After Seagate Limited Partnership rejected a purchase offer by residents in Old Orchard Village and Atlantic Village, some are interested in passing a rent control ordinance in Old Orchard Beach. Eloise Goldsmith photo
OLD ORCHARD BEACH — The owner of two mobile home parks in Old Orchard Beach, Old Orchard Village and Atlantic Village, rejected a bid by residents to purchase the parks on April 11.
But those involved in forming a resident co-op and putting forward a failed bid are still interested in exerting control over their homes – this time through rent control.
Sandy Ossolinski, interim board president of Seacoast Village Cooperative, said she recently spoke with two other interim board members about pursuing some sort of rent control ordinance — though she emphasized that the conversation is preliminary.
Val Philbrick, another resident who participated in the forming of the co-operative, also said that those involved in the effort are exploring the possibility of a rent control or rent stabilization ordinance, but also cautioned that nothing is definitive yet. Residents in the two parks own their homes but pay rent to keep them on the park property.
The idea that a new owner would come in and sharply raise park rents is not without precedent. Two adjacent mobile home parks in Wiscasset, Maine, sold for at least $1.9 million in two transactions in 2021 and 2022 – one to a man from Idaho and another to a team of investors from Colorado, according to the Bangor Daily News. Since then, residents have seen their rents nearly double. It’s part of a national trend where mobile home parks have become the target investors who are snapping up one of the only sources of affordable housing left in the United States.
A rent control ordinance is not without precedent in Maine either. Both Portland and South Portland have enacted rent control in recent years.
“I was disappointed … it’s a bummer” said Ossolinski of the rejected purchase offer. She did, however, say she feels better about the private buyer now that the owner, Seagate Limited Partnership, had shared more details about them, particularly that they are a “family business” with experience running mobile home parks.
“This was a difficult decision for us,” wrote Peter and Sheldon Pope – two officials with Seagate Limited Partnership – in the letter distributed to park residents dated April 11. The Popes said they decided against the residents’ offer because they were unsure that the co-op would be able to come up with the financing for the over $40 million bid and questioned how widespread support for the co-op was in the two parks.
When Seagate initially informed park residents of their intent to sell Old Orchard Village and Atlantic Village, residents sought the help of the Collective Development Institute, a nonprofit that helps communities form co-ops. Residents involved in organizing narrowly earned enough support within the parks to form a co-op and put forward a competing $40.5 million dollar offer. Residents were able to do this thanks to a state law enacted last year, which empowers park homeowners time to organize and put forward a purchase offer if they wish.
In their letter, the Popes said they had received the organizing petition that showed roughly 50 percent of residents were on board with forming a co-op, but “during discussion with CDI, they mentioned their lenders will be looking for at least 70% of the residents to support the conversion,” which means “another 75+ homes would need to join for the lenders to be comfortable providing debt to the cooperative.” They said this seemed like a “big hurdle” to clear.
In response to this, Nora Gosselin – market development and acquisitions specialist at Cooperative Development Institute’s New England Resident Owned Communities program – said that the concern around 70% was “not actually relevant.” Gosselin was involved in negotiations with the owner.
One potential lender included 70% resident support as a component of their underwriting process, but it was unlikely that the Seacoast Village Cooperative would have used that lender as part of their financing package, she said.
The Popes also questioned whether the residents would be able to secure funding due to “uncertainty” in the financing market – pointing to the Federal Reserve’s interest rate hikes in response to inflation and the hot labor market.
Gosselin, for her part, said that both residents and the other private buyer would be subjected to the same market conditions. As she sees it, “there’s no reason that the residents … are in a less financially feasible position than another purchaser.”
The Popes – who did not return the Biddeford Courier’s requests for comment – did not directly name the other buyer, but said they are a “family business with 30+ years of experience operating communities just like ours.” The business assured the Popes that they will keep the $600 rent in place for a year and will not redevelop the property into some other use (residents were told earlier this year that their lot fees would be raised $75 in June, to $600). There will also likely be a “Meet and Greet” with the buyer soon, they wrote.
Ossolinski mused that if she and others had known from the start that it was a family business, they may not have tried to form a cooperative at all.
“I feel so much better now that it’s a family business that’s buying (and) that they supposedly have 30 years of experience (operating parks),” she said. But it strikes her as a little “shady” that the current owners wouldn’t just come out and say who the buyer is, she said.
“What’s the big secret?,” Ossolinski asked. “I guess we’ll find out at the meet and greet.”
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