The Davids fighting Goliath in West Virginia

A feisty team of lawyers and tenants in Appalchian mobile home parks are fighting Alden’s owners — and sometimes, they’re winning.

News analysis

By Julie Reynolds

In Mercer County, West Virginia, Valeria Steele is proud of her home in Elk View Estates, a community she says used to be “such a nice place to live.” But since new owners took control nearly two years ago, “they’ve ruined it. There are trailers with broken windows, uncut grass. We never had that. We’ve had a sewer leak for months, and it’s leaking into a natural water source.” 

Who, exactly, took over? After extensive online research, Steele and others figured out it was the founders of Alden Global Capital and its affiliated businesses. 

Steele knows what it’s like to fall under the domain of Alden’s empire. Her mobile home park, like several hundred more across the nation, was quietly purchased in late 2021 by an Alden affiliate, Homes of America, or HOA.

What happened next was no secret: In Steele’s park — as in other HOA parks — rents abruptly shot up by as much 60%. Steele’s rent jumped from $550 to $850 overnight. Her park and others nearby quickly fell into disrepair — sewer leakages, collapsing floors and other hazards became common. Tenants complained the new managers tried to evict them for owing back rent they’d paid in full. For many of the park’s residents already struggling with limited income or disabilities, the sudden rent hikes were an insurmountable burden. 

Similar scenarios have played out in HOA parks across the south and midwest.

But a few of the West Virginia tenants — Steele among them — began investigating their secretive new owners. When they discovered the Alden connection, many were stunned, daunted by Alden cofounder Randall Smith’s seemingly unstoppable record of extracting cash from the businesses he buys — particularly local newspaper chains — while saddling them with debt, laying off wide swaths of the workforce and in some cases, shutting companies down. All while buying more than 16 mansions in Florida and the Hamptons.

With their own, more modest homes at stake, the Elk View Estates tenants chose to fight back.

In his book “Why David Sometimes Wins,” Harvard professor and longtime organizer Marshall Ganz describes the “foundation” for winning seemingly impossible struggles: depth of commitment. 

“David’s commitment to challenge Goliath did not depend on figuring out a good strategy,” Ganz writes. “On the contrary, good strategy grew out of his commitment to fight.”

In West Virginia, Steele and other mobile home park tenants have rallied under their own commitment, joining with a feisty group of rural lawyers to take on Goliath. 

They’re suing Alden cofounder Randal Smith’s company, Smith Management, over HOA’s alleged mismanagement of six West Virginia mobile home parks. 

“At the time we filed these lawsuits, the tenants didn’t even know where or to whom their rent money was going,” said plaintiffs’ attorney Adam Wolfe, whose firm, Mountain State Justice, offered to help the tenants pro bono. “We stepped in to help our friends and neighbors who were being subjected to unhealthy and unsafe living conditions while facing predatory rent hikes.”

The West Virginia nonprofit firm, Wolfe added, “has a storied history of taking on bad actors like Homes of America.” 

Deep ties to Alden

In responses to reporters and court inquiries, Homes of America officials have tried to distance themselves from Alden. But the ties are clear and abundant, according to court records. Although the parks’ deeds are held by a labyrinth of Delaware-based LLCs, nearly all legal documents related to HOA parks list Smith Management’s New Jersey address. In early communications with tenants, some HOA staff used Smith Management email addresses. 

The names of Alden cofounder Heath Freeman and numerous Alden officials appear on many of the company’s legal filings. Steele has a copy of a rent check that shows it was deposited into the account of Alden subsidiary Partridge Security LLC.

But the most troubling links tying the mobile home park venture to Alden invoke the name of Tribune Publishing, the newspaper chain that Alden took over in 2021 for a debt-laden purchase price of $633 million. 

A corporation called Tribune Holdco LLC was created when Alden bought Tribune Publishing to facilitate the purchase. 

But Tribune Holdco was later used to buy a mobile home park in West Virginia for HOA, called Gardner Estates. The purchase document was signed by Josh Kleban, Alden’s chief financial officer. And Homes of America LLC, public records show, is financed through an entity called “TRIBUNE II MHP FINANCE ONE LLC.” (MHP typically refers to mobile home park.) 

It’s still not clear whether Alden used Tribune money to buy its parks, but the connections to these Tribune-named LLCs is disturbing: after all, Alden has done similar things in the past. The company has admitted in court filings that it extracted hundreds of millions of dollars from the Digital First Media chain to invest in business ventures completely unrelated to local news, and in one case, into two of its own investment funds. 

To date, Homes of America has spent more than $260 million buying mobile home parks, according to a preliminary search of public records. The actual total is likely far greater.

