A report on and action request regarding inadequate funding of reserves for the Common Area (68% level) and The Club at Town Center (50% level). This based on 2012 year end financial analysis.
Questions/concerns on the basis for proposed modifications to the Country Club Lease Agreement (i.e., substitution of amenities).
Need for additional security (patrols) given the increase of vandalism and thievery within Somersett.
A refute of the premise that the $15/mo/unit assessments for the Country Club Lease Agreement is offset by savings in other areas. Rather, savings were not realized and actually cost the association $9.65/mo/unit. This based on 2012 yearend financial analysis.
A request that a formal report on the status of the Transition Committee Recommendations to the Board be presented at the next open BOD Meeting.
Significant BOD Business Item Results:
Approved modifications to SGCC Lease Agreement regarding provision of amenities. The 18 hole putt-putt course scheduled for June 30 delivery will be replaced by a 9 hole putt-putt course and a 60’ by 90’ multi-purpose court accommodating both Pickleball and Basketball. Approved extension of delivery from June 30 to July 31. Board president advised they were in preliminary discussions with the SGCC for acquisition of land on which the leased amenities are housed to provide permanent usage by association members. No discussion on any potential SOA financial impact.
Soliciting bids for Canyon9 path upgrade for ADA Compliance. No current plans to purchase golf carts for use by disabled
Submitted an offer for purchase of the lot adjacent to TCTC, which was topped by an outside party ($250,000). Stayed any further action (i.e., no counter offer). Will revisit if outside purchase falls through.
Sale of the foreclosed on 37 VUE lots nearing completion. The due diligence period has expired with purchaser offer still in place. Once purchaser’s architectural plan is approved the sale is expected to close.
The Groundskeeper was selected as the landscaping contractor for the Somersett entrance area. They will operate under the guide of an SOA Landscape Architect. Work expected to commence in the near future.
Bids were opened for TCTC painting contract. They ranged from $21K to $41K. Proposals will be reviewed by SOA maintenance manager before awarding.
No new status to report on SOA litigation issues or access provisions for “Northgate Owners”.
Ombudsman investigation of homeowner intervention affidavit regarding the SDC Subsidy Agreement was closed in favor of the SOA with procedural recommendations. Intervention affidavit regarding the SGCC Lease Agreement is still open.
BOD is consulting with the SOA Attorney on areas of potential monetary recovery from the Somersett Development Company (e.g., Reserve funding, TCTC repairs).
A draft of the complete and official BOD meeting minutes will be available on the SOA website (www.mysomersett.com) under the SOA/News and Documents tab. Member Log-in required.
Mr. Brooks has submitted a Blog article on the future of Somersett. In it he addresses the need to understand what kind of community we currently are, where we have been and where we need to go in the future. His article makes some very interesting points and all are encouraged to access and read it in its entirety by clicking on the following link:
The Somersett Owners Association Board of Directors (BOD) will be holding their open Board meeting on Tuesday, April 23rd at 5:30 PM in the Loft. For those interested in attending, the meeting agenda may be accessed via the following link:
The previous Board of Directors (BOD) for the Somersett Owners Association (SOA) entered into the Somersett Golf & Country Club (SGCC) Lease Agreement at an assessment cost of $15/month/unit owner (i.e., $435K annual cost based on 2415 unit owners). The BOD justified this expenditure on the premise that there would be zero financial impact on homeowners due to a $16/month/unit of assessment cost saving offsets the SOA would realize from the following five budget areas:
Canyon9 Maintenance and Golf Management: $3.00
Non-Golf Events Management Revenues: $3.00
Developer Subsidy Repayments: $5.00
Common Area landscaping: $3.00
Carryover of 2011 Operating Surplus: $2.00
Based on the 2012 SOA financial reports, Mr. Hardy performed an analysis on the zero impact premises and concluded that the $16/month/unit of cost savings from the forgoing five budget areas were not only not realized, but in some cases misrepresented. The actual saving offsets for these areas only amounted to $5.35/month/unit. When compared to the $15/month/unit cost going to the SGCC, this results in a $9.65/month/unit shortfall (i.e., $15/unit cost minus the $5.35/unit savings) or a financial impact of $280K on the SOA budget and not the stated $0.
In his report Mr. Hardy points out that in transition from Developer to Homeowner control it is the fiduciary responsibility of the new BOD to review all existing contracts and leases, and to terminate those they may find objectionable (i.e., under NRS 116.3105 “Termination of contracts and leases of declarant”). He further concludes that the SGCC Lease Agreement falls into this category.
Mr. Hardy’s complete report containing analysis details and conclusions may be accessed via the following link: SGCC AGREEMENT JUSTIFICATION ANALYSIS. In addition to posting on this website, Mr. Hardy’s report was also submitted to the current BOD for comment and consideration.
It should be noted that Mr. Hardy is a CPA whose professional background includes public accounting experience and Financial Management/Controller positions at major corporations.
The commercial building located at 7655 Town Square Way (i.e., the one adjacent to the 7665 Town Square Way building, which houses the Grape & Grain) has been sold. Per the Washoe County Assessor website, purchase price was $820,000 (latest listed price was $875,000). Buyer was Saemaul Investment, LLC, whose managing members are Tae S. Lee, Clay H. Lee and William Lee of the Reno area. It is not known what the Lee’s intentions are for the property. However, perhaps now steps will be taken to complete development of the property to the benefit of Somersett residents.
For those interested in a brief history of the 7655 and 7665 Town Square Way properties, the following summary is provided:
December 2006, Somersett Development Company (SDC) enters into a Deed of Trust and Security Agreement (Promissory Note) with Colonial Bank wherein the Town Square Way properties become security for an $8,775,000 loan. TRICOR TITLE becomes trustee for the Agreement.
August 2009, Colonial Bank fails, under FDIC disbursement proceedings, BB&T Corporation acquires Colonial Bank deposit assets including the Security Agreement. SDC stops making payments on the Promissory Note.
January 2010, BB&T substitutes Allied 1031 Exchange, Inc as trustee for the Deed of Trust and Security Agreement in lieu of TRICOR.
March 2010, Notice of Default and Election to Sell is issued to SDC by BB&T. Unpaid principal balance is listed as $8,670,428.
June 2010, Allied 1031 Exchange issues notice of sale by auction to satisfy indebtedness. Action is postponed.
July 2010, BB&T transfers to EAGLE SPE NV 1, LLC (a BB&T Subsidiary) all interests in Deed of Trust and Security Agreement.
November 2010, EAGLE SPE NV 1 acquires all rights to the Town Square Way properties for the sum of $3,322,000.
May 2012, EAGLE SPE NV 1 sells the 7665 Town Square Way property to CAV Somersett, LLC (Managing Members Carlos and Terri Vasquez) for $1,062,680. CAV Somersett subsequently opens Babe Matteri’s and acquires the Grape & Grain business.
March 2013, EAGLE SPE NV 1 sells the 7655 Town Square way property to Saemaul Investment, LLC for $820,000.