They’ll pass it – but they won’t defend it

Back in March, when Council passed the “rent stabilization and limitations on evictions” ordinance, two of the four Council members who voted for it extolled the new law as a well-crafted compromise.

A “ground-breaking” achievement, Councilman Jim Oddie called it (not only once but three times during a 10-minute speech).  “It’s not what some people want, and it’s more than other people wish we would do, but it is something that’s possible.”

“I believe this ordinance addresses the needs of both [tenants and landlords],” Councilwoman Marilyn Ezzy Ashcraft declared.  “Nobody’s happy with it, but I’d like to think it’s striking a fair balance.”

Now, it seems, those same two Council members – together with Vice Mayor Frank Matarrese, the only one who voted no in March – aren’t willing to stand behind the ordinance they passed – and praised – only four months ago.

Last Tuesday, Council voted, 3-2, with Mr. Matarrese, Mr. Oddie and Ms. Ashcraft in the majority, not to submit a ballot argument in opposition to the renters’ initiative that was expected to qualify for the November ballot (and did so the next day) – even though, if the initiative passes, it would throw the ordinance devised by Council into the dumpster.

Council also deadlocked, 2-2, on a motion not to place the March ordinance on the ballot as a charter amendment.  (Again, Mr. Matarrese and Ms. Ashcraft voted in favor of the motion; this time, Mr. Oddie abstained).  Council will get a chance to revisit the issue at its July 19 meeting, but if no minds are changed, a yes vote by Councilman Oddie will keep the ordinance itself off the ballot.

The result will be that voters will not be given the chance this November either to affirm the ordinance fashioned by Council or to review any explanation why their elected officials believe that the ordinance best accommodates the divergent interests of renters and landlords.

And if the competing initiative sponsored by a landlord’s group makes it onto the November ballot, voters will be forced to choose between two extremes with no input from Council about either of them.

How and why did this happen?

As the Merry-Go-Round (and others) have reported, Council’s initial step toward addressing the rental crisis in the City was to make cosmetic changes to the Rent Review Advisory Committee process.  This action was roundly criticized – including by us – and last November Council instructed staff to put together an ordinance with real teeth.

The effort lasted four months and took up all or part of five Council meetings, two of which lasted well into the next day.  Eventually, on February 16, Council adopted by a 4-1 vote an ordinance reflecting the consensus of its members, and on March 1 the ordinance passed its second reading.

Whatever else may be said about the law enacted by Council, it plainly represented a compromise.

On the one hand, renters, represented by the Alameda Renters Coalition, had demanded that Council set a cap on annual rent increases and prohibit so-called “no cause” evictions (i.e., terminating a tenancy by giving the statutory 30- or 60-days notice).  On the other hand, landlords, represented by Alamedans for Fair Rents, opposed any form of rent control and any outright ban on no-cause evictions.  They urged that the RRAC process remain the only remedy for tenants dissatisfied with a rent increase, and that no-cause evictions be permitted as long as the landlord paid relocation benefits to the current tenant and did not charge the new tenant significantly higher rent.

Council gave neither the renters nor the landlords what they wanted.

It did not establish a cap on rent increases but rather created an elaborate – and expensive – procedure in which a landlord who wants to raise the rent by more than five percent must present her case to the RRAC, and then, if unsuccessful, to a City-appointed hearing officer.  Nor did it proscribe no-cause evictions altogether but instead restricted the number of evictions permitted in any one building and barred the landlord from raising the rent to the new tenant by more than five percent.  And it set up another elaborate – and expensive – scheme for providing relocation benefits to renters in the case of no-cause or no-fault evictions.

There might have been a time when a law resulting from this kind of quest to stake out the middle ground would have left the opposing sides disgruntled but not disgusted.  But not these days.  The renters didn’t get what they wanted from Council – so they prepared an initiative embodying their original demands.  The landlords didn’t get what they wanted from Council – so they, too, came up with an initiative banning any form of rent control, although it was silent on no-cause evictions.

(We hasten to add that we find no fault with either group for resorting to the initiative process to pursue its objectives.  We know only too well, from the Crab Cove experience and elsewhere, that sometimes an initiative is the only way to force Council’s hand.  Nor would we demean, much less demonize, anyone who argues either that the March ordinance doesn’t provide enough protection for renters or that it imposes an unreasonable burden on landlords.  At the risk of sounding like Bill Clinton, we think it depends on how you define the problem you’re trying to solve and the goal you’re trying to achieve.)

