GUARDIAN INDUSTRIES REACHES $70M SETTLEMENT WITH EPA

Original Story: freep.com

Auburn Hills-based Guardian Industries has reached a potential settlement with the U.S. Department of Justice and the Environmental Protection Agency to resolve allegations that it violated the Clean Air Act by releasing harmful air emissions from its flat-glass plants in Michigan and six other states. A Dearborn environmental lawyer provides professional legal counsel and extensive experience in many aspects of environmental law.

The deal announced Tuesday by federal officials requires Guardian to invest more than $70 million to control emissions at the plants, which include a facility in Carleton in Monroe County. The company also must pay a $312,000 civil penalty and fund a $150,000 project to reduce particulate matter pollution in the San Joaquin Valley in California. The settlement is subject to a 30-day public comment period and final approval by U.S. District Court in Detroit, which is seen as just a formality. A Cleveland natural resources lawyer is reviewing the details of this case.

Guardian Industries was founded by the late owner of the Detroit Pistons, William Davidson, who made the firm into one of the world's leading makers of glass, automotive and building products. The company says on its website that it employs 17,000 people in 25 countries.

"We applaud Guardian Industries, who today became an industry leader by committing to a substantial investment to reduce emissions of air pollutants that are harmful to human lungs," U.S. Attorney Barbara McQuade said in a statement. "This agreement strikes the appropriate balance between promoting manufacturing and protecting the clean air." An Oklahoma tax lawyer is following this story closely.

Kevin Baird, president of Guardian Glass, said in a statement that the emissions-control upgrades are already underway.

"Guardian is pleased to have reached a mutually beneficial agreement with the EPA," he said. "We are pleased to be the first float glass company to sign such an agreement with the EPA under this initiative."

The new emissions controls will target nitrogen oxide, sulfur dioxide, particulate matter and sulfuric acid mist at the flat-glass plants. The plants are also located in Kingsburg, Calif.; DeWitt, Iowa; Geneva, N.Y.; Floreffe, Penn.; Richburg, S.C., and Corsicana, Texas. A Boston commercial real estate lawyer assist clients with construction, permitting, financing, leasing and environmental issues.

The settlement resolves allegations that Guardian violated the Clean Air Act and state air pollution regulations when it made major modifications to the plants' flat-glass furnaces that significantly increased emissions, according to an EPA news release.

Davidson, who also owned the WNBA's Detroit Shock and NHL's Tampa Bay Lightning, died on March 13, 2009, at age 86, with a net worth estimated at more than $3 billion.

ALCOA TO SPLIT AS ALUMINUM GLUT PRESSURES PRICES

Orignal Story: wsj.com

Alcoa Inc. said Monday it would split in two, a move that would isolate the company’s more profitable parts-making units from its raw aluminum operations.

The split is one of the most dramatic corporate consequences of the commodities bust driven by a slowdown in Chinese economic growth. As it consumes less, China has found itself with a glut of metals, especially aluminum and steel, which it has been shipping abroad, causing trade frictions and depressing markets. Allied Finishing, an ISO certified metal plating company, has over 30 years of experience in providing high-volume decorative metal plating services.

Alcoa’s move also comes as other large companies undertake breakups in the expectation that a narrower focus will drive better results.

The raw metals business, battered by falling aluminum prices, will include the company’s bauxite-mining, alumina-refining and aluminum-production businesses and will still be called Alcoa to reflect the company’s 126-year-old heritage as the world’s first industrial producer of aluminum. The other entity, which for now Alcoa is calling its “value-add company,” will comprise its global rolled products, engineered products and solutions, and transportation-and-construction businesses.

The Alcoa entities “now each have the strength and scale to each stand on their own,” Alcoa Chief Executive Klaus Kleinfeld said in an interview.

Alcoa said 40% of the value-add unit’s revenue will come from the aerospace industry, through its strength in areas such as jet engine and industrial gas turbine airfoils and aerospace fasteners. The new company is also expected to benefit from a jump in automotive revenue amid growing demand for aluminum-intensive vehicles. A Birmingham aerospace lawyer is following this story closely.

