I-Team: Land Lease Limbo – Locked Out
PALM SPRINGS, Calif. (KESQ) - News Channel 3 was first to report on a Palm Springs community, reeling over a controversial land lease renewal offer. The story sent shockwaves across the Coachella Valley. The deadline has now passed, so what happens now for the many homeowners who say they simply can't afford it?
I-Team investigator Peter Daut went back to Saddlerock Estates, and spoke with both residents and the attorney for the tribal landowner.
"I'm heartbroken that I can't leave this to anybody. I had plans for that, but it's not going to happen," Saddlerock Estates HOA President Dave Buck said. He is among the majority of homeowners who refused to sign the land lease renewal offer. As News Channel 3 reported in July, the deal would more than double monthly land rent, and required a $100,000 signing fee, plus $15,000 in attorneys fees, per home. In a letter to homeowners, attorney David Jacobs, representing tribal member William McGlamary, set a December 31st deadline. Miss it, and residents could lose their homes when the lease expires in 2042 with no compensation.
"It just wasn't right. It wasn't right for them to do what they did to us," Buck said.
Buck said at least nine of the 24 homeowners did sign. For them, monthly land rent jumps from about $190 to $640, with increases of 20 to 30 percent every five years. Most of the residents are over 65. Buck is 75.
Daut asked Buck: "For those of you who have not signed this new lease, what's going to happen to your homes in 16 years?" Buck replied, "We pack up everything that's in it and walk away."
Buck said he had hoped someone would step in. "I'm surprised that the tribe didn't move in to tell these people that they were doing something that was really not decent," he said.
Attorney David Jacobs sees it very differently. "They're not victims of anything. They're getting exactly what they bargained for," Jacobs said. Jacobs argues the original lease, created more than 50 years ago, locked in below-market rent for decades. "If your rent was $100 back then, why shouldn't it be $1500 today? That's just economic reality," he said.
Jacobs points to a Bureau of Indian Affairs appraisal conducted in 2000, saying fair-market rent was more than double what his client's father was paid. And he said the HOA walked away from negotiations for years. "You can't negotiate with people who are always walking away from the table. So we set the price and this is the price," he said.
Daut asked Jacobs: "So you're saying the residents at Saddlerock Estates are to blame for this situation?" He replied, "Well derivatively, they elect their board and their board has its president and they have chosen not to engage in good-faith negotiations."
The HOA's attorney, Michele McKee disputes that claim, writing to the BIA and Agua Caliente Tribe: "There have not been any written offers prior to the June offer that were rejected by the Saddlerock Estates HOA." She added: "The HOA tried many times, in good faith, to engage with Mr. Jacobs, but those interactions did not result in any real offers..." "To say that it has been difficult to deal with Mr. Jacobs over the years, is an understatement."
McKee provided an email chain, which she says shows years of unanswered requests from Jacobs. She also questions the $15,000 per lease attorney fee included in the deal.
Daut asked Jacobs: "$15,000 in attorneys fees. You're making a lot of money out of this?" Jacobs replied, "I don't want to discuss the matter of my attorneys fees."
Retired teacher Lisa Lenes lives in the Saddlerock Estates home her parents purchased more than four decades ago. She said she cannot afford the new lease. "I have an hourglass over my head every night for 16 years. If I haven't sold this place in a couple of years, and don't have the capital to go somewhere, I could be homeless. It's a terrible feeling, and he should think about that. Many lives are being impacted by this. I think it's greed. I don't have it, and even if I did have it I wouldn't give it to him," she said.
Daut asked Jacobs: "The word I keep hearing from residents is 'greed.' Is this greed?" Jacobs answered, "It's economic self-interest." Daut then asked, "And in 16 years what happens to these people?" Jacobs replied: "Their leases expire." Daut asked, "And they'll have to leave?" Jacobs answered, "As a practical matter, what you're saying is there's a number of elderly people, they can't afford it, chances are they won't be here." Daut asked, "Do you have any sympathy at all for people who are fearful they're going to lose their homes in 16 years?" Jacobs replied, "I have sympathy for anyone who doesn't understand a deal that they make."
Lenes believes the deal could backfire for the land owner (McGlamary) in the long run: "You're going to sit here with a lot of empty homes because we all had to vacate, and a lot of people aren't willing to buy. So karma, honey, it's all going to come back. And trust me it will," she said.
Daut asked Jacobs: "In 16 years, if the other half don't sign this, and they walk away from their homes, won't this hurt your client financially in the long run, he's going to be losing out on a lot of money." Jacobs replied, "That won't happen." Daut asked, "Why not?" Jacobs replied, "My client's been losing money in this for over 20 years, what difference does it make? Now, he's establishing fair market value, and to a certain extent his signing bonus will make up for the rent he has not been getting because these people were not willing to negotiate in good faith." Daut asked, "Is there any hope that some sort of an agreement can be reached with these residents?" Jacobs responded, "You don't keep walking into negotiations only to get hit upside the head and told 'We'll walk away.' So no, we established the price, and that's what it is."
Daut asked Buck, "If the landowner is watching this story, what do you want to say to him?" Buck answered, "Well I'd like to know how he sleeps at night."
Meanwhile, Buck said Saddlerock Estates should serve as a warning: "Why will people come and buy on Indian land if they know what's going to happen?" he asked.
Daut asked Jacobs: "Are you at all concerned that this is going to impact all Indian land in the Palm Springs area, because people are going to see this and not want to buy?" Jacobs answered, "That impact will be that people who have existing leases on tribal land know that if your lease is getting around 35 years, you better get to the table."
Daut reached out to both the BIA and Agua Caliente tribe, and they declined to comment. The issue highlights the risks associated with buying property on leased land. Nearly 20,000 people and businesses in the Valley lease tribal land. And with many of those leases expiring around the same time, this could be just the beginning. But both sides agree on one thing: Read the fine print, and know exactly what you're signing.
Check out the first part of Peter's report below:
