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Briarcrest Estates to be sold for $10M, but to whom?

LACONIA — A group of homeowners at Briarcrest Estates, led by former city councilor Jim Cowan, are seeking to block the sale of the manufactured housing community to a Florida corporation and have formed a cooperative to acquire it for the tenants. But, they have met with resistance from the owners of the park, Mark and Ruth Mooney, who yesterday asked the Belknap County Superior Court to approve the transaction.

On July 3, the Mooneys tentatively accepted an offer from Maple Holding and Redevelopment, LLC of Orlando, Florida, an affiliate of Hometown American Corporation, to purchase the park for $10 million. The community, which opened off Rte. 106 in 1988, consists of 241 units on 183 acres divided between Laconia and Belmont.

Within a week, in compliance with state law, the terms of the transaction were disclosed to the tenants, who have 60 days to make a counter offer by presenting a purchase and sales agreement. If a counter offer is forthcoming, the park owner is required to bargain in good faith with the tenants or their organization.

Cowan said that some tenants contacted ROC-NH, a program of the New Hampshire Community Loan Fund that has assisted and financed the conversion of 107 manufactured housing parks to cooperative ownership. After a meeting with officials of ROC-NH, on July 30 a number of tenants formed Lakemont Cooperative, with Cowan as its president.

Cowan declined yesterday to specify how many of the owners of the 232 occupied units at Briarcrest have joined the cooperative, saying only "it's in double figures."

On September 6, just two days before the deadline, Lakemont Cooperative submitted a purchase and sales agreement to acquire the park. According to the statute the cooperative has "a reasonable time beyond the 60-day period, if necessary, to obtain financing for the purchase."

Cowan said yesterday that he is especially troubled by the prospect of Hometown America, through its affiliate, acquiring the park. He said that the parent company, which is headquartered in Chicago but operates our of Orlando, has been the target of "many, many complaints."

In particular, Cowan fears for the lease agreement, which limits the annual increase in rents to the increase in property taxes and special assessments and, at the discretion of the owner, the percentage increase in the consumer price index. Furthermore, since the lease automatically renews it cannot be changed.

But, Cowan notes, a provision of the purchase and sales agreement entitles Maple Holding and Redevelopment, LLC to assign its rights in the purchase and sales agreement to one or more other entities. He expects that once acquired Briarcrest will be promptly transferred to another owner, likely another affiliate of Hometown America, which will proceed to alter the terms of the lease.

At a meeting with tenants, the Mooneys presented a letter from Thomas Stewart, general partner of Maple Holding and Redevelopment, LLC in which he assured them of "our desire and commitment to continue to operate the community at the same standards and with the same expectations as currently exist. Current Lease, Covenants and Park Rules," Stewart continued, "will be grandfathered to the current homeowners."

In petitioning the court, on behalf of the Mooneys, attorney John Giere stressed that the state statute is intended to safeguard the interests of tenants of manufactured housing parks. He explained that the owners twice polled the tenants. Initially 164 opposed a sale to the cooperative headed by Cowan and only seven favored it. When the owners of the 232 occupied units who failed to reply were subsequently polled, they claimed that 176 opposed selling to the cooperative. On the strength of the poll results, the Mooneys believe that the interests of the tenants, which the statute intends to protect, would best be served by selling to Maple Holding and Redevelopment, LLC.

The statute provides that a park owner who fails to bargain in good faith with its tenants or a cooperative may be liable to a penalty of $10,000 or ten-percent of the sale price, which in this case would amount to $1-million.

Consequently, Giere asked the court to find that the Mooney have met their obligations under the statute and that their refusal to accept the cooperative's offer would not violate the law and subject them to penalties.

Geire, who has represented a dozen cooperatives in similar transactions, said that the petition seeks to interpret the intent the statute to apply to the circumstances at Briarcrest, namely the apparent preference of a majority of tenants for the sale to Maple Holding and Redevelopment, LLC.

Giere conceded that Cowan's unease about the future of the lease arrangement should the park again change hands is "a valid concern." However, he believes that because the lease renews automatically it runs with the property and cannot be abrogated.

 
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