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HomeMy WebLinkAbout2015-04-14 City Council Agenda PacketCITY OF PALO ALTO CITY COUNCIL April 14, 2015 Special Meeting Council Chambers 6:00 PM Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday preceding the meeting. PUBLIC COMMENT Members of the public may speak to agendized items; up to three minutes per speaker, to be determined by the presiding officer. If you wish to address the Council on any issue that is on this agenda, please complete a speaker request card located on the table at the entrance to the Council Chambers, and deliver it to the City Clerk prior to discussion of the item. You are not required to give your name on the speaker card in order to speak to the Council, but it is very helpful. TIME ESTIMATES Time estimates are provided as part of the Council's effort to manage its time at Council meetings. Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. To ensure participation in a particular item, we suggest arriving at the beginning of the meeting and remaining until the item is called. HEARINGS REQUIRED BY LAW Applications and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and up to three minutes for concluding remarks after other members of the public have spoken. Call to Order Oral Communications Members of the public may speak to any item NOT on the agenda. Council reserves the right to limit the duration of Oral Communications period to 30 minutes. Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 1.Hearing on Buena Vista Mobilehome Park Residents Association’s Appeal of Hearing Officer’s Decision Relating to Mitigation Measures Proposed by Buena Vista Mobilehome Park Owner in Connection with Mobilehome Park Closure Application Adjournment AMERICANS WITH DISABILITY ACT (ADA) Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance. 1 April 14, 2015 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. (continued from April 13, 2015 Outside Attorney Letters Letter from City Attorney CITY OF PALO ALTO OFFICE OF THE CITY ATTORNEY April 13, 2015 The Honorable City Council Palo Alto, California Hearing on Buena Vista Mobilehome Park Residents Association’s Appeal of Hearing Officer’s Decision Relating to Mitigation Measures Proposed by Buena Vista Mobilehome Park Owner in Connection with Mobilehome Park Closure Application Attached is a letter dated March 30, 2015 from City Attorney, Molly Stump, outlining the information regarding this agenda item. On February 25, 2015 the City Attorney’s Office distributed Volumes 1, 2 and 3 of materials that constitute the administrative record on appeal to the Council regarding this matter. The document pertaining to the appeal procedures to be followed by the Council at the hearing is also attached. This hearing is scheduled to be considered by the Council on Monday, April 13, 2015, and if the matter is not concluded on that day, the hearing will be continued to Tuesday, April 14, 2015, as needed. ATTACHMENTS:  A: Buena Vista Letter (PDF)  B: BVMHP Appeal Procedures v2 (PDF) Department Head: Molly Stump, City Attorney Page 2 • CITY OF PALO ALTO OFFICE OF THE CITY ATTORNEY 250 Hamilton Avenue, 8th Floor Palo Alto, CA 94301 650.329.2171 THE HONORABLE CITY COUNCIL Palo Alto, California Re: Buena Vista Mobilehome Park Dear Members of the Council: March 30, 2015 On April 13 and 14, the City Council is scheduled to hear the appeal of the Hearing Officer's decision regarding the adequacy of mitigation measures related to the closure of the Buena Vista Mobile Home Park. This letter addresses certain pre-hearing matters. Please find attached the pre-hearing statements submitted by the Park Owner and the Residents' Association (Exhibit A), as well as additional correspondence regarding the appeal procedures (Exhibit B). The Residents' Association seeks to add two types of new evidence to the record in this matter: recent real estate listings and an "Appraisal Review Report" commenting on the Beccaria & Weber appraisals that are part of the Relocation Impact Report. (See cover letter and proposed new material, Exhibit C.) The Park owner objects that the proffered new material does not meet the standard set forth in the Council's appeal procedures, and is more prejudicial than probative. (See letter, Exhibit D.) This proceeding is convened to implement the City's responsibilities under Chapter 9.76 of the Municipal Code with appropriate notice, opportunity to be heard and fairness to all parties. The Council's appeal procedures provide that newly discovered and relevant evidence may be allowed where a party demonstrates that the evidence could not have been discovered using reasonable diligence during the proceeding before the Hearing Officer. The procedures also state they are general guidelines that may be modified as appropriate. We note that the Residents Associations' new material relates to matters that the Hearing Officer recommended be updated within 6 months of residents' relocation from Buena Vista: (a) the appraisals of the mobile homes and other living units at Buena Vista; and (b) the cost of comparable housing for purposes of calculating rent differentials and start-up costs. If the Council approves the Hearing Officer's recommendation that updates be made, these topics will be subject to further analysis and maybe be revised as appropriate. In light ofthe potential for this additional review, the Park owner's objections appear to go to the weight that should 150336 sh 0140132 THE HONORABLE CITY COUNCIL March 30, 2015 Page 2of2 Re: Buena Vista Mobilehome Park be given to the material provided by the Residents Association, rather than to the appropriateness of including it in the record of these proceedings. We recommend that the Residents' Associations' material be made a part of the record. Council may consider the information or direct the experts performing the updates to do so, giving it the weight -if any - that it is due. The Park owner, however, must be given an opportunity to respond to this material. Accordingly, the Park owner may provide rebuttal evidence or comments, if desired, no later than April 6. The Park owner's responsive letter of March 25 is already a part of the record and need not be repeated. In addition, the Residents Association has indicated an intention to exercise the option Council provided to bring one witness to make a statement or no more than 10 minutes. The Park Owner has stated it does not intend at this time to bring a witness, but has asked that the Residents' Association disclose the identity of their witness. We agree that this is fair and appropriate. No later than April 6, the Residents' Association shall inform the Council and the Park Owner of the identity of its witness, provide a general description of the nature of the witnesses intended statement, and provide a copy of any written assessment or comments that the witness intends to offer. Finally, during the week of April 6, this office will provide additional guidance to the parties and the public regarding the order of presentations at the April 13 hearing. PowerPoint presentations and other visual aids should be provided to the Clerk's Office the morning ofthe 13th, so that they can be loaded and tested in advance of the meeting. MSS:sh Attachments cc: Margaret Ecker Nanda, Esq. Nadia Aziz, Esq. James Zahradka, Esq. James Keene, City Manager Very truly yours, 1di:u~tv City Attorney Hillary Gitelman, Director of Planning and Community Environment Grant Kolling, Senior Assistant City Attorney Beth Minor, Interim City Clerk 150336 sh 0140132 EXHIBIT A APPLICANT'S PRE-HEARING STATEMENT The Toufic Jisser Family, the Owner of the Buena Vista Mobilehome Park located at 3980 El Camino Real in Palo Alto submits this Pre-Hearing Statement in opposition to the Buena Vista MHP Residents Association appeal of the decision of Craig Labadie, Hearing Officer, dated September 30, 2014 in the matter of the closure of the Buena Vista Mobilehome Park (Volume 2, Attachment 151). The Toufic Jisser family has owned Buena Vista Mobilehome Park (hereinafter Buena Vista or the Park) since 1986. Buena Vista has a mobilehome park operating permit with the State of California, Department of Housing and Community Development for 104 mobilehome spaces. Ofthose 104 spaces there are 98 occupied spaces. In addition to the mobilehome spaces there are twelve {12) studio apartments, which were originally part of a motel which existed on the property when it was operated in combination with a transient trailer park. Finally there is a single family home on the park, a portion of which houses the Park Office. The Park is 89 years old having begun as a "tourist camp" in 1926 (Volume 1, Attachment 3, Section 1.c.}. The property owned by the Jisser family includes the Park and the property which is immediately in front of the Park along El Camino Real which contains retail stores and a gas station, approximately 6.1 acres. Palo Alto Municipal Code, Chapter 9.76, Mobilehome Park Conversion Municipal Code Chapter 9.76, Mobilehome Park Conversion (hereinafter "the Conversion Ordinance" or "Ordinance" was enacted in 2001 after the City Council enacted an Urgency Ordinance in 2000 to temporarily freeze the amount of a noticed rent increase by the Park Owner to the tenants. The Ordinance contains two parts, first a process and procedure for closure of the Park contained in Sections 9.76.010 through 9.76.110 and the second portion contains a limit on allowable rent increases (Section 9.76.120 through 9.76.110). There is a detailed discussion regarding the enactment of the Ordinance contained in Volume 1, Attachment 8, Part A, Section 1, pages 7to13 of the record on appeal. In addition the record on appeal contains the minutes of the various city council meetings in which the Ordinance was discussed and then enacted. (See Volume 2, Attachment 11, Tabs 5 through 10). Several facts however are confirmed by an examination of the history of the enactment of the Ordinance. 1. Council Member Bern Beecham stated that the useful life of the Park was reasonably short, thereafter men~ioning ten years. The Assistant City Attorney, Ariel Calonne acknowledged in the April 30, 2001 meeting and the May 14, 2001 council hearings that extending the useful life of the park for ten years reflected the Council's goal and could be achieved by a Long Term Preservation Strategy between the City and the owners of the Park, also referred to as a "Development Agreement." 2. After enactment ofthe Ordinance on a 5 to 4 vote, no further efforts were ever undertaken by any member of the City Staff and the Park Owner to reach a Development or other Agreement regarding the preservation of Buena Vista as a mobilehome Park. Despite a suggestion to the contrary by the attorneys for the Residents Association2, the Park Owner has never received any property tax or any other benefit from the City of Palo Alto following enactment of the Ordinance. Park Closure Process. Thirty-one months ago, in September 2012 the Park Owner sent a letter to the tenants advising them that it was considering closing the Park and converting it to another use (Volume 1, Attachment 3, Appendix 7). On November 9, 2012 the Jisser family filed a Development Review Application with the City of Palo Alto for a Mobilehome Park Conversion pursuant to Municipal Code Chapter 9. 76 (Volume 1, Attachment 1 References to Volumes and Attachments are those identified and listed in the Attachments of the Appeal of Final Decision of the Hearing Officer in re the Matter of Application of Toufic Jisser, Trustee of the Jisser Family Trust, for Closure of the Buena Vista Mobilehome Park, Palo Alto, California compiled by Senior Assistant City Attorney, Grant Kolling, and as amended in his February 6 2015 email to counsel for the parties. 2 See Volume 1, Attachment 8, Part A, Section 1, pages 13 and 14. 1 3, Appendix 3). Initial informational meetings with the tenants were held on December 11 and 12, 2012. (Volume 1, Attachment 3, Appendix 10). City staff approved the Housing Relocation Specialist, David Richman of Autotemp pursuant to Section 976.030 (m) of the Ordinance. The Park Owner was also required to chose an appraiser from a list supplied by the City (Section 9.76.030 (d) (5) (iv)) to appraise the homes in the Park at its cost. The Park Owner selected the firm of Beccaria & Weber, Inc., which conducted on site interior and exterior inspections of each home in early 2013, followed by a written appraisal report of each home in the Park. Copies of the residents' appraisals were personally served on each resident in April 2013. In May 2013 the first draft of the Relocation Impact Report (RIR) was submitted to the City, which included electronic copies of the appraisals for all of the Park homes. Subsequently, over a period of ten months the Park Owner, at the City's written request amended the RIR four more times, and the City found that the Fifth Amended RIR met the requirements of the Ordinance and the Park Owner's application was deemed complete. (Municipal Code Section 9.76.040 (a)). Volume 1, Attachment 6, Tabs 8 through 13 contain the Law Foundation's written opposition to each version of the RIR, thus each of the Residents Association's perceived deficiencies in the RIR were considered by the City Attorney prior to its ultimate approval of the RIR in February 2014. Pursuant to Municipal Code Section 9. 76.040, subsection (f) the City must select a qualified hearing officer. The City Attorney, without consultation with, or input from the Park Owner or its attorney selected Craig Labadie, a former city attorney for the City of Walnut Creek as the Hearing Officer. Pursuant to subsection (g) of Municipal Code Section 9. 76.040, the hearing officer shall approve the application on the condition that the mitigation measures proposed by the park owner are adequate to mitigate the adverse impacts on the displaced residents, and may condition the approval on additional conditions. Craig Labadie held three public hearings regarding the application for closure on May 12, 13 and 14, 2014 at the Avenidas Senior Center in Palo Alto. As Council can observe through watching the city's videotape of the proceedings, or read in the transcript of the proceedings, (Volume 3, Attachment 19) testimony was given by the Residents' Association experts and any of the residents who wished to speak, as well as members of the public. In addition the Residents Association submitted written statements by residents unwilling or unable to testify publicly, see Volume 1, Attachment 6, Tab 14. At the 3rd hearing on May 14, 2014 the Park Owner presented a written amendment to the RIR. (Volume 1, Attachment 8, Tab 2). Specifically the Park Owner presented a letter to the Hearing Officer amending the mitigation assistance offered in the RIR to include an updated appraisal of the resident's homes to reflect what was repeated in the tenant's testimony at the hearings, specifically that the appraised values of their homes were too low. Secondly the mitigation assistance was amended to offer a 100% rent subsidy, or a payment of 100% of the difference between the resident's rent at Buena Vista and the rent at the resident's new housing. The Residents Association opposed the amendment and requested that the Hearing Officer find among other things that the hearing process was void and that an entirely new hearing process on the amended RIR was required. (Volume 1, Attachment 8, Tab 3). The Park Owner responded at length (Volume 1, Attachment 8, Tab 4) and in a letter to all counsel on May 23, 2014, Craig Labadie found that the, "hearing process remains legally valid and can continue forward, subject to reasonable adjustments to the post-hearing schedule if necessary to allow a full and fair opportunity for the presentation of additional evidence and arguments by both parties." (Volume 1, Attachment 8, Tab 4). The Residents Association did not request any adjustments to the post hearing schedule, nor submit any additional evidence but did argue again in its Post Hearing Brief and Attachments (Volume 2, Attachment 9) that the Hearing Officer should not have allowed the Park Owner to amend the RIR. The Park Owner submitted a Reply Brief to the Hearing Officer on July 23, 2014 (Volume 2, Attachment 10) and on August 27, 2014 the Hearing Officer issued his Tentative Decision finding that the Park Owner had met its burden of proof that the mitigation measures offered did meet the criteria of the City's 2 Mobilehome Park Conversion Ordinance. (Volume 2, Attachment 12). The Residents Association opposed the Hearing Officer's Tentative Decision. (Volume 2, Attachment 14). The Hearing Officer issued his Final Decision, 25 pages in length, on September 30, 2014 finding that, "After careful consideration of all the information presented, my ultimate conclusion is that the park owner has met its burden of proof by proposing a package of mitigation measures which, taken as a whole and with certain supplemental conditions, do meet the criteria set forth in the City's Mobilehome Park Conversion Ordinance for mandatory approval of the application to close the Buena Vista Mobilehome Park." (Volume 2, Attachment 15, page 2; emphasis supplied). The Park Owner filed a certificate of acceptance of the conditions of approval pursuant to Municipal Code Section 9.76.050 by letter to Hilary Gitelman on October 3, 2014. (Volume 2, Attachment 11, Tab 1). On October 14, 2014, the Residents Association filed an appeal of the Hearing Officer's decision. (Volume 2, Attachment 15). Parties to the Appeal. Despite requests to the city attorney by the Park Owner that the appeal be heard earlier, the City took approximately 