Three buildings of the Battistone Foundation’s holdings were listed for sale on the open market at $17.9 million in a prospectus dated April 7 from Steve Golis of Radius Commercial Real Estate. The Palm Tree Apartments on upper De la Vina Street have housed individuals in their “golden years” for the past half-century and are owned by a foundation established by Sam Battistone Sr. in 1968, but its current boardmembers have decided they would offer grants to seniors to fund their housing instead.
Although the foundation has shopped Palm Tree and its Edgerly properties downtown for the past year, looking for a buyer who would continue its low-income senior operations, the prospectus makes no mention of any covenant to maintain that status. It mentions Battistone’s ownership in the context of the property being “thoughtfully remodeled” and states, “Current rents are well below market due to current ownership running as a nonprofit offering senior housing.” It then says in bold type, “Tremendous value add in prime location.”
Battistone owns two sets of apartments: the Palm Tree on upper De la Vina and the Edgerly on a full city block in downtown Santa Barbara. Both house active seniors over the age of 62, some in their nineties who have lived in their apartment for three decades. Built in 1971, Palm Tree’s 40 units are the younger properties held by the Battistone Foundation. The Edgerly complex in downtown Santa Barbara is anchored by what was once the Edgerly Apartment Hotel built in 1912. The block — bounded by West Sola, De la Vina, West Victoria, and Chapala streets — and the 10 Edgerly parcels are home to about 150 Battistone tenants. Cindy Battistone Hill, CEO of the foundation, said that only the 1325 Chapala Street building has any type of housing restriction, one that can be terminated by an agreement with the City of Santa Barbara at any time.
“The properties have quietly been on the market for months and has been shared with affordable housing operators. And those operators can still make an offer,” Hill said.
When Hill held meetings with her tenants in February to inform them that their homes were being put up for sale, she was asked if the buyer would continue to rent seniors. At that time, the foundation did not know. The foundation’s agents had attempted to find a senior facility buyer for the past year and have now broadened the field.
The concern is that in Santa Barbara’s high-priced rental market, a new owner will increase rents. To address that, Hill told her tenants that the Battistone Foundation would provide grants to current tenants to make up the difference. The Battistone units rent for less than $1,600 a month, while market rate in Santa Barbara is twice that amount.
The foundation would fund the grants by selling the properties at an asking price of $80 million, a plan that would help a greater number of residents than just the existing tenants, Hill estimated. As two separately held properties, the board can sell the Palm Tree separately from the Edgerly property.
Asked if the city had any concerns over the potential loss of a big amount of senior housing, the district’s councilmember, Meagan Harmon, said, “I don’t have any information on this proposed private sale, so I can’t speak to the specifics here, but it is certainly my strong preference that the important, senior-serving use will be preserved or, at least, that the existing tenants receive sufficient support to facilitate easy relocation if such transitions become necessary.” She observed that “senior-serving housing — particularly low-income senior housing — is among the most important types of housing in our city’s housing portfolio, and we have nowhere near enough of it.”
The original Battistone Foundation incorporation papers state the trust would be “perpetual in operation” but that the Board of Managers could “terminate and distribute the corpus” — for charitable, religious, scientific, literary, or educational purposes — after 1985, at which time the trust could also be terminated by a unanimous board vote.
Correction: An earlier version of this story mistakenly stated that Cindy Hill had said the foundation intended to find a low-income senior buyer. Though tenants had asked if the buyer would continue to rent to seniors, her reply had been that she did not know.
