5 RE-USE PROGRAM INITIAL COST OF IMPLEMENTATION The following is an estimation of those costs and expenses likely to be incurred for each park. Accordingly, budget requirements are anticipated not to exceed approximately $108,500 for all Category III parks. This budget does not J "any costs or expenses" associated with City staff time such as land-use analysis, city relocation coordinators, and the like. The cost of implementation of the actual land acquisition (if applicable), grant of development rights and relocation program is the outgrowth of this analysis. This final budget shall be brought back to the housing committee for final approval. ANTICIPATED PRELIMINARY INVESTIGATORY COSTS TYPICAL PARK DESCRIPTION ESTIMATED COST APPRAISAL $ 7,500 *HCD TITLE 25 INSPECTION (PARK) $ -0- *HCD.TITLE 25 INSPECTION (HOMES) $ -0- LEVEL'I SITE ASSESSMENT $ 5,000 POSTAGE AND COPYING $ 500 MISCELLANEOUS $ 2,500 TOTAL $15,500 City Inspection. 39 SECTION 3.6 REUSE PROGRAM RECOMMENDATIONS • Implement Category III Program as set forth above. • Authorize expenditures to initiate implementation of program in accordance with the budget as set forth in section 3.5. 40 SECTION 3.7 BENEFITS • Through relocation greatly improve quality of life of residents currently living in substandard housing. • Long term improvement of the neighborhood through appropriate reuse of the property. 41 i i DE ANZA•LONDON CITY OF SAN BERNARDINO MOBILEHOME PARK CONVERSION PROGRAM i TABLE OF CONTENTS i CONVERSION PROGRAM SECTION1.1...................................................................................................................4 CATEGORYI OVERVIEW..........................................................................................................................4 SECTION1.2...................................................................................................................6 PROGRAMELEMENTS...............................................................................................................................6 SECTION1.3.................................................................................................................13 PRIORITIZATIONCRITERIA. ................................................................................................................. 13 SECTION1.4.................................................................................................................14 PROJECTEDGOALS AND TIMELINE. ................................................................................................... 14 SECTION1.5.................................................................................................................15 INITIAL COSTS OF IMPLEMENTATION................................................................................................ 15 SECTION1.6.................................................................................................................16 RECOMMENDATIONS............................................................................................................................... 16 REHABILITATION PROGRAM SECTION2.1.................................................................................................................17 CATEGORYII OVERVIEW....................................................................................................................... 17 SECTION2.2.................................................................................................................19 PROGRAMELEMENTS............................................................................................................................. 19 SECTION2.3.................................................................................................................22 PRIORITIZATIONCRITERIA. .................................................................................................................22 l i SECTION2.4.................................................................................................................23 iPROJECTED GOALS AND TIMELINE.....................................................................................................23 I SECTION2.5.................................................................................................................24 INITIALCOST OF IMPLEMENTATION..................................................................................................24 SECTION2.6.................................................................................................................25 RECOMMENDATIONS...............................................................................................................................25 RE-USE PROGRAM SECTION3.1.................................................................................................................26 CATEGORYIII OVERVIEW...................................................................................................................... 