90 days from the filing of the appeal by the Residents Association to conduct a hearing on January 12, 2015 to determine the procedures for the appeal. The City Attorney proposed the hearing be conducted in February but counsel for the Residents Association argued the hearing be held sometime in early April in order for both the City Council and all parties to amply prepare.3 The hearings on the Appeal were subsequently scheduled by the City Attorney's office, after discussion with counsel for both parties for April 13, 2015 and April 14, 2015, which also scheduled May 4, 2015 as the date for the Council to adopt its decision per Section 3.a. of the Appeal Procedures. Per Section 2 d. of the Appeal Procedures, "The parties to the proceeding are the Park owner and the residents, tenants and legal owners of the mobilehomes in the Park." (Emphasis supplied). By any reading of this language it is clear that the residents of the studio apartments are not parties to this appeal since they are not residents, tenants or legal owners of mobilehomes in the Park. The sentence does not state that residents or tenants living in the Park are included as parties in the appeal, but rather that the residents, tenants or legal owners of mobilehomes in the Park are parties. The City also did not state that all members of the Residents Association are parties to the appeal, an issue which was extensively discussed by counsel for both parties, and addressed prior to the January 12, 2015 hearing by counsel for both parties. (See Volume 2, Attachment 11, Tab 2, Tab 3, Tab 4 and Tab 5, and Volume 2, Attachment 18.) The Park Owner confirms its continuing position that the issue of standing to appeal the Hearing officer is a jurisdictional issue which has in no way been waived by the Park Owner. The City's decision of January 12, 2015 to allow the Residents Association to appeal on behalf of non-members of the Association, as well as to appeal on behalf of its individual members when the relief sought, specifically the amount of mitigation assistance is specific as to each member, and therefore not permitted under applicable law is reversible error. Burden of proof. Alt.hough it is the Residents Association who filed the appeal, pursuant to Municipal Code Section 9.76.040(g), the Park Owner, as the Applicant, bears the burden of proof. The standard of proof is "by a preponderance of the evidence." As noted by the Hearing Officer in his decision, both parties extensively discussed in their respective post-hearing briefs how the burden of proof should be applied, but the Hearing Officer noted that both parties appeared to be saying the same thing, which was, "To approve the conversion application, the hearing officer must weigh all the evidence and conclude that the approval criteria in Section 9. 76.040(g) have been met, i.e., that the mitigation measures proposed by the applicant, as supplemented by the hearing officer are adequate to mitigate the adverse impacts of park closure on 3 Nadia Aziz, Law Foundation of Silicon Valley, page 22, lines 11 through 14, from the transcript of City of Palo Alto City Council Meeting, January 12, 2015, prepared by Robin Pendergraft, CSR-8951. 3 the displaced residents." (Volume 2, Attachment 15, page 8, fn. 6). The traditional rules of evidence do not apply in administrative hearings. The Mitigation Assistance follows the Ordinance: The Park Owner has agreed to pay to each park resident4: 1. An amount equal to 100% of the on-site fair market value of each mobilehome, as determined by Becccaria & Weber, Inc. according to the methodology used in its April 2013 appraisal reports. The appraisals shall be updated to reflect current market conditions within six months of the owner's relocation from the Park. 2. A lump sum amount equal to 100% of the differential between average rents for apartments in the cities surrounding Palo Alto5 and the average space rents in the Buena Vista Mobilehome Park for a period of 12 months, which shall be updated to reflect current market conditions within six months of the resident's relocation from Buena Vista. In addition the Park Owner will pay for "start-up costs", meaning first and last month's rent plus security deposit in an amount equal to three times the average apartment rent. 3. Actual, reasonable moving costs for relocating all personal property for each mobilehome owner; AND Actual, reasonable expenses for a minimum overnight stay of two nights in a hotel/motel during the moving process. The appropriate level of these expenses will be determined by the Housing Relocation Specialist. 4. Additional Assistance for Handicapped/Disabled Residents including but not limited to: (a) help with packing or other physical tasks that the resident cannot do without assistance; and (b) the cost of replacing any special equipment that is necessitated y the resident's disability but cannot be moved. The appropriate amount of these payments will be determined by the Housing Relocation Specialist if not agreed by the affected parties. (See Volume 2, Attachment 15, Exhibit A, pp 24-25). Details of Mitigation Assistance As stated in the 5th Amended RIR, the average appraised value of a home at Buena Vista was, in April 2013, $18,816.00 (Volume 1, Attachment 3, Section 19, page 55). Per the express language of the Ordinance in Section 9.76.030(d)(S(iv) the Park Owner will pay the value the mobilehome would have if the park were not being closed, which another way of saying the home's on site market value. Further the Park Owner has agreed to have each home re-appraised to reflect current market conditions within six months ofthe mobilehome owner's relocation from the Park. The Residents Association argued at the time the RIR was being prepared, as well as at the public hearings in May 2014 that the appraisals were too low and did not adequately take into account the fact that the homes are located in Palo Alto. Please review, Exhibit A, page 10 of this document for an approximation of relocation benefits to be received on average. The Resident's Associations negative criticisms about the Appraisals are without merit because the appraisals are accurate and were completed by an unbiased qualified party. The Resident's Association made repeated claims each time a version of the RIR was submitted to the City6, and at the May 2014 hearings that the appraisals of the residents' homes are too low. However, 4 "Resident is defined under Municipal Code Section 9. 76.020 subsection (h) as the registered owner of a mobilehome who resides in the mobilehome. 5 As discussed and presented throughout the various versions of the RIR, the market rate apartment rent data was presented for the following cities: Palo Alto; Redwood City; Sunnyvale; Mountain View; and East Palo Alto. 6 See Volume 1, Attachment 6, Tabs 8, 9, 10, 11, 12 and 13. 4 these claims are without merit. First, the Association purports to obfuscate standards between the CRAA (California Relocation Assistance Act) standards and the Conversion Ordinance standards and highlights that the CRAA uses the "in-place value of a resident's coach." In the Buena Vista case, the in-place value is the value used in the appraisals (albeit it is referred to as the" on-site" value) and not the value of the coaches should they be removed from the Park. The Residents Association's argument is thus confusing and misleading. The homes at Buena Vista were in fact valued at their on-site, fair market value, there is no difference in this context between the words, "in-place" and "on-site." Further, as discussed supra in the discussion of the Park Closure Process, the Park Owner, in direct response to the tenant's testimony at the hearings that their appraisals were too low, agreed to have all of the homes reappraised within six months of the resident's sale of the home to the park owner. Secondly, the Resident's make the argument that their due process rights have been violated because they are unable to challenge the appraisals. The Resident's claims are hinged upon their assertion that the appraisals are too low. However, the appraiser, Mr. David Beccaria of Beccaria & Weber Inc., is an experienced qualified appraiser who was selected from a list of appraisers, supplied by the City, to provide opinions for mobilehomes7• Mr. Labadie, in his opinion, noted that Mr. Beccaria "has extensive experience appraising various kinds of residential properties, including mobilehomes located in mobilehome parks."8 The Residents Association did put forth a challenge to one the appraisals by using an additional appraisal from another appraiser, Mr. McCullough for the home at space 27. The Hearing Officer discussed this appraisal and found that it was based upon "the incorrect assumption that the subject mobilehome is permanently attached to the land and qualifies as real property."9 Mr. Labadie also found the Residents Association's expert Kenneth Baar to have no probative value since Kenneth Baar was not a qualified appraiser. Hearing Officer Labadie carefully considered but found that Residents Association's evidentiary support for the contention that Mr. Beccaria undervalued the 98 homes he appraised to be u npersuasive10. Lastly, the Residents Association overlooks the benefit that the homes were appraised by Mr. Beccaria as if all of their additions were obtained with proper permits. The Hearing Officer noted that the residents will receive a financial benefit since many of their homes were modified with unpermitted substandard additions11• The Combination Lump Sum Payment of the Rental Subsidy and Appraisal is more than Adequate The Residents Association has opined that the rent subsidy is essentially too low. This criticism is flawed because the rent subsidy is based upon the current average apartment rental rates in the surrounding cities, when the Park currently offers below-market rents, which is controlled by an Ordinance that limits the amount of rent increases the Park Owner can charge. A truly comparable subsidy would be based upon affordable housing rents from surrounding cities. Instead, the residents will benefit from receiving a significantly higher subsidy amount as part of their lump sum payment that imputes the benefit from the Park's particular location in Palo Alto by utilizing current market rental rates in the area. The Residents Association further complaint that the rent subsidy should not be based upon size of the unit but household size is not reasonable because the rental subsidy will be based upon fair market rent rates while the appraisals additionally assumed the additions were completed with permits. Thus, the residents will have already received the added benefit of their higher appraisals and will also receive a 7 See Volume 2, Attachment 15, p 12 8 See Volume 2, Attachment 15, p 12 9 See Volume 2, Attachment 15, p 13 10 See Volume 2, Attachment 15, p 13 11 See Volume 2, Attachment 15, p 15 5 subsidy based upon market rate subsidies for the true size of their units. The market rate subsidy is disproportionately beneficial to the Residents and not the Park Owner because the Park Owner has not been charging rents at market rate, but will be required to pay a subsidy calculated at market rate. The Residents Association's criticisms of the Relocation Specialist Dave Richman are misguided Following the Conversion Ordinance, the Park Owner identified a relocation specialist to assist residents, Mr. Dave Richman and his company, Autotemp, Inc. and the City subsequently approved the employment of Autotemp as a proper relocation specialist. Throughout their correspondence with the City regarding various versions of the RIR and in the Resident Association's Post-Hearing Brief and Attachments they have inferred that Mr. Richman works for the Park Owner because the Park Owner is required under the terms of the Ordinance to pay the Housing Relocation Specialist. Further in their Closing Brief the Residents Association refers to Mr. Richman as the Park Owner's expert.12 He is not the Park Owner's expert, and he did not testify at the public hearings as the Park Owner's expert; he is the City approved Housing Relocation Specialist. The Resident's Association criticisms appear to be entrenched in many assumptions about Mr. Richman's testimony regarding the additional assistance that Resident's will receive.13 Mr. Richman stated that the increased rent subsidy will provide the residents with "a great many more tools to secure replacement housing."14 Yet, the Resident's Association opines that Mr. Richman's testimony is given too much credence because he had previously stated that residents would likely need financing to purchase new mobilehomes and did not specifically state exact mobilehomes that could be purchased, but relied upon his past experience and general knowledge that he has seen units for sale before.15 Despite these criticisms, the Hearing Officer, Craig Labadie recognized the role the Housing Relocation Specialist plays in a park closure and in his decision gives several discretionary roles to Mr. Richman, including decisions regarding the appropriate level of moving costs and additional assistance for handicapped/disabled residents.16 The Hearing Officer's decision to rely upon Mr. Richman's knowledge is not misguided as the Resident's attempt to show because Mr. Richman's credentials are extensive in that he is a designated Right of Way Relocation Assistance Certified professional, has provided real estate related services to hundreds of clients, has personally handled several hundred projects, and has experience not only as a Project Manager but also as a case worker, working with people representing all socio-economic levels.17 Mr. Richman's belief that the increased rent subsidy provides many more tools for residents was not overvalued by the Hearing Officer as the Residents Association claims but given proper weight considering Mr. Richman's extensive experience in resident relocation. Comparable Housing as defined in the Ordinance does not include access to comparable schools. In this case, this appeal evaluates whether the Hearing Officer's decision followed the City's Conversion Ordinance properly, not whether the Ordinance should also include schools in an evaluation of Comparable Housing. The Conversion Ordinance is the only relevant and applicable legal standard that Council must ensure is followed. Although a discussion about schools and the impacts on residents with 12 Volume 2, Attachment 9, p. 19 13 Volume 2, Attachment 14, Resident's Association Opposition to Tentative Decision, pg 8 14 Volume 2, Attachment 14., Exhibit 14. 15 Volume 2, Attachment 14, pg. 8 16 See Volume 3, Attachment 15, pp 24-25. 17 Relocation Impact Report, Appendix 5. 6 children has taken place and is greatly appreciated by the Park Owner and all stakeholders, schools are conspicuously absent from the City's own Conversion Ordinance. A. The Legislative History of the Palo Alto Ordinance shows that many other Mobilehome Conversion Ordinances were reviewed that contained mention of "schools" but any mention of "schools" is conspicuously absent in the Palo Alto Ordinance. The Palo Alto City Council considered and voted upon the Mobilehome Park Conversion Ordinance in 2001. Assistant City Attorney, Ariel Calonne, drafted the Conversion Ordinance. He considered other Conversion Ordinances and provided copies of those to packets to the City Council. Bruce Stanton, who was the attorney for the residents, testified that he has reviewed 107 mobilehome rent ordinacnes and over 40 conversion ordinances n effect in cities and counties, and "he found Mr. Calonne's work to be excellent." The only discussion of Comparable Housing that occurred at the hearing on May 14, 2001, the meeting at which the Ordinance was adopted, reflect a statement by Mr. Calonne that the lump sum payment based on the cost of moving to and purchasing or renting comparable housing was "intended by the State to discourage conversion." There was not a single resident who testified at any hearing that the issue of continuing their child's or child's education in Palo Alto schooolwas a reason for support of the Conversion Ordinance or any of its provisions. Ultimately the Palo Alto City Council approved a mobilehome park conversion ordinance which contained the following definition of "comparable housing." "Comparable housing" means housing in an apartment complex or condominium that is similar in size, numbers of bedrooms and amenities to the mobilehome that is being displaced and is located in a community that has similar access to shopping, medical services, recreational facilities and transportation or a comparable Mobilehome park. The City of Monrovia's Conversion Ordinance which closely parallels the Palo Alto Ordinance, and also contains a rent increase cap on allowable rent increases to prevent rent increases which would act to drive tenants out so that mandatory relocation assistance payments could be avoided. The City of Monrovia's definition of comparable housing provides as follows: Comparable Housing. Housing which is comparable in floor area, number of bedrooms and amenities, proximity to public transportation, shopping, schools, employment opportunities and medical services and other relevant factors to the Mobilehome to which comparison is being made. (Emphasis added). The City of Capitola also has a mobilehome park conversion ordinance which is similar in many ways to the City of Palo Alto. Similar provisions include the requirements of the contents of the relocation impact report (RIR) and resident questionnaires. The definition of "Comparable Housing" is as follows: "Comparable Housing" means housing which, on balance, is comparable in floor area, number of bedrooms, and amenities, proximity to public transportation, shopping schools, employment opportunities and medical services and other relevant factors to the mobile home to which the comparison is being made. (Emphasis added) The Council meeting minutes of both April 30, 2001 and May 14, 2001 confirm that Assistant City Attorney Ariel Calonne had, in the process of preparing the draft conversion ordinance reviewed numerous conversion ordinances in other jurisdictions. He had even included copies of the City of Monrovia's Closure Ordinance in a council packet. It is clear that the City Attorney had before him examples ofthe definition of comparable housing which included references to "schools" as an element of comparability. 