Both groups circulated petitions, and each obtained more than the necessary number of signatures to qualify the initiative for the ballot.  This week, the tenants’ petition was certified by the Registrar of Voters.  The process of checking signatures on the landlords’ petition is ongoing (and is expected to be completed by July 27).

These events presented Council with a choice to which, in our view, the correct response was clear:  If the Council members truly believed they had done the right thing by enacting the March ordinance, they should stand foursquare behind it – and be prepared, if necessary, to oppose both the renters’ and the landlords’ initiatives and to spell out for the voters why their own solution was the best one.

Last Tuesday, Council got the chance to do just that.  Staff presented a report comparing the March ordinance to each of the initiatives and reminded Council of its right to submit a ballot argument for or against either of them (assuming the initiative qualified for the ballot).  Both Mayor Trish Spencer and Councilman Tony Daysog leapt at the opportunity to exercise this right.

“This Council spent a long time trying to come up with something, and it is not identical to the renters’ [initiative],” the Mayor said.  “I will be supporting Council’s [ordinance], which means I in effect oppose the renter’s initiative.”

Mr. Daysog made the same point more grandiloquently.  “My opinion is that it’s important to weigh in on ballot initiatives whose repercussions could be as profound as Berkeley-style rent control,” he said.  “[F]rankly, I think it’s the responsibility of every single Council member to clearly show the renters, the landlords, and the undecided Alamedans where we stand.  This measure is too profound not to speak our voices.”

And then there was the rest of Council.

As soon as the issue came up, Vice Mayor Matarrese moved that Council “not take a position” on the renters’ initiative.  He didn’t give a reason.  Councilman Oddie quickly seconded the motion.  He didn’t give a reason, either.

So it came down to Councilwoman Ashcraft.  “I believe in what we did as a Council,” she began, and one could almost see her turning the skull of Yorick over in her hands as she continued:

I know both sides were unhappy with it, but that doesn’t mean one side was right and one side was wrong.  There were some valuable truths on both sides.  But I’m also willing to let our ordinance stand on its own two feet, and voters may decide:  the City Council passed something, let’s give it a chance to work.  But do I want to make an argument against the renters? For the renters?  I agree with the Vice Mayor:  I don’t.  Or the landlords for that matter.

It was a speech whose opacity would have made Supreme Court Justice Anthony Kennedy (“Liberty finds no refuge in a jurisprudence of doubt”) proud.  The only rationale for Ms. Ashcraft’s do-nothing vote that could be teased out of her words was that she didn’t want to offend any interest group.  (Did we forget to mention that she’s running for reelection this November?)

We find ourselves disappointed – and a just a little bit dismayed.  Recently, we’ve been reading Steve Brill’s book on the history of the Affordable Care Act, and we can’t imagine President Obama (one of Ms. Ashcraft’s heroes) ever responding to efforts to repeal the law by saying:  The liberals think I did too little; the conservatives think I did too much; so I won’t bother to defend what I did – or even take a position one way or the other!

(And lest we appear to be letting them off the hook, we think Mr. Matarrese and Mr. Oddie owed the public a statement of the reasons for their John Ehrlichman-like willingness to let the March ordinance twist slowly, slowly in the wind.  The Vice Mayor may not have wanted to take any action that could be construed as favoring an ordinance he voted against, but Mr. Oddie’s silence is inexplicable on any principled basis.)

The staff report gave Council another option:  putting the March ordinance on the ballot as a charter amendment.  “Providing the community with an opportunity to ratify the existing Ordinance may be helpful for those voters who are seeking a middle ground between the two initiatives,” the report said.  “It could also help frame the debate within the community about how it wants to strike a balance between the rights of landlords and protections for tenants.”

True enough – but it could also confuse the hell out of the electorate.  When an initiative is placed on the ballot, voters are asked to mark yes or no in response to a 75-word “ballot question.”  Could an average voter tell the difference between the two (or three) competing rent initiatives from a 75-word description of each?  We’re not so sure, and we seriously doubt that many voters will scour the voter information pamphlet to figure it out.