26 SECTION3.2.................................................................................................................28 PROGRAMELEMENTS.............................................................................................................................28 SECTION3.3.................................................................................................................31 PRIORITIZATIONCRITERIA...................................................................................................................31 SECTION3.4.................................................................................................................33 PROJECTEDGOALS AND TIMELINE.....................................................................................................33 SECTION3.5.................................................................................................................35 INITIALCOST OF IMPLEMENTATION..................................................................................................35 SECTION3.6.................................................................................................................36 RECOMMENDATIONS...............................................................................................................................36 2 i INTRODUCTION DeAnza Group, Inc. in association with The London Group, (hereinafter referred to as "DeAnza•London") was retained by the Economic Development Department of the City of San Bernardino to analyze the feasibility of converting the City's forty-four (44) mobilehome parks to resident ownership. DeAnza•London presented its recommendations to the San Bernardino City Council on December 20, 1993. At that meeting the San Bernardino City Council authorized DeAnza•London to proceed with the development of a comprehensive program for the preservation and improvement of the City's mobilehome parks. In its analysis of the parks, DeAnza•London determined that the mobilehome parks within the City fell within three distinct categories. The City Council authorized action for those three categories as follows: CATEGORY I PARKS • To take all actions necessary for the formal development and implementation of a mobilehome park resident ownership conversion program. CATEGORY II PARKS • To develop a program with both long and short-term strategies that improve and preserve the Category II mobilehome parks and the homes situated therein as a long-term source of quality, affordable rental housing. CATEGORY III PARKS • To develop a re-use program for those Category III mobilehome parks that have reached the end of their useful life. It should be noted that the initial classification of parks is somewhat dynamic in nature and scope in that, final investigation and analysis may result in some of these facilities being re-categorized based upon factors such as, location within project areas, costs associated with program criteria, economic realities attendant to the residents abilities and park owners needs, and the like. 3 i SECTION 1.1 I CONVERSION PROGRAM i CATEGORY I OVERVIEW Category I parks are those which are most likely feasible for resident ownership or control and, if converted, will most likely result in, among other things, stabilized housing costs within the range of current rents, preservation of affordable housing, elimination of potential deterioration, long term overall park infrastructure improvement, as well as reduce the City's need to further regulate this section of the housing element. The following is a summary* of Category I parks: NUMBER OF PARKS: 29 NUMBER OF SPACES: 3,672 VACANT LOTS: 149 VACANT HOMES: 80 HOMES FOR SALE: 294 NUMBER OF RESIDENTS: 7,230 (Estimated) PARK SIZE RANGE: 45-403 Homesites *Note: Based upon available data as of November 30, 1993,and subject to change. 4 i CATEGORY I PARKS CONVERSION PROGRAM Park Name Number of spaces Vacant Lots Vacant Homes Homes For Sale Acacia Villa 82 3 3 8 Arrowlane 68 1 2 0 Bonanza Trailer Park 52 8 0 1 Country Club 58 1 0 0 Fiesta Hills 141 0 0 14 Friendly Village 85 9 11 7 Glen Aire 131 1 0 6 Herkelrath 67 0 0 4 Lytle Creek 55 4 3 6 Manor MHP 2 69 4 4 4 Mediterranean 81 1 1 3 Meridian Terrace 266 41 15 53 Mountain Shadows 403 0 0 0 Ninth Street 108 7 1 3 Oasis Palms 139 20 11 12 Orangewood 155 15 2 14 Pacific Palms Trailer Park 142 0 0 8 Pepper Villa 51 1 0 4 Petite Chateaux 69 3 1 6 Rancho Meridian 143 6 7 31 Royal Coach 45 2 0 8 Royal York Estates 93 2 3 8 Second Meridian 96 0 0 2 Sequoia Plaza 242 3 3 27 Spa 181 9 9 19 Terra Alta 62 1 0 6 Thunderbird 161 2 0 11 Tropicana 146 5 4 5 Valencia Lea 281 0 0 24 TOTAL 3672 1491 801 294 5 SECTION 1.2 CONVERSION PROGRAM PROGRAM ELEMENTS The Category I conversion program consists of nine (9) component elements as follows: Element 1 Prioritization. In light of the volume of contacts initiated by De Anza•London with resident groups and park owners during the course of its' preparation of the CONVERSION FEASIBILITY STUDY, the following represents preliminary prioritization based on mobilehome park owner and resident responses: GROUP A This group consists of eleven (11) mobilehome parks where significant interest of participation in the conversion program has been obtained. These parks are as follows: PARK SPACES Acacia Village 82 Friendly Village 85 Glen Aire 131 Lytle Creek 55 Ninth Street 108 Oasis Palms 139 Orangewood 160 Pacific Palms 142 Pepper Villa 51 Rancho Meridian 143 Tropicana 148 GROUP B Group B mobilehome parks consist of those parks which have been identified as appropriate for conversion to resident ownership or control but are more likely to be converted once the program has been fully established and implemented. This group consists of nineteen (19) mobilehome parks as follows: PARK SPACES Arrowlane 68 6 Bonanza 52 Country Club 58 ! Fiesta Hills 141 Friendly Village 85 Herkelrath 67 Manor#2 69 Meridian Terrace 266 Mountain Shadows 403 Oasis Palms 139 Petite Chateaux 69 Royal Coach 45 Royal York Estates 93 Second Meridian 96 Sequoia Plaza 242 Spa 181 Terra Alta 62 Thunderbird 161 Valencia Lea 281 Accordingly, the following elements of this Category I program reference, unless otherwise noted, Group A mobilehome parks: Element 2 Mobilehome Parh Owners. Based upon our prior contacts with Group A park owners, this element includes the following: • Re-initiate park owner contact • Obtain current park operating information • Preliminary identification of owners estimation of park value Element 3 The Residents. Based upon our prior contacts with Group A park residents, this element includes the following: • Re-evaluate resident demographics for purposes of re-certification and updating of relevant financial information. • Determine the potential eligibility and qualification of each household with respect to existing governmentally sponsored financing assistance programs. • Develop requirements for an in-park facility upgrade and/or common area amenity package consistent with the resident demographics of the park. Element 4 Conversion Viability Analysis. Conversion viability analysis encompasses the following: • Review and Analysis • Existing ordinances 7 i • Land use regulations • Pending rent control litigation • Funding sources: • RDA • MPROP • CDBG • HOME • HOPE • Tax Exempt Mortgage Revenue Bonds �stabhsh Existing low-income programs preliminary park value • Property tax exemption confirmation • Prepare conversion budget • Provide City recommendation for amendment of regulations and ordinances • Develop governmental low-income and credit enhanced loan programs �rehminary Develop conventional interim and long-term financing programs negotiation of terms of purchase • Organization of Resident Association • Resident meetings: • Introductory seminars • Confidential resident survey • Supervise formation of acquisition association • Organize structure of committees • Introduce conversion team roles • Assign tenants to various committees; delegate tasks • Physical • Any park drawings including site plans and utility systems • Plans and specifications for all improvements. Detailed description of all improvements • All engineering and inspection reports • Conduct an appraisal • Flood zone information • Soils and seismic • Electrical • Utility system distribution analysis to include electrical, water, sewer, gas, telephone, and cable. • Storm drainage • Sewer • Water • Health reports • Level I site assessment • Termite report 8 i • HCD inspection report • Any other engineering and inspection reports in Seller's possession • Inventory of all personal property including park owned coaches, equipment, and furnishings, etc. • Governmental Approvals • Copy of all permits and licenses • 'Evidence of zoning • Utility franchise agreements, if applicable • Copy of any rent control ordinances affecting the Property �itleAny other governmental information pertaining to the Property and Survey • Copy of the last title policy issued including a legal description of the Property and a plot plan • Copy of ALTA survey, certified to Buyer, showing all roads, encroachments, boundaries, permanent improvements and easements • Preliminary title report issued within the last 30 days to Buyer from a title company designated by Buyer, with readable copies of all underlying documents • Agreements • Copy of all leases • Copy of any loan documents and other loan information, if applicable to the transaction • Copy of all service and other agreements • Copy of rules and regulations • Information on any tenant government litigation affecting the Property during the prior 5 years • Financial • Monthly operating statement for the prior 3 calendar years and the current year-to-date, including detail on all capital expenditures • Copy of the last 2 years' tax returns • Copy of prior 3 years' balance sheets • Detailed general ledger for the prior year and current year-to- date • Current rent roll showing all charges and listing all security deposits • Description and calculation of all tenant charges, where applicable • Rent history for the prior 4 years • Copy of the last 3 months income receipts journal with corresponding deposit slips and bank statements 9 f • Copy of the latest delinquency report or accounts receivable report • Supporting documentation for any miscellaneous income (storage, laundry, vending machines, late charges, etc.) • Availability of original invoice files • Copy of all electric, gas, sewer, trash, and water bill for the prior 3 calendar years and the current year-to-date • Copy of the last 3 years' tax bills • Copy of the last 3 years insurance bills and coverage • Description of all advertising and marketing programs and their associated costs • Copy of all maintenance and repair bills over $500 for the prior 3 calendar years and the current year-to-date • Summary of the current employee payroll including all benefits provided (space, home, utilities, insurance, etc.) - a copy of the payroll register with detail • Assessments • Conduct an appraisal • Review if available, park drawings including site plans and utility system layouts • Obtain engineering inspection reports, to the extent applicable. • Flood plane analysis. • Soils and seismic tests. • Utility system distribution analysis to include electrical, water, sewer, gas, telephone, and cable. • Storm drainage. • Level I site assessment. • Site work improvements to include hardscape areas, fencing, lighting, all buildings such as the clubhouse, laundry rooms, storage/maintenance, recreational facilities and amenities such as playgrounds, tennis courts, pool, spa and shuffleboard courts. • Termite report. • Mobilehome park Title 25 compliance analysis - health and safety status reports. • Consistency with original Conditional Use Permits, General Plan, Variance requirements, density and zoning issues. Element 5 Structure of Resident Ownership or Control. The form and structure of the vehicle utilized to achieve resident ownership or control will vary i depending upon the factors obtained pursuant to elements 2 and 3 above. The alternative structures available include: • Condominium. Each participating