7 Nonetheless, the definition of comparable housing in the Palo Alto conversion ordinance did not contain any reference to schools. Furthermore there is no category of comparability specifically called out in the definition which could reasonably be extended to include schools. The ordinance specifically enumerates shopping, medical services, access to transportation and recreational facilities. Education, and specifically schools, do not fit within any of the enumerated categories of comparability. The school system was excellent in 2001, the year the ordinance was adopted. If the city intended for the schools to be ·an element of measuring comparable replacement housing it could have included it either specifically or in some generalized category of "other facilities" that could be construed to include schools. As was discussed supra there was no resident or public testimony at either the April 30, 2001 or the May 14, 2001 city council hearings which mentioned the importance of schools, or the need to preserve access by the residents to the school system. B. For this Appeal, the Council's role is to evaluate whether the Conversion Ordinance has been adequately followed. All stakeholders appreciate that relocating to new homes is a difficult process and that changing schools presents an additional consideration. However, the Park Owner also appreciates the legislative process where concerned parties have already come together to manufacture ordinances that provide governance during these transitions. The Palo Alto Mobilehome Conversion Ordinance legislative history demonstrates that its adoption was well considered by all concerned parties at that time and the Council had knowledge of Palo Alto's above-average schools. Ultimately, we must respect that any mention of schools within the Ordinance is intentionally absent, particularly in light of the legislative history that shows the governing body was well aware other Ordinances did mention schools and that Palo Alto had excellent schools at time of adoption. As parties governed under this adopted Ordinance now in full effect and dictating this proceeding, we must accept and respect the fact that schools is not mentioned within the Ordinance. C. Options for Residents who want their children to remain in Palo Alto Unified School District: Apartments and Inter-district transfers available regardless of location. The Park owner recognizes the well settled fact that Palo Alto Unified School District (PAUSD) is excellent and believes that the rent subsidy provides a good alternative option for residents wishing to keep their children within the school district as well as possible inter-district transfers. The rent subsidy is based upon fair market value rents, despite that Buena Vista offers rents far below market rates. Furthermore, because Buena Vista is the only mobilehome park within the City, residents who wish to keep their children within PAUSD will have the option of renting an apartment using this subsidy. The Park's own expert, Dr. Padilla even admitted that there is nothing special about Buena Vista that provides an advantage for the children that reside in Buena Vista; rather, it is living in an area served by the PAUSD that is of academic benefit to the children. Therefore, if residents use their rent subsidy to rent an apartment within PAUSD served areas, this problem can be mitigated. Additionally, the option of inter-district transfers is also preferred by the Park Owner. The Park Owner hopes that the PAUSD can recognize the value that the children of Buena Vista bring to their educational system and allow the children to continue attending PAUSD schools until they graduate. First, school districts are funded by property taxes. Possible redevelopment of the park to residential homes after Park closure will provide PAUSD with a significant boon in property taxes. Thus, any burden PAUSD may face by allowing the children to continue their education in the district will be offset by the anticipated significant increase in revenue from their property tax base. 8 In summary, the Park Owner recognizes the unique consideration that families with school age children face upon relocation but hopes that the PAUSD has the compassion to allow Buena Vista children to continue attending their educational institutions by allowing inter-district transfers, regardless of where the residents ultimately relocate. Conclusion Buena Vista Mobilehome Park is the only mobilehome park in Palo Alto and represents 0.35% of the housing stock in the City of Palo Alto.18 The adequacy of the mitigation assistance offered to the Residents through the Relocation Impact Report and the amendment to the Report at the final public hearing on May 14, 2014 was carefully considered by the Hearing Officer, Craig Labadie. Mr. Labadie's twenty five page opinion reflects his careful and studied consideration of all of the evidence submitted to him by both the Park Owner and the Residents Association. Every argument raised by the Residents Association in both their Post Hearing Brief19 and their Opposition to the Hearing Officer's Tentative Decision20 has been addressed by Mr. Labadie. The City's Mobilehome Conversion Ordinance clearly contemplates that it is the Hearing Officer to whom the decision as to the adequacy of the mitigation assistance is given. The Park Owner met the burden of proof by a preponderance of the evidence that the mitigation measures it proposed were adequate to mitigate the adverse impacts on the displaced residents. Further the Hearing Officer was mindful of the limitation contained in State law, specifically in Government Code §65863.7 subsection (e) which provides that the steps to mitigate the adverse impact of a park closure shall not exceed the reasonable costs of relocation. The Owner of Buena Vista Mobilehome Park has the unqualified right to close the Park and cease its operation as a mobilehome park, provided it complies with state law and the Municipal Code 9.76. The Park Owner understands and appreciates as the Landlord who offers the least expensive, non-subsidized rental housing in the City of Palo Alto that some of the tenants do not want to leave the Park. As occurred at the public hearings before Mr. Labadie, heartfelt testimony will be given at the time ofthe appeal by the residents as well as members ofthe community. The City Council however, must as Mr. Labadie wrote, accept that their task in this appeal is to "dispassionately consider and analyze the factual evidence and legal arguments presented by the parties and reach a conclusion on the essential question whether the mitigation measures ... meet the standard of adequacy without being unreasonable. Although I am mindful of the impact this decision will have on the lives of park residents, my factual and legal conclusions must be based on evidence and reasoned analysis, not emotion or sympathy."21 Date: March 23, 2015 Respectfully Submitted, Margaret Ecker Nanda, esq. 18 Palo Alto Housing Element, Adopted November 10, 2014, p 47 19 Volume 2, Attachment 9 20 Volume 2, Attachment 14 21 Volume 2, Attachment 15, p 1 9 EXHIBIT A For instance, below follows a calculation of the lump sum payment tenants will receive based upon 1-bedroom and 2-bedroom units. This lump sum is payable without identification of a specific relocation property is not tied to any requirement other than the residency requirements set forth in the Conversion Ordinance. These figures are an average approximation using Hearing Officer Craig Labadie's Tentative Decision. Figure 1. l1eedroom I Palo Alto lsunnyvale I Redwood City I Mountain View I East Palo Alto I Average Total Average Rent Monthly Subsidy 12 month subsidy Start up Costs Moving Costs rentbits.com* rentjungle.com** zillow.com*** -all units Average $2,864.00 $2,236.00 $3,026.00 $2,483.00 $2,515.00 $2,380.00 $2,410.00 $2,430.00 $3,495.00 $2,850.00 $3,475.00 $2,945.00 $2,958.00 $2,488.67 $2,970.33 $2,619.33 $2,208 $26,496 $8,874 $1,739 $20,868 $7,466 $2,220 $26,640 $8,911 $1,869 $22,432 $7,858 !Sample Mitigation Benefits for random park tenant moving to 1 Bedroom apartment 100% of Appraised Value $22,203 ($18,816, park average appraisal+ 18% increase****) 12 month subsidy $22,441 (based on data above) Start up costs $7,860 (3x the monthly cost of an apartment) Moving Costs $1,100 (from LFSV post-hearing brief, increased from $990) Disabled Assistance TBD Return of Deposit variable $2,064 $1,314 $15,768 $6,192 $53,604 Mitigation Assistance For Mobilehome Owners with 1-bedroom unit I Payable in lump sum regardless of where tenant relocates. Figure 2. Average Rent Monthly Subsidy 12 month subsidy Start up Costs Moving Costs rentbits.com* rentjungle.com** zillow.com*** -all units Average 100% of Appraised Value 12 month subsidy Start up costs Moving Costs Disabled Assistance Return of Deposit $3,936 $3,400 $3,495 $3,610 $2,860 $34,320 $10,830 $22,203 $27,283 $9,071 $1,100 TBD variable $2,823 $3,035 $2,850 $2,903 $2,153 $25,836 $8,709 $3,843 $3,125 $3,475 $3,481 $2,731 $32,772 $10,443 $2,989 no data $3,245 no data $2,945 $3,060 $2,310 $27,720 $9,180 {$18,816, park average appraisal+ 18% increase) (based on data above) (3x the monthly cost of an apartment) (from LFSV post-hearing brief, increased from $990) $2,064 $2,064 $1,314 $15,768 $6,192 $59,657 Mitigation Assistance for Mobilehome Owners with 2-bedroom unit Payable in lump sum regardless of where tenant relocates. Note: Current apartment rent data was obtained using these websites: * http://rentbits.com/rb/t/rental-rates/apartments/palo_alto-california **https://www.rentjungle.com/comparerent/ ***http://www.zillow.com/research/data/ ****The 18% increase was based upon average real property values increase in Palo Alto between Q4 2013 and Ql 2015 using data from·www.zillow.com and www.trulia.com 10 I $2 759 08 , $2,759 $1,870 $22,441 $7,860 $1,100 $3 024 ' $3,024 $2,274 $27,283 $9,071 $1,100 I Appeal of Hearing Officer's Decision Concerning Buena Vista Mitigation Measures I. Introduction Four hundred Palo Alto residents live at Buena Vista Mobile Home Park and its closure would mean the loss of their current homes and their displacement from Palo Alto. It would also mean the obliteration of a vibrant, diverse, and close-knit community, and the loss of a shrinking number of affordable housing opportunities for low-income families in Palo Alto. The Buena Vista MHP Residents Association is appealing the Hearing Officer's approval of the owner's relocation assistance plan because it does not comply with Palo Alto's Mobilehome Conversion Ordinance ("Ordinance"). The proposed assistance does not adequately compensate Buena Vista's families for the loss of their mobilehomes, and it is far below what is needed to allow the families to find a new, comparable, permanent place to live within 35 miles of Buena Vista. On behalf of the more than 100 families living in Palo Alto's only mobilehome park, the Residents Association requests that the City Council overturn the decision of the Hearing Officer, and deny the owner's request to close Buena Vista. II. Background: Buena Vista Mobile Home Park The Buena Vista community is comprised of low-income, working class families. Nearly half of its families make under $30,000 a year; another thirty percent make between $30,000 and $40,000 a year.1 Approximately ninety percent of Buena Vista families are Latino and nearly eighty percent speak Spanish as their primary language. 2 Buena Vista has existed in its current location for nearly a century, and has housed permanent residents since the 1950s.3 For more than 60 years, Buena Vista has provided a crucial source of affordable housing and home ownership opportunity to working families who whose labor has supported the unprecedented growth of business in the region.4 As an affordability crisis rages in Silicon Valley, Buena Vista is the one of the only options for homeownership available to lower income residents of Palo Alto. The City of Palo Alto has long recognized the central role of Buena Vista in creating affordable housing opportunities for Palo Alto's working class families. For decades, Palo Alto has recognized Buena Vista as "an important affordable housing resource" in the Housing Element of its Comprehensive Plan. 5 As recently as November 2014, in the midst of this closure process, the City Council approved its 2015-2022 state-mandated Housing Element.6 Yet again, the City Council recognized and relied on Buena Vista's affordable housing stock as an essential tool to meet the City's current and future housing needs. The City Council also stated that its 'Kenneth K. Baar, PhD., Analysis of Relocation Impact Report (RIR) and Mitigation for Proposed Closure of Buena Vista Park (May 5, 2015) at 3. 2Donald Barr, MD, PhD and Amado Padilla, PhD, The Families and Children Who Live in the Buena Vista Mobile Home Park (March 17, 2014) (report of study conducted for the Stanford Graduate School of Education) at 7. 3Barr and Padilla at 1. 4Joseph W. Doherty, PhD, Report of Dr. Joseph W. Doherty, Buena Vista Mobile Home, Park Palo Alto Mobile Home Park Conversion Ordinance (May 5, 2014), para. 22. 5Palo Alto Ordinance No. 4672 (Dec. 19, 2000). 6City of Palo Alto 2015-2023 Housing Element ("Housing Element"), available at: http://www.cityofpaloalto.org/ gov /depts/pln/advance/housing_element_update_20 l 5 _2023 .asp. PRE-HEARING STATEMENT OF THE BUENA VISTA MHP RESIDENTS ASSOCIATION 1 Appeal of Hearing Officer's Decision Concerning Buena Vista Mitigation Measures "Five-Year Objective" is to "Preserve the 120 mobile home units in the Buena Vista Mobile Home Park as a low and moderate income housing resource."7 In addition to Buena Vista's importance from an affordable housing standpoint, the chart below shows how it contributes ethnic, cultural and socioeconomic diversity to Palo Alto. Buena Vista's Demoj?raohics Comoared to Palo Alto Generallv8 Buena Vista Mobile Home Park Palo Alto Median Income $35,000 $120,025 Latino Population 73%-90% 6% Occupation 18% -Service Industry 75% -Management 23% -Sales/Office 9% -Construction/Maintenance Likewise, the 129 children living at Buena Vista contribute greatly to the diversity of the Palo Alto schools.9 III. Background: Efforts to Close Buena Vista In 2000, Buena Vista's owner attempted to significantly increase the rent at Buena Vista.10 Recognizing the importance of Buena Vista as a source of affordable housing, the City Council enacted a Mobilehome Park Conversion Ordinance ("Ordinance") which limited rent increases and permitted the closure of Buena Vista only if and when the owner adequately compensated residents for the loss of their mobilehomes.11 In 2012, the owner initiated the closure process and, in 2013, submitted a Relocation Impact Report ("RIR") for approval by the City. After five rejected submissions of the RIR and 18 months, the City deemed the RIR to be technically complete and scheduled a hearing to determine its adequacy.12 During the three-day hearing, testimony was taken from residents, several expert witnesses, and members of the public. The park owner did not testify. At the conclusion of the three-day hearing, the owner submitted a last-minute change to the RIR, promising updated appraisals six months prior to the park closure (and an update to the rent differential). The Hearing Officer denied the Resident Association's request for further hearing on this last-minute addendum to the RIR.13 Following the hearing, the parties submitted briefing to Hearing Officer Craig Labadie. On September 30, 2014, Mr. Labadie approved the owners' proposed assistance with minor changes. 14 The Residents Association filed this appeal to the 7Housing Element at 140. 8See Doherty Report; Barr and Padilla at 7. 9Barr and Padilla at 4-5. 10Palo Alto Ordinance No. 4672 (Dec. 19, 2000). l!Palo Alto Mun. Code§ 9.76.010 et. seq. 12Letter from Grant Kolling, Office of the City Attorney, Palo Alto deeming RIR complete dated Feb. 20, 2014. 13Letter from Craig Labadie, Hearing Officer to M. Morris and M. Nanda dated May 23, 2014. 