Moreover, converting the March ordinance to a charter provision creates its own set of problems.  As an ordinance, changes can be made by majority vote on Council; as a charter provision, changes can be made only by a vote of a people.  As the staff report acknowledged, placing the ordinance in the Charter would hamper “the ability for the Council to respond relatively quickly to changing circumstances in the economy [and] public opinion” as well as “the ability to refine the regulations as the program is implemented over time.”  To give credit where it is due, Ms. Ashcraft made precisely this point at the Council meeting.

At bottom, if Council wanted to “help frame the debate within the community,” there is a better way to do it than by putting the March ordinance on the ballot as a charter amendment.  You guessed it:  Council should decide to submit a ballot argument opposing the renters’ and – if it gets certified – the landlords’ initiatives, and making the case why an ordinance intended to take a “middle-of-the-road” approach is better than both of them.

It’s not too late.  When Council meets again on the 19th, one item on the agenda is the ministerial act of placing the renters’ initiative on the ballot.  Staff also is recommending that Council consider foregoing its customary month-long August recess and scheduling a regular meeting on the 12th to place the landlord’s initiative (if it qualifies) on the ballot, too.  (To us, this recommendation makes eminent sense).  And while they’re at it, maybe Mr. Oddie and Ms. Ashcraft will come to their senses and realize that taking a position is what Alamedans elected them, and expect them, to do.

Sources:

Staff reports: 2016-07-05 staff report re rent control initiatives2016-07-19 staff report

About Robert Sullwold

Partner, Sullwold & Hughes Specializes in investment litigation
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22 Responses to They’ll pass it – but they won’t defend it

  1. BMac says:

    I would argue that what the renters are doing is less analogous to repealing Obamacare (the landlord ordinance would fit that description better), but rather instituting a Medicare for all plan.

  2. Paul S Foreman says:

    I rarely agree with Ms. Ashcraft, but when she opposed the placement of our Rent Stabilization Ordinance on the ballot as a Charter Amendment, I almost cheered! She very rightly pointed out that the Ordinance promises regular review of effectiveness, and that making it part of the Charter would make it impossible to amend or repeal it except by the ballot, whereas, as an Ordinance it can be amended or repealed by a simple vote of Council. In fact I was disheartened by the position of the folks I usually support, Mayor Spenser and Councilmember Daysog who appear to be willing to put the Ordinance on the ballot, notwithstanding the fact that it would then be, for practical purposes, set in stone, thus surrendering the one very clear advantage the Ordinance offers, the ability to learn from mistakes, and/or react to changing economic conditions.

    However, just a few minutes later came the 3-2 vote to not submit an argument against the ARC and Landlord Initiatives, and everything returned to normal. My heroes, the Mayor and Mr. Daysog were saying the right thing! The Council passed this Ordinance 4-1 and has a duty to defend it. That the Mayor and Mr. Daysog are willing to do this despite the fact that it may anger both tenants and landlords is all the proof that I need that they are more interested in doing what is right than worrying about the political consequences. I particularly commend Mr. Daysog who has taken this position despite the fact that he is running for re-election and is trying to reduce the relocation payments required by the Ordinance. That is rare political courage. Courage that Ms. Ashcraft and Mr. Oddie appear to lack.

    As for Mr. Matarrese, I can understand his opposition to defending the Ordinance. He voted against it. However, Council could still publish their opposition to the Initiatives with a note that Mr. Matarrese does not join in the statement.

    Finally, I have a question. Why did both ARC and the Landlords both frame their Initiatives as Charter Amendments? The Alameda Charter states at Article 21 that Initiatives will be governed by the general law. Section 9217 of the CA Elections Code says that local Initiatives can only be repealed or amended by a vote of the people unless the Ordinance created by the initiative states otherwise. Therefore, their Initiatives are protected from repeal or amendment by Council regardless of whether or not they are in the form of an Ordinance or Charter Amendment.

  3. wordist45 says:

    The mayor, the council and a city attorney have publicly acknowledged that the ordinance has an egregious flaw harmful to renters–the fixed-term lease loophole–which enables landlords to avoid paying relocation costs of no-fault evicted tenants. Even though they’ve been provided text on how to close this loophole, they have failed to close the Fixed-lease Loophole! This is PROOF that the “flexibility” the ordinance entails is flawed because the ordinance is subject to the whims and bias of a city management that doesn’t really care about renters. This alone is reason enough to vote for ARCs charter amendment, which cannot be so easily manipulated.