resident owns an undivided interest in the land including the common areas, has an exclusive 10 easement to use the lot, owns the airspace above the lot and is a member of the homeowner's association. In effect, each participating resident has purchased the space upon which his home sits. • Planned Unit Development. Each participating resident owns his or her lot in fee simple and is a member of a homeowner's association which owns the common areas. • Corporate. A resident owned corporation is formed as a non-profit mutual benefit corporation whose shareholders (or members) are the residents. Each participating resident owns an interest (often a share) in the corporation and leases his space from the corporation. • 501 (c)(3 . Acquisition of the mobilehome park by a qualified 501 (c)(3). The relationship of the residents and the 501(c)(3) will vary depending on numerous certain economic and practical factors. Selection of the structure of ownership or control is a critical element with respect to identifying the most readily available funding sources. Element 6 Financing. Identification and selection of alternative financing sources such as: • Interim financing. Some mobilehome parks may require interim acquisition financing as a first step to the conversion process in order to accommodate the timing requirements of the residents and the mobilehome park owners. Interim financing sources may include: • Conventional institutional interim financing. • Short-term bond acquisition financing. Lng-terin Seller assisted financing. financing. Long-term or "permanent financing" depends on the type of structure of ownership selected, as follows: • Planned development/Condominium form of ownership. This form of ownership requires individual financing. In essence, each participating household shall obtain his or her financing based on traditionally accepted loan qualification standards and, to the extent available, standards and guidelines established by state, federal and locally available low and moderate income assistance programs. Funding sources are available as follows: • Conventionally available loans • The Mobilehome Park Resident Ownership Program (M.P.R.O.P.) • C.H.A.F.A. • H.O.M.E. • Utilization of 20% set aside to assist low and moderate income households 11 • Corporate form of ownership. The corporate form of ownership involves two types of financing, as follows: • Conventionally available first trust deed secured financing from local institutional lenders based upon traditional lending criteria • Cash participation from the residents which in the aggregate constitutes the "downpayment" portion of the purchase price. • 501 (c)(3) financing. 501(c)(3) financing is generally available through issuance of bonds which may be in the form of the following: • Taxable bond exempt • Tax exempt bond In order to take advantage of historically low interest rates and to accommodate the fact that the Group A category of mobilehome parks includes a ' variety of methods of ownership. We recommend the following: • Creation of a uniform interim financing mechanism with which to acquire a number of parks without regard to their ultimate structure of ownership. This interim financing may be in the form of a bond issue which (i) permits acquisition of a number of mobilehome park facilities concurrently with the debt service of the bond being paid by the rental income of the mobilehome parks and (ii) the debt represented by the bond being paid off as each mobilehome park goes through the second stage of conversion to its ultimate form of ownership. Element 7 Mobilehome Housing Source Pool. The vacant lots, vacant homes, and homes for sale within Category I parks represents a portion of the Housing Source Pool available to accommodate element 5 of section 3.2 of the program. Element 8 Mobilehomes in Place. • Title 25 Health and Safety analysis of each home in order to identify and prioritize those homes requiring rehabilitation assistance. • Potential upgrade or replacement of existing homes consistent with resident demographics. i Element 9 Inter-departmental liaison. An essential ingredient to the conversion program which draws upon the resources of different departments within the City, is the creation of an inter-departmental liaison committee to assist in expediting approvals, the sharing of information and the like. i 12 i SECTION 1.3 CONVERSION PROGRAM PRIORITIZATION CRITERIA While the residents and the owners of the Group A parks have indicated a willingness and desire to participate in the conversion program, the following prioritization criteria will result in the natural selection of the first group of parks to undergo the conversion process: • Owners willingness and desire to sell his or her mobilehome park at a fair and reasonable price. • Residents ability to participate in the acquisition of the mobilehome park with monthly housing costs at generally acceptable, affordable levels, and for those who qualify as low and moderate income households, at monthly housing costs not exceeding applicable standards. • Mobilehome parks which, after completion of the Conversion Viability Analysis as set forth in element 3 above, have not been re-categorized as a result of such analysis and inspections. 13 i SECTION 1.4 CONVERSION PROGRAM PROJECTED GOALS AND TIMELINE The following denotes our recommended goals and timelines attendant thereto: MONTHS 1-3 • Re-commence negotiations with park owners. • Commence Second Stage Analysis of residents. • Commence Conversion Viability Analysis. • Final selection of prototypical models. • Selection of mode of resident ownership or control. • Funding source selection and finalization. MONTHS 4-6 • Final park acquisition due diligence. MONTHS 7-12 • Breakout of parks to initially selected form of ownership or control. MONTHS 13-24 • Commence the above noted process of program implementation with respect to additional Category I mobilehome parks, as appropriate. MONTHS 25-36 • Commence the above noted process of program implementation with respect to the remaining Category I mobilehome parks. 