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Page 4 Memo to Chair and Members of the Planning Commission February 19, 2009 Survey of the Residents Presumably in response to the Palm Springs decision, the statute was amended in 2002 by adding what is now subsection (d) to Section 66427.5 providing that the park owner must "obtain a survey of support of residents...for the proposed conversion." In amending the stal.ute, the Legislature made findings that its intent was to prevent sham conversions and Co ensure that all conversions under this Section be "bona fide resident conversions". Unfortunately, the Legislature did not define what it meant by a "bona fide resident conversion" and did not state what the level of support, if any, was required in order for the conversion to represent a bona fide resident conversion. Moreover, as pointed out by the park owners, the legislative history of this amendment provides that the purpose of the amendment was to provide additional information to the local agency and the fact that a majority of residents do not support the conversion is not an appropriate means to determine the legitimacy of the conversion. Accordingly, park owners take the position that the survey is more or less meauingless (so long as it is done) and that cities cannot deny conversion applications on grounds that there is not majority support (as evidenced by the survey) for the conversion. That position does not strike me as entirely reasonable but there is neither statutory direction nor case law that resolves the difficult question of how to decide whether an application is for a bona tide resident conversion. Here, the park owner did obtain a survey of support of the Vineyard Villa residents. As provided by statute, the park owner did confer with a group of residents at the Park (the group that had been the "negotiating committee" for the Rent Stabilization AgreernenC) concerning the form and content of the survey. I also reviewed the draft survey, discussed it with the Park residents, and made a number of suggested changes to the form and content of the survey, all of which the park owner agreed to. The survey was sent to the residents in March 2008 and the residents who responded mailed the surveys directly to the City, rather than to the park owner. (A copy of the survey is attached.) Residents were given three choices: support for the conversion; don't support the conversion; and "decline to respond at this time". We received 119 responses: 41 in support; 39 not in support; and 38 who marked "declined to respond at this time." Certainly there are a number of ways to Cally these results. If one looks at those who voted either yes or no, then a majority voted yes. If one looks at who voted yes, no, or declined to respond, then the "yes" votes represent only 34%. If one looks at the total number of spaces in the park (208), then the "yes" votes represent only 20%. As indicated above, park owners take the position that the purpose of the survey is simply to provide additional information to the local agency and may not be used to deny an application. Litigation Concerning the Results of Resident Survey In at least three cases following the amendment to Section 66427.5, cities have denied conversion applications on grounds that the surveys did not show sufficient resident support. Those decisions were challenged by the park owners, represented by the same law firm that is representing the pack owner here. In those three instances, the trial court sided with the park owners that the amendment to Section 66427.5 did not vest the local agency with the authority to deny the conversion application on grounds that a majority of the residents were not in favor of the conversion. Those park owners are now pursuing damage claims against those cities in the millions of dollars as a result of the delays.