How Sunrise Terrace Became A Resident-owned Mobile Home Park -- A Tribute To Ted Hyatt
When Ted and Betty Jane Hyatt moved into the park it was privately owned. The former owner was charging rents of $400 and up. Ted found out that our residents had tried and failed twice before to buy the park. He also knew that through the efforts of other residents, the homeowners association had been incorporated. So a germ of an idea started to grow in Ted’s mind. He found out that the State of California did not have a current list of corporation ofﬁcers in the Park registered. He quickly put together a group of ofﬁcers and sent the updated list to the state.
Ted also attended a Golden State Mobile Home Owner Association convention, where he spoke with conference speaker David Semelsberger, who was talking to the convention about residents purchasing their parks and picked up a lot of information.
Meanwhile, Sunrise Terrace had become one of the properties in a limited partnership real estate portfolio managed by Merrill Lynch-Hubbard. This investor group was unhappy about the amount of proﬁt coming from this rent-controlled park. This group offered the park to the city of Arroyo Grande for $15,000,000.00 explaining to the city they could ﬂoat a bond issue to ﬁnance the sale. The city refused.
One day as Ted read the Wall Street Journal, he noticed an ad for a mobile home park for sale on the west coast. The description of the park sounded familiar, stating it had a beautiful lighted tennis court for night tennis as one of the amenities. Ted was a tennis player, so he knew the lights on the court did not work and that the surface of the court was so bad it was difﬁcult to play on.
He called Merrill-Lynch posing as a potential buyer. After listening for a while, Ted told the salesman that he was a resident of Sunrise Terrace and pointed out to him the false information and inaccuracies in the ad. He also told him that Merrill Lynch was violating a California State law that requires an owner to ﬁrst offer the park for sale to the residents for a period of thirty days before being advertised to the general public. The next day Ted received a “fax” from Merrill Lynch: “This is your ofﬁcial notice that Sunrise Terrace is for sale.”
Ted quickly called the board together and because no purchase price was quoted, the board agreed to offer $6.5 million. Merrill Lynch countered with-$9.5 million. Over a three-day period both sides negotiated and we made a ﬁnal offer of $8.3 million, knowing we could not possibly pay more. Miracle of miracles, they accepted! From that point on the board had a selling job on their hands to persuade renters to become shareholders. Many residents felt comfortable that rent control was forever and would not consider buying.
Sunrise Terrace needed to sell 150 shares initially to have enough money for the down payment.
Only 139 would commit at first, so Ted spent hours working and reworking ﬁgures to be able to get enough money to secure the deal. He managed to work some magic and the residents bought the park with only 139 shareholders. The Board hired a law ﬁrm of Endeman, Lincoln, Turek & Heater of which David Semelsberger was an associate, to assist us with the sale, as their specialty is mobile home park law. David and his ﬁrm assisted us with the buyout. The ﬁrm was able to make an unsecured loan to us of $300.000.00 to start the proceedings on April 25, 1994. the purchase was ﬁnalized on March 25,1995. It only took us ten years to pay off the mortgage in 2005.