14 i SECTION 1.5 CONVERSION PROGRAM INITIAL COSTS OF IMPLEMENTATION The following budget is an estimation of those costs and expenses likely to be incurred for each park at the analysis stage, based on a one hundred space typical park. Accordingly, budget requirements are anticipated not to exceed $213,000 for the first twelve months. The costs of implementation of the actual conversion program is the outgrowth of the analysis. This final budget shall be brought back to the housing committee for final approval. PRELIMINARY INVESTIGATORY COSTS TYPICAL PARK (100 HOMESITES)` DESCRIPTION:: ESTIMATED COST APPRAISAL $ 7,500 HCD TITLE 25 INSPECTION (PARK) $ 2,500.`. HCD TITLE 25 INSPECTION (HOMES) $ 2,500 LEVEL I SITE ASSESSMENT $ 5,000 SITE INSPECTION ! $10,000 ' POSTAGE AND COPYING $ 1,500 PRELIMINARY CIVIL ENGINEERING STUDY. $ 1,500 MISCELLANEOUS $ 5,000 TOTAL $35,500 15 i SECTION 1.6 CONVERSION PROGRAM RECOMMENDATIONS • Implement Category II program as set forth above. • Authorize expenditures to initiate implementation of program in accordance with the budget set forth in section 2.5. 16 SECTION 2.1 REHABILITATION PROGRAM CATEGORY II OVERVIEW Category II parks are comprised of those mobilehome parks which, in our opinion, operate within reasonable parameters as rental mobilehome park facilities. While these mobilehome park facilities do not have the traditional attributes important to conversion to resident ownership, they, nonetheless, should be supported as continued rental operations to help maintain that portion of the affordable housing stock represented by mobilehome parks. In identifying those attributes important to conversion, consideration is given to the overall physical conditions, both structural and cosmetic, of the property and the individual homes and sites. The combined factors of size, age, location and physical conditions led us to categorize these parks as Category II. During the course of our analysis and investigation it became apparent that a number of these facilities, as well as the homes situated therein, require both short and long-term strategies with regard to their maintenance and operation to sustain long-term economic viability of the parks. The primary focus of such strategies is development of a program for rehabilitation of the parks and homes in conjunction with a program for long-term stabilization of rents. The following is a summary* of Category II parks: NUMBER OF PARKS: 8 NUMBER OF SPACES: 358 VACANT LOTS: 40 HOMES FOR SALE: 4 VACANT HOMES: 2 NUMBER OF RESIDENTS: 663 (Estimated) PARK SIZE RANGE: 13-72 Homesites *Note: Based upon available data as of November 30, 1993, and subject to change. I 17 I CATEGORY II PARKS REHABILITATION PROGRAM Park Name Number of spaces Vacant Lots Vacant Homes Homes For Sale Crestview 38 4 0 0 Cypress Inn 72 14 0 3 Hi-U Trailer Park 71 4 2 0 Highland 62 11 0 0 Manor MHP 1 60 7 0 1 Rancho Trailer Park 27 0 0 0 Sunset 13 0 0 0 Valley Vista RV Park 15 0 0 0 TOTAL 358 40 2 4 18 SECTION 2.2 REHABILITATION PROGRAM PROGRAM ELEMENTS The Category II Rehabilitation Program consists of nine component elements as follows: Element 1 Agency's Long-term Housing Strategies. Each mobilehome park should be examined within the framework of the following issues: • Is the mobilehome park's continued operation consistent with: • current and long-term land use strategies for the immediate and surrounding areas; • anticipated demographic changes in the immediate and surrounding areas which may impact continued use and operation. • Does continued operation and potential investment promote and assist in furthering the Agency's housing goals? Element 2 Mobilehome Parh Owners. In order to implement an appropriate rehabilitation program it is necessary to initiate preliminary discussions with the Category II mobilehome park owners to ascertain the following: • The owner's desire and willingness to participate in a rehabilitation program. • The owner's ability to financially participate in an Agency-sponsored mobilehome park capital investment program. Element 3 The Residents. Conduct Confidential Resident Survey analysis to: • Determine the potential eligibility and qualification of each household with respect to existing governmentally sponsored rent and home rehabilitation assistance programs. • Develop requirements for an in-park facility upgrade and/or common area amenity package consistent with the resident demographics of the park. 19 i Element 4 Mobilehomes in Place. Title 25 Health and Safety analysis of each home in order to identify and prioritize those homes requiring rehabilitation assistance. Potential upgrade or replacement of existing homes consistent with resident demographics. Element 5 Mobilehome Park Physical Plant Assessment. Physical plant analysis encompasses the following: • Conduct an appraisal • Review if available, park drawings including site plans and utility system layouts. • Obtain engineering inspection reports, to the extent applicable. • Flood plane analysis. • Soils and seismic tests. • Utility system distribution analysis to include electrical, water, sewer, gas, telephone, and cable. • Storm drainage. • Level I site assessment. • Site work improvements to include hardscape areas, fencing, lighting, all buildings such as the clubhouse, laundry