14Craig Labadie, "Final Decision in the Matter of the Application of Toufic Jisser, As Trustee of the Jisser Family Trust, for Closure of Buena Vista Mobilehome Park in Palo Alto, California," (Final Hearing Decision) dated September 30, 2014. PRE-HEARING STATEMENT OF THE BUENA VISTA MHP RESIDENTS ASSOCIATION 2 Appeal of Hearing Officer's Decision Concerning Buena Vista Mitigation Measures City Council on October 14, 2014. The City Council held a preliminary hearing on January 20, 2015, to set the procedures for the appeal. IV. The City Council's Authority The City Council's role in the mobilehome park closure process is part of its broader planning and zoning authority to protect the public's health, safety and welfare; local laws that govern the use of land fit squarely within that power.15 The Ordinance explicitly recognizes the unique and vulnerable situation of mobilehome owners-they own their homes but rent the space on which the homes sit-and provides them with special protections. One of the explicit purposes of enacting the ordinance was to support preservation and indirectly discourage conversion because of the financial burden conversion imposed on the owner.16 Thus, the Ordinance's provisions must be considered in context of its enactment-an effort by the City Council to preserve this crucial source of affordable housing. The Ordinance specifically requires the City Council to make the final decision about whether or not the relocation assistance provided by the owner is adequate, and, thus, whether Buena Vista can be closed.17 The City Council must make the decision on a de novo review, meaning that the City Council has the opportunity to review all evidence, ask questions of the owner and residents, and must use its independent judgment to reject, accept, or modify the decision of the Hearing Officer.18 V. The Relocation Plan Does Not Comply with the Conversion Ordinance Under the terms of the Ordinance, the City must not approve a mobilehome park closure unless the mitigation measures proposed by the owner "are adequate to mitigate the adverse impacts on the displaced residents."19 For residents whose mobilehomes can be moved, which is a small number of residents, the owner must pay for the cost of moving the mobilehome, and a lump sum payment that is intended to cover a rent differential, moving expenses, and start-up costs. 2° For all other residents, along with the lump-sum payment of moving costs, the owner must offer a relocation payment that includes the cost of purchasing comparable housing, any remaining loan payments on the mobilehome, and the loss of investment in the mobilehome.21 A. The Hearing Decision's Interpretation of the ''Reasonable Cost of Relocation" Is Wrong 15See Palo Alto Mun. Code§ 9.76.010; see Euclid v. Amber Realty Co. (1926) 272 U.S. 365, 387; Miller v. Board of Public Works of City of Los Angeles (1925) 195 Cal. 477, 490. 16Testimony of Ariel Calonne, City Attorney, City of Palo Alto Council Meeting Minutes, 4/30/01, p. 92-69. 17Palo Alto Mun. Code §9.76.060. Although it was decided under a different Government Code section, Goldstone v. County of Santa Cruz, 207 Cal.App.4th 1038 (2012) upheld a local jurisdiction's discretion to reject a mobilehome park conversion. Id. at 1042. 18 Appeal Procedures: Application for Closure of Buena Vista Mobilehome Park Pursuant to Palo Alto Municipal Code Chapter 9.76 (adopted Jan. 12, 2015). 19Palo Alto Mun. Code§ 9.76.040(g). 2°ralo Alto Mun. Code§ 9.76.040(g)(l). 21Palo Alto Mun. Code§ 9.76.040(g)(2). PRE-HEARING STATEMENT OF THE BUENA VISTA MHP RESIDENTS ASSOCIATION 3 Appeal of Hearing Officer's Decision Concerning Buena Vista Mitigation Measures The hearing decision notes that the Ordinance does not require any mitigation assistance that would exceed the "reasonable costs of relocation" and asserts that the term "reasonable costs of relocation" is not defined anywhere in the law.22 However, the California Relocation Assistance Act, which pertains to displacement by government action, establishes uniform standards for relocation benefits and, in doing so, provides a framework for understanding what is "reasonable" in this context.23 The CRAA sets forth the types of compensation that are "reasonable and necessary" when a person or entity is displaced, and its regulations require "fair and reasonable" relocation payments.24 Under the CRAA, reasonable costs of relocation contemplate: a "comparable" home that is affordable to the displaced resident, is of a similar size and function, and is in a similar location.25 The location of the replacement housing must be in a neighborhood that is "not less desirable than the location of the displaced person's dwelling with respect to public utilities, facilities, services, and the displaced person's place of employment,"26 and displaced individuals are entitled to "payment for actual moving and related expenses ... including actual and reasonable expenses in moving and actual direct losses of tangible personal property as a result of moving. ,m These requirements set the statewide benchmark for relocation benefits, and the Hearing Officer should have turned to them when considering the "reasonable costs of relocation" under the Ordinance. Viewed in the context of established California law, the hearing decision's statement that the owner is not responsible for paying the cost of a replacement mobilehome for each resident is incorrect.28 Payments that make relocation to replacement housing possible are not only required by the Ordinance as a condition for closure of the park; they are reasonable by definition. B. The Proposed Mitigation Measures Will Not Allow Any Resident to Relocate to Comparable Housing 1. The Appraised Value of the Mobilehomes is not an Adequate Method to Measure Payment for Comparable Housing As stated above, the owner is required to provide Buena Vista residents with a relocation package that includes the "cost of comparable housing."29 The Ordinance lists mobilehomes, condominiums, and apartments as types of potential replacment housing. While not explicitly stated in the Ordinance, a common-sense reading of these options leads to the conclusion that comparable housing includes comparable tenure. That is, payments to mobilehome owners should allow them to "mov[e] to and purchas[e]" comparable ownership housing (mobilehome or condominium) and renters should be provided with sufficient compensation to allow them to rent a comparable apartment. 3° For mobilehome owners, the owner has refused to comply with 22 Final Hearing Decision at 4. 23See Gov't Code§ 7262; City of Mountain View v. Superior Court, 54 Cal. App. 3d 72, 78-80 (1975). 24Gov't Code§ 7262; CCR§ 6010 (a)(l). 25Gov't Code §7260(i)(l)(3); 25 CCR§ 6008. 26Gov't Code §7260 (i)(6); 25 CCR§ 6008 (c)(2). 27Gov't Code §7262. 28Final Hearing Decision at 16. 29Palo Alto Mun. Code§ 9.76.020(i). 3°ralo Alto Mun. Code§ 9.76.020(i); Moreover, the City Council should reverse decision to deny relocation assistance to the studio tenants, who face the loss of their affordable units. Final Hearing Decision, 17-18. The City 4 PRE-HEARING STATEMENT OF THE BUENA VISTA MHP RESIDENTS ASSOCIATION Appeal of Hearing Officer's Decision Concerning Buena Vista Mitigation Measures this part of the Ordinance and is only offering payment equal to (artificially low) appraised values of residents' mobilehomes. These appraisal amounts, while relevant to the loss of equity that residents will suffer if Buena Vista is closed, have no relevance to the cost of comparable housing. And while the Ordinance requires the RIR to include appraisals of mobilehomes, the appraisals are not a cap on mitigation assistance provided to those displaced.31 The cost of purchasing mobilehomes within a 35-mile radius of the Buena Vista is far greater than the appraised values. The owner's relocation specialist himself testified that residents will need $20,000 to $50,000 more than the average $18,816 being offered at the time of the hearing to purchase a mobilehome within 35 miles of the park. 32 At the time of the hearing, the floor on mobilehome prices in the neighboring cities was over $40,000, with few offerings for less than $70,000.33 At that time, residents would have needed at least $100,000 to purchase replacement mobilehome housing.34 Today, mobilehomes for sale in Sunnyvale and Mountain View range from $119,000 to $379,000.35 Moreover, the Resident Association's expert Dr. Joseph Doherty examined the quality of the mobilehome parks that the owner lists as "comparable," and found them wanting. These mobilehome parks are not in fact comparable, particularly as to the quality of schools (as described further below). In any event, even these inferior parks would still not be accessible to the vast majority of Buena Vista families because the cost of mobilehomes at those parks is significantly more than the relocation payment being offered. 2. The Appraisal Amounts Initially Proposed by the Owners Are Too Low As alluded to above, the mobilehome appraisals performed by the owner's appraiser are low and rely on flawed methodology. At the time of the RIR, the appraised values ranged from $5,500 to $45,000, with an average of $18,816.36 As explained in the report of expert James Brabant, the methods used by the owner's appraiser skewed towards misleadingly low comparables to appraise the mobilehomes and the owner's appraiser completely ignored the high value of owning a home in Palo Alto. 37 The Ordinance requires the appraisals to look at the in- place value of the mobilehome. 38 In-place value is not limited the physical value of the mobilehome itself, but the value of occupying a particular space in a particular neighborhood with particular amenities. 39 It is clear from the testimony of residents at the park that the driving factor for residents choosing to live in the park is its location in Palo Alto, including its location Council has broad authority to require the owner to mitigate any negative impacts of the closure, including requiring that the studio tenants be given relocation assistance. Palo Alto Mun. Code§ 9.76.040(g)(l). 31See Palo Alto Mun. Code§ 9.76.030(d)(5)(iv). 32Transcript, 23: 11-13; 33Baar at iii. 34Hearing Transcript at 68. 35See searches: http://www.trulia.com/for sale/Mountain View.CA/MOBILEIMANUFACTURED type and http://www.trulia.com/for sale/Sunnyvale,CA/MOBILEIMANUFACTURED type, run on 3/23/2015. 36Although Palo Alto housing prices have increased by 49.8% since 1992, the owner dismisses any increase in value for the Buena Vista's mobilehomes. Many of the appraised values for the mobilehomes are even less than what residents paid for them. Baar at 8. 37See James Brabant, MAI, Review of Appraisals by Beccaria & Webster, Inc., re Buena Vista Mobile Home Park. 38Palo Alto Mun. Code§ 9.76.030(d)(5)(iv). 39See Adamson v. City of Malibu, 854 F. Supp. 1476 (C.D. Cal 1994). PRE-HEARING STATEMENT OF THE BUENA VISTA MHP RESIDENTS ASSOCIATION 5 Appeal of Hearing Officer's Decision Concerning Buena Vista Mitigation Measures near high-quality schools, public transportation, several medical facilities, and the overall safety of the neighborhood.40 And yet the owner's appraiser did not even attempt to determine what any of the Buena Vista mobilehomes would sell for in-place and in the current market. 3. The Mitigation Assistance Fails to Consider Essential Amenities in its Determination of Comparable Housing As mentioned above, the comparable mobilehome parks identified in the RIR were not actually comparable. A "comparable mobilehome park," is "a mobilehome park that is similar in condition, age, size and amenities to the park that is being closed and is located within a community similar to that in which the park that is being closed is located and has similar access to community amenities such as shopping, medical services, recreational facilities and transportation."41 In plain English, the Ordinance requires enough mitigation assistance so that displaced residents are able to afford new homes in a community similar to Palo Alto. The owner argues that because the Ordinance does not contain the words "schools" or "education" that no consideration can be given to the public schools when determining whether a community is comparable to Palo Alto.42 However, while the words "schools" and "education" do not appear in the Ordinance, the term "comparable" requires that alternative housing be "located within a community that is similar to that in which the park that is being closed is located."43 That is, the Ordinance not only defines "comparable" to include certain enumerated "amenities" but also includes within the definition the larger "community" in which the mobilehome park exists. Thus, to assess whether the proposed mitigation assistance is adequate it must be determined (1) whether the Palo Alto public schools are part of the Palo Alto "community," (2) whether Palo Alto schools are exceptional compared to other communities to which residents might be relocated, and (3) whether the residents will be adversely impacted by losing access to the Palo Alto public schools. The citizen testimony received during the May hearing leaves no doubt as to the role Palo Alto's public schools play in the larger community. Citizen after citizen testified regarding the importance of education and the public school system to what it means to live in Palo Alto.44 Both the Palo Alto school board and the city's PT A groups have felt compelled to take positions on the closure of Buena Vista.45 The Residents' expert, Professor Amado Padilla, noted that Palo Alto residents pay a premium on real estate and have assessed themselves higher taxes to support the schools, allowing the school district to expend significant resources on education, which other communities are unable to match.46 Further, expert Dr. Joseph Doherty's report shows that the educational results for children attending Palo Alto schools are significantly 40Hearing Transcript at 85-126. 41Palo Alto Mun. Code§ 9.76.020(b). 420wner's Closing Brief, at 48-52. While the definition of "comparable housing" discussed by the owner at pages 48-52 of their brief does not include this same phrase, the owner provide no rationale for why the Ordinance should differentiate between what characteristics that constitute a comparable community in which a mobilehome park is located versus a comparable community in which an apartment complex or condominium is located. 43/d. 44See, e.g., Hearing Transcript at 143, 150-156, 168-195. 45/d. at 157, 170-172, 181-185. 46/d. at 136-138. PRE-HEARING STATEMENT OF THE BUENA VISTA MHP RESIDENTS ASSOCIATION 6 Appeal of Hearing Officer's Decision Concerning Buena Vista Mitigation Measures higher than those for children who live in other areas of the region.47 Dr. Doherty reached this conclusion by comparing data for Palo Alto's schools to similar data for schools attended by children living in mobilehome parks within a 35-mile radius of Buena Vista.48 Buena Vista's residents have taken full advantage of Palo Alto's educational opportunities, with over one hundred children from the park enrolled, no drop-outs, and significant parent participation.49 C. The Lump-sum Relocation Assistance Package Will Not Adequately Compensate Residents for Start-up Housing Costs Along with the cost of purchasing a comparable home, the owner is required to a "lump sum" relocation assistance package to all residents, regardless of whether their mobilehomes can be moved. These amounts include costs to move personal property, a rent differential, and "start-up costs" (first months' rent, last months' rent, and a security deposit), as well as additional assistance for families with disabled and elderly household members.50 During the last few minutes of the hearing, the owner stated that they would pay a 100% rent differential for one year for all residents, rather than th~ 40% rent differential proposed in the RIR.51 However, instead of compensating residents for the difference between what the resident pays now and the actual rent of an appropriately-sized unit, the owner only agreed to pay residents the rent differential based on the original size of their mobilehomes, without considering any additions to the unit.52 Therefore, for all but four families, the owner will only provide a rent differential at the one-bedroom unit rate, which is inadequate given the actual sizes of many residents' families.53 Families, especially ones with children, will need a unit larger than one bedroom and would not be able to find affordable units with the assistance that the Owner proposes to provide.54 Again, given the meager relocation amount offered, these residents will be required to move far from Palo Alto-and their jobs and schools-in order to afford a new, appropriately-sized unit. The lump sum for relocation of personal property is likewise inadequate. The $990.00 lump sum for relocation of personal property is based on an average amount for moving costs for a 1-to 4-room unit under the Uniform Relocation Act.55 However, by averaging the moving cost amounts for 1-, 2-, 3-, and 4-room homes, the RIR skews the cost of moving artificially low. Even very small 1-bedroom mobilehomes have 3 or more rooms. According to the schedule, the 47Doherty at paras. 25-29. 48/d. at paras. 5-14. 49Barr and Padilla at note 3 at 4-5. 50Palo Alto Mun. Code §9.76.040(g)(l); Palo Alto Mun. Code, §9.76.040(g)(2)(c). 51Hearing Transcript at 200-203. 52RIR at 72. 53/d. 54Baar at 3. 