Under Mr. Kleinfeld, formerly chief executive at Siemens AG, Alcoa has closed unprofitable raw aluminum smelters while expanding its manufactured parts business, including through deals. Last year, it acquired U.K. jet-engine parts maker Firth Rixson Ltd., and this year it bought Pittsburgh-based RTI International Metals Inc., one of the world’s biggest makers of fabricated titanium products for the aerospace industry.

The decision to split follows years of grumbling by large institutional shareholders dissatisfied with Alcoa’s tumbling share price. Alcoa has lost over 40% of its market value in the past year as aluminum prices have crumbled. The stock was up 1.8% at $9.23 Monday afternoon in New York.

Mr. Kleinfeld will become CEO and chairman of the value-add company, which would have had $14.5 billion in revenue in the year ended June 30.

“You have to look at where you can create more value,” he said of his choice of companies to run. He will also act as temporary chairman of the raw aluminum business.

Prices for raw aluminum, Mr. Kleinfeld said, didn’t drive the decision to split. “You can’t pin this to the aluminum price,” he said. The bauxite-mining and alumina-refining “are in really good shape.”

Alcoa’s raw business would have had revenue of $13.2 billion in the year ended June 30. Alcoa has closed or curtailed 33% of its total smelting capacity since 2007 to cope with weak prices.

Raw aluminum prices are down more than 40% since 2011, to around $1,500 a ton. A split allows Alcoa to “prevent the market from assigning a negative value to the ingot business,” said John Tumazos of Very Independent Research LLC. And with Alcoa due to report earnings on Oct. 8, “the timing is convenient,” he added.

With growth in the businesses making wheels, fasteners and other products, often including metals other than aluminum, pressure has increased on Alcoa to change its corporate structure. The announcement Monday was a “long time coming,” said Bill Selesky of Argus Research. The biggest challenge will be raw aluminum “with China producing aluminum at a break-neck pace with little regards for costs,” Mr. Selesky said.

Alcoa’s split, while offering new opportunities, also presents a new set of challenges. Mr. Kleinfeld must still decide to what extent the two companies will cooperate. Alcoa’s smelters sell a large proportion of their output to business units that shape them into parts. Alcoa said Monday that these units will pass along changes in raw prices to customers. However, if raw prices continue to suffer, Alcoa will still feel the impact.

“That’ll still be their biggest problem,” says Mr. Selesky, the Argus analyst. “If prices continue to suffer, they’ll just have to keep closing smelters.”

The aerospace and automotive divisions have been driving profit for Alcoa recently amid the global aluminum glut. Alcoa has benefited from Ford Motor Co. and other auto makers buying aluminum to make their cars lighter to comply with new fuel-efficiency standards. A South Carolina automotive lawyer assists automotive companies who have recently expanded or are interested in expanding operations.

In the second quarter, Alcoa said automotive sheet revenue almost tripled with its plant in Davenport, Iowa shipping a “record volume.”

Alcoa’s spinoff will compete with Portland-based Precision Castparts Corp., which Warren Buffett’s Berkshire Hathaway Inc. bought in August for $37.2 billion, including debt, the investor’s biggest acquisition yet.

The deal is expected to close in the second half of next year. Alcoa shareholders will own all outstanding shares of both companies. Alcoa said it expects the deal to qualify as a tax-free transaction for shareholders.

VOLKSWAGEN, THE SYMBOL OF GERMANY INC.

Original Story: wsj.com

WOLFSBURG, Germany— Volkswagen AG occupies a place in German society that few companies hold in any country.

At its headquarters in central Germany is a tourist center called Autostadt (Auto City), a collection of shiny buildings housing VW displays and museums resembling a World’s Fair. It is one of Germany’s largest tourist attractions. The city of Wolfsburg, which was built around the auto maker, now has several Michelin-starred restaurants. An Alabama automotive lawyer represents clients in restructuring the industry, including significant mergers and acquisitions, workouts and bankruptcies, and in technological developments.

