Alamosa City Council approves $1.1 million gap funding to SLVHC for purchase of Century Mobile Home Park
ALAMOSA — By unanimous vote, Alamosa City Council approved a motion to provide up to $1.1 million in gap funding to the San Luis Valley Housing Coalition for the purchase of Century Mobile Home Park at its meeting Wednesday.
Located at 17th Street and State Avenue, CMPH has 184 lots, including 104 lots occupied by people living in homes they own.
In exchange for the funding, SLVHC is committed to repaying the entirety of funds to the city within one year and to list the city on the deed with the property basically serving as collateral until the funding is repaid.
The motion also included the city’s commitment to provide limited financial and technical assistance in addressing the failing sewer system on the property which has a significant, historic need for repair or replacement.
Council member Kristina Daniels was absent from the meeting, and Liz Hensley abstained from voting due to serving on the SLVHC Board of Directors.
Prior to the meeting, council members spent an hour in a work session where detailed information on the gap funding was presented and discussed. Once the meeting convened, City Manager Heather Brooks summarized the importance of the purchase.
If successful, SLVHC’s purchase would keep the property under local control, honoring the residents’ stated preference for the park to be owned and managed by the non-profit and effectively stopping its purchase by an out-of-state private buyer who already owns one mobile home park in the city and — has happened there - would most likely raise lot rental fees.
The majority of people living at CMPH — including many families with young children – are vulnerable and living on low, or fixed incomes.
As Brooks reminded council members, mobile homes are critical in addressing the lack of affordable housing. But across the country, large corporations are buying mobile home parks as investments, often raising lot rentals and fees to provide greater financial return. The practice has triggered public concern, even prompting Colorado’s passage of the Mobile Home Park Act that protects residents impacted by the sales.
Alamosa is no exception. A housing study revealed a documented shortage of 500 affordable housing units are required to meet the city’s current needs. And one mobile home park in the city has already been purchased by the California- based LLC.
Given Alamosa’s affordable housing crisis, Brooks said it was crucial to the city’s goals to keep 184 existing affordable housing units affordable. Failure to do so would greatly exacerbate an already growing problem.
Since July, when the buyer made a cash offer to purchase CMHP for $6.8 million, Dawn Melgares, SLVHC executive director, and other community partners have worked intensively with the 104 homeowners living at CMHP, educating them on their rights guaranteed by state statute and facilitating them in deciding how they wanted to go forward.
When the homeowners voted overwhelmingly for SLVHC to purchase and manage the property, Melgares, with significant help from First Southwest Bank and other community partners, was able to submit an offer to the sellers of $5,765,000.
That offer, which is $1 million less than the $6.8 million offer already on the table, was based on the property appraisal, which was based on the assumption that the entire sewer system needs to be replaced. According to Brooks, if the condition of the sewer system was not a consideration, indications are that the property would appraise higher than $6.8 million.
The current owners of CMHP told Melgares that they would sell to SLVHC only if the non-profit matched the $6.8 million offer they already received.
Per the Mobile Home Park Act, the current owners of CMHP are not obligated to sell to SLVHC unless the non-profit can match the $6.8 million offer they have already received.
Meanwhile, the clock is ticking. State statute does not provide unlimited time for a counteroffer to be made and there simply isn’t enough time to obtain those commitments from funders before the time period to submit an offer has expired.
"SLVHC anticipates getting loans to cover the full $6.8 through two different lenders,” Brooks said. “ However, those lenders have to get official board approval the beginning of December. If the boards approve what their staff is recommending, the city will only provide funding to cover closing costs, estimated at $40,000. Should the boards approve lower amounts, the city's contribution would increase to cover the amount up to $1.1 million."
As Brooks further explained, even though the appraisal came in below the $6.8 million, Melgares has indicated that the city's commitment to help with the sewer reassured the two lenders the project would get done and, as a result, the full value of the park would be realized from a lending perspective.