UPDATE – Country Club Lease Agreement

A meeting was held in Las Vegas on July 2, 2013 between previous Somersett Owners Association (SOA) Board members (B. Smith, T. Roland, R. Lee), the  current SOA Board President (T. Fakonas), the SOA Attorney, and representatives from the Nevada Attorney General’s office. The purpose being to discuss the alleged violations of Nevada Law associated with the current Country Club Lease Agreement and the filing of a “Complaint for Disciplinary Action and Notice of Hearing” (the Complaint) before the Nevada Commission on Common Interest Communities and Condominiums (the Commission).

A proposed settlement calls for the current SOA Board of Directors to develop a new Lease Agreement with the Country Club and submit it to a vote of the homeowners.  In the meantime the AG will stay filing of the Complaint with the Commission, pending resolution of other terms associated with the proposed settlement and/or voting results.  As these terms become known, they will be posted on the Somersett United website.

If a settlement agreement cannot be reached, the Complaint will be filed before the Commission with an objective of voiding the existing Lease Agreement and seeking possible disciplinary action against some or all of the Respondents (i.e., the previous 2011 SOA Board members and the Somersett Development Company).

Previous to the above referenced meeting, the following was reported at the June 25, 2013 SOA Board meeting.

  1. Pending resolution of the Complaint, a status quo on the existing Lease Agreement will be in place. That is, the 2013 planned amenities will not be built, the $100,000 of up-front payment to the Country Club to build these amenities will not be provided, and the Country Club monthly payments of $15/mo/unit will be reduced accordingly.
  2. The current Board has been served by the Attorney for the Somersett Development Company to indemnify previous Board members against any loss associated with Complaint resolution. This is action is currently being reviewed by the SOA Attorney.


If the proposed settlement goes forward, it will be interesting to see if the current Board can come up with a new Country Club Lease Agreement that has strong enough appeal to obtain a majority vote of homeowners. That is, in lieu of reduced assessments and/or applying these funds to what may be considered as more worthwhile endeavors.

12 thoughts on “UPDATE – Country Club Lease Agreement

  1. Having recently moved from a planned community where a disgruntled group of homeowners destroyed the property values by shutting down the golf course, I am appalled by your actions. If u are so unhappy living in the most coveted planned community in Reno/Sparks you need to just move, but do not destroy this community!!

    1. Why as a “concerned homeowner” do you choose to denigrate those who oppose the current Lease Agreement as disgruntled, unhappy and wanting to shut down the golf course, when this is just not the case? We all know the real purpose of the Lease Agreement was to assess homeowners for the purpose of offsetting the operating losses of a private country club. As another “concerned homeowner”, I believe this to be a bad precedent and a decision to be made only via homeowner vote, and not by a Developer controlled Board with conflict of interests. There are legal and proper procedures to be followed, or do you disagree?

  2. Very interesting report…I was wondering why this information has not been made available on the MySomersett web site..

    Reading between the lines, it seems at every property owner will be getting a dues reduction – of $5, $10, maybe $15 a month, until there has been a homeowner vote any new facilities access agreement with the SGCC.

    It seems to me that the Real Estate Division believe that the monies sent to the SGCC by the SoA board may well have been against our CC&Rs.

  3. We are having a hard time understanding the motivation of those so against the private country club… is it your very few dollars a month going to support something you don’t belong to? The lovely (and inexpensive) meals that you can buy 3 times a day? The golf you can play on an exceptional course at a very reduced rate? The bocce ball you can take your kids/gkids to play? What? If you want to see what happens to resale prices when a golf course goes brown, check the houses around the course in Sparks. If SCC goes brown, will the prices of houses in Somersett be reduced? – history says yes. Do the math, guys, and then get a lovely 3 course dinner at the club, maybe $14.99? – open for all, Wed through Sunday… and please stop complaining.

    1. Tony – Nice try – But let me see if I can help you understand. It has nothing to do with being against a private Country Club. Rather it has to do with subsidizing it via homeowner assessments they had no say in. Apparently the Nevada Attorney General’s office has determined the current Lease Agreement was illegal, hence their Complaint action. So instead of attacking those who disagree with how the Lease Agreement came about, try to appreciate the merits of their complaint. If you are concerned that the Country Club cannot stand on its own two feet, then let the homeowners decide whether or not they want subsidize you in a fair and legal manner and not in violation of our CC&R’s and/or Nevada Law. If, however, you believe the Country Club is or can be solvent without the Lease Agreement, then why the emotionalism on the part of so many Country Club members? Which one is it?

      Please no more Kool-Aid responses about a “sense of community” or providing “amenities … to make us all believe the “Its’ Good to be Home!” as stated by your previous president.