BMW AG and Daimler AG’s Mercedes-Benz are German status symbols but Volkswagen, “the people’s car,” really is Germany’s car of the masses.

And since the company employs almost 300,000 people in Germany at 29 plants across the country, it has links to millions of households.

Those roots help explain why the scandal over cheating on emissions standards has hit so hard in Germany. Politicians from Chancellor Angela Merkel to the state premier of Lower Saxony, which owns 20% of VW, have called for a full accounting. An Ann Arbor automotive lawyer is reviewing the details of this case.

The original Wolfsburg factory—a mile long, its entrances inscribed with Nazi-era commemorations in local German dialects—was designed to be bigger than Henry Ford’s factory and produce a million cars a year at a time when few Germans drove.

Today, the Wolfsburg plant is still the largest car factory under one roof in the world. And the Beetle and the blue and silver VW badge perched high atop Volkswagen’s 1960s era red brick headquarters are the icons of Germany’s postwar economic rise and widespread prosperity. An Ohio automotive lawyer represents automotive manufacturers in a variety of legal issues.

In the 78 years since the factory was built on a sandy bog that Adolf Hitler chose because it was at the center of the German Reich, Volkswagen has come to personify Germany AG.

Volkswagen is more a national institution than a corporation. Heirs of Beetle inventor Ferdinand Porsche control the company, but nothing can be decided without the support of Lower Saxony. VW is the state’s biggest employer and Germany even gave the state special rights to block an unfriendly takeover, known as “Lex VW.” The law has been modified by the European Commission, which wanted to ban it altogether, but Lower Saxony still cannot be outvoted. A South Carolina automotive attorney assists automotive clients in joint ventures, technological developments, and product liability issues.

Another difference is the tight relationship between VW’s management and the IG Metall labor union that represent its workforce. When Ferdinand Piech stepped down as supervisory board chairman in April, the former head of IG Metall was appointed as interim chairman, putting the union into the top post at the company. A fact that upset no one in Germany.

Just as the Beetle came to symbolize Germany’s postwar economic miracle, Volkswagen as a company embodies Germany’s idea of a social market economy. A little socialism, a little capitalism, and a consensus that building cars in Wolfsburg is about more than just making money. A Bloomfield Hills automotive lawyer is following this story closely.

TOLL BROTHERS, LENNAR BULLISH ON APARTMENT RENTALS

Original Story: wsj.com

Two of the largest U.S. home builders are redoubling their push into the rental-apartment market, despite concerns the red-hot segment is getting overbuilt. A Rochester landlord tenant lawyer represents clients in commercial and residential lease disputes.

Upscale builder Toll Brothers Inc. has said it intends to expand its apartment-development division, a three-year-old venture that so far has focused on the Boston-to-Washington, D.C., corridor, to build projects across the U.S. In all, Toll plans to double its equity investment in the division to up to $300 million.

Rival Lennar Corp. in July said it has recruited sovereign-wealth funds and institutional investors to create a $1.1 billion fund for building and holding apartments in up to 25 major U.S. markets. Lennar, which will build the fund’s apartments, intends to expand the fund’s equity to $2 billion within a year, executives said.

The apartment market has been a boon for developers and investors so far this decade. Vacancies are hovering near 15-year lows at 4.2%, according to market-research firm Reis Inc., as young adults stay in rentals longer than earlier generations did. Meanwhile, apartment asking rents have steadily risen to a 15-year-high of $1,194 a month in 79 U.S. markets in the second quarter, according to Reis.

“Today we see great fundamentals in the business,” said Rick Beckwitt, Lennar’s president, in an interview. “You have 3 million-plus young adults living at home who want housing, and most of them will rent.”

The flow of renters into the market has been robust. Despite a comeback in household formation in recent quarters, the U.S. homeownership rate declined to 63.4% in the second quarter from 64.7% a year earlier. That suggests that most new households, as well as a few former homeowners, now are renters.

