Mobile Home Mogul Muzzled

The City of Goleta stood fast against an attempted end-run around its mobile home rent control ordinances-namely Daniel Guggenheim’s bid to subdivide his Rancho Mobile Home Park and sell its 150 parcels for about $250,000 each. It is a strategy that has been used successfully by park owners throughout California, led by activist Sam Zell. Several park residents said they were pleasantly surprised to see their City Council circle the wagons around a Goleta city staff report that could spell doom for the proposed condo conversion.

Those attending the June 4 hearing were not sure if the more business-oriented council majority elected last year would defend the parks as staunchly as did Goleta’s previous council, which successfully fought Guggenheim’s attempt to vanquish the city’s rent control ordinance in the courts. Two of those new councilmembers, Eric Onnen and Michael Bennett, received considerable campaign contributions from Guggenheim before the election.

Despite threats of another lawsuit, though, the council seconded planning staff’s insistence that Guggenheim’s subdivision tract map requires an Environmental Impact Report (EIR). Clarke Fairbrother( pictured above, center, with two other company employees )-president of Newport Pacific Capital Company, Inc., which manages the Rancho Mobile Homes property on behalf of Guggenheim-told the City Council that an EIR is uncalled for because Guggenheim is proposing no physical changes to the park and that the city’s approval is therefore a simple ministerial process. An attorney for Guggenheim, Thomas Casparian, threatened to sue for “millions of dollars” if the council directed staff to proceed with an EIR. None of the two dozen other municipalities where his firm’s clients have proposed such subdivisions has required an EIR, he said, and an EIR is no place for the city to vet “social and economic issues” such as the loss of affordable housing. He called the city staff’s position “extremely novel.”

State law calls for environmental review because the project might displace affordable housing, said Goleta Planning Director Steve Chase. That would necessitate the construction of replacement housing elsewhere, said Chase, and that is an environmental effect. In addition, he said, approval of Guggenheim’s tract map would likely set a precedent so that in addition to the 150 households at the Rancho Mobile Home Park, those at Goleta’s three other rent-controlled parks would be affected.

Fairbrother claimed that there would “be no displacement.” Park residents would be offered “binding lease contracts” to stay at their current rent-controlled rates plus annual cost-of-living increases. However, for those who are willing, he said, his client is prepared to offer his tenants a “once-in-a-lifetime opportunity” to buy the parcels under their mobile homes. Fairbrother enumerated the government subsidies that can be used to assist low-income buyers, including loans that require no payments until the land is sold.

In that case, asked Onnen, “Why avoid the EIR?” Responding to implications that the city was using the EIR simply to stall and obstruct, Onnen said, “I can assure you the [EIR] was never about derailing the process. I can assure that that was never part of the discussion in closed session.”

Bennett asked how Guggenheim could be trusted to allow people to stay in their homes at current rents, since Guggenheim will make the profits he seeks only if people purchase. “To say he’ll look after everybody seems a little disingenuous,” said Bennett. “We don’t know how many can be financed through government subsidies for low-income,” Fairbrother admitted, “but we can’t go forward without the tract map.”

Noting that there is “no hard evidence that tenants would not be displaced,” Goleta planner Patricia Miller said that the EIR would create a process for “mulling, examining, weighing, and coming up with replacement alternatives if needed.”

The City Council, with Roger Aceves absent, voted 4-1 to proceed with the EIR.