The $52.5 million bid from residents of Laguna Terrace Mobilehome Park to buy the 46-acre ocean-view property was rejected by the park’s owner, Amy Esslinger, it was announced Tuesday.
Residents apparently were outbid in a process the residents’ association president described this week as inequitable. Revised bids from other potential buyers are expected next week, according to lawyers representing the owner.
“This one-of-a-kind location and quality of asset has generated a considerable amount of interest and several offers above your offering price and/or including favorable terms,” read Sean Schlueter, secretary for the residents’ association, from an email sent by Vince Reynolds, agent for San Diego’s CBRE real estate firm, the company hired by Esslinger to market the property.
The response came in answer to a query about the status of the residents’ bid from Sue Lofton, the association’s attorney. Their bid and a good-faith check of $500,000 was hand-delivered to Reynolds by the association’s president, Gary Skeen, and Schlueter last month.
The brokerage company did not provide promised confidential documents to residents when it required the residents’ association supply $500,000 in earnest money to support its bid, Lofton said.
The documents, including rent rolls, might have influenced the association to raise its bid by revealing the park’s income and cost of operations, Lofton and Skeen said.
“Once you determine profit and loss, you can establish the price of the park,” said Skeen. “They never gave us that opportunity. Skeen added that the association was the only bidder required to present a good-faith check.
Norm Sangalang, another broker at CBRE working with Reynolds, said he was working under an agreement with Santa Ana’s Hart, King and Coldren, Esslinger’s attorney firm, and would not disclose any information on the private property sale.
Rachelle Menaker, an attorney with Hart, King and Coldren, said a “narrowed field” of potential buyers are now being asked for their “best and final offer” before Esslinger selects the winning bid. Final bidding closes on Dec. 20, said Menaker.
Because it’s a private sale, no information on the number or identify of the bidders would be disclosed, Menaker said
Star Management took over management of Laguna Terrace Park in October, ousting four-year park manager James Lawson and his mother, park resident Sheila Lawson, who helped manage the park for 20 years. Robert Coldren, principal of Hart, King and Coldren, also represents Star Management, which manages numerous mobilehome properties in Orange County, according to the management company’s owner, Mike Cirello.
Coldren’s cross-involvement representing both the park property manager and evaluating buyout bids suggests a potential conflict of interest.
“In theory, it’s a conflict of interest from an ethical point of view,” said Peter Reich, a 24-year law professor specializing in environmental and natural resources law at Whittier Law School in Costa Mesa. “I don’t know, technically, if there’s a legal conflict of interest, but, again, this happens all the time.”
The park’s pending sale comes after a recent state Supreme Court decision, which some suggest could influence bidding on the Laguna park. The court determined that the owners of Pacific Palisades Bowl Mobile Estates must seek California Coastal Commission approval before subdividing into lots for individual sale to tenants.
Owners of the 156-space Laguna Terrace Park received city approval to subdivide and sell lots to residents, but filed suit to block Coastal Commission review of the process.
On Wednesday, Skeen sent a letter Wednesday notifying park residents that their bid came up short and informing those who anteed up the half-million-dollar deposit that their money will be returned.