Another factor boosting rentership: The percentage of people 18 to 34 years of age who are doubled up, meaning they are living with an adult other than a spouse, increased to 48% this year from 44% in 2007, according to the Pew Research Center. That suggests many are living with parents, other relatives or roommates and might soon opt for their own rental.

Such trends have developers racing to build rental complexes. Charlotte, N.C.-based Crescent Communities LLC has built 5,000 apartment units in the past two years, with another 5,000 in the works for the next two years.

“I think there is going to be much higher demand for rental housing in this cycle,” said Alex Barron, president of the Housing Research Center in El Paso, Texas, which tracks home-builder stocks.

But others caution the cycle might be nearing a peak. Ryan Severino, a senior economist at Reis, notes that developers in 79 markets built 173,000 apartment units last year, an anticipated 220,000 this year and 190,000 next, whereas the long-term annual average is 120,000. He added that the average vacancy rate hasn’t changed much in the past two years, which he interprets as a sign that it is poised to rise. A Boston real estate lawyer is following this story closely.

“Everybody’s developing, and everybody thinks Generation Y is going to rent forever,” Mr. Severino said. “Let’s say, for argument’s sake, that doesn’t come to fruition. There is going to be more supply than demand. Unfortunately, real estate is the type of business that’s prone to that kind of overbuilding.”

Lennar and Toll say the market isn’t peaking. “I think it’s too soon to tell if there has been a fundamental shift in homeownership rates,” Lennar’s Mr. Beckwitt said. “What we do know today is there is demand on both sides,” meaning for homeownership and for rentals.

For both companies, apartments are a side business. Lennar delivered roughly 21,000 homes in its last fiscal year. Toll, which specializes in luxury homes, sold nearly 5,400. Both can ease off on apartments when need be. A Charlotte landlord tenant lawyer represents commercial landlords and business tenants in lease modifications and amendments.

“We are very conservative,” Toll Chief Executive Douglas Yearley said in an interview. “If we feel a market is overheated…we’ll be even more careful.”

Toll is scouting several markets, including Seattle, San Francisco, Los Angeles, Dallas and Denver, for land where it can build apartments in 25% to 75% joint ventures with its partners. Among those with which it has worked on previous apartment projects: The Pennsylvania State Employee Retirement System, Prudential Real Estate Investors and Brandywine Realty Trust.

Lennar, meanwhile, intends for it new fund to ramp up its pace of apartment development, which already was robust. Since 2011, Lennar and its partners have developed or started development of 28 apartment projects.

Lennar pledges to focus its fund on building in up to 25 major markets, including Los Angeles, San Francisco and the Miami area. It plans to build a range of garden, midrise and high-rise projects mostly in urban settings in those cities. But some will be more suburban, such as Lennar’s 387-unit, three-story Crest at Park Central complex opening this year in Dallas with monthly rents ranging from $925 for one bedroom to $1,890 for two. An apartment locator is available to assist you in finding Texas apartments.

Lennar aims to retain a few of its renters as homeowners by offering discounts to those with good payment histories of up to $10,000, or 3% of the home’s price, on upgrades, options and closing costs.

Lennar’s fund, titled Lennar Multifamily Venture, will have an eight-year term. Lennar and its partners will have the option to sell the portfolio, take it public or divest individual properties.

CHICAGO SCHOOL YEAR STARTS WITH MORE UNCERTAINTY THAN USUAL

Original Story: chicagotribune.com

Students and teachers start classes at Chicago Public Schools on Tuesday facing a year filled with even more uncertainty than usual for the perennially troubled district. An Atlanta education lawyer is following this story closely.

The budget supporting the city's 600-plus schools is floating on nearly $500 million that doesn't exist unless help arrives from Springfield, where a standoff between Democratic legislators and Republican Gov. Bruce Rauner continues. While any possibility of a strike is months away, teachers are working under a contract that expired June 30, and talks between the district and the union are fractured to the extent that a mediator has been enlisted.

