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The lives of residents living in nearly 700 manufactured homes hang in the balance as three Sussex County parks are in the process of being sold. Senate Bill 122, which would have allowed homeowners a first shot at purchasing their parks, could come to a vote in Dover – but even if that bill passes, it would not affect the pending sale of the three parks.
For 10 months, manufactured homeowners have waited, protested and haggled with legislators and park owners to pass laws to protect the people who live in the parks. But a bill to prohibit steep rent increases was withdrawn Jan. 10, and a moratorium to halt park sales failed Jan. 24, after Speaker of the House Terry Spence tried to suspend House rules in an effort to move that legislation forward.
S.B. 122, aimed at allowing those who live in manufactured-home parks to have an opportunity to purchase the parks, is the only legislation still in play.
S.B. 122, or the right-of-first-refusal bill, passed the Senate, 17-2, in June, but it was never introduced in the House. It remains in a subcommittee, still being negotiated and rewritten.
“If we would have passed this bill in June, these people would own their parks right now. They would own the land under their parks. They would be protected. This is a time-sensitive bill,” said Rep. Pete Schwarztkopf, D-Rehoboth Beach. “Why do the tenants have to compromise, when park owners made a good life off their backs?”
In the meantime, Lewes’ Love Creek park, Laurel Village in Laurel and Georgetown’s Sand Hill Acres tentatively have been sold to Ken Burnham of K.C. Burnham & Associates, based in New York.
Kay Kumitis, president of Love Creek Inc., said she incorporated a homeowner-based organization in August, after attempts to pass bills began to stall.
Park owner Milt Chaski, she said, has been a fair landlord, but she said homeowners facing lot-rent increases attempted to collectively buy the Love Creek park. In January, she submitted a formal bid for $18 million to jointly own the 168 Love Creek lots, along with two other parks owned by Chaski.
“Shortly after that, we were told there was bonafide bid, but we weren’t told by who,” said Kumitis. Chaski, she said, accepted another offer. “Even after all this went through, we made another offer, which has not been responded to. The park tentatively has been sold, but they have not gone to settlement,” she said.
Chaski did not respond to requests for comment at press time.
Burnham said his bid has been accepted. “We were the successful bidder on it – the one that was chosen … We expect to close at the end of the month.” Burnham said he was bound by a confidentiality agreement and could not disclose the sale price. He did not say if he would raise lot rents, but he did say he would not change the park’s use, if the sale were finalized.
Some homeowners question the sale to Burnham, noting he has received notice of violations for improper wastewater removal and illegal dumping at his parks.
According to Department of Natural Resources and Environmental Control (DNREC) records, the agency issued a notice of violation for a “nonconforming wastewater water treatment and disposal system,” for Scottsdale, Burnham’s park in Laurel. No penalty fee was issued, but DNREC officials say a new collection system in that park is nearly in place. In 2004, DNREC also issued a notice of violation for improper discharge into the Nanticoke River from Burnham’s Mobile Garden community in Seaford. The agency issued Burnham more than $80,000 in penalties for the illegal dumping.
DNREC’s Peter Hansen said Burnham did not pay the penalty, but he invested more than $80,000 to upgrade a wastewater treatment plant for the site.
Calls to Burnham regarding the violations were not returned at press time.
“Let me just say this, I have not heard one good thing about this prospective buyer. If the owners of those three parks cared about those who live there, they would let the homeowners buy their parks, said Schwarztkopf. “I think what people don’t understand is that these people get displaced. And a lot of them are older residents.”
Park owners and homeowners last met behind closed doors Thursday, March 13. S.B. 122, as is now written, is called the right of first offer. It requires owners to notify homeowners within 30 days of an offer of sale. Homeowners have 30 days to submit their bid, and park owners have another 30 days to settle, if they accept the deal.
If a third party offers a sale price higher than the homeowners’ offer, the homeowners can counter offer within 3 percent, which has been called a “second bite of the apple clause,” said Fred Neil, spokesman for the Delaware Manufactured Homeowners Association (DMHOA).
But, two sticking points remain. Homeowners want to ensure that homeowner associations are recognized by DMHOA, not front associations contrived by park owners. Park owners are also pushing for the right to sell parks at auction, which homeowners say would remove them from the competitive bidding process. “They might use a shill to drive up the price. If they are offering the right of first offer, why not just offer the sale to the community?” said Neil.
No future meeting date has been set and at press time, no one could say when or if the three parks will be sold.
“This is up in the air. How this is going to affect us, I don’t know,” said Kumitis.
Contact Kevin Spence at k.spence@capegazette.com
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