Attempts to reach Alden, Smith Management and HOA chief operating officer Bryon Fields Jr. for comment were unsuccessful. On Oct. 17 he said it was not a good time to talk and to call back in the afternoon. The call back to Fields went to voicemail and cut off the message.

Taking on Goliath

While it’s unknown if the HOA tenants will ultimately win their war, their determination has carried this group to some significant early victories.

The tenants recently succeeded in getting their rent hikes halted. In a related case, the Mercer County Court also ordered the parks to complete repairs so they comply with permitting requirements. 

“They’ve done repairs only in response to court orders,” Wolfe said.

Still, the efforts in West Virginia could provide inspiration to those who worry about the fate of local news under private equity firms like Alden. 

Despite living in a relatively remote region, the West Virginia tenants reached far beyond their own sphere. They read about journalists’ long struggle with Alden, and studied the firm’s history of shutting down retail chains like Payless ShoeSource and Fred’s pharmacies. 

Steele learned about legislative initiatives from people fighting HOA in states like Idaho, where lawmakers have passed laws imposing increased fines in response to HOA’s lagging on obtaining proper permits.

Armed with cell phone cameras, tenants and community organizers have documented HOA parks’ maintenance issues and apparent code violations. They’ve made copies of receipts, notices and documents showing that tenants had in many cases paid their rent in full, yet were still given “eviction” notices that were not formatted in compliance with the law.

Because of these efforts, some evictions have been halted, and the Mercer County Court has ordered a stay on rent increases — at least until the parks come into compliance with permit requirements.

Stalling in court 

This is not to say the fight has been won. Homes of America tenants still contend with attempted evictions, water issues — in one Virginia park, HOA neglected to pay the $15,000 water bill, causing a shutoff — and most notoriously, leaking sewage, one of the most common complaints in HOA parks. 

In one example, Florida’s Department of Environmental Protection opened an investigation into HOA’s Lake Runnymeade Mobile Home Park after a July 2022 inspection found the septic system’s discharge into drain fields was “very turbid and cloudy,” and exceeded legal levels of solids and fecal coliform bacteria.  

It took the park’s managers eight months to bring the system up to code. 

Across the country, tenants in HOA parks have complained about similar health hazards, rent hikes and evictions. Some tenants, including in neighboring VIrginia, have lost legal battles. Some in West Virginia are weary of an already lengthy court fight they’re not sure they’ll win.

Mountain State Justice lawyers are concerned about rising vacancy rates at HOA’s parks in West Virginia. “A lot of people are getting out,” said Jackie Lane, a paralegal and black lung specialist at the firm who’s working on the firm’s two HOA lawsuits. “It made me think of a ghost town. It’s sad.”

Steele says the once-full Elk View Estates is about 50% vacant. At nearby Gardner Estates, she said, a friend had to move her home out of the park. “Her doctor told her she had to move because of her asthma. You’ve got systemic issues like water and sewer and it affects everyone that lives there.  

“That’s where I get angry.” 

Besides the courts, Steele and her colleagues hope to take their fight to local lawmakers and commissioners. “We’re looking to change laws.” she said. For example, they want local officials to pass new regulations so landlords “can’t raise rent if they’re not doing the maintenance.” They also want rules prohibiting landlords from remaining anonymous, as HOA initially did at a number of its parks.

In a potential class action case in which Steele is one of six named plaintiffs, Mountain State Justice attorneys are now asking for an injunction to stop HOA from terminating lease agreements (which would likely lead to raising rents) as well as “operating manufactured home communities without permits.” Gardner Estates — the park purchased by Tribune Holdco — is named as a co-defendant in the suit.

Court records show HOA and Smith Management have for months failed to hand over court-ordered discovery materials and have missed scheduled depositions. 

In response, Mountain State Justice recently filed a motion asking the court to enforce its own orders and issue sanctions against HOA and Smith Management for their “egregious failure” to follow court orders.

A hearing is scheduled.

Steele is grateful for the team at Mountain State Justice, and she’s hopeful the injunction will be granted, which could extend tenants’ temporary reprieve from rent hikes. “That would not only give relief, but would give us positivity going forward.” 

“These are people mostly on fixed incomes already being hit in the pocketbook with higher grocery prices, higher gas prices, you name it — these are the folks that are always getting squeezed,” said Colten Fleu, a senior attorney at Mountain State Justice who’s spent years working with tenants in manufactured housing communities. 

“It is important to stand up with them and fight with them,” Fleu said. 

“It also matters to hold to account these large, faceless companies that are buying up these communities; to make them abide by the laws of this state, to make sure if they are going to get into the business of being a landlord, they know that real lives are being affected by their decisions.”  

And if their class-action suit makes it to its scheduled trial date in June, Steele is confident about the outcome. 

“We will win that one.”