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Home My WebLink About1992-06-23 - AGENDA REPORTS - PROPOSED MH PARK CLOSURE ORD (2)CONSENT CALENDAR DATE: June 23, 1992 AGENDA REPORT Item to be presented SUBJECT: PROPOSED MOBILE80ME PARE CLOSURE ORDINANCE DEPARTMENT: Community Development BACKGROUND The City Council, in response to public participation meetings last month, requested that the City Attorney provide a public opinion on the recent United States Supreme Court Yee decision regarding mobilehome park closures and vacancy control. The Council further requested that staff review the City Attorney's findings in conjunction with the City rent stabilization ordinance. The City Attorney's opinion is attached. The conclusion of the letter is that the Court has not taken final action on this issue in general, and in particular that the City not adopt nor amend the current ordinance regarding vacancy decontrol or a park closure ordinance with stringent relocation requirements at this time. Receive and file. ATTACHMENTS Letter from City Attorney dated June 11, 1992 Letter from Anthony J. DeLill dated May 28, 1992 Continued To: A ��nda Item.: Mayor Klajic and Coucilmembers City Council City of Santa Clarita 23920 Valencia Boulevard Santa Clarita, California 91355 Re: Analysis of Proposed Park Closure Ordinance Dear Mayor Klajic and Councilmembers: VENTURA COUNTY OFFICE 2310 PONDEROSA DRIVE SUITE I CAMARILLO, CALIFORNIA 93010 (BC.) 997-3069 ORANGE COUNTY OFFICE 3200 BRISTOL STREET SUITE 690 COSTA MESA, CALIFORNIA 92626 O191 566-6669 BURKE, WILLIAMS. SORENSEN 6 GAAR LIGHTON PLAZA 7300 COLLEGE BOULEVARD SUITE 220 OVERLAND PARK, KANSAS 66210 (913) 339-6200 OT COUNSLL DWIGHT A, NEWELL WRITER'S DIRECT DIAL (213) 236-2837 OUR FILE NO. 02012-035 The purpose of.this letter is to provide you with a revisited analysis of a proposed.park closure ordinance ("Ordinance") in light of the recent decision of.Yee v. City of Escondido (1992) 118 L.Ed.2d 153. The Ordinance was submitted to, the City Council by Don Wilder in late 1991, prior to the Yee decision. The Yee decision does not change our analysis of the Ordinance which was provided to you by letter dated.February 28, 1992 under attorney/client privilege. The primary issue of concern regarding the Ordinance is whether the type of relocation benefits which the Ordinance imposes constitutes a taking. It is our opinion that the type of relocation benefits set forth in the Ordinance would be subject to legal challenge and may not withstand judicial scrutiny. The City's ability -to regulate mobilehome park closures and conversions is found in Government Code sections 65863.7 and 65863.8. Subsection (e) of section 65863.7 provides: 19594.1 LAW OFFICES BURKE, WILLIAMS 8C SORENSEN ' 611 WEST SIXTH STREET, SUITE 2500 ' MARTN J BURKE' ROBERT V. WADDEN LOS ANGELES, CALIFORNIA 9000 JAMES T. BRADSHAW. JR,' MARYANN LINK GOODKIND MARK C. ALLEN, JR* TIM07MY B. McOSKER (2131 236-0600 MARTIN L. BURKE' RITA J. MUNSON CARL K. NEWTON' STEVEN J. OAWSON J. ROBERT FLANDRICK' RRY P. KAVFMA.. TELECOPIER: 12131 236-2700 NORMAN E. GAARf STEPHEN R. ONSTOT EDWARD M. FOX' JAIME AREVALO DENNIS P. BURKE' F. DANIELS CRAWFORO. lY HARRY C. WILLIAMS LEI -AND C. DOLLEY' JOHN E. CAVANAUGH (1912-1967) NEIL F. YEAGER' MARK D. HENSLEY ROYAL M. SORENSEN BRIAN A PIERIO PETER D. TREMBLAY 119M -19e31 CHARLES M. CPLOERON' GILBERT A TRWIUJO PETER M. THORSOW GREGORY P. PRIAMOS JERRY,M. PATTERSON DAVID M. MI,CARTHY HAROLD A BRIDGES' JOSEPH P. BUCHMAN CHERYL J. KANE' GREGORY T. DION RAYMOND J. FUENTES' ANTHONY P. CONGO" BARRY S. GLASER AUDREY NO June 11, 1992 VIRGINIA R. PESOLA KAREN J. SCHULOT S. PAUL BRUGUERA JANET S. GARMS* B. DEREK STRAATSMA PAUL C ANDERSON DON G. KIRCHER BRENDA L DIEOERICHS MICHELE VADON-RIVERA TIMOTHY V. P. GALLAGHER - SCOTT F. FIELD JOHN J. WELSH MARY REGIUS GAYLE' MARY JO SHELTON-DUTCHER RUFUS C. YOUNG, OR. JEFFREY KIGH7UNGER STEVEN KARLTON NOP OVIN E. MINASBIAN JUDITH A ENRIGHT JUDITH K. ANDERSON XRYN P. PETERS- TIMOTHY O. CREMIN THOMAS G WOOD GREGORY G. DIAZ LISA E. KRANITZ KENNETH D. ROZEU_ KIM E. McNALLY LAURIE E. SHERWOOD M. LOIS BOBAK 'PROFESSIONAL CORPORRN.. to PROFESSIONAL ASSOCIATOM .OMITTED