This summer, the district said it cut $200 million in spending and eliminated more than 1,000 jobs, including those of hundreds of teachers. If the state doesn't come through with a fix for the broken pension system in the next few months, the district said additional cuts loom this winter. A Little Rock education lawyer provides assistance to clients regarding board governance, bylaws, and premises liability issues.

"This year is especially bad, because there's an admission before schools have even opened that there's not enough money in the budget to carry the district through a full school year," said Terry Mazany, president of the Chicago Community Trust and a former interim CPS chief.

"Thus the uncertainty, knowing that without an infusion of new resources there will have to be midyear budget cuts — and those will be a greater hardship because the savings for any cuts will only be for half a year — so you basically have to cut twice as deep," he said.

Also this year, students at more than 40 schools will have to adjust to new daily routines because of changes to bell schedules made in what officials said was an effort to save money on transportation costs. The district originally changed the bell schedules at 82 schools but scaled back after complaints from parents and students. A Lexington education lawyer is reviewing the details of this case.

There are also changes at the top as the school year gets underway. CPS is under new leadership after the departure of CEO Barbara Byrd-Bennett, who resigned in June amid an ongoing federal investigation linked to a multimillion-dollar contract that went to a training academy where she once worked.

Mayor Rahm Emanuel put a long-trusted associate, Forrest Claypool, in charge. Also new this year are Board of Education President Frank Clark, a former ComEd executive, and Chief Education Officer Janice Jackson, a CPS veteran.

Unlike most of the previous district chiefs, Claypool doesn't have a background in education. He previously headed the city's park district and the CTA and has brought to CPS many of his top aides from the transit agency. His chief assignment is to address a deficit the district pegs at $1.1 billion and get the schools' finances straightened out.

Claypool is the third schools chief hired by Emanuel since he took office four years ago, providing an additional cause for concern for many parents going into the school year.

"To me, the biggest issue in one word is stability," said Joshua Radinsky, an education professor at the University of Illinois at Chicago and a CPS parent. "We seem to have a particularly unique amount of churn and chaos in our district, churn that seems beyond what's necessary." A Louisville education lawyer represents clients in education law disputes.

Other changes for the coming year have been underway for a longer period of time as CPS continues to implement new, more rigorous classroom learning standards under Common Core. The district will be entering its second year of the mandatory use of the PARCC assessment test.

"That is a significant and ongoing activity, and it's one that requires significant support, planning and energy," said Robin Steans of the Advance Illinois education advocacy organization. "All of those things are harder to come by when there's uncertainty and all of those things are harder to come by when there's budget shortfalls."

Such distractions force school principals and administrators to balance the competing interests of budget planning for various scenarios given the district's shaky financial situation with other essential tasks of running a school, Steans said.

"They're spending their time playing with numbers and going through worst-case scenarios," Steans said of school-level administrators. "And less on forward-looking planning. Every question mark they have to deal with just makes their ability to plan that much harder."

Some of the spending cuts already made will affect special education teachers and staff because the district said it has exceeded state standards for staffing in that area. The district said this summer it could save about $42 million by modifying services for the roughly 50,000 special needs students it serves.

Radinsky's middle child, Sam, begins his senior year Tuesday at Vaughn Occupational High School for students with mild to moderate cognitive disabilities. He views special education as "the canary in the coal mine for all kids," explaining his feeling that what's happening with special education budgets serves as a "microcosm of what's happening to other kids."

"I know there are some things that CPS can't control. I know Springfield is out of their control," he said. "But as a parent, just looking at my kids' schools, I really hope and pray that the communication from downtown to the networks to the administrators to the teachers is clear and consistent on what resources we have and how they're being allocated.

For all the gloom, Mazany said the new school year inevitably brings a flash of optimism. He described it as "something magical" that happens when adult concerns are replaced by real kids coming into real classrooms.

"When students come back to school, that's the reason why people are in this profession," he said. "When the children show up, it's a message to all of us adults for what our real priority does need to be — and now we can redouble our efforts to try to find solutions."