    • MP says:

      wordist45, what is the “Fixed-lease Loophole” in the City’s ordinance and how does its existence – if it does exist – prove city management doesn’t really care about renters?

      Do you know whether the ARC takes the same position on this point?

      • wordist45 says:

        The fact that the mayor and city council know about the loophole and have not acted to correct it is proof they don’t care about renters.

        The FTL loophole was pointed out by the mayor at the Jan 17 council meeting, and it was discussed by the council (around 2AM the 18th.) She said, in effect, that if a landlord could get the tenant to sign a fixed-term lease–a lease with no Evergreen Clause*–the tenant could be forced to leave at the end of the lease and relocation costs wouldn’t apply because, technically, it wouldn’t be an eviction. (Before rent control became an issue, most residential leases would come with an Evergreen Clause, which says, typically, that the lease automatically renews, extends or reverts to month-to-month.)

        At the March 1 meeting the city’s ordinance was passed with no changes. At this meeting the mayor once again acknowledged the existence of the FTL loophole, muttering that if it becomes a problem it can be fixed later. Within minutes of their vote, around 10:35pm, I had received an e-mail from my landlord requiring me to sign a fixed-term lease.

        Six months have passed, and nothings been done, even though I complained about the FTL loophole to the mayor and city council in a lengthy e-mail where I offered text that would close the loophole. I further complained about it at one of the city’s training workshops where the same city attorney who was at the January 17-18 meeting acknowledged the FTL loophole.

        The FTL loophole favors landlords and harms renters. City management knows about it and has failed to remove it–proof they don’t care about renters. Now they’re considering making this same ordinance, City Code 3148, a charter amendment, permanently cementing the anti-tenant FTL loophole into place.

        I have discussed the FTL loophole at ARC meetings and via e-mail with their attorneys, confirming their position is the same as mine.

      • MP says:

        I’m skeptical that that is really the way things work under the City ordinance. What part of the ARC initiative would fix that problem if it exists and, if the ordinance got that fix, would you still support the ARC initiative?

  4. David says:

    Jim Oddie abstained on a couple of votes related to this matter. Did he give a reason why?

    • Mr. Oddie abstained on the motion not to place the City ordinance on the ballot, saying, “I’m just not ready to make that decision.” He then moved that the motion return to Council on July 19. “I’m not saying I’ll vote in favor of it; I may oppose it,” he said. The motion passed, 3-2, with Mr. Oddie, Mayor Spencer, and Councilman Daysog voting yes.

  5. Paul S Foreman says:

    After discussing the subject with the Mayor, Mr. Daysog and others, I now, reluctantly, support the placement of the Ordinance on the ballot as an Initiative for incorporation into the City Charter. My reluctance is, as I have stated before, incorporating the Ordinance into the Charter means that it can only be amended or repealed by a vote of the people, which renders Section 6-58.195 providing for annual review and suggestion of changes rather ineffective. However, I tend to agree with those who argue that if the Ordinance is not on the ballot it will not get proper consideration by the voters. Therefore I have determined that I am willing to give up the flexibility of the Ordinance to get it the fair consideration of the voters.

    What is going to be very important is for some organization to sponsor a workshop that gives voters a fair comparison of the various alternatives. The Chart approved at the last council Meeting may be helpful but a live workshop is going to be essential.

  6. MP says:

    Not advancing a Council-approved ballot argument is what we might call the “Leadership Initiative – Letting others lead!”. It starts big, with this hometown issue, but it will soon branch out to other things such as no longer approving resolutions and proclamations that express the Council’s opinion about how the Legislature, Congress, the U.N., etc. should act.

    • MP says:

      I hereby dial back on the sarcasm. Councilmembers advanced a pretty good argument defending the city ordinance as against the ARC initiative at last night’s meeting. Mr. Foreman’s remarks during public comment were very thoughtful.