IM KANSAS 6 E..U. , .ADMITTED IN KANSAS (ADMITTED IN CAUFORNIA KANSAS 6 M550UR1 Mayor Klajic and Coucilmembers City Council City of Santa Clarita 23920 Valencia Boulevard Santa Clarita, California 91355 Re: Analysis of Proposed Park Closure Ordinance Dear Mayor Klajic and Councilmembers: VENTURA COUNTY OFFICE 2310 PONDEROSA DRIVE SUITE I CAMARILLO, CALIFORNIA 93010 (BC.) 997-3069 ORANGE COUNTY OFFICE 3200 BRISTOL STREET SUITE 690 COSTA MESA, CALIFORNIA 92626 O191 566-6669 BURKE, WILLIAMS. SORENSEN 6 GAAR LIGHTON PLAZA 7300 COLLEGE BOULEVARD SUITE 220 OVERLAND PARK, KANSAS 66210 (913) 339-6200 OT COUNSLL DWIGHT A, NEWELL WRITER'S DIRECT DIAL (213) 236-2837 OUR FILE NO. 02012-035 The purpose of.this letter is to provide you with a revisited analysis of a proposed.park closure ordinance ("Ordinance") in light of the recent decision of.Yee v. City of Escondido (1992) 118 L.Ed.2d 153. The Ordinance was submitted to, the City Council by Don Wilder in late 1991, prior to the Yee decision. The Yee decision does not change our analysis of the Ordinance which was provided to you by letter dated.February 28, 1992 under attorney/client privilege. The primary issue of concern regarding the Ordinance is whether the type of relocation benefits which the Ordinance imposes constitutes a taking. It is our opinion that the type of relocation benefits set forth in the Ordinance would be subject to legal challenge and may not withstand judicial scrutiny. The City's ability -to regulate mobilehome park closures and conversions is found in Government Code sections 65863.7 and 65863.8. Subsection (e) of section 65863.7 provides: 19594.1 Mayor Klajic and Councilmembers June 11, 1992 Page 2 "The legislative body, or, its delegated advisory agency, shall review the report, prior to any change of use, and may require, as a condition of -the change, the person or entity to take steps to mitigate any adverse impact of the conversion, closure, or cessation of use on the ability of displaced mobilehome park residents to find adequate housing in a mobilehome park. The stens Is added.) The phrase "reasonable costs of relocation" is not defined and one of the issues therefore becomes whether the requirements imposed by the Ordinance proposed by Mr. Wilder are in fact reasonable relocation costs. Among other requirements, the proposed Ordinance requires the following benefits: • Requires the park owner to pay for packing, moving and storage of all tenants household articles and personal property (§ 100.112(A)(1)); • Requires the park owner to -pay reasonable costs of lodging, meals, kennel fees and other expenses if the tenant is unable to occupy the coach because of activities related to the move (§ 100.112(A)(5)); • Requires that if the basic monthly park rental at the new location exceeds that of the old park, the park owner will pay the excess for seven years (§ 100.112(A)(6)); • Requires that if the coach is destroyed during relocation, it must be replaced by a comparable current year coach (§ 100.12(A)(8).); • Requires an adjustment allowance of between $7,000 and $10,000 (§ 100.112(A)(9)); • Requires that where an owner is required to purchase the mobilehome because relocation is not possible, the cost will be 125% of the on-site value (§ 100.113(B)(1)). It is fairly well accepted that the on-site value of a mobilehome generally exceeds the market value of the.mobilehome; and 19594.1 Mayor Klajic and Councilmembers June 11, 1992 Page 3 Requires an incentive relocation bonus of $3,500 to be paid when a tenant consummates arrangements to relocate within 120 days (§ 100.114). It is clearthat not all of the requirements directly relate to relocation and it is questionable whether those requirements that do relate to relocation would be held to be reasonable. The only appellate decision dealing with a park closure ordinance is.the unpublished decision of Rooke v. Scotts Valley (Sixth Appellate District, 1990). Among other things, the ordinance at issue in Rooke required a park owner to purchase the mobilehome for its on-site value. Following the reasoning employed by the federal court in Hall v. City of Santa Barbara (9th Cir. 1986) 833 F.2d 