Appraisal dispute complicates Buena Vista decision

Council to consider closure application for Palo Alto's sole mobile-home park on May 26

When Palo Alto officials indicated on April 14 their plan to approve the closure of Buena Vista Mobile Home Park, they specified that the park would have to be re-appraised to account for the high quality of local schools and the park's safe location.

But with appraiser David Beccaria declaring last week that he will not do the council's bidding, officials are now facing an uncomfortable choice: to either rescind their direction, thus, dealing a potential financial blow to the park's roughly 400 residents, or to further prolong a closure process that has already dragged on for a year and a half and risk a lawsuit from the property owner.

The council will consider these options and possibly others on May 26, when it is set to formally approve the closure application for the city's sole mobile-home park. To do so, it would have to approve a set of findings that were drafted by City Attorney Molly Stump and that lay out the rationale for the council's decision. The findings, which were made public Thursday, effectively affirm Beccaria's position and allow the Jisser family to proceed with the park's closure without expanding the scope of the appraisals.

The adequacy of the Buena Vista appraisals was at the heart of the April 14 hearing, with attorneys for the mobile-home park's residents arguing that the appraisals understate the value of Buena Vista homes and does not consider the value of Palo Alto's vaunted school system. The Law Foundation of Silicon Valley, which is representing the Buena Vista Residents Association, also commissioned a review of Beccaria's appraisals by a different appraiser, James Brabant, who criticized Beccaria's methodology.

Beccaria defended his appraising methodology in a detailed letter and in his oral testimony at the April 14 hearing. At that time, he said he would consider the council's direction for a revised appraisal and that he would discuss it with his business partners. but on May 5, Beccaria asserted in a letter that his company, Beccaria & Weber, "will not engage in further discussions about appraised methodology of Scope of Work issues.

"None of the criticisms brought against our reports have altered any of our opinions of value, the methodology utilized, or our Scope of Work," the letter reads. "In my judgment further communication to the appraiser in this regard would be considered pressuring the appraiser."

He also noted that if the City Council changes the scope of the appraisals, his letter will "also serve as (a) resignation from the subsequent appraisal assignment."

If the council votes to approve the findings as drafted by Stump, it will effectively concede this point to Beccaria. Though the value of each home would have to be re-appraised to reflect the current market before a resident leaves Buena Vista -- an adjustment that no one disputes -- the scope of these appraisals would not be expanded to include schools and safety. The section in the findings that pertains to updated appraisals specifies that updates would be prepared "according to the methodology utilized in the 2013 reports."

In approving the findings, the council would also affirm that Beccaria's response to Brabant's critique was "persuasive and adequate."

In a memo to the council, Stump notes that the findings omit the direction that the council gave to Beccaria on April 14 about revising the scope of the appraisals. She wrote that staff is now researching other options that the council has in regard to the closure application and that it will report on May 26 whether there are "other alternatives that would address Council's concern to ensure that the updated appraisals are complete and accurate, and in particular that the in-place value of the Buena Vista units reflect all the attributes of the community location, including public schools and safety."

Meanwhile, attorneys for the Buena Vista Residents Association are urging the council to commission new appraisals. It is clear, wrote attorney James Zahradka, that "for the council's directive to be followed, a different appraiser will need to be appointed, and new appraisals will have to be conducted." Zahradka noted that local law requires a "qualified appraiser ... to be chosen by the park owner from a list supplied by the City."

At the May 26 hearing, the council should "direct staff to supply this list and inform the park owner that if he wants to pursue his closure application, he will need to submit a new Relocation Impact Report including information based on the new appraisals," Zahradka wrote.

Zahradka also noted that the process for selecting an appraiser was not followed when Beccaria was initially chosen to work on the Buena Vista closure application. Beccaria's firm was recommended to the city by Prometheus Real Estate Group, which was under contract with the Jisser family to convert the mobile-home park to a luxury-apartment development, but backed away from its plan in June 2014.

As evidence, Zahradka included an October 2012 email sent by Tuttle, a senior development manager at Prometheus, to former city planner Jason Nortz. The email includes statements of qualification for relocation specialist Dave Richman and for Beccaria, both of whom were later hired by the Jissers to work on the Relocation Impact Report for the closure application. Tuttle describes Beccaria as "the appraiser that seems to have the most complex park closure experience in the Bay Area."