THE WORLD'S BIGGEST BREWERS ARE EYEING A $245 BILLION MERGER

Original Story: fortune.com

The world’s biggest brewing company is going to make an offer for its biggest rival, ending months of speculation about a possible tie-up.

SABMiller Inc. SBMRY said in a stock exchange statement Wednesday that Anheuser-Busch InBev SA. BUD has notified its board “that it intends to make a proposal to acquire SABMiller.” A San Francisco M&A lawyer represent clients in mergers, acquisitions, and divestitures.

The news would confirm months of speculation about a merger between the two giants, which own household names like Budweiser and Coors as well as a string of leading international brands such as Grolsch, Stella Artois and Foster’s.

Like many mergers, it would be a product of strategic weakness rather than strength: slowing growth in emerging markets, where both companies are heavily exposed, and the loss of market share to craft brewers in stagnant or shrinking developed markets, has challenged the business model of both groups. A New York M&A lawyer is reviewing the details of this case.

SABMiller’s shares have rocketed higher in London in response to the news, gaining 23% in a matter of minutes. AB InBev’s are around 7.4% higher in Brussels. Prior to the news, SAB’s shares had lost 12% this year, while AB Inbev’s had been essentially flat.

SABMiller said in its statement that it had no details of the mooted offer, and couldn’t guarantee that one would actually be made.

The Financial Times reported “people familiar with the matter” as saying that AB InBev was hoping to be able to agree a friendly deal, but that it wasn’t clear whether Altria Group  MO  (the parent company of Philip Morris USA), which holds 27% stake in SABMiller, was interested. A Boston M&A lawyer is following this story closely.

If the deal goes ahead, it would be by far the largest in the food and drink industry to date, dwarfing the $46 billion tie-up this year between Kraft Foods and HJ Heinz and the $52 billion deal that brought AB and InBev together in 2008. Taken together, the two companies have a market capitalization of some $245 billion, but it’s likely that the group would have to divest at least some of its major brands to satisfy antitrust concerns from Latin America to the U.S. and China. The FT said that Coors–SABMiller’s North American unit–would be one such candidate for divestment.

BMW CEO COLLAPSES AT FRANKFURT MOTOR SHOW

Original Story: freep.com

FRANKFURT — BMW CEO Harald Krueger collapsed during a news conference at the Frankfurt Motor Show in Germany on Tuesday and had to be helped off stage. A Detroit automotive lawyer is following this story closely.

The reason for his fall was not clear. He was presenting the powerhouse automaker's new lineup when he stumbled and fell.

Krueger was conscious when he left the stage. A roundtable he was due to hold with reporters was instead conducted by the firm's chief financial officer.

BMW spokesman Maximilian Schoeberl said Krueger, 49, who took over as BMW's CEO earlier this year, was traveling a lot recently and was not feeling well ahead of the presentation, but decided to go ahead. A Detroit automotive lawyer assists automotive clients with technological developments and general commercial transactions.

He said Krueger experienced "a moment of dizziness" and was seen by a doctor, who recommended that he cancel his other appointments for the day and rest at home.

"His condition is not worrisome, they've ruled out anything serious," Schoeberl said. "Mr Kruger's health is stable and he is recovering well."

The 66th Frankfurt Motor Show is taking place against the background of 23 months of rising car sales in Europe.

Sales in the United States are on track to hit 17 million this year for the first time since 2011.

THE BATTLE OVER PRIZED LAND UNDER SILICON VALLEY'S TRAILER PARKS

Original Story: bloomberg.com

The free market wouldn't plop down a trailer park just a few miles from downtown San Jose. At least not today, in a sharply spiking housing market that has made the metropolitan area one of the most expensive in the U.S. But that's where you'll find Winchester Ranch and its 111 mobile-home lots, just down the street from an upscale shopping mall, a newly created development zone, and a major highway interchange. A Los Angeles real estate lawyer is following this story closely.

