Dick Spotswood: Novato mobile park makes a strong case
Last month, the Marin County Civil Grand Jury issued its report, “Novato’s Chronic Fiscal Deficits: A Call to Action.”
The report stated that the city-owned Marin Valley Mobile Country Club was a financial burden on Novato. The facility is home to 430 residents. They are all over age 55 and 41% are within Marin’s definition of low or very low income.
Within five days of the report’s release, Dean Moser, a Novato resident whose family firm owns 17 mobile home parks with 4,000 spaces, made a $30 million offer to buy the supposedly money-losing facility from the city.
That ignited a firestorm among residents concerned that the land under their not-so-mobile manufactured homes will be sold out from under them.
Novato’s MVMCC budget showed, “In the past four fiscal years MVMCC’s expenses exceeded revenues by … more than $3.6 million.”
That’s misleading and incorrect.
The residents’ committee reports that “audited financial statements from MVMCC’s management company (The Helsing Group) for FY 2029-2020 shows a surplus of $842,000.” Its monthly reports, which the city receives, indicate the park has $4.8 million in cash reserves.
Supervisor Eric Lucan, a former member of the City Council, shared the 2023-24 MVMCC budget, which was on the council’s June 13 agenda.
“On Page 2, you will see net operating income (NOI) at $1.3 million,” he said. “The NOI for the park has been in that range for quite some time. About half of that NOI goes to debt service, which will be completely paid off soon, and the other half goes into capital and capital reserves. The park is very profitable.”
Don’t blame the grand jury for this confusion. Grand jurors relied on a MVMCC budget supplied by city staff. A budget isn’t a profit-and-loss statement prepared to generally accepted accounting principles. Unlike every other Marin municipality, Novato doesn’t have audited financial statements for the last three years.
The inconsistency is caused by the city including a capital budget that’s mostly a wish list.
The mobile country club was purchased in 1997 for $20 million under the leadership of Councilmember Pat Eklund to provide affordable senior housing at no taxpayer cost. The purchase was composed of two bonds, one for $18 million plus a supplemental bond for $2.7 million.
Years later, after millions were paid in principal and interest, the remaining debt on the $18 million bond was refinanced into a $7.9 million Bank of Marin loan. It’ll be paid off in 2027. The subordinate bond has already been paid. All principal and interest were generated from residents’ rents. None came from city funds.
MVMCC’s attorney, Hanson Bridgett, calls for the city to “Suspend all discussion and negotiations for the sale of the Park … until such time as accurate and complete information is available.”
I continue to suggest the joint selection of a neutral accountant to prepare a financial report all agree to accept. The residents concur, as does potential buyer Moser. The latter is a first-class mobile home park operator who supports a neutral analysis to “guarantee transparency.”
What the residents thought they were getting when they purchased their manufactured homes and rented space was an implied agreement that they could finish their days at Marin Valley. Moser, as a practical businessperson, can’t guarantee that result for longer than 10 years.
“My goal is a ‘win-win’ after exploring all options,” said Councilmember Mark Millberg, who represents Marin Valley’s District 5.
There’s one option that would provide the city with cash while providing the residents long-term stability.
“Residents are exploring possible ownership of the park themselves,” said Jay Shelfer, the residents council board president. “In response to the city’s recent pursuit of a sale, the (committee) board formed an ad hoc committee that is currently exploring several mechanisms for self-ownership.”