If the council adopts on May 26 the findings drafted by Stump, it would conclude the closure process and empower the Jisser family to immediately begin the six-month eviction process for the mobile-home park's residents. If not, the closure process that began in the fall 2012 would see another extension.

That latter decision could also place the city at an increase risk of a lawsuit. At the April 14, the Jissers' attorney, Margaret Nanda, strongly objected to the council's determination to revise the appraisals' scope and asserted her right to challenge the requirement in court. The council's purview, she said, was to review last year's decision by a hearing officer, who affirmed the Relocation Impact Report in the closure application, which residents later appealed. By demanding a different scope, the council is effectively rewriting the law, she argued.

"I do not believe that a review of a hearing officer's decision is an opportunity to rewrite the ordinance. ... We did not agree to an updated appraisal based upon a different scope," Nanda said. "You are exceeding what is provided in the ordinance."

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31 people like this
Posted by Desert Jack
a resident of Old Palo Alto
on May 15, 2015 at 10:52 am

Buena Vista supporters, including the author of this article, consistently ignore a very inconvenient fact: the appraiser Beccaria said that the value of Palo Alto schools is already embedded in his appraisal.

Beccaria will not submit to political pressure to increase his appraisal by counting the same element twice, so in that respect "he will not do the council's bidding." Who's wrong here, Beccaria who is the expert appraiser, or Council, who are muddling around in a political mess of their own creation?

4 people like this
Posted by Rainer
a resident of Evergreen Park
on May 15, 2015 at 1:24 pm

Rainer is a registered user.

And the anonymous Desert Jack says:
t"The appraiser Beccaria said that the value of Palo Alto schools is already embedded in his appraisal."
And that makes it so? Not! Just ask appraiser James Brabant what he thinks.
Here is the real problem, which was created in 2001, after the crash with property values low:
The 2001 City Ordinance #4696 is written in a way that in 2015 there is no solution to close the Buena Vista Park at a cost which leaves much money to the Jissers. The ordinance is contradictory in itself. That is a known situation in logic, mathematics, and even law: a problem which has no solution within the framework of logical, mathematical, or legal law. Organizations have been found to have by-laws that they cannot be dissolved. The point in question is the invocation in the ordinance of cost of “remedy being reasonable”.
1. There is no mobile home park in 35 miles. So we cannot move the tenants.
2. The actual cost of either creating or buying low income housing in Palo Alto, in actual Dollars, may be unreasonable elsewhere, but whatever it is, it is the market price, so it is reasonable by definition! That’s what the ordinance says: it has to be reasonable. That all might have looked OK in 2001 after the crash, but now we have 2015. Lawyers are licking their lips.
The City Council could have, and should have, rejected the hearing officer’s “approval” of the closing application because the mitigation measures proposed by the Park Owner are inadequate to mitigate the adverse impacts on the displaced residents. Instead the Council tried to fix the problem. The Council sometimes does that, i.e., by re-designing 2nd stories and the like in session.
By not “explicitly” taking into account the value of the Palo Alto Education the appraiser failed. He gets an F on his appraisal. He can claim it is automatically included until he is blue in his face, but in the end a judge will decide.
His awards might be adequate in Central Valley, but not here. For an estimate of the value of such Education, you should study Judge LaDoris Cordell’s Op-ed Web Link. Hello, she is a former judge!
Any real professional appraiser who knows more than comparing multiple listing entries will be able to make a convincing case. Test your knowledge: how much do you have to pay your neighbor if you illegally cut down a 20 inch well-placed tree on your neighbor’s property, because you want a better view (called vanity logging, just for Google search)? Educational answer: about $35,000, nearly independent of species of tree. For one tree! Sounds reasonable to you? Probably not, but do your search, and you will find enough court cases and I can guide you through the mathematics of the appraisal process.
It is only because the City Council once more was intimidated by the City Attorney not to get going on the problem in the fall (“spooked”, Dave Price of the Palo Alto Daily News wrote) that we got to that stage. IMO the City Attorney has not been hired to avoid a law suits at any price. In fact, I think that if there are not a few lawsuits against the City in litigious California every year, my interests as a citizen of Palo Alto have not been aggressively enough represented.
The mistake the Jissers made on their side is that they did not counter the $14.5 Million they were offered with whatever they wanted. Maybe with $30Million? Now they have to shell out at least $5Million for relocation cost, if the Park can be closed at all, and the property might be unmarketable for years, because no Title Insurance Company will want to touch it.
On a more fundamental level the mistake the owners made was to employ a lawyer, who is paid by billable hours, instead of a real estate broker, who is paid by results.