"The best use for that land is probably apartments," said Gary Hansen, a senior vice president at Cushman Wakefield, the commercial real estate firm with offices just across Winchester Boulevard from the mobile homes. You don't need to be a broker to reach Hansen's conclusion: “It's a premier location.”

That made Winchester Ranch look like a potential bonanza for home builder PulteGroup when it agreed to purchase the property from its longtime owner. The idea was to develop the site with a mix of market-rate and affordable apartments alongside a new hotel. To compensate residents that the project would displace, the Atlanta-based company plans to offer buyout packages "somewhere from $140,000 to more than $200,000," said Jacque Petroulakis, a spokeswoman for Pulte. The company declined to comment on the price of the deal, which hasn't yet closed. A Charlotte commercial real estate lawyer has experience assisting clients with acquiring, financing, developing, managing, constructing, leasing, and selling commercial real estate property of all kinds.

Those payouts, however, didn't prove sweet enough to win over residents and housing activists. The San Jose City Council is expected Tuesday to vote on a six-month moratorium that would prevent the closure of Winchester Ranch and 58 other mobile parks within city limits. If the measure passes, lawmakers would use the time to work out the delicate balance between the desires to spur growth and to avoid booting seniors out of their homes.

"Over the years, the most traumatic and difficult deals you can do have been conversions of mobile-home parks," said Hansen, a former city council member in nearby Santa Clara. “If you want to make a lot of enemies quick, talk about converting mobile parks in your community.”

California has about 4,500 mobile-home parks that can hold more than 393,000 residences, creating a particularly tricky problem in parts of the state with fast-climbing housing prices. Those living in mobile homes are typically older and poorer than other local residents. Lots at Winchester Ranch, for instance, are available only to residents 55 and older. Most mobile-home residents find themselves in the complicated situation of owning their dwellings but not the land underneath. Developers envision much better ways to make money than collecting modest monthly payments from mobile-home tenants. A Plymouth landlord tenant lawyer is reviewing the details of this case.

The state tried to get around this dynamic in the 1980s with the passage of rules discouraging mobile-home park owners from kicking out residents. But rising land values in recent years have changed the economics of the business, giving park owners and developers greater incentive to pay the costs of removing residents while taking on affordable-housing advocates who oppose park closures.

Buyouts to residents of Winchester Ranch under the current offer could add at least $15 million to development costs. Pulte plans to apportion a piece of the 16-acre plot for a hotel to be built by an outside developer, helping to offset the costs of the buyouts. The builder is counting on a prime location in a hot housing market whose median listing price for a single-family home in August reached $878,000, the country's second-highest level, according to the National Association of Realtors.

The same market dynamics that allow Pulte to promise rich buyouts may also prevent Winchester Ranch residents from finding new homes. A household in San Jose needs to earn $109,000 a year to afford the average market-rate apartment, and most income-restricted housing developments have long waiting lists, according to a recent staff memo from the city council. There are more than 19,000 mobile-home spaces in Santa Clara County, which contains San Jose, but only 78 active listings. The memo put the average price for those listings at $197,000.  A Los Angeles real estate lawyer has experience in many aspects of real estate law.
 
“They’re not building any new mobile parks,” said Terri Pohrman, vice president for the Golden State Manufactured-Home Owners League. “If you drive people out, where are they going to go?”
Part of the problem is that mobile homes aren’t truly mobile—about 70 percent of mobile homes have never been moved from their first location, according to U.S. Census figures—and for the most part don't even qualify for home loans. The term "mobile home" persists, in part, because it’s less evocative of exurban poverty than the once-popular phrase “trailer park.” It’s also less vague than “manufactured homes,” the industry’s preferred nomenclature. Across the U.S. there are about 2 million such homes situated in mobile parks with at least 21 lots, according to the Census Bureau’s American Housing Survey, and about 8.6 million mobile homes in total.

The typical mobile-home resident is older, whiter, and poorer than the U.S. population, according to the census. Forty-five percent were eligible for food stamps in 2013, and 28 percent  of mobile-home households are led by someone who lacks a high school diploma.