55RIR at 68. PRE-HEARING STATEMENT OF THE BUENA VISTA MHP RESIDENTS ASSOCIATION 7 Appeal of Hearing Officer's Decision Concerning Buena Vista Mitigation Measures cost to move a 3-room home in California is $1100, and the costs of moving personal property from larger homes are predictably higher.56 D. The Owner's Last-Minute Promise to Provide an Updated Appraisal Creates an Unappealable Process As described above, the owner made an eleventh-hour amendment to its RIR at the close of the hearing. The owner stated that it would "pay the full on-site, fair market value of each home ... which appraisal shall be updated within six months or less of the homeowner' s relocation from the park. "57 First, since the amounts of the appraisals were unknown at the end of the hearing, the Hearing Officer should not have made a determination as to whether the mitigation package as a whole was adequate. Second, while updating the outdated appraisals (conducted in January 2013) is certainly advisable, the owner's proposal to base the mitigation amount on appraisals to be done after approval of the closure creates serious fairness concerns since residents will have no means of appealing these amounts. If this approach is approved, the owner will have evaded the Conversion Ordinance and been empowered to set unilaterally the value of residents' homes without any neutral third-party review. Lastly, because the owner plans to use the same appraiser for these future appraisals, it is likely that that any updated appraisal will continue to discredit the value of the mobilehomes being in Palo Alto, therefore valuing the homes artificially low. 58 E. The Owner Has No Real Plan to Find Housing for Buena Vista Residents The owner's proposed relocation plan is not a plan at all-it is simply a report of housing data. The Hearing Officer accepted the owner's assurance that the Relocation Specialist will find housing options for the residents.59 However, this assurance is not grounded in reality and the Council should reject it. For the few mobilehomes that can be moved, the RIR fails to identify a single mobilehome park or other housing opportunity within 35 miles that would allow the current homeowners to transition without significant personal expense.60 The owner's own relocation expert admitted during the hearing that it would be difficult to find housing within 35 miles of the park with the assistance that the owner is providing.61 In fact, the RIR states that the best options for relocation are outside of Santa Clara County.62 This suggestion is echoed by Thomas 56U.S. Department of Transportation, Federal Highway Administration, "Uniform Relocation Assistance and Real Property Acquisition Policies Act, as amended," <http://www.fhwa.dot.gov/real_estate/practitioners/uniform_act/relocation/moving__cost_schedule.cfm>. 51/d. at 22 (emphasis omitted). 58Brabant Report. 59Final Hearing Decision at 16. 60The relocation specialist stated that he could help displaced residents obtain mortgages to help cover the cost of relocating to another mobilehome. This "offer" is fundamentally flawed in two respects: First, residents should not be forced to take out mortgages to pay for the replacement housing that the Ordinance requires the owner to provide. Second, the relocation specialist provides no explanation as to how he would ensure that residents-many of whom are low income and have poor, or non-existent, credit-could obtain affordable financing. 61Hearing Transcript at 22. 62RIR at 67. 8 PRE-HEARING STATEMENT OF THE BUENA VISTA MHP RESIDENTS ASSOCIATION Appeal of Hearing Officer's Decision Concerning Buena Vista Mitigation Measures Kerr, the owner's rebuttal expert, who stated, "In my experience, sometimes homeowners opt to relocate to the Central Valley where living costs are lower."63 Moving residents to the Central Valley will not suffice under the Ordinance. V. The Owner Should Detail Future Plans at the Site The City Council should require the owner to detail future plans at the Buena Vista site. Not only does the Ordinance require this, but the City Council and the citizens of Palo Alto have a right to know what development, if any, is planned for the future site, including whether or not a zoning change will be required. 64 The owner's refusal to provide any details about the future use of the site is counter, not only to the Ordinance, but to the City Council's interests in effectively using Palo Alto's limited land resources. The City Council's decision regarding Buena Vista's closure should not occur in a vacuum. VI. Conclusion Any of the failures of the RIR and hearing decision alone justify the Council overturning the Hearing Officer's decision and rejecting the owner's application to close Buena Vista; taken together, they certainly do. Palo Alto's Ordinance requires, as a condition of the conversion or closure of the park, that the owner provide mitigation measures that are "adequate to mitigate the adverse impacts on the displaced residents."65 After over a year and a half and five different versions of the RIR- including one that was effectively produced during the hearing-the owner has yet to meaningfully address the "adverse impacts on displaced residents." The failures are listed in the chart below: How the RIR Differs from the Ordinance What Ordinance Requires Cost of physically moving the mobilehome within 35 miles of the park Overnight stay in a motel while mobilehome is being moved What Owner Has Offered Will pay for costs to move mobilehome but fails to identify any parks within 35 miles of the park $144/night for 2 nights at a local motel.66 What The City Council Should Require Actual costs for moving mobilehome and identification of parks to where homes can be moved within 35 miles of park Actual costs for overnight stay for the days required to move the mobilehome 63Letter from Thomas Kerr (June 6, 2014), 2. Kerr implies that the only reasonable destination for relocated mobilehomes is the Central Valley; he states in the previous paragraph, "It is possible that homes could be relocated to a space in the Central Valley where there is a high vacancy rate in mobilehome parks." 64Palo Alto Mun. Code§ 9.76.030 (d)(l). 65Palo Alto Mun. Code§ 9.76.040. 66The Hearing decision requires the owner to compensate for actual, reasonable expenses for any required overnight stay, with no limits on the length of the stay. Final Hearing Decision, p. 24. 9 PRE-HEARING STATEMENT OF THE BUENA VISTA MHP RESIDENTS ASSOCIATION Appeal of Hearing Officer's Decision Concerning Buena Vista Mitigation Measures Cost of purchasing a comparable mobilehome in a comparable mobilehome park The loss of investment in the mobilehome Any remaining loan payments Moving costs First and last month's rent in new unit Security deposit One year rent differential for low-income residents Additional assistance for disabled and senior families An updated appraised value of the residents' mobile homes that fails to take into consideration in-place value of park being in Palo Alto Limited to the updated appraisal value, even though some residents paid more for their mobilehomes Assumes updated appraised value will cover remaining loan payments. Limited to $990. Rent based on a one-bedroom rate. Actual security deposit in unit Limited to $1140 /month. Based on rent in a one-bedroom unit for most families, regardless of family size No information about what type of assistance will be provided Cost of purchasing a comparable mobilehome in a comparable park in a comparable community to Palo Alto within 35 miles of park Compensate residents for any loss in investment in their mobilehomes Compensate residents for any remaining loan payments that must be paid Actual moving costs Actual first and last month's rent Actual security deposit in unit One-year rent differential based on actual rent of the unit the family will move to, and the rent at the park when the RIR was approved69 Specify what assistance disabled and elderly families will receive The proposed relocation measures lack substance and create no realistic expectation that residents will be able to find and secure comparable housing in a comparable community; nor does the RIR guarantee that residents will be adequately compensated for the loss of their homes. As the Hearing Officer heard, many of the 400 residents of Buena Vista have lived there for years, if not decades. They have spent their life savings on buying their homes, making additions and improvements, and decorating their interiors. The homeowners in the park have jobs in Palo Alto or close by; their children attend the schools near their homes; and they are members of a community that will suffer wholesale disintegration if the park closes. The families who live at Buena Vista will likely be forced to move farther from their jobs and families, to leave the high-quality schools that their children are attending, and to say good- bye to the community they have built in the years-or even decades-that they have lived in the park. The proposed mitigation measures are not sufficient, and the City Council should deny the owner's request to close Buena Vista. 67 Id. The Hearing decision requires the owner to compensate for actual, reasonable moving expenses, and is not limited to $990.00. 68 Id. Although the Hearing Officer decision requires that the rents be updated to reflect rental rates six months prior to closure, the decision still only limits most residents to a rent differential based on a one-bedroom unit. 69In January 2015, the owner increased rents at Buena Vista by 9%. 10 PRE-HEARING STATEMENT OF THE BUENA VISTA MHP RESIDENTS ASSOCIATION EXHIBIT B MAR.GAR.ET ECKER. NANDA ATTORNEY AT LAW March 18, 2015 VIA ELECTRONIC MAIL AND FIRST CLASS MAIL Molly S. Stump, City Attorney Grant Kolling, Senior Assistant City Attorney City of Palo Alto 250 Hamilton Avenue, Palo Alto, CA 94301 RE: Park Owner Comments to Buena Vista Mobilehome Park Appeal Procedures Dear Molly and Grant: Thank you in advance for allowing the undersigned an opportunity to comment on the Appeal Procedures for the upcoming April 13 and 14, 2015 hearings. After review, there are a few points I would like to confirm. 1. Please be advised that the Park Owner will present its argument only after the conclusion of public testimony and not before. It would be procedurally improper to allow likely multiple hour gaps and possibly multiple day gaps in time to occur between presentations of both sides' arguments because of the extensive public testimony anticipated. Therefore this letter confirms that at least as to the Park Owner, its 30 minute opening argument will be made only after public testimony concludes. 2. The Park Owner is the appellee; therefore, the Park Owner should be entitled to present argument second, after the appellant, the Resident's Association, presents first. It is well established that during any traditional legal proceeding the moving party presents first. Particularly in an appellate trial, the appealing party traditionally presents first and the party whom the appeal is being brought against presents second. The Park Owner would like to adhere to these established principles and present its opening argument and thereafter its rebuttal after the Resident's Association opening argument and rebuttal. • 485 ALBERTO w AY, SUITE 100. Los GATOS, CA 95032 • PHONE 408.355.7010. FAX 408.355.7094. E-MAIL MAR.G>\RET.NANDA@INFOG;\IN.COM Letter to Molly Stump and Grant Kolling Page 2of3 March 18, 2015 3. The name of the expert witness to be appearing on behalf of the Resident's Association and any or all materials the expert shall be presenting must be made available to the Park Owner simultaneous with its Pre-Hearing statement. The Park Owner, at this point in time does not intend to call any further expert witness. Park Owner reserves the right to change its position, based upon the disclosure of a new expert witness by the Residents Association. Obviously any expert the Residents' Association intends to call has now been identified. I am requesting that a copy of any written report and the expert's CV be given to the undersigned, as the Park Owner's counsel no later than the close of business day on March 23, 2015. Withholding of this information from the Park Owner would be extremely prejudicial and . will not allow adequate time for the Park Owner to prepare a response to such witness testimony and any report. 4. All new evidence the Resident's Association seeks to offer, if any, shall be made available to the Park Owner no later than 21 days before the hearing and shall be subject to the City's Attorney's initial review as to its relevance, and the City Attorney to so advise the City Council in a memorandum. In my view the Adopted Appeal Procedures that you forwarded did not contain the language of the motion made by the Council as shown in the transcript of the proceedings. At two different times in the hearing, in a colloquy between you and Councilmember Berman beginning on page 75, line 7 and continuing to page 77, line 14, it is clear that it was intended that you make an initial determination as to the relevance of any "new evidence." Further in the Mayor's summary of the motion, she stated, "In (sic] request for new evidence shall be submitted to the City Attorney's Office who will analyze proposed evidence and prepare a summary for Council." (Page 88, lines 7 to 9). I want to confirm that first this is also your understanding since it is not included in item 2 e., of the Appeal Procedures. Further please confirm that your determination will be copied to all counsel as soon as it is made by your office so that we can prepare our arguments accordingly. 5. All PowerPoint presentations or other visual aids to be used in presentation by either party should be made available to the opposing party by Wednesday, April 8th at least 4 days prior to the hearing on or by April 13, 2015. The Park Owner hopes that this will ensure a procedurally fair process for both sides. At the January hearing the Residents Associations' Power Point was not made available until hours before the hearing. • Letter to Molly Stump and Grant Kolling Page 3of3 March 18, 2015 Thank you again for your attempts to ensure a fair hearing occurs by clarifying and confirming the appeal pro~edures. cc: Nadia Aziz, Law Foundation of Silicon Valley James Zahradka, Law Foundation of Silicon Valley (Via electronic and first class mail) • March 20, 2015 Molly Stump City Attorney Grant Kolling PUBLIC INTEREST LAW FIRM Oftdna Legal de Interes Publico Law Foundation of Silicon Valley 152 North Third Street, 3rd Floor San Jose, California 95112 Telephone (408) 293-4790 • Fax (408) 293-0106 www .lawfoundation.org Senior Assistant City Attorney City of Palo Alto 250 Hamilton Ave. Palo Alto, CA 94301 Via email Re: Letter from Margaret Nanda Regarding Appeal Procedures (March 18, 2015) Dear Ms. Stump and Mr. Kolling: As you are well aware, the parties had an opportunity to weigh in on the procedures that the City would be using in this matter over four months ago. Both sides took advantage of that opportunity both in writing and in the hearing held at Council. Then your office drafted and sent the procedures to the parties. There is no indication that Council anticipated revisions to those procedures after your office produced them. Ms. Nanda now unilaterally-with absolutely no consultation with us-demands a raft of changes to those procedures, less than a month before the hearing, including demanding that the Residents Association comply with unreasonable disclosure deadlines that she has manufactured. These changes were never contemplated by Council. The City should rebuff Ms. Nanda's eleventh-hour effort to alter the rules of the game. Thank you for your consideration. Sincerely, James F. Zahradka II Supervising Attorney Cc: Margaret Nanda EXHIBIT C March 23, 2015 Molly Stump, City Attorney City of Palo Alto City Hall, ?'h Floor 250 Hamilton Ave. Palo Alto, CA 94301 PUBLIC INTEREST LAW FIRM Oficina Legal de Interes Publico Law Foundation of Silicon Valley 152 North Third Street, 3rd Floor San Jose, California 95112 Telephone (408) 293-4790 • Fax (408) 293-0106 www.lawfoundation.org By E-mail and Mail Re: Appeal Brief of Buena Vista MHP Residents Association and Request for Appraisal Review Report as New Evidence Dear Ms. Stump: The Buena Vista MHP Residents Association submits the attached appeal brief contesting the decision of the Hearing Officer Craig Labadie. We further write to request that the City Council allow new evidence of Trulia.com mobilehome listings in Sunnyvale and Mountain View, as introduced on page 5 of the Appeal Brief and attached here. Trulia.com is an online residential real estate site for home buyers, sellers, renters and real estate professionals in the United States. It lists properties for sale and rent as well as tools and information needed to be successful in the home search process. Evidence of the current price of homes in nearby communities such as Mountain View and Sunnvyale are highly relevant as to whether Buena Vista residents will be able to relocate to comparable housing with the relocation payments that are currently being offered.1 Lastly, we request that the City Council consider the "Appraisal Review Report" by an expert appraiser Jim Brabant, submitted here and with the Residents Association's brief. The report is prepared by James Brabant, MAI, who has extensive experience as a real estate appraiser and specific experience with mobile homes.2 Mr. Brabant has been retained as an expert witness by a variety of municipalities, banks, and law firms for a variety of real estate-related cases.3 More specifically in relation to mobilehome parks, Mr. Brabant has served as an expert witness for a variety of purposes includin§ rent hearings, park closures and conversions, eminent domain, and failure to maintain lawsuits. 1 See http://en.wikipedia.org/wiki!frulia 2 James Brabant, MAI, "Appraisal Review Report: Review of Appraisals by Beccaria & Weber, Inc. Re: Buena Vista Mobile Home Park," attachment, "Qualifications of Appraiser," dated March 23, 2015. 3 Id. 4 Id. Resident's Association Appeal of Decision of the Hearing Officer and Request for Inclusion of New Evidence March 23, 2015 Page2of3 The report is not new, undiscovered, factual evidence of the type that seems to be anticipated by the Appeal Procedures, but rather serves more as an analysis of the evidence. It will assist the City Council in being able to weigh the evidence regarding appraisals contained in ·the owner's Relocation Impact Report (RIR). While the report does contain some evidence pertaining to mobilehome sales in the nearby communities, this evidence is principally facilitative of the expert's analysis. It is important to note that the park owner amended the RIR in the last minutes of the hearing by offering to update the park appraisals six months prior to the park closure.5 This last-minute addendum was done at the end of the hearing, after all testimony had concluded, and with no opportunity for the Residents Association to question the owner or its witnesses about the addendum. Despite the Residents Association's objections to this last-minute addendum, the Hearing Officer allowed the owner to amend the Relocation Impact Report to include the last-minute addendum without any further testimony on the issue and relied on these unknown future appraisal amounts to support the finding that relocation assistance being provided to the residents was adequate.6 Given that the Hearing Officer allowed the owner to make last-minute additions to the RIR regarding the appraisals described in the RIR, without rebuttal and without any mechanism to appeal those unknown future amounts, the City should allow this report to serve at least as rebuttal of the methodology of the appraiser that will likely be performing those appraisals. Please note that Mr. Brabant will not be the Residents Association's expert witness who will be testifying at the appeal hearing. Should you wish to discuss this matter further, please contact me at (408) 280-2453 or bye- mail at nadia.aziz@lawfoundation.org. Respectfully submitted, Nadia Aziz, Senior Attorney Kyra Kazantzis, Directing Attorney Public Interest Law Firm and Fair Housing Law Project Law Foundation of Silicon Valley 5 Park Owner's Closing Brief, 22-24. 6 Final Decision in the Matter of the Application of Toufic Jisser, As Trustee of the Jisser Family Trust, For Closure of the Buena Vista Mobilehome Park in Palo Alto, California, p. 24. Isl Resident's Association Appeal of Decision of the Hearing Officer and Request for Inclusion of New Evidence March 23, 2015 Page3 of3 Sue Himmelrich, Special Counsel Western Center on Law and Poverty Isl Matthew Dolan Sidley Austin LLP Encl. CC: Margaret Nanda (by-email to menanda@infogain.com) APPRAISAL REVIEW REPORT REVIEW OF APPRAISALS BY BECCARIA & WEBER, INC. RE: BUENA VISTA MOBILE HOME PARK PALO AL TO, CALIFORNIA REVIEWED BY JAMES BRABANT, MAI PREPARED FOR Law Foundation of Silicon Valley, Sidley Austin LLP and Western Center on Law and Poverty DATE OF REPORT March 23, 2015 PREPARED BY Anderson & Brabant, Inc. 353 West Ninth Avenue Escondido, California 92025 File No. 15-016 March 23, 2015 Mathew Dolan, Associate Sidley Austin LLP 1001 Page Mill Road Palo Alto, CA 94304 Re: Appraisal Review ANDERSON & BRABANT, INC. REAL ESTATE APPRAISERS AND CONSULTANTS 353 W. NINTH A VENUE ESCONDIDO, CALIFORNIA 92025-5032 TELEPHONE (760) 741-4146 FAX (760) 741-1049 Appraisals of Homes in Buena Vista Mobile Home Park Palo Alto, California Dear Mr. Dolan: As requested, I have completed a review of 32 appraisals of the above referenced property. Standard 3 of the Uniform Standards of Professional Appraisal Practice (USP AP) establishes the criteria to be addressed in such a review. Within the framework of guidelines set forth in Standard 3 of USP AP, I have summarized the following pertinent comments, opinions and conclusions resulting from the review process. Identification of the Client This review report was prepared at the request of the Law Foundation of Silicon Valley, Sidley Austin LLP, and Western Center on Law and Poverty. The opinions expressed herein are those of the author and do not necessarily represent the views of the Resident Association or their attorneys. Intended Use and Users of the Review Report It is my understanding that the review appraisers' opinions and conclusions will be utilized by my client to assist in evaluating the appraisals of mobile homes/travel trailers that were included in a Resident Impact Report (RIR). Purpose of the Review Assignment · The primary purpose of this review is to develop an opinion as to the overall adequacy and appropriateness of the reports being reviewed, and, specifically not to develop independent opinions of market value for each of the homes. Further, it is intended to determine ifthe results of the appraisal are credible for the intended user's intended use and also to evaluate compliance with relevant USP AP and client requirements. Matthew Dolan Review Appraisal March 23, 2015 Page 2 of9 Identification of the Reports The reports under review are identified as Summary Appraisal Reports as described by Standard 2-2(b) of USPAP. The reports were prepared by Beccaria & Weber, Inc., Realtors, Appraisers and Property Managers. Their office is located at 830-F Bay Avenue, Capitola, California 95010. Their client was Toufic Jisser of San Jose, California. It appears that Beccaria & Weber prepared 99 appraisal reports and their conclusions were reported in the Resident Impact Report (RIR) for Buena Vista Mobile Home Park. The RIR was prepared by Margaret Ecker Nanda, Attorney at Law and Brian Grasser, Attorney at Law, on behalf of the park owner, The Jisser Family. The Fair Housing Law Project has provided me with copies of 32 of the appraisal reports. They have indicated that the 32 reports represent all of the appraisals they have in this matter. This is a substantial number of reports and would appear to be a fair representation of the entire body of work that was completed by Beccaria & Weber in this assignment. The 32 reports are appraisals of the homes on the following spaces in Buena Vista Mobile Home Park: 2, 5, 13, 16, 19, 21, 24, 31, 32, 35, 38, 46, 47, 48, 50, 58, 63, 71, 72, 73, 74, 76, 82, 83, 88, 89, 102, 103, 105, 109, 110 and 112. The appraisals are dated in January and February of2013. Identification of the Appraised Property The appraised property consists of the homes located in Buena Vista Mobile Home Park. Buena Vista is a high density park that was originally built as an overnight trailer/RV park but gradually evolved into a place for long term residency. In the 32 appraisals I have reviewed, there is a wide range in the type, age and size of the homes. The types of homes include mobile homes, travel trailers, park models and motor homes. The age of the homes ranges from 1955 to the 2004, and the sizes range from 180 to 877 square feet. Interest Appraised Each appraisal includes an opinion of the in-place market value as well as the offsite value, where applicable. Effective Date of Value and Report The valuation dates for the 32 appraisals are various days in January and February of 2013. The report dates are the same as the dates of value. Effective Date of Review and Review Report This review and review report are made as of March 23, 2015. I personally inspected the subject park, and the five parks that contain comparable sales, on March 19, 2015. Matthew Dolan Review Appraisal March 23, 2015 Page 3 of9 Scope of the Review Process In developing this review, I have undertaken the following tasks: 1. Conducted a thorough office review of the 32 appraisal reports that were provided. The primary focus of the review has been the opinions of the in-place market values of the 32 homes. 2. Also reviewed the Resident Impact Report (RIR) and other documents. 3. Discussed the property and reports with the client. 4. Verified the accuracy of certain factual documentation contained in the reports. 5. Field reviewed the subject property and selected market data. Exterior inspections of the homes. I have relied on details of the interior of the subject homes as described in the appraisal reports. 6. Prepared the review report. Extraordinary Assumptions/Hypothetical Conditions The opinions of in-place market value are based on two hypothetical conditions. The first is the assumption that the park is not going to be closed. The second is the assumption that any additions to the homes were legally permitted. However, it appears that the second assumption is actually what is termed an extraordinary assumption rather than a hypothetical condition. Unless the appraiser knows that every addition to the homes in the park is not legally permitted it should be labeled an extraordinary assumption. This is considered to be somewhat of a technical matter and did not appear to effect the value conclusions. Completeness of the Report and USP AP Compliance The intent of the appraiser was to prepare Summary Appraisals in conformance with Standards Rule 2-2(b) of USP AP. It appears that all of the components of a Summary Appraisal Report are present in the reviewed appraisal reports according to USP AP Standards in effect as of the date of the reports. While the components of the appraisals appear to be consistent with USP AP, I have serious disagreements with the choice of comparable sales and the way they have been analyzed. Appropriateness of Appraisal Methods and Techniques The appraisal assignment included providing opinions of the in-place market value of the homes in Buena Vista Mobile Home Park. The appraiser has adequately set the foundation for the valuation process by describing the pertinent physical characteristics and legal constraints of the subject property, and the market in which it will compete. To solve this appraisal problem, the appraiser has properly identified the Sales Comparison Approach as the most appropriate valuation method for the in-place market values of the homes appraised. Matthew Dolan Review Appraisal March 23, 2015 Page 4 of9 Adequacy and Relevance of Comparable Data As previously mentioned, there is a wide variety in the type, size and age of the 32 homes appraised. However, the appraiser utilized only 13 sales as the data base for all 32 appraisals. Six of those sales are from Buena Vista, while seven are from five other parks. One sale was utilized from Adobe Wells in Sunnyvale, two from Blue Bonnet Mobile Home Park in Sunnyvale, one from Sahara Village in Mountain View, two from Santiago Villa Mobile Home Park in Mountain View, and one from Harbor Village in Redwood City. Each appraisal has either seven or eight comparable sales that are compared and adjusted to a subject home for the valuation analysis. At first glance that appears to be a large comparable data base for the analysis of each home. However, in spite of the substantial variations in type, size and age of the 32 homes appraised, many of the comparable sales are utilized for almost all of the home appraisals. In fact, Space 202 in Sahara Village and Space 160 in Harbor Village were used in all 32 appraisals despite significant differences in the subject homes. In addition, Spaces 30 and 48 in Buena Vista, Spaces 3 and 43 in Blue Bonnet, and Space 27 in Santiago Villa, were used in almost all of the 32 appraisals. It looks like a very small sampling of sales was chosen from a potentially large data base that could produce misleading results. One example of inappropriate market data would be from the appraisal of Space 74 in Buena Vista. This is a small park model that was built in 2004. However, five of the seven sales utilized were built in the 1960s and are not comparable. Another example of inappropriate data would be the one and only comparable sale that was utilized from Sahara Village in Mountain View (Space 202). It was a 1969 home with 576 square feet that sold for $15,000 in September 2012. However, MHousing (HCD records) reports a sale in July 2010, of a 520 square foot home built in 1963, on Space 177, that sold for $34,000. They report another sale in July 2010, of a 550 square foot home built in 1962, on Space 165, at a price of $22,000. In addition, the MLS reports a sale in May 2011, of a 688 square foot home built in 1964, on Space 253, for $28,000. The MLS also reports a sale in March 2011, of a 720 square foot home built in 1967, for a price of $20,000. The lower sale at $15,000 was utilized in all 32 of the appraisals. Focusing on the lower sale and ignoring higher sales would likely produce a misleading result. A further example would be the two comparable sales that were utilized from Santiago Villa MHP in Mountain View. The first is a 1970 home on Space 24 with 672 square feet that sold for $26,000 in November 2011. The second sale used is a 1966 home on Space 27 with 600 square feet that sold for 18,000 in March 2012. However, the MLS reports higher sales during the same time period that were not used. The MLS reports a sale in July 2012, of a 960 square foot home built in 1966, on Space 307, for $50;000. The MLS also reports a sale in December 2012, of an 800 square foot home built in 1969, on Space 249, for a price of $40,000. Again, ignoring higher sales in favor of lower sales would produce a misleading result. Matthew Dolan Review Appraisal March 23, 2015 Page 5 of9 Six sales of homes from Buena Vista were utilized as comparables. Five of the six sales sold between October 2010 and July 2012. However, one sale (Space 54) was a park model and sold in May 2006 at a price of $23,000. It appears that this older transaction was utilized because it was the only sale found of a park model. However, no time adjustment was made for the six+ year difference between the sale date and the appraiser's date of value. The range of the six sales from Buena Vista is from $3,000 to $29,000. However, I am aware of at least three of the homes in the park that were purchased for $50,000 or more. The home on Space 24 was reportedly purchased for $55,000 in 2006 but was only appraised in 2013 for $31,500. The home on Space 73 was reportedly purchased for $50,000 in 2003/2004, but was only appraised for $16,000. The home on Space 110 was reported sold by MHousing in July 2012 for $50,000 but was only appraised for $30,000. It is important to provide further information about the sale of the home on Space 110. In the appraisal being reviewed, in discussing the prior purchase of the home the appraiser states, "The current owner has not provided the date purchased or for what price." However, MHousing reported a sale of the home in July 2012 at a price of $50,000. Although the appraisals refer to MHousing as a data source in some of the other 32 appraisals, there is no mention of this sale. This is significant because it would have been critical information for the valuation of the home on Space 110. Of the six sales from Buena Vista utilized in the 32 appraisals, the highest sale was at a price of $29,000. Ignoring a sale at $50,000 in this park seriously undermines the credibility of the valuation conclusions. We interviewed the owner of the home on Space 110, Hariberto Avalos, who confirmed that he purchased it for a price of $50,000 in July of 2012, and that the home was in good condition. He also stated that he was unaware of the pending park closure and would not have purchased if he had known. He was notified of the closure about three months after he bought the home. Appraising this home for $30,000 in February 2013, when it was purchased only seven months prior at $50,000 and the housing market was increasing, is not credible and in my opinion has produced a misleading result. The significance of this is not just the impact on the valuation of the home on Space 110, but the fact that this sale could have been utilized as a comparable sale for other homes in the park. Adequacy of Adjustment Process The 13 comparable sales that served as the data base for the appraisals of the 32 homes ranged in date from May 2006 to October 2012, with all but one of them occurring in the two year period from October 2010 to October 2012. However, no time adjustments were made for the difference between the sale dates of the comparables and the dates of value. And in the Neighborhood section of each report, the Property Value box is checked for Stable rather than Increasing. This is in contrast to the data presented in the report that includes information about the substantial increase in median home price for single-family homes in Palo Alto and the surrounding area, having increased from $1,428,000 in 2011 to $1,726,000 in 2012. The report then says "Conversely the median sale price for mobile and manufactured homes in mobile home Matthew Dolan Review Appraisal March 23, 2015 Page 6 of9 parks throughout Santa Clara County was $70,000 in 2012 up from $63,000 in 2011." The word "conversely" is inaccurate since the market for mobile homes was going up, albeit not as rapidly as the market for single-family homes. In addition, the "Increasing" box should have been checked in the Neighborhood section, rather than the "Stable" box. More importantly, the appraisals should have recognized that the market for mobile homes was increasing and that fact should have been reflected by making time adjustments. No adjustments are made in the 32 appraisals for differences in Location and/or Site Value. When the comparable sale is from Redwood City, Mountain View or Sunnyvale, the report indicates the location is offset by the rent. It appears that for location, the appraisers are primarily concerned with the quality of the park and all of the comparable parks are rated superior to Buena Vista. However, there does not appear to be any recognition of the superior home prices in Palo Alto compared with those other cities. Using Space 112 in Buena Vista as an example, Comparable 1 is located in Redwood City, which has a substantially lower median home price than Palo Alto. However, the park (Harbor Village) is rated superior to Buena Vista. But, the location is stated to be offset by the rent. The space rent for Space 112 in Buena Vista is $695 while the space rent for Comparable 1 in Harbor Village is $708 which is only $13 per month higher. Apparently, the higher rent is supposed to be offsetting the superior park. However, the superior Palo Alto location