For Immediate Release: Monday, May 12, 2014
Contact: Kevin Borden, email@example.com, (202) 360-8876
Equity LifeStyles Properties, Chairman Sam Zell, Face Increased Scrutiny Over Risky Business Practices
Manufactured Home Owners Will Attend Shareholders Meeting to Cite Concerns
(CHICAGO)— Equity Life Styles Properties (ELS), a Real Estate Investment Trust (REIT), and the nation’s largest corporate owner of manufactured home communities is holding its shareholders meeting on Tuesday amid increased scrutiny of both their management practices and of recent statements made by its chairman, Sam Zell. Manufactured home owners from ELS communities in seven states, many of whom are seniors living on fixed incomes, will be attending the shareholders meeting where they will bring their grievances directly to ELS’ Board of Directors.
ELS currently owns 380 manufactured home communities in 32 states. These are land-lease communities in which the REIT (ELS) owns the land under the homes, which are not mobile. ELS has been facing criticism due to large rent increases coupled with decreased maintenance. This double whammy undermines the affordability of ELS communities and destabilizes these properties as long-term real estate investments. ELS recently faced a $111 million verdict in Santa Clara County, California for breach of contract, negligence and nuisance for failing to maintain one of its manufactured home developments.
“The Santa Clara County decision adds proof to the claim that ELS’ business practices are putting the health of our communities at risk. Our retirement security and home equity are being ravaged by ELS,” stated Richard Robinson, a senior who resides in an ELS-owned community in Farr West, Utah. “I’m coming to Chicago to ask ELS why they are continuing to push our rents through the roof, while at the same time allowing our community’s infrastructure to fall to pieces. In my opinion, this risky business model is putting our families’ and our communities’ financial well-being in jeopardy.”
Zell is also facing a petition drive calling for his removal as ELS chairman. The petition has garnered thousands of signatures due to his recent disparaging comments made about the work ethic of those not in the top 1% income bracket in the country in a TV interview.
“It is infuriating that someone who makes millions off of monthly rents paid to his company by seniors who worked their entire lives and who are living on Social Security is questioning our work ethic,” added Pam Bournival, a home owner in an ELS Community in Sarasota, Florida. “ELS should view these comments as an embarrassment to their customer base. We feel it is in the best interests of shareholders to avoid risk posed to ELS’ marketability and ask for Mr. Zell to step down as Chairman of ELS.”
Manufactured home owners involved with MHAction, a project of the Center for Community Change Action, have called on ELS, and other REITs to re-evaluate their business models and management practices. MHAction community leaders believe the path forward for ELS and other REITS is to put in place long term lease agreements that outline a fair and balanced rent increase and capital improvement process. MHAction is also calling for ELS’s principals to support America’s retirement systems of Social Security and Medicare that the vast majority of their customers rely upon.