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Uploaded: Thursday, September 10, 2009, 9:48 AM
Page Mill could lose control of EPA properties
As Wells Fargo seeks receiver, landlord apologizes to tenants, brings back maintenance workers
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by Gennady Sheyner
Palo Alto Online Staff
Page Mill Properties, the largest landlord in East Palo Alto, may soon lose control of its 1,700 apartments in the Woodland Park neighborhood to a court-appointed receiver.
Wells Fargo, which lent money to Page Mill for the purchase of the East Palo Alto properties, announced Wednesday that it is "moving to have the courts appoint a receiver for the properties."
A receiver is a person designated by the court to carry out its orders.
"The safety and quality of life of the tenants at Woodland Park is of primary concern to Wells Fargo," Wells Fargo announced in its statement. "As the lender, we are moving to have the courts appoint a receiver for the properties.
"The receiver will ensure that professional on-site property management is addressing property conditions and maintenance."
The bank's statement was released just days after Page Mill appeared to have abandoned its buildings and leasing offices, leaving floors covered in trash, fire-alarms malfunctioning and confused tenants wondering where to submit their rent checks. Last Friday, building inspectors, police officers and officials from the Menlo Park Fire District all visited the property at 5 Newell Court and uncovered a slew of building-code violations. Property managers, however, were nowhere in sight.
Since then, maintenance workers had returned to the apartment buildings to clean things up and reopen its management offices.
Though Page Mill did not return repeated calls seeking comment Wednesday, a tour of 5 Newell Court showed that many of the most egregious problems have been fixed. The ground-floor hallway at 5 Newell Court was completely dark last week, but all the lights were replaced since then. The shattered glass that covered a portion of the hallway floor was cleaned up and the neon "Exit" sign, which someone knocked off the hallway entrance, was once again hanging in its rightful place.
Tenants and city officials have been speculating that Page Mill's apparent abandonment of its buildings last week was connected to the company missed $50 million payment to Wells Fargo in early August. Page Mill announced last Friday that it has worked out a deal with Wells Fargo that would allow Page Mill to hold on to the properties, at least in the short term.
Page Mill spokesman Adam Alberti had called the company's negotiations with Wells Fargo an "evolving process" and characterized its recent deal with the bank as an "interim solution." But city officials and fire district officials said they were concerned about the consequences of Page Mill going bankrupt and losing its buildings.
Menlo Park Fire Protection District Chief Harold Schapelhouman said the department identified eight buildings with non-functioning fire alarms. Another building had a fire alarm system that was installed, but that no longer meets code regulations, which require alarms to have monitoring systems. The buildings with fire-alarm violations are around Newell Road and O'Keefe Street.
"In light of everything going on, we're extremely concerned," Schapelhouman said. "What we don't want to see happen is the company going out of business and these issues not getting resolved because of deferred maintenance."
Schapelhouman told the Weekly he is concerned about other buildings with violations that haven't been detected yet. He said fire officials had spoken to Page Mill on Tuesday and were assured that the company would have employees on a "fire watch" at buildings with non-functioning fire-alarm systems.
Page Mill agreed to have its maintenance workers on "fire watch" throughout the day and to contract out the nighttime watch to a security company, Schapelhouman said.
Page Mill bought most of its East Palo Alto buildings in late 2007 and has made a series of improvements to the properties in the following months, including installing new security systems, lights and security gates. Schapelhouman praised Page Mill's investment in its buildings and said many of the problems at Newell Court and other apartment buildings long predated Page Mill's involvement. But he also observed that the company's investments in its properties have noticeably waned in recent months.
"The life and safety of the tenants is the highest priority," Schapelhouman said. "When you have a company whose financial future is in question, you don't know what's going to happen to the tenants.
"No one really knows what's happening but them (Page Mill) and Wells Fargo."
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| Comments
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Posted by Chris Lund, a resident of East Palo Alto, on Sep 9, 2009 at 5:59 pm Please visit www.epa-tenants.org for more information on Page Mill Properties and its East Palo Alto portfolio.
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Posted by qq, a resident of the Barron Park neighborhood, on Sep 9, 2009 at 7:24 pm Could the tenants themselves take control of these properties, or will they just be sold for pennies on the dollar to another blood thirsty investment company? Can you imagine the tax write-offs alone for Wells Fargo on the failed deal?
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Posted by Joe Harrell, a resident of Another Palo Alto neighborhood, on Sep 9, 2009 at 10:46 pm Where is the city councl? Missing in action again. This issue has been on the city agenda for a LONG time with no action. Thanks to Wells Fargo for stepping in and taking care of the problem. Maybe we should vote Wells Fargo in as city council
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Posted by I Hate Our Council, a resident of East Palo Alto, on Sep 9, 2009 at 11:40 pm The only thing our city council members care about is there pockets!!!! There never here to help us unless we hire them on the side.
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Posted by Hmmm, a resident of East Palo Alto, on Sep 10, 2009 at 11:42 am City council members not being quoted doesn't mean they aren't involved. I am sure with the reporter on deadline there wasn't time to get more info, or perhaps the reporter didn't ask city council members anything.
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Posted by joe, a resident of the Old Palo Alto neighborhood, on Sep 11, 2009 at 7:12 am Again, the leadership of East Palo Alto and San Mateo County need to step up to the plate and assume their responsibilities. Forget the protest walks and blaming of other communities for ongoing problems. Just shut up, do your job, and clean up the problems in the community to make it a decent and respectable place for hard working class citizens. End of story.
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Posted by joe, a resident of the Old Palo Alto neighborhood, on Sep 11, 2009 at 7:12 am Again, the leadership of East Palo Alto and San Mateo County need to step up to the plate and assume their responsibilities. Forget the protest walks and blaming of other communities for ongoing problems. Just shut up, do your job, and clean up the problems in the community to make it a decent and respectable place for hard working class citizens. End of story.
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Posted by Ha!!!!!!!!!!!!, a resident of East Palo Alto, on Sep 11, 2009 at 10:22 am So glad to hear Page Mill's gonna lose their shirts. They lost everyone's trust and good will a long time ago, so it's about time they lose control of that which they did such a crummy job trying to control...
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Posted by Rich, a resident of Another Palo Alto neighborhood, on Sep 11, 2009 at 11:59 am Replying to "qq": Unfortunately, I can't imagine how the tenants could possibly acquire the properties in question, because if they had that kind of money, they could probably easily afford to buy homes in Palo Alto.
I do hope this mess doesn't turn into a windfall sale to a new buyer who is interested only in the money and cares nothing for the people who simply can't afford to live anywhere else (or even to keep living in EPA if their rents go through the roof). However, the housing market being what it is, I'm pessimistic.
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Posted by Interesting, a resident of East Palo Alto, on Sep 11, 2009 at 10:03 pm On other threads, I seem to recall Joe blaming the tenants. Now he's blaming City Council. Where's the appropriate finger-pointing at the suited criminals whose headquarters are in your town, Joe? How do you know that city and county officials aren't involved?
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Posted by To the Schadenfreudes, a resident of the Meadow Park neighborhood, on Sep 12, 2009 at 6:26 am Yes, it would be horrible if someone else bought these properties and tried to make a profit,instead of running it the proper way, as a charity to those who wish to live there and pay less than it costs to run the place.
Only the government can operate at a loss, not bound by normal laws and accounting rules...until it collapses of its own weight and brings down everyone. The rest of us have to earn the money somehow to pay our debts.
Good luck getting someone else to buy the properties. Enjoy the fruits of your labors.
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Posted by Jack, a resident of East Palo Alto, on Sep 12, 2009 at 9:04 pm Hahaha, how embarrassing for poor old Page Mill.
May they never work in this town again.
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Posted by Hmmm, a resident of East Palo Alto, on Sep 12, 2009 at 11:21 pm Get real, To the Schadenfreudes. We're happy to have landlords make a profit. However, the profits have to be made legally.
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Posted by To the Schadenfreudes, a resident of the Meadow Park neighborhood, on Sep 13, 2009 at 7:53 am The problem in this country is that we can hassle lawsuit to death a business or a person, basically condemning them to punishment without any proof of wrongdoing.
