Fact or Fiction

courtesy of Freedigitalphotos.net
courtesy of Freedigitalphotos.net

Posted by Herb James

Finding a way to save the golf course will be accomplished if the discussion is constrained by facts, not the ad hominem attacks and vitriol we have heard and read about.  Fabricated accusations about ill- intentions, name calling, claims of make-believe groups, false or irrational comparisons, fabricated crises, etc. divert attention from the core issues that need to be resolved if Somersett/Del Webb is going to preserve the golf course.  In any disagreement only the relevant and material facts should be discussed – providing the real goal is to achieve a mutually satisfactory solution.  To discuss the core issues, facts need to replace fiction.  With this goal in mind I present a number of issues that are either FACT OR FICTION.  I believe these issues are relevant and material to any discussion about the Lease Agreement and recommend they be addressed.

FACT OR FICTION:

The former Board made no effort to determine what if any new amenities, the property owners wanted prior to creating and implementing the Lease Agreement.

FACTOR FICTION:

The former Board made no effort to obtain an independent, objective cost analysis to determine the value of the amenities and to determine an appropriate cost for the property owners.

FACT OR FICTION:

Secret meetings between the former Board and the Somersett Country Club, Inc. were held to determine the cost to be charged to the property owners and then amenities to be provided.

FACT OR FICTION:

The former Board did not allow the property owners the opportunity to vote for this Lease Agreement, as required by law and the CC&R’s, prior to its implementation.

FACT OR FICTION:

The CC&R’s do not grant the Board the authority to add new amenities nor do the CC&R’s give the Board the power to force property owners to pay for new amenities property owners did not approve.

FACT OR FICTION:

The total cost to the property owners, for this 10 year Lease Agreement, is no less than $5,000,000.00 but more probably closer to $7,000,000.00.

FACT OR FICTION:

The book value of the Somersett Country Club, Inc. was artificially increased from approximately, $2,000,000.00 to between $7,000,000.00 and $9,000,000.00 solely as a result of this Lease Agreement.

FACT OR FICTION:

This Lease Agreement can be considered a very secure debt instrument that has a low risk of default.

FACT OR FICTION:

The Somersett Country Club, Inc. has the option of selling their club to a third party, the sale of which would include the golf operation ($2,000,000.00) and this Lease Agreement ($5,000,000.00 to $7,000,000.00).

FACT OR FICTION:

If the Somersett Country Club, Inc. sold the club, the Lease Agreement states the SOA is obligated to continue paying the new owners for this Agreement.

FACT OR FICTION:

If the Somersett Country Club, Inc. sold the club to a third party, the money from its sale would be shared only with its approximately 135 owners.

FACT OR FICTION:

The Attorney General’s Office is considering filing a formal complaint against the former Board because it created and implemented this Lease Agreement without the knowledge of the property owners.

FACT OR FICTION:

The current Board has the authority, under Nevada law, to void this Lease Agreement immediately and unilaterally.

FACT OR FICTION:

If the current Board exercised it power to void this Lease Agreement, the SOA would save over $36,000.00 per month, the threat by the Attorney General’s Office to file a formal complaint against the former Board would be removed and the SOA would save tens of thousands of dollar in unnecessary legal fees by not having to defend the former Board.

FACT OR FICTION:

Refusal of the current Board to void this Lease Agreement is a violation of the current Board’s fiduciary responsibility to manage the SOA in the best interest of the property owners.

FACT OR FICTION:

Handouts, welfare payments or subsidizes harm both the recipients and the providers.

FACT OR FICTION:

The purpose of this $5,000,000.00 to $7,000,000.00 Lease Agreement is fourfold:  1.) continue subsidizing the Somersett Country Club, Inc.; 2.) expand the club’s existing facilities; 3.) create a very secure debt instrument that would be sold along with the golf operation; 4.) help pay the cost for constructing of the club’s private clubhouse.

FACT OR FICTION:

The purpose of this $5,000,000.00 to $7,000,000.00 Lease Agreement is to provide new amenities.

These issues seem to be at the heart of the disagreement.  The proponents and opponents of this Lease Agreement have the same goal in mind – the preservation of the golf course in Somersett.  The disagreement seems to emanate from how this goal should be achieved.  Opponents of this Lease Agreement agree with Messrs. Blake Smith and Ray Lee who have publically stated this Lease Agreement will not save the club.  Proponents disagree with their assessment.

I hope the issues are discussed so a solution can be amicably achieved.  I make a quantum leap in assuming both opponents and proponents will respond to these issues.  I am especially interested in the response from the Somersett Country Club, Inc.’s erudite official spokesperson “Bagdad Barry”.  No doubt “Bagdad Barry’s” analysis will be sagacious, cogent and powerful; after all he is representing the official position and values of his fellow owners of the Somersett Country Club, Inc.