rooms, storage/maintenance, recreational facilities and amenities such as playgrounds, tennis courts, pool, spa and shuffleboard courts. Termite report. • Mobilehome park Title 25 compliance analysis - health and safety status reports. • Consistency with original Conditional Use Permits, General Plan, Variance requirements, density and zoning issues. Element 6 Funding Source Availability. Category II parks encompass two i main elements of potential financial expenditures. The first is expenditures in connection with rehabilitation of the mobilehome park infrastructure and the second is rehabilitation of individual homes situated thereon. Early identification of alternative methods and sources of financing is critical. Potential sources of funds may well include: • C.D.B.G. ` H.O.M.E. • C.H.A.F.A. I • Expansion of currently implemented existing Agency-wide programs such as: • Space rent subsidy program. I 20 I State inspect program. Program. _ an element of the . Seismic retrofitting a i]itation PTogram Single family irit" program. ro ams hborhood"Sp rogr neig institutional direct-to-borrower loan p Conventional Agency. guaranteed by the development Accords and Covenants. Critical to this process II t ark owners and Element 7 ants to be implemented between Category P d coven � a ital investment as well as to assure the of accords an the Agency's cap stock. the Agency to safeguard arks as affordable rental housing preservation of mobilehome p tailored to suit the specifics of any given though ultimately Such accords, would include the following* Category II park, at a minimum, neral park operations, long-term maintenance Basic standards f o gark services; to insure long-term and the providing p idelines rent stabilization gu Intra-park ark in the event that affordability; acquire the mobilehom park the ability First right of refusal to enditures, and the like; and, ark owner decides to sell at some later ate, the p recapture its exp ect to modification of the Agency to recap regulations subj ority of the Establishment of park rules and T th ark owner, a maj e only with the consent of the p and Chang Agency.residents and the Ag vacant homes Source Pool. The vacant lots, ortion of the II mobilehome parks represent a p Element 8 Mobilehome Housin ro am. and homes for sale within Category nodate Element 5 of section 3.2 of this p source available to accommodate ingredient to a program housing An essential is the ent 9 Inter-de artmental o ia�er nt departments within the City,approval, Elem u on the resources which draws p artment liaison committee to assist in expediting creation of an inter-dep the sharing of information and the like. 21 i SECTION 2.3 REHABILITATION PROGRAM PRIORITIZATION CRITERIA One of the most difficult tasks is the prioritization of the Category II parks. While each identified park is in clear need of varying degrees and forms of rehabilitation, logic dictates two directives: 1. Mere home rehabilitation in a park undergoing decay absent park rehabilitation, may not be the most effective use of available economic resources; and, 2. Absent a park owners willingness to participate in a park rehabilitation program, expenditure of economic resources in the Analysis Phase (for instance Element 5 above) seems fruitless. Accordingly, Category II parks should be prioritized for rehabilitation in accordance with the following: • Desire, willingness and ability of the park owner to participate in the program. • Desire and willingness of the residents to participate in the program. • Commencement of the Section 2.2 elements. • Selection of prototypical models. • Analysis of the projected costs associated with implementation of the park and home rehabilitation. • Selection of method of park and home rehabilitation funding. • Finalization of accords and covenants. 22 i SECTION 2.4 REHABILITATION PROGRAM PROJECTED GOALS AND TIMELINE The following denotes our recommended goals and timelines attendant thereto: MONTHS 1-2 • Initiate contact with all Category II mobilehome park owners to ascertain their desire and willingness to participate in the program. • Preliminary park designation. MONTH 2-3 • Commence resident survey and demographic studies. • Re-certification of parks chosen to serve as the prototypical models for Agency sponsored rehabilitation program. MONTHS 4-6 • Commence and complete analysis. • Prepare final rehabilitation budget for approval. • Final selection of prototypical models. MONTHS 7-12 • Implementation of rehabilitation program with respect to two Category II mobilehome parks. MONTHS 13-24 • Commence the above noted process and program implementation with respect to three additional Category II mobilehome parks. MONTHS 25-36 • Commence the above noted process and program implementation with respect to the remaining Category II mobilehome parks. 23 i SECTION 2.5 REHABILITATION PROGRAM INITIAL COST OF IMPLEMENTATION The following budget is an estimation of those costs and expenses likely to be incurred for each park at the analysis stage, based on a one hundred space typical park. Accordingly, budget requirements are anticipated not to exceed $102,000 for the first twelve months. The costs of implementation of the actual rehabilitation program is the outgrowth of the analysis. This final budget shall be brought back to the housing committee for final approval. ,I PRELIMINARY INVESTIGATORY COSTS TYPICAL PARK (100 HOMESITES) DESCRIPTION ! ESTIMATED COST APPRAISAL $ 7,500 HCD'TITLE 25 INSPECTION (PARK) $ 2,500. HCD'TITLE 25 INSPECTION (HOMES) $ 2,500 LEVEL I SITE ASSESSMENT $ 5,000 SITE INSPECTION $10,000 POSTAGE AND COPYING MISCELLANEOUS $ 5,000 TOTAL $34,000 24 I SECTION 2.6 REHABILITATION PROGRAM RECOMMENDATIONS Implement Category II program as set forth above. Authorize expenditures to initiate implementation of program in accordance with the budget set forth in section 2.5. 