  7. Paul S Foreman says:

    Reply to Wordist45 and MP.
    My reading of the Ordinance does not support the conclusion that there is a fixed term lease loophole. Section 6-58.35(B) states that a landlord cannot offer an existing tennant a fixed term lease unless the tennant requests it. Otherwise the one year lease offer must contain substantially the same terms as the old month to month lease. Section 6-58.35(A) covers new tennants. They must be offered a one year lease and there is no prohibition about it being a fixed term lease. However Section 6-58.140(C), while authorizing an eviction for breach of the lease, excludes therefrom eviction for failure to surrender possession. Therefore a tennant cannot be evicted for cause merely because he fails to surrender possession at the expiration of a fixed term. Thus the Landlord can only evict the tennant by way of Section 6-58.140(A) for ‘no cause’ which triggers relocation payments and the limitation of the rent increase to the new tennant to 5%.
    I am open to listen to the argument that there is a fixed term loophole, but until I read an argument citing specific chapter and verse, this is my opinion.

    • David says:

      Paul, I’m with you, but it will likely need to be tested in court.

      • Paul S Foreman says:

        Yes, and I will admit that the Ordinance language could be improved by a definition and blanket prohibition of fixed term residential leases.

    • wordist45 says:

      “… until I read an argument citing specific chapter and verse, this is my opinion.”
      In my Alameda Sun Letter to the Editor, 7/14/16, I cite an example of how a FTL can be slipped to an unsuspecting tenant with the intent to deny/avoid relocation benefits. A prominent local attorney promptly took issue with my interpretation; so you’re in good company.

      However, I and others who were at the Council meeting (it’s 2/16, not 1/17 as I misquoted) were witness to almost an hour of discussion revealing the INTENT of the law, however poorly reflected in the laws ambiguous TEXT. Bear in mind that no less than four attorneys were on the dais, with a fifth, the City’s Mr Roush, at table below. The discussion starts around 4:51 in the video transcript: http://alameda.granicus.com/MediaPlayer.php?view_id=6&clip_id=1714

      The tenor and content of the discussion puts a magnifying glass over the significance of an Evergreen clause and the mayor and the Economic Development Director make it quite clear the lack of one nullifies any obligation to pay tenant relocation.

      Bear in mind that, after more than 10 years on a month-to-month status, within five minutes of Council’s vote to pass the ordinance, I received a Fixed-term Lease (no Evergreen clause). Whoever wrote that lease also apparently saw and seized upon the new law’s ambiguity.

      Ordinance 3148 (see text below) requires landlords to offer a one-year lease to “any prospective tenant,” “any current tenant” and “any current tenant on a month-to-month tenancy.” While paragraph B clearly protects term lease renters, paragraph C appears to single out M-T-M renters for exploitation, just as I was. It requires a close and narrow reading of the subsection, but apparently my landlord”s attorney thought it worth a shot. Many others will do the same.

      The point is, it’s an ambiguity that’s easy to rectify and worthy of attention if the Council cares equally about renters and landlords. For five months they have not acted. Draw your own conclusions.

      Here’s the actual text:
      [[6.58.35 Offer of a One Year Lease
      A Landlord shall offer one time a one year lease to

      A Any prospective Tenant

      B Any current Tenant with a lease at the first time the Landlord serves a notice of Rent Increase following the effective date of this Ordinance unless 1 the current lease is not a fixed term lease and the Landlord has served on the Tenant a Notice to Vacate or 2 the Tenant is in default under the lease and offering a lease to the Tenant may waive any claims the Landlord has regarding the default.

      If the current lease is not a fixed term lease the Landlord shall not offer the Tenant a fixed term lease unless the Tenant requests such a lease The Landlord must offer a Tenant a lease that has terms materially the same as the terms in the current lease as to duration Housing Services and household composition provided such terms do not conflict with this Article.

      C Any current Tenant on a month to month tenancy at the first time the Landlord serves a notice of Rent Increase following the effective date of this Ordinance unless the Landlord has notified the Tenant that the Tenant is in default under the month to month tenancy and offering a lease.]]

  8. I wouldn’t favor a blanket prohibition. For example, a teacher may go on sabbatical and want to rent their house for year. Or any person might take a temporary assignment out of town and want to rent for a fixed period. But, the period needs to be well defined, and it needs to be illegal to renew the lease. Otherwise all leases would become fixed term and the landlords could renew them or get rid of the tenant without eviction.