I would completely go along with any and all lawsuits IF the one who loses the lawsuit has to pay the bill for the other party and all expenses incurred. That would bring about a bit more evenhandedness, and before anyone screams "not fair to the poor"...I have no doubt at all that there are attorney who would happily take contingenncy suits that they were confident of winning even for the poorest client.
ACORN, with the help of the now-Organizer-in-Chief, took full advantage of our ability to hassle lawsuit businesses into making poor choices in mortgages, and I suspect these tactics have not changed since in hassling other businesses also.
We desperately need tort reform on all levels.
In the meantime, keep rejoicing as your buildings find nobody willing to take on the challenge of owning them. THAT will teach 'em!.
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Posted by Hmmm, a resident of East Palo Alto, on Sep 14, 2009 at 12:59 am As is typical, someone thinking they know the whole story when they don't. Page Mill is an example of insane litigiousness. We desperately need carpetbagger reform.
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Posted by Natalie, a resident of East Palo Alto, on Sep 14, 2009 at 9:19 am The important issue here, really, are the 1500 residents forced to move due to illegal rent increases (or attempts) by Page Mill.
This country is done -- the rich have only to sue people and cities until the latter cannot afford to fight.
It's clear that East Palo Alto is soon to return to Palo Alto et al--as soon as the the riffraff are gotten rid of...
Some of us have devoted our lives, fought against terrible odds and epithets, only to have our property and lives stolen.
This story is much bigger than it may appear at first glance.
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Posted by Hmmm, a resident of East Palo Alto, on Sep 14, 2009 at 10:28 am Natalie, what a thoughtful post! Let me add: Page Mill tenants are much greater in number than 1500. They bought more than 1800 units, the majority of which are apartment complexes, large and small. They also purchased a number of fourplexes, duplexes and even some single family homes. I am not sure of the current vacancy rate, but when they started on their eviction campaign, I would guess conservatively that there were at least 3600 tenants, at 2 tenants per, but I honestly believe the number of tenants, including children, was greater than 4000.
I am not sure why you would think EPA would return to PA? It's a different county, and San Mateo County wouldn't give its approval, much less the City of EPA. We have a say in the matter of these decisions - the residents here, too. We're here to stay and I am betting that the old guard will be around, as will their children, for quite some time, in addition to newer arrivals. As the Latinos and Pacific Islanders become more involved, I think EPA will reflect other parts of San Mateo County that have these populations. However, EPA is smaller than most of the other peninsula cities in San Mateo County.
EPA is committed to affordable housing, which is why we have a Rent Stabilization Ordinance and have drafted an even better one, which can be found here: Web Link
Given the slanted news coverage of the town and the more all too common violent happenings, it's hard to know what living in EPA is really like, as well as what Page Mill has done to this town. It's really great that you've posted, because people often assume that Page Mill tenants are just a bunch of lazy people who want something for free - but that would really be Page Mill!
If you haven't checked it out, this is a really useful website: epa-tenants.org
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Posted by Hmmm, a resident of East Palo Alto, on Sep 14, 2009 at 10:48 am Ok, data on epa-tenants.org indicates via county records that there is an average of 3.83 residents per rental unit in EPA. Multiply that by the 1818 units owned and this PMP debacle and previous illegal rent hikes, harassment and evictions has effected 6963 people, which is a huge percentage of EPA's population.
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Posted by Rich, a resident of Another Palo Alto neighborhood, on Sep 14, 2009 at 1:32 pm I assume the "1500" would be those who were not able to survive through all the recent mess and have already been forced to leave their homes.
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Posted by Hmmm, a resident of East Palo Alto, on Sep 14, 2009 at 11:49 pm Sorry, Rich, I didn't make my point clear at all.
The figure of 1500 displaced tenants is from epa-tenants.org, but what I meant to say was that it might be higher than that by this time, especially if people moved in the last few weeks as PMP abandoned offices.
The site states that approx. 6,800 people lived in units that PMP purchased, but my estimate is that that number was closer to 7000. The data points aren't that outdated, but the vacancy rate is quite high - it's obvious driving around this part of town and walking around some of the apt. complexes. Regardless of my over-focus, 1500 people is a heckuva lot in less than 3 years.
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