seems to be lost in this process. The lack of adjustment for either Location or Site Value is the same for all 32 appraisals. However, it is interesting to note that there is some support for a site value, even in the comparable parks utilized in the appraisals. For example, the home on Space 200 in Sahara Village sold for $48,000 in November 2014. It was a 1972 single-wide home with 576 square feet. It has been removed and a new home is currently being installed. In effect, the buyer paid $48,000 in site value for the right to control the space and purchase the new home that is being installed. The same thing happened at Space 139 in Santiago Villa MHP. A 600 square foot home, built in 1969, was purchased for $43,000 in September 2013. It was removed and a new home is on the site. It should not be surprising to find examples of this type of site value in mobile home parks located in areas where you have such high home prices. The 32 appraisals include adjustments for the difference in the size of the homes at a rate of $20.00 per square foot. This same rate of adjustment was made regardless of the age or quality of the home. For example, in the appraisal of the home on Space 19, Comparable No. 1 is the home on Space 37 in Buena Vista which is a 1959 home with 176 square feet that sold for $3,000 in November 2011. The sale price calculates to $17.05 per square feet. The home being appraised was built in 1958 and has 378 square feet. The difference in the size of the two homes is 202 square feet (378 minus 176), and the size adjustment is 202 x $20 = 4,040. Contrast this with the appraisal of the home on Space 74 in Buena Vista that was built in 2004 and has 441 square feet. Comparable No. 7 is the home on Space 54 in Buena Vista that was also built in 2004 and has 286 square feet. That home sold for $23,000 in May 2006, which calculates to $80.42 per square foot. The difference in the size of the two homes is 155 square feet (441 Matthew Dolan Review Appraisal March 23, 2015 Page 7 of9 minus 286), and the size adjustment is 155 x $20 = $3,100. The use of the same size adjustment rate for the appraisal of these two homes is inappropriate and in my opinion produces an incorrect value conclusion. This same incorrect analysis was used for all of the appraisals. Adjustments were made for differences in the age of the homes (year built) based on $100 per year. This is such a small amount that borders on being nominal. This becomes exaggerated in the appraisal of the home on Space 74 which was built in 2004. Five of the comparable sales used in that appraisal were built in the 1960s but they are not really comparable. Using an inadequate upward adjustment of $100 per year understates the indicated value of that home. Significance of the Date of Value in a Rising Market Although the appraisals of the 32 homes in Buena Vista provide statistical data about the rising housing market, that fact has not been recognized in the analyses of comparable sales that go clear back to 2010 (one sale goes back to 2006), while the date of value is in early 2013. This lack of making time adjustments has already been discussed in the previous section. However, the determination of the date of value becomes extremely important when you have a rising market. Using Zillow as a source, the median price for residential properties (all homes) in Santa Clara County increased from $593,000 as of January 2010, to $853,000 as of January 2015, or a total increase of 44 percent for the five year period. However, the median price for residential properties in Palo Alto increased from $1, 100,000 to $2,200,000 during the same period, for an increase of 100 percent. For that same time period, Sunnyvale increased 50 percent, Mountain View increased 48 percent and Redwood City increased 34 percent. The increase in Palo Alto for the most recent two years alone (January 2013 to January 2015) was 4 7 percent (see attached Exhibit 1). To further illustrate the significance of the raising housing market I have identified a couple of mobile homes that sold in 2011 or 2012 and then resold more recently. The first sale involves Space 43 in Blue Bonnet Mobile Home Park. This transaction occurred in March 2012 at a purchase price of $25,000 and as previously discussed was utilized in almost all of the 32 appraisals. According to MLS, this home resold in December 2014 at the significantly higher price of $62,900. I have also identified the April 2011 sale of Space 228 in Santiago Villa for $38,000. This 860 square foot home was built in 1969 and although it was not used in any of the 32 appraisals I reviewed, it is similar to the data used. According to MLS, this home resold in November 2014 at a price of $85,000. Both of these examples demonstrate the impact that the date of value can have, particularly in a rising market. Again, referring to data that occurred after the dates of the appraisals is not intended as a criticism of the appraisals since no appraiser can be responsible for Matthew Dolan Review Appraisal March 23, 2015 Page 8 of9 failing to use data that had not yet occurred. However, it certainly emphasizes the significance of the date of value to the home values. Appropriateness & Reasonableness of Analysis, Opinions & Conclusions The appraiser provided an adequate description of the subject properties and employed a valuation technique that is commonly used by the industry in providing opinions of in-place market value of mobile homes/travel trailers, etc. However, in my opinion, the selection and analyses of the comparable data in the 32 appraisals is flawed and does not provide reasonable estimates of in-place market value. It also appears that most of the shortcomings have resulted in an under valuation of the homes. Thank you for this opportunity to be of service. Please let me know if I can be of further assistance in this matter. Respectfully submitted, ANDERSON & BRABANT, INC. £"~ IlU;Brabant, MAI State Certification No. AG002100 Attachments: Exhibit 1 (Residential trends reported by Zillow) Statement of Qualifications Matthew Dolan Review Appraisal March 23, 2015 Page 9 of9 APPRAISER'S CERTIFICATION I do hereby certify that, to the best of my knowledge and belief ... 1. The statements of fact contained in this review report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, are my personal, unbiased professional analyses, opinions and conclusions. 3. I have no present or prospective future interest in the property that is the subject of the work under review, and I have no personal interest or bias with respect to the parties involved. 4. I have no bias with respect to the property that is the subject of the work under review or to the parties involved with this assignment. 5. My compensation is not contingent on an action or event resulting from the analyses, opinions, or conclusions in this review or from its use. Further, my compensation is not contingent upon development or reporting of predetermined assignment results or assignment results that favors the cause of the client, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal review. 6. My analyses, opinions, and conclusions were developed, and this review report was prepared, in conformity with the requirements of the Uniform Standards of Professional Appraisal Practice. 7. The use of this review report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 8. I have made a personal inspection of the properties that are the subject of this review report. 9. Patricia Haskins provided significant professional assistance to the person signing this review report. 10. As of the date of this report, I, James Brabant, have completed the requirements under the continuing education program of the Appraisal Institute. 11. I have not provided any service regarding the subject property in the three years immediately preceding acceptance of this assignment, as an appraiser or in any capacity. &~ esBI~ant, MAI March 23, 2015 State Certification No. AG002100 Attachments Anderson & Brabant, Inc. ::i::... ;:i: ~ ;;i c ;:i: Re b;:; ~ ~ § .!"" S' fl Jannarv-06 Januarv-07 Januarv-08 Januarv-09 Januarv-10 Januarv-11 Januarv-12 Januarv-13 Jannarv-14 Januarv-15 Santa Clara Cotmtv Avg %Change %Change Price Annual Monthlv $737 000 ---- $743 000 0.8% 0.1% $719 000 -3.2% -0.3% $613 000 -14.7% -1.2% $593 000 -3.3% -0.3% $587 000 -1.0% -0.1% $574 000 -2.2% -0.2% $662.000 15.3% 1.3% $772 000 16.6% 1.4% $853 000 10.5% 0.9% * Median Price as of February 2006 Source: TRENDS -RESIDENTIAL PROPERTIES (ALL HOMES) Palo Alto Stmnwale Motmtain View Redwood Cit Avg %Change %Change Avg %Change %Change Avg % Change %Change Avg %Change %Change Price Annual Monthlv Price Annual Monthly Price Annual Monthly Price Annual Monthly $947 000 * -- --$789 000 ----$789 000 ----$830 000 -- -- $1.100 000 16.2% 1.4% $792 000 0.4% 0.0% $807 000 2.3% 0.2% $836 000 0.7% 0.1% $1300000 18.2% 1.5% $815 000 2.9% 0.2% $820,000 1.6% 0.1% $828 000 -1.0% -0.1% $1 100 000 -15.4% -1.3% $746 000 -8.5% -0.7% $755 000 -7.9% -0.7% $733 000 -11.5% -1.0% $1 100 000 0.0% 0.0% $733 000 -1.7% -0.1% $744 000 -1.5% -0.1% $745 000 1.6% 0.1% $1000000 -9.1% -0.8% $746 000 1.8% 0.2% $748 000 0.5% 0.0% $720 000 -3.4% -0.3% $1200000 20.0% 1.7% $740 000 -0.8% -0.1% $754 000 0.8% 0.1% $703 000 -2.4% -0.2% $1500000 25.0% 2.1% $872 000 17.8% 1.5% $930 000 23.3% 1.9% $816 000 16.1% 1.3% $1900000 26.7% 2.2% $977 000 12.0% 1.0% $1000000 7.5% 0.6% $960 000 17.6% 1.5% $2,200 000 15.8% 1.3% $1 100 000 12.6% 1.1% $! 100 000 10.0% 0.8% $1000000 4.2% 0.4% Zillow 3/5/2015 & 3/10/2015 Qualifications of the Appraiser -James Brabant, MAI Page Two III. Professional Affiliations: A. Member, Appraisal Institute, MAI (1985 President, San Diego Chapter) B. Realtor Member, North County Association of Realtors C. Member, International Right of Way Association D. Real Estate Brokers License, State of California E. Teaching Credential, State of California, Community College Level F. Certified General Real Estate Appraiser (AG002100) Office of Real Estate Appraisers, State of California IV. Appraisal Experience: Co-Owner -Anderson & Brabant, Inc., Since 1979 Co-Owner -Robert M. Dodd & Associates, Inc., 1977 -1979 Appraisal Manager-California First Bank, Huntington Beach, California, 1974 -1977 Staff Appraiser -California First Bank, San Diego, California, 1972 -197 4 Staff Appraiser -0. W. Cotton Co., San Diego, California, 1970 -1972 Staff Appraiser-Davis Brabant, MAI, Huntington Park, California, 1960 -1962 V. Teaching Experience: Southwestern College, Chula Vista, California, "Real Estate Appraisal" VI. Expert Witness: Superior Court, San Diego, Los Angeles, Riverside, and San Bernardino Counties Rent Control Hearings: Cities of Oceanside, Escondido, Ventura, Concord, Yucaipa, Carpenteria, Palmdale, San Marcos, Carson, Watsonville Various Arbitration Hearings Assessment Appeals Boards of Riverside County, San Diego County and Orange County Federal Bankruptcy Courts in San Diego County & Santa Barbara County United States District Court -Northern District of California VII. Types of Appraisals: Residential Property: Commercial Property: Industrial Property: Vacant Land: Agricultural: Special Purpose Appraisals: Mobile Home Parks: Anderson & Brabant, Inc. Single-family residence, condominiums, apartments, subdivisions, existing and proposed Office buildings, shopping centers, office condominiums, etc., existing and proposed Single/multi-tenant, business parks, etc., existing and proposed Industrial, commercial, residential, and rural Ranches, avocado and citrus groves, etc. Leasehold estates, possessory interest, historical appraisals, etc. For a variety of purposes including rent hearings, park closure, park conversions, failure to maintain litigation, eminent domain, etc. Qualifications of the Appraiser -James Brabant, MAI Page Three VIII. Partial List of Appraisal Clients: Banks Bank of America Bank of New York City National Bank Downey Savings Fidelity Federal Bank First Interstate Bank First Pacific National Bank Flagship Federal Savings Great Western Bank Industrial Bank of Japan Palomar Savings & Loan Redlands Federal Bank Union Bank of California Wells Fargo Bank Government Agencies and Municipalities California Department of Transportation/Cal trans Carlsbad Municipal Water District City of Carlsbad City of Chula Vista City of Colton City of Concord City of Escondido City of Laguna Beach City of La Mesa City of Salinas City of San Bernardino City of San Diego City of San Marcos City of Vista City of Yucaipa County of San Diego Fallbrook Public Utility District Metropolitan Water District Oceanside Unified School District Pacific Telephone Poway Municipal Water District Ramona Unified School District SANDAG (San Diego Assoc. of Govts.) San Diego County Water Authority San Diego Unified Port District San Marcos Unified School District U.S. Depart. of the Interior Bureau of Indian Affairs U.S. Department of Justice Anderson & Brabant, Inc. Law Firms Aleshire & Wynder, LLP Asaro, Keagy, Freeland. & McKinley Best, Best & Krieger Daley & Heft Endeman, Lincoln, Turek & Heater Foley & Lardner, LLP Fulbright & Jaworski Gray, Cary, Ware & Freidenrich Higgs, Fletcher & Mack Latham & Watkins Lounsbery, Ferguson, Altona & Peak Luce, Forward, Hamilton & Scripps McDonald & Allen Mcinnis, Fitzgerald, Rees, Sharkey & Mcintyre O'Melveny & Meyers Procopio, Cory, Hargreaves & Savitch Rutan & Tucker Singer, Richard Sullivan Wertz McDade & Wallace Tatro & Zamoyski Thorsnes Bartolotta & McGuire Woodruff, Spradlin & Smart Worden Williams, APC Title Companies Chicago Title Fidelity National Title Insurance First American Title St. Paul Title Title Insurance & Trust Others Avco Community Developers Coldwell Banker Dixieline Lumber Golden Eagle Insurance National Steel & Shipbuilding Co. Northern San Diego County Hospital District Prudential Insurance Corp. Rosenow, Spevacek, Group San Diego Gas & Electric Co. 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Trulia is a real estate search engine that helps you find homes for sale and make smarter real estate decisions in the process. HoW? By analyzing real estate Information on millions of homes in C~!ifornio and nationwide as well as helping you understand hyper-local Mo11nt,1in View,..,.,; es1c.1e trencls. Refine your real estate search In Mountain View, CA by price, number of bedrooms, bathrooms, property type (Including tow0homes, ·:011dorni111um> and s•1gle-forn1ly hoines), and more. Use our Interactive MuuniaiP V1~w i'orne w u; ''"~'to view real estate activity across Mountain View ZIP codes and In other cities nearby Mountain View. See local real estate trends, and compare your home to ,.2remly sc:~d home$ in \.1ounw1n View and to similar homes for sale In Mountain View,. View our Moun1:~w V1t-:t·-J 1 r.:~111:::.:.111--,;.:u1ut.> to see average llstlng prices, sale prices and Information for local school districts. Join Mnum.1;.-, V•ew, COJl'nm1111c,, 10 get In touch with Mountain View real estate agents, real estate brokers and other real estate sellers and buyers. Compare tM1m1;11n V1~·t1 111onga~e1 from multiple lenders and mortgage brokers to flnance your home purchase. Not ready to buy yet? Find and compare Mou~rain View Aparrmernc, for rem. Copyright«> 2015 Trulla, Inc. All rights reserved. Fair Ho11s1ng and Fqu01 Opportun1ry Have a question? Visit our Help Cenrer to find the answer 3/23/2015 3:59 PM Sunnyvale Mobile/Manufactured Homes For Sale I Trulia.com http://www.trulia.com/for_sale/Sunnyvale,CA/MOBILEIMANUFAC ... Buy Sell Rent Mortgage Find an Agent More For Professionals .., My Boards 1 Saved Searches Sign In Sunnyvale, CA 0 SAVED Y Q - Min Price .., Max Price .., All Beds .., All Baths .., Mobile I Man... .., 1 more filter Q. All Fiiters :: LIST '!!! 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Sunnyvale CA Hotel -BeverlyHeritage.com Enjoy a Relaxing Stay In Silicon Valley, The Beverly Heritage Hotel 16 • 18 of 18 Results « Previous Hotel Dining Rooms & Suites 1 2 Find out more. Contact a local agent. 17.JulleTsailaw (650) 600-3370 ***** (0) PRO Nearby Homes For Rent I 271 Lawrence Station Rel • $2,404-$4,539 • 1-2 bd Sl7 1 -2 ba 621 TasrnJn Dr • $2,694-$4,046 flilf1' 1-2bd ~~ 1 -2 ba More Nearby Homes For Rent » Ask a question about Ask agents or local experts anything 3/23/2015 4:00 PM EXHIBIT D MAR_GAR_ET ECKER_ NANDA ATTORNEY AT LAW March 25, 2015 Via Electronic Mail and First Class Mail Molly S. Stump City Attorney Grant Kolling Senior Assistant City Attorney City of Palo Alto 250 Hamilton A venue Palo Alto, CA 94301 Email: Molly.Stump@cityofpaloallo.org Email: Grant.Kolling@cityofpaloalto.org Re: Closure of Buena Vista Mobilehome Park Mobilehome Park Conversion Ordinance, Chapter 9.6 of the Palo Alto Municipal Code Dear Ms. Stump and Mr. Kolling: The undersigned attorney represents the owners of Buena Vista Mobilehome Park (the Toufic Jisser Family) with respect to the upcoming Appeal hearings occurring on April 13, 2015 and April 14, 2015. The correspondence that the Residents Association emailed Monday, March 23, 2015, containing materials they wish to submit as additional evidence, clearly violates the Appeal Procedures that were adopted by the City Council on January 12, 2015. I write to adamantly encourage you to adhere to those procedures and deny admission of this evidence because it is not procedurally proper or relevant. The Appeals Procedures provide clear requirements. To reiterate, the Appeal Procedures state: 2(e): The evidentiaiy record is closed. Witness testimony will not be taken and new documents shall not be offered as a basis for decision on appeal, except that Council may allow new evidence if a party can demonstrate that newly discovered and relevant evidence exists that could not have been discovered with exercise of • 485 ,\LBLRTO w ,, Y, Sum 100, Los G'\TOS, CA. 95032 . PHONE 4-08.355.7010 . FAX 408.355.7094. E-M/\IL MARC/\RET.NAND'\@INF()GAIN.COM Letter to Molly Stump and Grant Kolling Page 2of6 March 25, 2015 reasonable diligence during the initial proceeding before the Hearing Officer. [Emphasis added]. The evidentiary standards are very clear that the party must show that the evidence was: 1) newly discovered, 2) relevant, 3) and could not have been discovered with the exercise of reasonable diligence during the initial proceeding before the Hearing Officer. The Residents Association's proffered evidence fails to meet the above criteria. Furthermore, the Appeal Procedures are also clear in limiting each party who wishes to submit a Pre-Hearing Statement to a 10-page limit (See Appeal Procedures 2(f)). 