Committee of Concerned Residents
Windsor Mobile Country Club
1066 Maple Drive
Windsor, CA 95492
February 12, 2008
Dan Hauser, Director
Steve Gullage, Director
Roy Smart, Director
Steve Clute, Director
Franklin J. Lacusky, Director
Maurice and Diane Priest, Directors
Resident Owned Parks, Inc.
7420 Greenhaven Drive, Suite 125
Sacramento, CA 95831
Re: ROP Attempted Acquisition of Windsor Mobile Country Club
Dear Chairman and Members of the Board:
The Committee of Concerned Residents of Windsor Mobile Country Club was started last summer when residents learned that ROP was seeking to buy the park and increase our rents by 72%. Most of us in this 336-unit senior’s park have very low fixed incomes. At least 70 of us are “extremely low income”, meaning our incomes are less than 30% of the area median income. ROP has issued a rent increase notice which would raise most rents here from $301 to $518 per month on April 1. Many of us will be forced to move if that happens. We are writing to members of ROP’s Board of Directors to ask your help. The corporate charter of ROP states its purpose is to “preserve affordable housing”. This rent increase will force 335 of us to lose our affordable housing (one unit in the park is occupied by the park manager).
We have already been through one arbitration over the ROP rent increase. The arbitrator ruled in November that there was no evidence to justify such an increase by ROP. See http//housingrights.googlepages.com/wmccarbitration. But ROP is now seeking approval of an even higher rent increase, and a new arbitration commenced January 30. No new evidence has been presented justifying such a huge increase, and we are hopeful that the arbitrator will reject this one also.
For over 30 years, the owner of the park has kept rents low, and has always listened and responded to residents’ concerns. His open and respectful approach to us has been one of the big pluses of living in this park. We were initially hopeful that ROP would continue this tradition. But our experience with Mr. and Mrs. Priest since last summer has been extremely unpleasant. We have found them to be hostile, secretive, overbearing and uncompromising. While Mr. Priest has met with residents on several occasions about the increase, he has been evasive about ROP’s reasons for requesting a 72% increase. There are discrepancies in the figures which ROP is using to justify the proposed increase which would, at a minimum, reduce the increase by 25%. The inflated interest rate – 5.75% – which ROP wants to pay on the municipal bonds issued to finance its acquisition of our park is more than 25% higher than the 4.45% interest rates paid on similar municipal bonds used by another non-profit to finance its purchase of a nearby mobile home park in November. The higher interest rate applied to the $25.5 million which ROP will finance translates to over $70 per month in higher space rents for every resident in the park. Mr. Priest had an appraisal of the Windsor Mobile Country Club done last July which showed a market value of $16 million, but he claims that because ROP is a non-profit, it is entitled to pay a higher amount for the park and pass this additional cost on to residents of the park in the form of higher rents. We ask you, the Board of Directors of ROP, to tell us how this is “preserving affordable housing”.
We have been trying without much success to find out if Mr. and Mrs. Priest stand to receive any personal compensation if the sale of our park to ROP is completed. In addition to the $23 million purchase price which the current owner will receive, we understand that an additional $2.5 million in bonds will be sold to cover ROP’s expenses incurred in the acquisition of the property. We hope the ROP Board will review carefully what this additional $2.5 million is to be used for.
Senator Dan Hauser, a member of ROP’s Board who formerly represented the residents of this park in the legislature, testified under oath in the current arbitration proceedings that Mr. Priest received compensation from ROP each year since the non-profit was started (2001). But the disclosure forms filed by ROP with the Attorney General (also under penalty of perjury) state that there were no financial transactions between ROP and any officer or director of ROP in 2004. The Attorney General’s Registry of Charitable Trusts informed us that as of three weeks ago, ROP had not filed the required disclosure forms for 2005, 2006 or 2007. A copy of the 2004 disclosure form, apparently signed by Mr. Priest, is attached. The ROP tax return for 2006 states that neither Mr. Priest nor Mrs. Priest received any compensation from ROP during that year, and that neither devoted any time on a weekly basis to their positions as officers and directors of the corporation.
Failure to file these forms, accurately completed and in a timely manner, jeopardizes ROP’s tax exempt status and exposes the corporation to liability and penalties. Loss of ROP’s non-profit status would have vey serious consequences for residents in the parks which ROP owns. Bad financial management practices may also put directors (even disinterested directors) at risk of personal liability. The disclosure forms which ROP should have submitted to the Attorney General should also have been submitted to the ROP Board for its review. Apparently this has not been done, which may evidence a lack of proper oversight by the Board.
We are also surprised and concerned by Senator Hauser’s testimony that Mr. Priest has been given broad authority by the Board to bind ROP to real estate transactions such as this. Directors of public benefit corporations are required by the State to use great caution when making investment decisions involving corporate funds. Allowing one office or director to make these important decisions without Board review and approval may violate Board members’ duty of care to the corporation. See Corporations Code Sec. 5240(b)(1).
In closing, we believe Mr. Priest’s actions with respect to the acquisition of Windsor Mobile Country Club violate ROP’s intended purpose which is to preserve affordable housing. It appears to our committee that ROP’s goals in acquiring this park have nothing to do with “preserving affordable housing”. Raising rents to what Mr. and Mrs. Priest claim are “market levels”, and generating income for ROP seem to be the primary, and perhaps the ONLY, goals of ROP’s acquisition of Windsor Mobile Country Club.
We would request that the ROP Board investigate and correct the reporting deficiencies with respect to disclosures required to be made to the Attorney General, and correct any discrepancies in ROP’s federal and state tax returns. More fundamentally, we would request the Board to independently evaluate whether the purchase of Windsor Mobile Country Club is consistent with the stated purpose of the corporation. We think the answer is “no”.
If you have any questions, or if you would like our Committee to provide any additional information, please do not hesitate to contact me.
Yours truly, .
Donna M. Helwig, Chair .
Committee of Concerned Residents
cc: Debora Fudge, Mayor of Windsor
Maurice Priest, Esq.
David Grabill, Esq.
Gerald Lenhard wrote:
2/15/2008 1:21 PM Gerald Lenhard wrote:
I was a past GSMOL VP in ’98 & resigned due to Mr. Priest obvious takeover. Seems obvious to me that he has gross Conflict of Interest as he’s paid to be a GSMOL lobbyist, corp atty & now this ROP business. Almost seems like GSMOL & Priest are in collusion; not to help residents, but to fleece them? I assume you have an atty & am wondering why you are not suing. I’d certainly be willing to donate to such a lawsuit. You might want to publish this report in the GSMOL paper. I don’t think they could legally refuse this & I’d certainly be willing to donate for the cost of this also. I’m sure I’m not the only one who would donate. Please keep me informed: Gerald Lenhard, Escondido, firstname.lastname@example.org