25 I SECTION 3.1 I REUSE PROGRAM i CATEGORY III OVERVIEW Category III mobilehome parks consist of those mobilehome parks best suited for the development and implementation of a re-use program. In many instances, the facilities that fall into this category may have exceeded their useful life as rental mobilehome parks and increasingly provide challenges for both park owners and park residents. The following is a summary* of Category III parks: I NUMBER OF PARKS: 7 i NUMBER OF SPACES: 201 VACANT LOTS: 46 VACANT HOMES 3 NUMBER OF RESIDENTS: 319 (Estimated) PARK SIZE RANGE: 11-63 (Homesites) *Note: Based upon available data as of November 30, 1993,and subject to change. 26 i CATEGORY III PARKS RE-USE PROGRAM Park Name Number of spaces Vacant Lots Vacant Homes Homes For Sale Brown's Trailer Park 17 1 1 0 Meadowbrook Trailer Park 21 12 0 0 Shady Nook 27 19 0 0 Trails End 20 0 0 0 Turnbull's Trailer Park 11 0 0 0 Vogue 63 7 2 12 Welcome Inn 42 7 0 0 TOTAL 201 46 3 12 27 i SECTION 3.2 REUSE PROGRAM PROGRAM ELEMENTS The Category III re-use program consists of seven component elements as follows: Element I Title 25 Compliance. A detailed regulatory review of the mobilehome park to determine compliance or lack of compliance with Title 25 Health and Safety requirements is the primary initial focus of analysis. Element 2 Land-Use Analysis. An alternative land-use analysis shall be conducted in order to determine whether or not it is either appropriate or feasible for the Agency to acquire the land, either directly or via an OPA and/or a DDA for purposes of integration into an existing or projected redevelopment strategy. Such a preliminary determination will dictate the course of action to be taken with the park owner. If at the end of this analysis the determination to acquire the land is made, commence element 3A as indicated below. If at the end of this analysis the determination not to acquire the land is made, commence element 3B as indicated below. Element 3 The Mobilehome Park Owners and/or Developer. Initiation of contact with the mobilehome park owner is predicated upon the findings in the land-use analysis. Those findings will result in one of two prescribed courses of action for each park with respect to timing of owner contact and the nature of negotiations with the owner. 3A. Where a determination has been made to acquire the land, proceed as follows: • Initiate negotiations for acquisition with park owner. • Appraisal of the land. • Physical plant inspection and analysis limited to the following: ALTA survey. Level I Site Assessment. Cost of land and infrastructure clearance. Finalize acquisition with park owner. 3B. Where a determination has been made not to acquire the land, proceed as follows: • Commencement of preliminary meetings with the park owners to address the degree of health and safety violations. 28 I IIdentification of owner's desires and needs with respect to his ability to "reuse the existing site". I • Consistency of owners desired alternative use with zoning, density, general plan, long-term housing strategies for the site and the existing adjacent community development. • Assessment of economic benefits available to park owner by designation of the mobilehome park as a blighted area. Element 4 The Residents. Conduct Confidential Resident Survey analysis to determine the following: • degree of desire and willingness on the part of the residents to relocate to the following: • Category I mobilehome parks. • Category II mobilehome parks. • Alternative existing vacant housing situated within the City of i San Bernardino. i Special needs and circumstances with regard to integrated socialization must be addressed as part of the resident confidential survey analysis. For instance, special attention needs to be given to the long-term impact of moving families which may result in such issues as: • Transportation to services and employment. • Changes in schools for children. • Overcoming the fear of government interaction. • Analysis of the "costs-in-context". Costs in context analysis will permit us to analyze the ultimate cost of relocation and new home purchase "in-context" with existing housing costs for each of the potentially affected families. Element 5 Mobilehome Housin-' Source Pool. The mobilehome housing source pool consists of the following: • All vacant lots in Category I and Category II parks. • All vacant homes in Category I and Category II parks. • Direct liaison with REO directors of the following lenders such as Bank of America (including Sec Pac Housing) and Greentree Financial. Private housing exchange program whereby current owners of Category I and Category II parks affected by significant vacancies can provide, economic incentives, such as long-term rent reductions or direct sale of park owned homes to relocating residents from Category III facilities. 