1. The randomly selected Trulia listings are not newly discovered evidence, are not relevant to this Appeal, and fail to meet the criteria that they could not have not been discovered with the exercise of reasonable diligence during the initial proceeding. First, the evidentiary record on comparable mobilehome parks is closed since data on this exact issue has already been presented and discussed between the City and the Park Owner.1 A comprehensive discussion on the parks that comprised the comparable pm·k data, including what specifically makes a mobilehome park comparable to Buena Vista, was discussed in detail in the Relocation Impact Report (RIR) section 19.2 Secondly, the randomly selected Trulia.com mobilehome listings (hereinafter "Trulia evidence" or "Trulia listings") that the Association is attempting to force into evidence for the appeal are irrelevant. The RIR already canvassed the 98 units which are at issue in the Park using substantial research. Only 30 of the 98 units are even mobilehomes. · The rest of the Park units are various types of Recreational Vehicles (RV's) or "Park models", a specific type of manufactured housing unit. The Trulia listings are not ge1mane, there is no way to determine what other amenities or other restrictions (such as community age restrictions, which may impact price) are in place where the units shown on Trulia are located. The Trulia listings do not provide any new or relevant inf01mation and must be denied admission into evidence. Due to the irrelevance of the Trulia listings, namely that only 30 of the Park's 98 units at issue are even mobilehomes, that the condition of the Parks in the listings relative to the condition of Buena Vista Mobilehome Park is unknown, that any other restrictions about the units listed in the other parks (which may increase value, is also unknown), and 1 See Relocation Impact Report pg. 57 and Appendix 30 and 43. 2 See Relocation Impact Report, Section 19, pg. 55-58. -· Letter to Molly Stump and Grant Kolling Page 3of6 March 25, 2015 finally the possible prejudice to the Park Owner that would result from admitting these randomly selected mobilehome listings, the sole conclusion that can be drawn is these enumerated factors outweigh any limited probative value that the listings might have. The Trulia listings do not provide any evidence that was not already reasonably obtainable at the initial hearing with the exercise of due diligence. The prime example of exercising due diligence during the requisite initial Hearing is the evidence provided in the RlR, in which, "Appendix 43 ... contained comparable mobilehome sales data for mobilehome parks within a 35 mile range of Buena Vista."3 The Resident Association cannot suddenly cherry pick a handful of listings to replace properly vetted, comprehensive, and already discussed data for their own purposes. Lastly, the Association attempts to say that the Trulia listings are highly relevant to show whether tenants will be able to relocate based on the cmTent payments. Perhaps, the Residents Association should review the initial Hearing Officer's Decision, where he explicitly writes that the rent subsidy shall be updated to reflect current market conditions within six months of the owner's relocation from the Park and the appraisals will be updated similarly to reflect current market conditions.4 For the foregoing reasons, the Trulia evidence must not be admitted as evidence for the Appeals Hearing. 2. The "Appraisal Review Report" is clearly not newly discovered evidence, patently fails to meet the criteria that it could not have not been discovered with the exercise of reasonable diligence during the initial proceeding, and any argument that it is a rebuttal to changes to the RIR is without merit. The Resident's Association even admits that, "the Report is not new, undiscovered, factual evidence of the type that seems to be anticipated by the Appeal Procedures," and it underhandedly tries to re-characterize it as, "more an analysis of evidence." This attempt is procedurally and professionally wrong. First, because there is no reason why this Report could not have been obtained during the Hearing Process, as by the Association's own admission, the evidence must be excluded from the appeal. The Residents Association attempts to obfuscate this issue by inventing some far-fetched argument about how this report is a rebuttal argument to amended mitigation assistance presented on May 14, 2014 when; instead, the only issue 3 See Relocation Impact Report, pg. 58 4 See Hearing Officer's Final Decision, Exhibit A, Sections I and 2 . .....• Letter to Molly Stump and Grant Kolling Page 4of6 March 25, 2015 regarding the appraisals that the Resident Association has consistently complained about is that the appraisals were too low5. During the hearing process, the Residents Association had 15 months from time of receipt of resident's appraisals (April 2013) to order other appraisals or order a review of their appraisals to be considered during the initial hearing process. In fact, the Residents Association did put forth an additional appraisal that was considered by the Hearing Officer, the appraisal of the home at Space 27 by S. Mark McCullough of EAppraisal Valuation. The Hearing Officer found McCullough's appraisal unpersuasive because of significant flaws in the assumption that the home was real property and not a mobilehome. Simply put, there is no reason that through the exercise of reasonable diligence during the initial proceeding, this report could not have been obtained. For the foregoing reasons, this Repo1i must not be admitted as evidence. Secondly, the argument that the RlR was amended during the Hearing and this new Report is some type of a "rebuttal argument" is an intentional obfuscation of issues. To be clear, the amendments made to the RlR, that the Residents Association claims were "at the last minute," were two updates that only benefited the residents and did not change the RlR methodology because the updates only consisted of: 1) Increasing the Rent Subsidy from 40% to 100% and 2) Offering to provide appraisals to be updated to reflect current market conditions within six months of the owner's relocation from the Buena Vista Mobilehome Park. Increasing the amount of rent subsidy and ordering more current appraisals does not change the RlR methodology in anyway, it only increases benefits to residents. Here, this new Report is not a rebuttal to an increase of rent subsidy or a decision to offer updated appraisals. A rebuttal would actually address the updates by taking a rebuttal position to them; for instance, that the appraisals should not be updated or that the appraisals should not be not be updated within 6 months. This Report is not even relevant to the rebuttal argument that the Resident Association is claiming. The Resident Association must not be allowed to circumvent the established Appeals Procedures adopted by the City Council on the basis of manufactured, attenuated, and irrelevant arguments. Thirdly, the pre-hearing statement is limited to 10 pages. This report combined with their brief exceeds the limit. This Report must be denied based upon the clear limitations provided by the City Council. Lastly, claims that the Resident Association was not offered time to rebut or challenge changes made to the RlR are without merit. Additional considerations to adjust the hearing schedule so that the Association could have challenged the amendments to the RlR was offered by Hearing Officer, Labadie, to the Residents Association, but the 5 For example, See Nadia Aziz, Law Foundation of Silicon Valley, October 10, 2013 Letter to City Attorney, pg. 5 Letter to Molly Stump and Grant Kolling Page 5 of6 March 25, 2015 Association never made use of said offer. To quote directly from Hearing Officer, Craig Labadie's, May 23, 2014 letter: It has been pointed out that the letter in question was submitted after the post- hearing schedule had been determined. If either party believes that reasonable adjustments to that schedule are necessary to allow sufficient time for preparation of closing statements and supporting materials, please let me know. [Emphasis Added]6 The Association cannot attempt to now claim lack of rebuttal opportunity as a way to sneak new evidence into the appeal hearing when they clearly already had the chance to challenge or rebut any of the amendments to the CIR and failed to do so. The Association claim that this is their only rebuttal opportunity is clearly without merit. For the foregoing reasons, the Appraisal Report must not be admitted into evidence for the Appeal. 3. The Identity of the Association's Expert Witness is requested and the Park Owner will not present Argument until after Presentation of the Resident Association's Expert Witness has completed. The Resident Association stated in its March 23, 2015 correspondence that it will have another expert witness testify on its behalf; however, it has failed to disclose the name of that individual. In the interest of due process, the Park Owner requests the identity of the expert witness set to testify as well as the subject matter. Because of the Association's refusal to disclose the identity and subject matter of their expert, the Park Owner re-affirms its previously stated position that its 30 minute initial argument will take place after the Resident Association and any expert witness the Association chooses to call. Due Process requires a fair and balanced proceeding. If the Park Owner does not hear the expert witness testimony until after its 30 minute argument, it can only address the expert witness in its rebuttal argument. Considering the rebuttal argument is only 15 minutes in length, this will not allow enough time to rebut both the Associations and the expert's arguments, especially an expert's opinion which the Park Owner will only be hearing for the first time at the Hearing. The Park Owner requests that the proceeding be as fair as possible and that any Association Expert be made to finish his/her presentation on behalf of the Association and before the Owner's 6 Hearing Officer, Craig Labadie, May 14, 2014 Letter to Patties; See Also Park Owner's Closing Brief, Exhibit 5. . .......•. Letter to Molly Stump and Grant Kolling Page 6of6 March 25, 2015 presentation. The Park 0\\-ner disclosed even before the March 23, 2015 deadline that it did not intend to call an expert witness in an effort to be collegial and cooperative to the City Attorney's office and opposing counsel. Conclusion. The Resident Association must not be permitted to benefit from attempting to shirk previously established appeal procedures because they feel entitled to do so. The Trulia listings and the Appraisal Review Report must be denied admission as evidence. There is no legal loophole that allows their admission. The proposed evidence is neither relevant, nor can be shown to have not be obtainable during the hearing procedure by a party exercising reasonable diligence. Moreover, admitting the additional the evidence would be extremely prejudicial to the Park Owner. The pr~judice outweighs any probative value the proposed evidence may offer because the evidence is clearly not relevant and because it has been put forth in a way that intentionally circumvents the agreed upon procedures governing the process. It is highly ironic that James Zahradka in his letter to you of March 20, 2015 accuses the undersigned of unilaterally demanding disclosure deadlines. In fact, the undersigned was attempting to suggest reasonable mutua1 disclosure deadlines. Perhaps the most telling statement in Mr. Zahradka's letter however is the following, "The City should rebuff Ms. Nanda's eleventh-hour effort to alter the rules of the game." I was unaware until receipt of Mr. Zahradka's letter that he regarded this process as a "game" and my client, Joe Jisser has asked me to convey to the City and to Mr. Zahradka that he considers his characterization offensive and insulting. The closure of Buena Vista Mobilehome Park is not now, nor has it ever been a "game" to my client. Thank you. Very truly yours, fk y~ =rCKER NANDA cc: Joe Jisser, via electronic email only James F. Zahradka, via electronic email and first class mail Nadia Aziz, via electronic email and first class mail ···-··---------•-··· ······ ATTACHMENT B 150113 mf 00710537 APPEAL PROCEDURES Application for Closure of Buena Vista Mobilehome Park Pursuant to Palo Alto Municipal Code Chapter 9.76 ADOPTED BY PALO ALTO CITY COUNCIL, JANUARY 12, 2015 1. Introduction a. The appeal procedures are adopted to implement Palo Alto Municipal Code Chapter 9.76. If there is a conflict between these procedures and the Municipal Code, the Municipal Code shall govern. 2. Conduct of the Appeal a. The appeal hearing shall be taped and/or stenographically recorded. All documents and other materials submitted to the Hearing Officer and at the appeal hearing shall be included in the record of proceedings. b. The appeal is subject to the provisions of the Brown Act (California’s open meeting law). c. The applicant bears the burden of proving by a preponderance of the evidence that the criteria for approval of the application, as set forth in Municipal Code section 9.76.040(g), have been met. d. The parties to this proceeding are the Park owner and the residents, tenants and legal owners of the mobilehomes in the Park. e. The evidentiary record is closed. Witness testimony will not be taken and new documents shall not be offered as a basis for decision on appeal, except that Council may allow new evidence if a party can demonstrate that newly discovered and relevant evidence exists that could not have been discovered with the exercise of reasonable diligence during the initial proceeding before the Hearing Officer. No later than 21 days before the appeal hearing, a party seeking to offer new evidence shall submit a short description of the proposed testimony or documentary evidence, its relevance, and the basis for accepting new evidence on appeal. In addition, each party may have one expert or other witness testify for up to 10 minutes regarding the inferences to be drawn and the weight to be given to the evidence in the record. f. The Council shall exercise its independent judgment regarding whether the criteria for approval of the closure application has been met, based on the record of proceedings before the Hearing Officer and the Council. The parties may make legal arguments to the Council, including regarding the inferences to be drawn and the weight to be given 150113 mf 00710537 to evidence in the record. Written pre-hearing statements are not required; any party wishing to submit a written pre-hearing statement not to exceed 10 pages shall do so no later than 21 days before the date that the appeal is scheduled to be heard. The appeal will be heard on or about April 13, 2015. Pre-hearing statements and requests to hear new evidence, if any, shall be transmitted to the City Attorney no later than March 23, 2015. g. The Council intends to conduct the appeal as follows, though the parties are advised that Council retains discretion to adjust the procedure as appropriate and consistent with law:  Owner/applicant – 30 minutes  Owner’s expert or other witness – 10 minutes  Residents – 30 minutes  Residents’ expert or other witness – 10 minutes  Owner/applicant rebuttal – 15 minutes  Residents’ rebuttal – 15 minutes h. The Council will allow time for members of the public to address the Council, as required by the Brown Act, either before or after the parties have made their presentations. Public comment will be subject to reasonable time limits. Public comment is not evidence. Public comment will not be considered as a basis for the Council’s decision in this matter. i. These appeal procedures are intended to provide general guidelines for the conduct of the appeal and may be modified as determined appropriate by the Council. 3. Written Decision a. The Council will issue a written decision, making specific findings based on the evidence and resolving the appeal. The Council’s staff will prepare the findings and decision for the Council’s review and adoption. The proposed decision will be made available to the parties before the Council is scheduled to adopt it, consistent with the Council’s regular agenda procedures. Any party wishing to make brief written comments must do so no later than five calendar days before the decision is agendized for Council adoption. b. The Council’s decision shall be final immediately upon adoption of its written decision, and is not subject to rehearing or further administrative appeal. The procedures and timelines in California Code of Civil Procedure Section 1094.6 shall apply to any judicial proceeding challenging the Council’s determination.