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Page 5 Memo to Chair and Members of the Planning Commission February 19, 2009 Those court decisions, of course, are trial court decisions and are not binding on Pleasanton. "There is an argument, in light of the amendment to the statute, that cities can deny these applications on grounds that they are not "bona fide resident conversions". But this park owner will contest any such decision and I am satisfied that the denial on that ground will lead to a court challenge. And, if the City's denial is set aside, the park owner will, if past practice holds, seek substantial damages against the City for delays. Indeed, when the park owner was advised that this item was being continued from the Commission's January 28 meeting, I received a stern email from the attorneys representing the park owner that "We will be filing a lawsuit against the City for approximately $25 million if the City continues to delay the hearing or otherwise interfere~s~ with the conversion." fhe Pwrohase Price of the hots. There have been a number of meetings with park residents concerning this conversion. I have attended most, if not all, of such meetings. Based on comments that I have heard expressed at those meetings, as well as comments that residents have made to me personally, one of the reasons for opposing the conversion is the uncertainty as to the purchase price of the lots, once sales of the lots begin. 'fo that end, after the City received the conversion application, we requested on numerous occasions that the park owner provide that information to the residents and to the City. To date the owner has refused on two grounds. The first is that because the lots will not be sold for ten years, it would be completely uninformative and useless to provide that information today. Although the information may well be stale in ten years, it is unlikely that the price will go down over that time period. Hence, I thought it would be relevant and useful information for the residents to have at this time. "the second reason is that the owners, again relying on the Palm Springs case, argue they are not required to provide such information. In that case, one of the conditions that the City had imposed was that the owner disclose the tentative purchase price. The court of appeal disagreed, finding that Section 66427.5 did not require such disclosure. The park owner also contends that the conversion will provide an opportunity for older residents to purchase real property and thereby enjoy all the benefits thereof, such as increases in real property values, being able to bequeath it, obtaining real estate loans, taking income tax deductions, etc. "fhe fallacy of that contention is that many of the residents have moved into the park because they no longer wanted to own their own homes. If real property ownership were important, there are many opportunities, such as condominiums, that were and are available to such residents. Although some of the existing residents will purchase their lots, more likely most will not, either because they do not have the financial wherewithal to do so, do not have enough income to qualify for a loan, or simply do not wish to be a real property owner. Loss of Affordable Housing. Another issue that has been raised is that the conversion will result in the loss of affordable housing for senior residents. As stated above, the monthly rents currently range from about $500 to $900. Generally speaking, those rents, standing alone, would qualify as "affordable rents". For example, a studio unit that rents for less than $1205 and a one bedroom apartment that rents for less than $1370 are considered affordable for households in the 80% of the median income; a studio unit that rents for less than $750 and a one bedroom apartment that rents for less than $850 are considered affordable Cor households in the 50% of the median income.