12701 the Rooke court found this provision to constitute a physical taking. The reasoning of Hall was recently rejected by the United States Supreme Court in Yee v. City of Escondido, supra. In Yee, the Court rejected the argument that a vacancy decontrol ordinance constituted an actual physical taking of the park owner's property, but indicated that there might be a regulatory taking. A physical.taking requires the landowner to submit to the physical occupation of his land. (118 L.Ed.2d at 165.) The Court noted that "-[a]t least on the face of the regulatory scheme, neither the City nor the State compels petitioners, once they have rented their property to tenants, to continue doing SO." (Id.) While the park owners argued that the park closure laws created a "gauntlet" which prohibited them from changing their land use, the Court did not address this issue as the park owners had admittedly not .tried to close the park (Jd.) However, attorneys representing the City's interests reported that the Justices' questioning showed that there was an interest in park closure ordinances. This interest is reflected in the opinion in which the Court specifically states: "A different case would be presented were the statute, on its face or as applied, to compel a landowner over objection to rent his property or to refrain -in perpetuity from terminating a tenancy." (118 L.Ed.2d at 166.) The United States Supreme Court has thereforeindicated that a park closure law, either by itself or in conjunction with other laws, may constitute a taking. 19594.1 Mayor Klajic and Councilmembers June 11, 1992 Page 4 According to discussion of the League of California Cities Mobilehome Committee it is likely that park closure ordinances will be thenext"wave" of litigation and in fact in recent months there have already been several lawsuits filed involving park closure ordinances. One of the issues which has been raised in such suits is that which was touched upon by the Supreme Court, i.e., that a park closure ordinance with stringent relocation requirements prevents an owner from going out of business and therefore constitutes a physical taking. In light of the.decision in Yee v. City of Escondido we anticipate that the lawsuits will also allege a regulatory taking. Another argument which has also been raised in the lawsuits is that the relocation ordinance is preempted by Government Code section 65863.7. It is our recommendation that the City Council refrain from adopting a park closure ordinance until it is possible to determine the outcome of the current litigation. Alternatively, if the City does desire to adopt a park closure ordinance in the near future, we recommend that the relocation requirements be limited in nature and not go as far as the proposed Ordinance in order to reduce the City's exposure to costly litigation. Please feel free to contact me should you have any questions regarding this matter. LEK:mjs cc: George Caravalho Carl K. Newton Timothy B. McOsker 19594.1 Very truly yours, Lisa E. Kranitz for BURKE, WILLIAMS & SORENSEN 25000-101 N. Hawkbryn Santa Clarita, Ca 91321 May 28,.1992 City of Santa Clarita City Council 23920 Valencia Blvd. Suite 300 CITY OF SANTA CLARITA NAY 26 2 40 Pli °92 Santa Clarita, Ca 91321 Re: AMENDMENT TO ORDINANCE 90-38, chapter 8.57 OF THE SANTA CLARITA MUNICIPAL CODE - RENT STABILIZATION ORDINANCE Because of the recent decision by the United States Supreme Court in the Yee vs the City of,Escondido upholding "Vacancy Control", the Rent Stabilization Ordinance of Santa Clarita can now be amended to provide this much needed protection from unreasonable rent increases upon the sale of an existing mobilehome. PROPOSED AMENDMENT: Upon the sale or transfer of an existing mobilehome, the new resident shall be subject to an adjustment of the current gross rent for that space equal to the lesser of a six percent (6%) increase or an increase equal to the percentage of the CPI at the time of the sale or transfer. This addition to the ordinance rent increases now being made sale of older mobilehomes. Sincerely, Antho y J. De Lill Mulberry Mobilehome Park is necessary to stop excessive and seriously hampering the