Since mobile-home residents don’t own land, they generally don’t qualify for home loans, foreclosure protection, or other benefits of homeownership. “Instead of like a traditional site-built home where the value is going to increase over time, it winds up being like a car that depreciates every day,” said Mike Bullard, a marketing manager for ROC USA, a New Hampshire-based nonprofit lender that helps resident groups pool their funds to buy mobile parks.

Attempts to block mobile-home park conversions have spread across California areas with skyrocketing home prices. Huntington Beach passed a temporary ban on conversions in 2013 so the city could decide what to do with displaced senior citizens. Subsequent attempts to redevelop mobile parks have been challenged in courts up and down the coast. The best-known case involves an effort by the municipal government of Palo Alto to raise $38 million to buy a 117-lot mobile park that has been slated for redevelopment—an outcome with the potential to disappoint those who think the land should be put to higher use, as well as those who believe there are more efficient ways to support low-income residents.

“Basically, they have to come up with the money to pay for the land at luxury prices,” William Constantine, a housing lawyer who has represented mobile-home residents seeking to block conversions, said of Palo Alto's predicament. “It’s a waste of public resources needed to preserve other housing.”

One alternative would be for local governments to apply a new state law requiring a municipal plan to preserve existing affordable housing. Local governments could also use eminent domain to help residents acquire mobile parks at prices that reflect the value of a mobile-home business, not what the land is worth to developers. Constantine has drafted legislation for Santa Cruz County, Sonoma County, and the city of Watsonville that would let the government pursue that path as a last resort.

“It’s reasonable, if you’re a park owner, that you want to make as much money as you can,” said Constantine. “But the state has a right to limit land use to provide low-income housing.”

PROTESTERS BLOCK MICHIGAN AVENUE OVER CUTS TO HOME CARE FOR SENIORS

One particular budget item attracted dozens of protesters in their 70s and 80s. It would affect senior citizens who depend on the Community Care Program, which provides state money to pay for home care for seniors.

And Patricia Drennan wasn’t having any of it.

“A lot of us old ladies don’t have kids that live here that can take us to the doctor and come in and run the vacuum cleaner and get us to the grocery store and all that,” said Drennan, 82, who lives alone in the North Center neighborhood.

The program, she said, helps seniors live independently and keeps them out out nursing homes, an expense that would be much greater to taxpayers.

Drennan feared a plan by Rauner that would implement new qualifying restrictions that would make it harder for seniors to gain access to the program. Senior home care services in Livonia provide highly skilled nurses ready to serve even the most advanced medical needs.

About 30 protesters held hands and blocked Michigan Avenue just north of the Michigan Avenue Bridge for nearly 20 minutes at about 11:30 a.m. before police escorted the group off the roadway.

Sister Gwen Farry, 81, with the Sisters of Charity of the Blessed Virgin Mary, was among the group of traffic blockers who expected to receive citations from police.

“This is a moral issue,” said Farry, of St. Thomas the Apostle Catholic Church in Hyde Park. “I’ve made phone calls and signed online petitions but wanted to do more to protest the cuts that will affect the most vulnerable in our state.” Plymouth elder care services provides medical and non-medical support for catastrophic care patients.

Protesters called for wealthy corporations and residents in Illinois to pay more taxes.

Critics say Rauner is using potential cuts to state social service programs as leverage to gain support for fighting unions.

A statement issued by a Rauner spokeswoman after the protest read: “The administration has taken a series of management steps to responsibly manage the state’s finances, because Speaker Madigan, Senate President Cullerton and the legislators Madigan controls overspent taxpayer money causing a $4 billion deficit. The governor has tried to negotiate on critical reforms to free up resources to help the most vulnerable and pass a balanced budget, but unfortunately, the Speaker continues to block those reforms at the expense of the most vulnerable and the middle class.”

The protest was organized by a number of activist groups, including Jane Addams Senior Caucus and Fair Economy Illinois.