In a pair of decisions issued on the same day, the Second District Court of Appeal, Division Four, has addressed the scope of permitted regulation when a mobile home park owner elects to convert a park into a residential subdivision and sell individual spaces. In cases from the City of Los Angeles and the Los Angeles suburb of Carson, the court ruled that local government may apply state law and local considerations to restrict mobile home park conversions.

The first case, Pacific Palisades Bowl Mobile Estates, LLC v City of Los Angeles, addressed the question of whether or not the procedures for conversion found in the Subdivision Map Act pre-empt all other regulatory requirements, such as those in the Coastal Act and the Mello Act. The decision also addressed whether or not the city complied with provisions of the Permit Streamlining Act. 

The second decision, Colony Cove Properties, LLC v. City of Carson, dealt with the extent to which the City of Carson could add to the specific statutory requirements for park conversions.

The facts of Pacific Palisades reflect a common pattern. Starting in April 2007 – and before filing an application – the park owner's representative met with city staff to discuss the approval process for converting the 170-space Palisades Bowl on Pacific Coast Highway into a residential subdivision. Staff provided a packet of information, including information on Coastal Act requirements and permits. At a follow-up meeting, the city staff advised the representative that a general plan amendment and rezoning were required.

Over several months, the city was in communication with the park owner's representative and noted that there was continuing internal discussion as to the specific approvals necessary. On November 13, 2007, the property owner submitted an application for a tentative map to convert the mobile home park. Staff said the application was incomplete because it did not include a general plan amendment and zoning change. The property owner asserted that the city was required to process the application pursuant to the Subdivision Map Act (specifically, Government Code § 66427.5) and the Permit Streamlining Act. City staff sent a follow-up email message on November 20 referencing items necessary for a complete application. Because the Palisades Bowl is located in the coastal zone, the city pointed to the Coastal Act and the Mello Act. The former requires an applicant to get a coastal development permit prior to nearly any development activity in the coastal zone. The latter preserves low- and moderate-income housing in the coastal zone.

Neither the city nor the applicant took further action until January 2008, when the applicant filed a writ and complaint in Los Angeles County Superior Court. The property owner argued that the city wrongly refused to process the application and that only requirements set forth in the Map Act (§ 66427.5) were applicable. The property owner complained about the city's failure to maintain a list of required information for a park conversion and for failing to process the application. The trial court found that the city did not have the required list, but ruled there was no legal sanction for the failure. The court also said that the November 20 email message substantially complied with the Permit Streamlining Act requirement to provide an applicant with a written completeness determination.

The property owner then filed an amended lawsuit, arguing that the additional information required by the city was in conflict with the Subdivision Map Act. By this point, the city no longer maintained that a general plan amendment and rezoning were required. Still, the county said the applicant had to comply with the Coastal and Mello acts, and must file a tentative subdivision map. Los Angeles County Superior Court Judge James Chalfant concurred in property owner's argument, finding that the Mello Act housing requirements did not apply. The court ordered the application deemed complete, and directed the city to process the application based upon § 66427.5. Both sides appealed.

Addressing first the Permit Streamlining Act issue, the appellate court agreed with the trial court that the city's failure to maintain the checklist of requirements for a mobile home park conversion did not result in the application being deemed complete.

"In any event," Justice Thomas Willhite Jr. wrote for the court, "the city did maintain and provided to Palisades Bowl a list that it contended applied to Palisades Bowl's proposed conversion, albeit one that included numerous items that could not be required under § 66427.5. As the trial court properly found, the only effect of [Government Code] §§ 65940 and 65942 is to preclude the City from requiring any items not on the list it provided to Palisades Bowl."

With respect to the City refusing to accept the application, the court suggested that such an approach violated the Permit Streamlining Act but was "irrelevant" because the city staff had sent an email message outlining the necessary information. While the email message did not meet the technical requirements for a completeness determination, it constituted substantial compliance with the state law, the court ruled.

The court then turned to the issue of whether or not § 66427.5 pre-empted the Coastal Act and the Mello Act. While the court recognized earlier decisions that local enactments and development standards may be barred (as well as its own companion decision in Colony Cove, discussed below), the court ruled pre-emption did not apply to the Coastal and Mello acts.

"To be sure, the policy behind § 66427.5 is an important one – to encourage conversions of mobile home parks to resident ownership while protecting nonpurchasing residents," Willhite wrote. "But the policy considerations behind the Coastal Act – as well as the Mello Act, inasmuch as its genesis was the Coastal Act – are far more extensive." He cited the Coastal Act's stated "paramount concern" for protecting coastal resources.

The Colony Cove case addressed how local governments may apply park conversion requirements, or more specifically, what local governments may not do.

In February 2008, the City of Carson adopted an ordinance that applied certain presumptions as to whether or not a conversion was a bona fide conversion, based upon the results of the tenant survey mandated by Government Code § 66427.5. If less than 35 percent of tenants support a conversion, the action is presumed to be not bonafide and the city may reject the proposal. If 35 percent to 50 percent of tenants support conversion, the park owner has the burden of proving the proposal is bona fide. With more than 50 percent tenant support, the conversion is presumed to be legitimate.

Colony Cove Properties, which owns Colony Cove Mobilehome Park and which had submitted a park conversion application, filed a lawsuit seeking to set aside the city's ordinance. Soon thereafter, Colony Cove filed an amended lawsuit challenging an earlier interim ordinance that had been periodically extended. The interim ordinance had imposed a moratorium on mobile home park conversions.

The Los Angeles County Superior Court consolidated the two lawsuits for trial and agreed with the property owner that the city's duties with respect to the tenant survey were ministerial in character, and that the city's attempts to impose additional requirements were barred by § 66427.5. The trial court also found that the moratorium conflicted with the same code section.

On appeal, the Second District agreed with the trial court as to the additional tenant survey requirements. However, the appellate court disagreed with the lower court's decision that the city's duties were ministerial in character and that the ordinance conflicted with the statute. After retracing the legislative history, Justice Nora Manella wrote that although a city or county could not modify the requirements for the survey or create tenant benefits different from those found in the statue, the city could take into consideration the results of the survey in its decision to approve, conditionally approve, or deny a conversion request.

With respect to the moratorium ordinance, the appellate court noted the ordinance had run its statutory course of two years by the time the lawsuits were heard. Accordingly, the court concluded those claims were moot.

Both appellate panels invited the Legislature to clean up the statutory ambiguities at issue in the cases. 

First Case:

Pacific Palisades Bowl Mobile Estates, LLC v City of Los Angeles, No. B216515, 2010 DJDAR 13805. Filed August 31, 2010.

The Lawyers:
For Pacific Palisades Bowl: Craig M. Collins, Blum Collins, (213) 572-0400.

For the city: Amy Brothers, deputy city attorney, (213) 978-8069.

Second Case:
Colony Cove Properties, LLC v. City of Carson, No. B219352, 2010 DJDAR 13779. Filed August 31, 2010.

The Lawyers:
For Colony Cove: Thomas W. Casparian, Gilchrist & Rutter, (310) 393-4000.

For the city: Jeff M. Malawy, Aleshire & Wynder, (949) 223-1170.