Residents of Palm Beach Park Acquire the Final Piece of the Puzzle with Counsel from The Gibbs Law Firm, APC.
The residentsâ€™ acquisition protects a unique property located in the seaside community of San Clemente from almost certain closure.
San Clemente, CA, December 18, 2007: With less than 11 years remaining on their lease, the residents of Palm Beach Park in San Clemente, CA knew that the days in their ocean-side paradise were numbered. Palm Beach Park, a 126 space manufactured housing community, located on Coast Highway, directly across the street from the beach, is home to residents who enjoy both the manufactured housing lifestyle, as well as their proximity to the Pacific Ocean. Palm Beach is one of a very small handful of the thousands of manufactured housing communities in California located within a stones-throw of the beach. Many of these communities, such as the former Treasure Island park in Laguna Beach which is now the Montage Resort and Residences, have been closed over the past 15 years in favor of more profitable uses. Although the residents of the Palm Beach Park bought a leasehold interest in the park from the former owners of the park many years ago, they were unable at the time to purchase the ground below the park from its then owner. Their fortunes changed when the Forster family, the former owners of much of the property upon which the City of San Clemente was built (and namesakes of Forster Ranch), listed the land beneath the mobile home park for sale. The residents turned to The Gibbs Law Firm, APC, also of San Clemente, for guidance and representation in the negotiations to acquire the park. On December 18, 2007, the residents closed escrow on the $24.7 million dollar purchase of the final piece of the puzzle which guarantees the future for the residents of the Palm Beach Park. The Gibbs Law Firm, APC in concert with the residents were able to negotiate the acquisition, raise capital, obtain lending commitments and overcome a number of impediments to close escrow in less than 90 days â€“ resident park acquisitions generally take anywhere from six to eighteen months.
The land upon which the Palm Beach Park was built has been owned by the Forster family since the early 1920s, and was originally used for farming. In 1958, the Forster family leased the property and allowed the Palm Beach Park to be built and operated â€“ first as a transient trailer camp, later as a mobile home park. The residents of the Palm Beach Park formed a cooperative and purchased the park lease in 1992. The park consists of 11.68 ocean view acres on the East side of Pacific Coast Highway in San Clemente, with an additional 1.80 acres of beach front property just south of the Shorecliffs Beach Club.
Throughout their years of ownership of the park, the residents have attempted to negotiate and acquire the land from the Forster family with little success. Earlier this year, the Forster family prepared an extensive marketing analysis of the property for re-use upon the expiration of the lease in 2018 as a hotel/retail mix or as an ocean-view, luxury residential development project. They then put the ground interest up for sale, on the basis that in 11 years when the lease expired, the property could be redeveloped for a much more profitable use. The Forster family immediately received an offer from an investor in Beverly Hills. Fortunately, the residents of the Palm Beach Park had the foresight in 1992 to purchase a Right of First Refusal when they acquired the park lease. Upon learning that the park was for sale, the Palm Beach Park Association immediately contacted Gerald R. Gibbs of The Gibbs Law Firm, APC to represent their interests, and help structure the acquisition.
Mr. Gibbs, who has represented mobile home park owners, nonprofit housing groups and residents in the acquisition of thousands of mobile home park spaces, immediately began working with Matt Forster, Scott Dragos and Mike Flynn, all of Marcus & Millichap who had listed the property for sale to begin the process of purchasing the fee interest from the Forster Family. The residents, working with Mr. Gibbs were able to raise in excess of $9 million for a cash down payment, and procured an extremely favorable loan from Thrivent Financial which will allow the residents to comfortably continue to own and live in the park for the foreseeable future. Provisions were made by the Palm Beach Park Association to protect those lower-income residents who could not afford to either pay their share of the acquisition cost in cash nor able to bear the increased cost associated with paying the new loan from Thrivent Financial. Throughout the acquisition, the Association worked very hard so that the purchase of the last piece of the puzzle did not economically evict anyone from the park.
Mr. Gibbs commented, â€œThe residentsâ€™ acquisition of the land from the Forster Family completes a long, at times arduous journey for the residents of Palm Beach Park. Had this gone any other way, there is little doubt that come 2018, Palm Beach Park would have been closed and developed into a more profitable use, such as a hotel and retail or high-end, ocean view custom home lots. The residents should all congratulate each other for having the foresight to negotiate the First Right of Refusal in 1992, and for their ability to react quickly to the offer made by another party or this deal would never have happened. The residents have really come together and pulled off a miracle. We are always happy to be a part of the completion of any resident purchase of a mobile home park â€“ whether we are working for the park owner, or the residents, there is great satisfaction in protecting peopleâ€™s homes from an uncertain future.â€
Mr. Gibbs wishes to thank and acknowledge directly those without whom this transaction would not have been possible, including the tireless efforts of the Residents, and the Board of Directors of Palm Beach Park Association. Further, special thanks go to Matthew Forster, Scott Dragos and Mike Flynn of Marcus & Millichap, the listing agents, Jeff Toland of Industry Mortgage, the staff of Thrivent, their counsel Lou Antosh of Allen Matkins et al. LLP and Rosie Christensen of Chicago Title Company.
About The Gibbs Law Firm, APC
The Gibbs Law Firm, APC has represented clients in all aspects of Real Estate and Business Transactions for more than 33 years from its office in San Clemente. Gerald R. Gibbs, and his son David Gibbs have a combined 48 years experience representing mobile home park owners and residents in a variety of legal matters, specializing in the sale of parks to its residents. Mr. Gibbs is generally acknowledged as one of the pioneers in the field of mobile home park conversions and subdivision, having represented Cities and other local jurisdictions, park owners, nonprofit entities, resident groups, and having testified in court and before legislative and administrative bodies on the subject of mobile home parks and conversion. Mr. Gibbs has worked with other industry leaders on shaping the legislation governing park conversions. For more information about this transaction or about the firm, please call David L. Gibbs at (949) 492-3350.