    The protection in the ordinance seems to me to only to the *first* time rent is increased, or lease renewed. So, the initial lease offer may not be fixed term, but all subsequent ones could be. And since there is no prohibition on renewing the leases, every tenant on an annual lease is effectively exempt from all eviction protection and relocation payments. True, the “termination of tenancy” can only happen once a year, but each and every year the tenant can be forced to leave without recourse or payment.

  9. Note that the City’s ordinance does not define the operative term “Fixed-term Lease,” upon which so much hinges–family stability, hope and dreams.

    Think about what’s being done here. What in one paragraph seems like tenant protection flies out the window in the next paragraph. It’s like a midway card trick. “Follow my hands, chickadees. Now you see it; now you don’t.”

    And if a tenant gets wise, he has to go before a tribunal appointed by the very person who engineered the loophole. It’s like something from the Three Stooges’ “Who’s on First” routine. It would be comical if it weren’t so transparently pathetic!

    Tenants are human beings, not objects on a chessboard. We’re being manipulated like toys.

  10. Paul S Foreman says:

    Reply to wordlist45 and Monty.

    Ok, I have egg all over my face! Wordlist, thank you so much for revising your reference to the Council video to Feb. 16. I had tried to find it before and was frustrated. After listening, I must reverse my prior opinion and say that I fully agree with your long comment posted Jul 14 at 4:52 pm. I am a former Judge. The Ordinance is quite ambiguous. Thus, as a judge, I would look to the discussions of Council and Staff to determine their intent. There is absolutely no question that their intent was to exempt fixed term leases from both relocation costs and the 5% re-rental limitation.

    Mr. Oddie was very clear that he wanted fixed term leases prohibited because he feared that landlords would now attempt to sign all new tenants to fixed term leases, but he was overruled by three other Councilmembers who reasoned that the Ordinance could be amended if landlords chose this option. On the other hand, Mayor Spenser was just as clear that she felt that landlords and tenants should be free to negotiate fixed term leases that avoid relocation costs and re-rental limitation.

    All of the above being said, wordlist45 admits that current yearly tenants are protected, and I believe that holders of month to month leases are also protected, because they do not have to accept the one time offer of a fixed term lease, and can continue month to month. If the landlord then terminates their lease he will suffer relocation costs and the re-rental limitation. The person who really concerns me is the prospective tenant who is offered a fixed term lease and signs it because he knows no better.

    I would suggest that a worthy amendment to the Ordinance to satisfy both the pro and con fixed lease interests would require a Landlord to place a bold type notice in any fixed term lease offered to any tenant expressly informing the tenant of rights he is loosing by signing the same. However, I still share Mr. Oddie’s concern that if fixed term leases become the norm in this tight market, tenants do not have the negotiating leverage to avoid such a lease.

    Finally, I believe the Ordinance, warts and all, is a reasonable response to a difficult problem and needs to be given time to work and grow into a better document. I believe that the ARC proposed ordinance is not in the long term interests of either tenants or landlords. More on that later.

    • “they do not have to accept the one time offer of a fixed term lease, and can continue month to month.”

      The problem here, and it’s a BIG problem, is that, especially in a hyperventilating market like today, there’s virtually no such thing as an “arms-length” negotiation of a residential lease, especially after the tenant has already moved in. The tenant is in situation of de-facto duress. She’ll sign whatever a landlord puts in front of her if she thinks it will keep her in her home.

      The preferred solution, which I have previously proposed to the mayor and city council, is to insert a clause in the relocation fees section that says relocation fees accrue and vest based on length of tenancy, irrespective of any language in a lease.

      This method circumvents all the legal gymnastics and word games.

  11. wordist45 says:

    Today’s post from FB/Alameda Peeps:
    This from Alameda Peeps this morning:
    “[Name Redacted] FYI, every complex I talked to when I was looking is now using a FTL and there is no negotiating on that point. So the only ones that may not be using it are mom and pops. I have this looming over my head next April – it cost me $10k to MOVE IN (and another 10K or so to move out of my other place into temporary housing, storage, moving fees etc, until I could find a place.) Honestly they might as well just throw the whole thing out if they allow FTL to be a part of this as it’s only a matter of a year or two before that’s all that’s used.”

    This is clear evidence that the Fixed-term lease has gone viral among landlords bent on nullifying tenants’ 3148 rights to Relocation Fees. The ordinance has no teeth without relocation benefits. It’s rapidly becoming a sham, not worth the ink it took to write it.

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