12 people like this
Posted by resident
a resident of Another Palo Alto neighborhood
on May 15, 2015 at 1:52 pm

I got a master's degree in computer science in one of the best grad schools in America. And yet, I haven't been able to follow the logic (or false logic?) in Rainer's post.

12 people like this
Posted by Craig Laughton
a resident of College Terrace
on May 15, 2015 at 1:57 pm

One step closer to a huge lawsuit, against the city of Palo Alto (re: us citizens), by the BV owner, if our CC demands another appraisal.

17 people like this
Posted by Crescent Park Dad
a resident of Crescent Park
on May 15, 2015 at 3:18 pm

@ Rainer - again, totally false statement that there are no mobile home parks within 35 miles of Palo Alto. Just do a Google search.

Castro Valley
Daly City
East Palo Alto
Half Moon Bay
La Honda
Los Gatos
Moss Beach
Mountain View
Redwood City
San Bruno
San Jose
San Leandro
South San Francisco
Union City

But don't let the facts get in the way of your argument...

Like this comment
Posted by Rainer
a resident of Evergreen Park
on May 15, 2015 at 4:29 pm

Rainer is a registered user.

[Post removed.]

7 people like this
Posted by Desert Jack
a resident of Old Palo Alto
on May 15, 2015 at 5:40 pm

[Post removed.]

Like this comment
Posted by Sparty
a resident of another community
on May 15, 2015 at 7:14 pm

Sparty is a registered user.

"I got a master's degree in computer science in one of the best grad schools in America. And yet, I haven't been able to follow the logic (or false logic?) in Rainer's post."

Is there a big market for comp sci majors in the real estate litigation field?

10 people like this
Posted by Desert Jack
a resident of Old Palo Alto
on May 15, 2015 at 7:53 pm

Strange that my two-word post above would be deleted. Nothing offensive as far as I can tell - merely said that a prior poster who favors reform was engaging in incoherent speech. (I'm using dictionary definitions here to expand the two words for the benefit of the moderator.)

Free speech is a great concept, but it does go both ways.

3 people like this
Posted by Casey
a resident of another community
on May 16, 2015 at 12:58 am

Is the appraisal available for public review? I'd like to take a gander.

I'm not sure who all have an interest in this, because even I do, and I don't even live in the same county. But I don't see why the appraiser would be required by anyone to name the specific value of the school system. There are many factors that help establish value but why would all of those factors need named specifically?

The valuation of the park seems like a job nearly any appraiser could do well, even if they would all arrive at a different value. It isn't rocket science. Its a picking of likely comparables, or substituting when none can be found.

Please expand on the real issues. Who wants more money then this deal will yield them? How much more do they want? Who do they want it from? What is reasonable?

2 people like this
Posted by george drysdale
a resident of Professorville
on May 16, 2015 at 11:48 am

Because of rent control on mobile home parks as "affordable housing" the land price has been dramatically reduced in the case of mobile home parks throughout California where rent control is extensive. This much reduced land value accrues to the mobile home owners who have reaped a huge windfall profit in the sale of their mobile homes. Again on the internet: The end of rent control: the catastrophe in Capitola . . . and The end of rent control the crash . . . " Unlike NYC where rent control is going out the back door the vivid nature of the racket mobile home owners have been running is much more stark. Subsidized housing is really only affordable to those truly in need, not economic refugees. Vouchers are the best procedure as government built housing cost more largely due to "prevailing wages. George Drysdale a social science teacher

4 people like this
Posted by Me
a resident of Adobe-Meadow
on May 16, 2015 at 12:53 pm

Stop making this to be everyone's problem. The latest offer from Jisser is reasonable and equitable as compared to other renters facing relocation. CC Please QUIT using my TAX dollars on this issue. We need to move on .

3 people like this
Posted by palo alto resident
a resident of Crescent Park
on May 16, 2015 at 6:28 pm

If the appraiser has already included the value of PAUSD and public safety in his appraisal, the only changes should be based on changes in the value of the trailers. Although the value of a house in Palo Alto has gone up, I wonder if an RV goes up or down in value as it ages.

Like this comment
Posted by ResidentB
a resident of Barron Park
on Jul 29, 2015 at 3:36 pm

Finally the cc come to their senses and made a good decision for the community.

Sorry, but further commenting on this topic has been closed.

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