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show there was true majority support for the conversion. Because the Council was not convinced this was the state of the law and denied the application. Coincidentally, a few days after the Council's decision, there was an Appellate Court decision that all that was required with respect to the survey of support was that it be sent out, and whether anybody supported it or the majority supported it was not important. As long as the survey was given, it is sufficient and that state law trumps local control over the issue. Given this, the park owner, feeling his rights were not properly observed, filed litigation against the City. Following this, the City attempted and successfully negotiated with the park owner, met with park residents, discussed important issues and concessions. These discussions were successful, and principles of agreement were presented to the residents who were in favor of them, which now are embodied in a settlement agreement. Mr. Roush said in conclusion, the conversion application is before the Council for consideration. If, after the public hearing, the Council is in favor of granting the application, this would be the first action. If taken, staff is recommending the Council also approve the settlement agreement, the terms of which the City Manager will discuss. Mr. Fialho acknowledged that the outcome is a reflection of the power of communication between a property owner, the City and the neighborhood. He noted staff and the Committee met with the neighborhood to explore opportunities for a solution in lieu of litigation. The theme heard at the neighborhood meeting was to provide clarity and stability around 12 core ideas raised at the meeting. The proposed agreement reflects 10 items important to the City, to the neighborhood, and to Mr. Guggenheim. Some are simple clarifications; others are a clear attempt by the property owner to strengthen the concept of stability and clarity for residents. 1. There is a confirmation by both parties that the conversion date for the park, meaning the date the lots could first be sold, would be no earlier than January 1, 2020. 2. The existing rent stabilization agreement in place would be extended through December 31, 2017. Currently it is set to expire in 2012. Mr. Guggenheim has agreed that if the CPI as measured year to year remains below 7 the rent stabilization agreement would be extended through December 31, 2022. He said the current rent stabilization agreement has a floor of 2% and a ceiling of 5 The ability of allowing the CPI to grow 2% above the ceiling demonstrates good faith negotiations on the part of the property owner. On the other hand, if in any of those years, the CPI is above 7% the rent stabilization agreement would not automatically be extended, and presumably, a new rent stabilization agreement would need to be negotiated prior to 2017. 3. Upon conversion for all residents who currently reside at the park and are considered lower income households as defined by state law, the current provisions of the Government Code that determine how rents are calculated, which is by CPI, will apply to all future rent increases for those residents. 4. Upon conversion for all residents who currently reside at the park and are then not lower income households, the provisions of the rent stabilization agreement will apply as to how rents for residents are calculated. So, if the agreement goes beyond 2017, that protection is in place for them. 5. For all residents who currently reside in the park and for those who choose to purchase their lots when offered for sale, the park owner has agreed to provide a City Council Minutes Page 4 of 8 March 2, 2010