Longmont City Council OKs $300,000 Loan to Mobile Home Park Co-op
Longmont will contribute $300,000 in city funds toward a $3.2 million project residents are pursuing to purchase and assume ownership of Longmont Mobile Home Park.
City council on Tuesday night unanimously voted to make an interest-free $300,000 loan to the Longmont Mobile Home Park Cooperative Board.
The loan, which the co-op board will have to repay no later than 10 years after receiving it, will come from the city’s affordable housing fund. The aim is to help keep living costs affordable for members of the resident-owned community.
Residents plan to buy the mobile home park at 525 15th Ave. from owner Paul Bliss, with the $3.2 million purchase to be financed with an interest-bearing loan from a partner of ROC USA, a national nonprofit organization that has helped broker similar deals transferring ownership of mobile home parks to resident ownership co-ops.
“Everybody’s really excited about taking over the park,” Mike King, president of the Longmont Mobile Home Park Cooperative Board said Wednesday.
Closing on the cooperative’s purchase of the property has tentatively been set for Feb. 1, he said. Residents have talked about a community block-party celebration of the event, weather depending.
The co-op board has prepared a budget to repay the interest-bearing loan and capitalize a reserve account, as well as a budget to cover ongoing maintenance expenses and future contributions to the reserve account, according to a report from Kathy Fedler, the city’s housing and community investment manager.
Those financial obligations would increase residents’ lot payments from about $600 a month to $750 a month, Fedler said in a memo for council.
All current members of the cooperative voted to raise their lot payments to $750, as well as to make one-time $250 payments for membership in the cooperative.
The cooperative’s board asked for the $300,000 in city funding to reduce the size of the loan to finance the $3.2 million purchase.
The city loan would result in lot rents of $700 a month, rather than $750, Fedler said.
“It is estimated that after the initial increase” from $600 to $700, “rents will not increase more than 1 percent a year for the next five years,” she wrote to council.
“While an increase of 1 percent is estimated per year, the actual increase in rents will be determined by the co-op board each year to ensure that the budget is adequate to cover the park’s expenses,” Fedler said.
The Longmont Mobile Home Park Cooperative Board’s application for the Longmont loan was reviewed by the city staff, an Affordable Housing Technical Review Group and the city’s Housing and Human Services Advisory Board, she said.
The Technical Review Group and the advisory board both recommended approval of the $300,000 in city funding for an interest-free term of 10 years. Under the arrangement, the Longmont Mobile Home Park’s 36 units would be designated as “permanently affordable” under a deed restriction.
King was one of a number of park tenants who showed up at Tuesday’s meeting to ask for council approval of the loan.
In a Dec. 12 presentation to the Affordable Housing Technical Review Group , King said the interest-free city loan could help keep the co-op’s monthly charges to park residents relatively affordable.
Lot rents right now range from $575 to $600, King said last month, but buying the park would ideally stabilize rent prices, which King said have risen every year since he moved in five years ago, when he paid just $400 monthly.
“We aren’t given any reason for the increases,” King said. ”... Members of other parks that have become resident-owned who I’ve spoken to talk about the relief they felt in gaining more control of their future.”
The park’s 36 mobile homes are all already owned by their residents, and resident ownership will be a requirement of the co-op.
Twenty-six of the park’s 36 residents have joined the co-op and voted to raise their monthly lot payments to as much as $750, but the city’s loan will mean lower initial monthly payment increases, King said Wednesday.
“I don’t think we’ll have any issues” getting the other residents on board with the arrangement once the cooperative takes over ownership of the mobile home park, he said.
John Fryar: 303-684-5211, firstname.lastname@example.org or twitter.com/jfryartc