29 i I Element 6 Funding Source Availability. Category III parks encompass two potential elements of financial expenditure. The first is expenditures with respect to those Category III parks wherein the Agency has made a determination that it is in its best interest to acquire the land, these expenditures may not be applicable with respect to all Category III facilities. The second element is the cost associated with the relocation of the residents consistent with the above noted elements. Early identification of alternative methods and sources of financing is critical. Potential sources of relocation funds may well include: • C.D.B.G. • H.O.M.E. • C.H.A.F.A. • Expansion of currently implemented existing City-wide programs such as: • Space rent subsidy program. • Conventional institutional direct-to-borrower loan programs potentially guaranteed by the Agency (such as sponsored first time home buyer programs and the like). Element 7 Inter-departmental Liaison. An essential ingredient to a program which draws upon the resources of different departments within the City, is the creation of an inter-departmental liaison committee to assist in expediting approval, the sharing of information and the like. 30 I I SECTION 3.3 REUSE PROGRAM PRIORITIZATION CRITERIA Clearly the most sensitive issues presented by Category III parks are: Enforcement of the detected Title 25 Health and Safety violations; and, Relocation of the residents. In view of the above, the following directives are imperative: 1. Absent consensual agreement by a park owner to either (i) sell the land to the Agency (wherein the Agency has made a determination that purchasing is in it's best interest) or (ii) Owner desires to "reuse" his or her own property. The only remaining alternative, to wit, a non- consensual approach places the Agency in the position of potential owner/Agency disputes, such as owner initiated litigation over the contemplated plans of the Agency, or Agency initiated litigation over code enforcement. 2. Absent resident willingness to participate in a relocation program the Agency is likewise faced with attempting to implement a program in and for the best interests of its residents but in opposition to their desires. Both of these alternatives appear counter productive to a long-term housing strategy which needs to blend traditional economic realities with a need to assure the health and safety of its inhabitants, thus, it is recommended that the initial prototypical Category III models be prioritized and selected based on the following: With respect to those parks where the Agency has determined that it is in its best interest to acquire the land: • Consensual agreement has been achieved between the Agency and park owner with regard to price; and, • Residents are willing and desirous of participating in a relocation program. With respect to those parks where the Agency has determined that land acquisition is not in its best interest: 31 i i Owner wishes to consensually reuse his own property and an agreement of reuse and development has been negotiated between the Agency and the Owner; and, The residents are willing and desirous of participating in a relocation program. 32 i SECTION 3.4 REUSE PROGRAM PROJECTED GOALS AND TIMELINE The following denotes our recommended goals and timelines attendant thereto: MONTHS 1-2 • Conduct a Title 25 review of each park. MONTH 2-3 • Complete a land-use analysis for each park. Where a determination has been made to acquire the land, the timeline and goals are as follows: MONTH 4 • Set a schedule for acquisition of the parks based upon findings in the land-use analysis. MONTHS 5-9 • Obtain an appraisal.Conduct a physical plant inspection and analysis. • Investigate funding source availability for land acquisition and resident relocation related costs. • Initiate negotiations for acquisition of the land with the park owner. • Conduct Confidential Resident Survey analysis to determine (a) degree and willingness on the part of the residents to relocate and (b) the impact of such a move upon the residents with regard to requirements for proper integration into a new neighborhood. MONTHS 10-12 • Develop resident relocation programs for each park. • Finalization and presentation for approval of cost budget in connection with relocation program. • Initiate acquisition of land. 33 • Initiate relocation program. MONTHS 13-24 • Future goals and timelines are fully dependent upon the schedule for acquisition of the parks determined as a result of the land-use analysis and the resident relocation program requirements. Those goals and timelines should be developed at this time to budget costs for these programs in the upcoming year. Where a determination has been made not to acquire the land, the timeline and goals are as follows: MONTH 4 • Initiate contact with park owners regarding Title 25 inspections and their ability to re-use the existing site. • Specific program elements will be developed in response to the issues presented as a result of meetings with the park owner. Future timelines and goals for these parks are fully dependent upon the potential re-use negotiated with the park owner. It is recommended that such negotiations be resolved within this calendar year to provide for development of a budget for these programs in the upcoming year. 34 SECTION 3.5 RE-USE PROGRAM INITIAL COST OF IMPLEMENTATION The following is an estimation of those costs and expenses likely to be incurred for each park at the analysis stage, based on a one hundred space typical park. Accordingly, budget requirements are anticipated not to exceed $72,000 for the first twelve months. The cost of implementation of the actual land acquisition (if applicable), grant of development rights and relocation program is the outgrowth of this analysis. This final budget shall be brought back to the housing committee for final approval. PRELIMINARY INVESTIGATORY COSTS TYPICAL PARK (100 HOMESITES) DESCRIPTION ESTIMATED COST APPRAISAL $ 7,500 HCD TITLE 25 INSPECTION (PARK) $ 2,500.' HCD TITLE 25 INSPECTION (HOMES) $ 2,500 LEVEL I SITE ASSESSMENT $ 5,000 POSTAGE AND COPYING $ 1,500 ' MISCELLANEOUS TOTAL $24,000 35 SECTION 3.6 REUSE PROGRAM RECOMMENDATIONS • Implement Category III Program as set forth above. • Authorize expenditures to initiate implementation of program in accordance with the budget as set forth in section 3.5. 36