      1. Actually, we don’t think it can be solvent without community support.
        We DO think the community has far more to gain than the monthly assessment. Have you tried dinner there? No where else in our community to eat and drink at such a moderate price. Unless you want a taco.

    2. You do realize that anyone off the streets can go in and eat at the restaurant…without subsidizing a private club!

  4. Great step in the right direction. I recommend and believe that as a community our first priority should get the golf course facility on good financial footing. This should take priority over additional amenities. To do this since SOA will still be investing in the golf course financial stability I suggest one of our SOA board members who isnt a golf member be put on the Golf Club board. This will facilitate a better exchange of ideas between the two entities. I also suggest that the financials of the golf club (given our investment) be shared so as to open up a better understanding of whats happening wih the golf club and to get prudent input/suggestions from somersett residents for constructive improvements. Once again the priority is making the golf club financially stable as the alternatives as outlined in the june meetin are not very attractive

    1. I agree Steve,

      Yes, we need transparency with the SGCC financials, yes we need a plan to make sure that the Golf Course survives. Yes we need to be proactive as a community, however, subsidizing 130 equity members under the current agreement makes no sense. Do the math – they contributed $23,400 a year towards mitigating SGCC losses – the other 2317 homeowners, builders contributed $407,205 in 2012. This does seem to smack of “some were now more equal than others” (George Orwell).

      The solution is that the Championship golf course’s 99 year lease should be owned by the SOA. We own and run one Golf Course already – the Canyon 9. Why not two?

      This way the association can protect all of our community interests, not just leave them in the hands of a private club (the few!).

      Like the Canyon 9, the Championship Golf Course should be public.

      That is the only way we will get the math to work…buying for the residents the Country Club’s compromised 5 acre site for $4,000,000 or so is not by any a stretch value for money!

      1. its tough to make a comparison with the canyon 9 as while its public is a loss proposition. I would include the canyon 9 almost as an amenity, a facility to have in house events on as well as open it for public play but the fact is it is a loss situation and will probably always be that. Turning to the club itself analyzing the financials for everyone to see…not only the full members, could be interesting and evoke questions/suggestions. Right night they are experimenting with temporary memberships at less per month dues…will it be successful…i know of several full members that have dropped out because they were paying higher monthly dues. I believe they can wait a year and get back in at the lower monthly cost. Is this experiment going to work financially? With these and other unknowns, other options to increase profitability need to be examined and it shouldnt involve the extension of the $15 per month over a longer period of time. There was talk of SOA taking over the land where the pro shop/restaurant currently sit in exchange for extending the $15 per month for 8 yrs. In order to do that a new clubhouse would have to be built on that same piece of land….given the previous years operating losses (2012 a profit) and the negative capex how can a new club house be affordable without increasing costs or having the capital expenditure funds to complete it. If you cant build the new club house, then you cant eliminate the existing proshop and restaurant and then adding amenities for the SOA on this same land is not viable.
        Also the profitability/running of the restaurant should be assessed….although a great spot to have a drink after a round of golf i for one (and know several others) who have had poor dining experiences.
        When all is worked out with the legal questions that have entered the picture both SOA and the golf board should work out both short and at least middle term plans/financials that will keep the club financially sound…We have to all work together
        to make it work

        respectully submitted
        steve altman

    2. Needless to say, our first and next priorities for the Association are spelled out in Article II, Section 1 (Purpose of the Association) of the CC&R’s. Those are what need to be followed and neither the private golf club nor its financial health are mentioned.

      Owners need to vote on any future amenities and capital improvements.

      SGCC equity members choose their board. The Somersett Owners Association (SOA) Board has no right to “put” anyone on the Somersett Golf and Country Club (SGCC) Board.

      In my opinion, each of the current 5 SOA board members is too cozy with SGCC, member or not. Whether it be admitted or not, I am sure they ran for the SOA Board in an attempt to protect the existing and expand future SGCC interests while not understanding their fiduciary duties and the other business aspects of running our Association.

      The current Agreement allows for two observers to attend SGCC board meetings. Currently those two are SOA Board members. Last year one of the two was a non-equity SGCC member as well as a SOA board member. Not much independence so far. BTW Sierra Canyon owners pay over one third of the $15 cumulative amount diverted from HOA dues (monthly assessment) to SGCC. At least one of the two observers needs to be a Sierra Canyon Owner and non-SGCC member.

      Under normal circumstances I would say the financial statements are for Club members only, but at this abnormal juncture and in order to dispel myths and enable a true analysis of the numbers, I suggest the Club make their statements and latest audit available to requesting SOA members.

      Bottom line of all this is that the former developer-controlled board should never have made an Agreement with SGCC and the sooner it is voided the better.

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