HOAs and Country Clubs Are They a Good Match – Part 2

Somersett UnitedTo further address this issue perhaps it is worthwhile to consider what is going on in our sister community Arrow Creek.  There is currently a proposition before Arrow Creek residents to purchase the Arrow Creek Golf Course.  Although they are currently in a somewhat different situation than we here in Somersett, some of the issues are similar and what Arrow Creek residents are facing is not an improbable situation for Somersett. That is, there is nothing in the Somersett BOD proposed CC&R Amendments and Country Club Purchase Agreement that would preclude a subsequent BOD decision to either provide additional funding to the Country Club or, in the event of default, to assume operation of the Country Club, with either eventuality being financed via homeowner assessments and, depending on the assessment amounts, without a homeowner vote. The current BOD has stated that neither is their intention. However, can they speak for future BOD’s, or alternatively how much trust can we put in this statement.  Given the disingenuous manner in the way the BOD conducted the CC&R and SGCC voting process, this trust is questionable.

To see what Arrow Creek residents are saying we encourage readers to visit the Arrow Creek website at www.arrowcreek411.wordpress.com, wherein many pro and con articles addressing HOA ownership of golf courses can be accessed. Specifically under the “Blog Summary”, “Voices to the Webmaster” and “Online Articles” tabs.

Articles of particular relevance to the Somersett Country Club purchase issue can be found under the “Concerned Neighbors of Arrow Creek Discussions” link.  Under this link, SU recommends viewing the Power Point presentation entitled “Should the HOA invest in a Golf Course”, which can also be viewed on this website by clicking on the following link (this is a very lengthy presentation, so allow a minute or two for download):

Should the HOA Invest in a Golf Course

The above is a very informative presentation. It addresses not only the Arrow Creek Golf Course purchase issue, but alternative options for community improvement that could represent a better use of funds.  Many of the questions addressed in the presentation have been raised by both proponents and opponents of our own Country Club Purchase Agreement.   Questions that, to date, have not been adequately addressed by the Somersett BOD.  Hopefully to be considered before completion of their due diligence period.

It is the  Somersett BOD’s assertion that they are not interested in the Somersett Country Club itself, but only being able to control what happens to the Country Club property and hence, acquisition of  the Developers property reverter rights should the Country Club fail.  Given this, it is fair to question why the BOD did not attempt to negotiate an agreement with the Developer directly for the reverter rights, rather than purchasing the Country Club properties for $2.75M ($4M with interest) to achieve the same result.

Do not be influenced by the BOD’s assertion that, under the proposed Country Club Purchase Agreement, your assessments will not be affected.  Perhaps not immediately, but here are no downstream assurances to this assertion, particularly given the BOD’s apparent bias to support the Somersett Country Club.  Yes, the agreement has now been approved by a majority of homeowners, but it is not yet a done deal.  The BOD can still terminate the agreement anytime during the due diligence period for any reason.

4 thoughts on “HOAs and Country Clubs Are They a Good Match – Part 2

  1. Once again you and your band of few distort the facts and leave out important details in an attempt to negatively influence others that might read some of your posts.

    First of all, there is very little parallel (especially financially) between Arrow Creek and Somersett, other than both have golf courses and are gated (somewhat) communities, whose property values would be severely impacted by the failure of the golf course(s).

    Arrow Creek has been bleeding huge amounts of money for a long time, due to their lack of water rights and significant cost structure to run the club. SGCC on the other hand does not have to spend HUGE amounts of money every year for water (which will never change) and has a cost structure that is completely manageable and constantly improving. Therefore the chances of homeowners having to fund the golf course are fairly remote. To suggest otherwise is just misleading and based on nothing other than your desire to wish ill will on the Country club.

    The SGCC equity members are quite confident that the Country club can and will be managed fiscally, such that no homeowner funding will ever be necessary. That is obviously NOT the case at Arrow Creek. One must not forget that the members of the Country Club are also homeowners and as such have no interest in allowing a situation such that additional funding could be necessary from their H/O dues, their friends H/O dues, their neighbors H/O dues or anyone else’s H/O dues.

  2. It is interesting that the Somersett BOD has not said or even considered what will happen if/when the golf course fails. There is no way the HOA should operate or own a golf course. It is a loosing venture just look at all the information provide from other HOA’s. I know we are not entitled to an answer but what is the SGCA going to do with the money they receive from the HOA? I have been told by reliable sources that right now the SGCA is only doing minumin maintence on the course and equipment because they do not have the money to spend. How do they think they are going to keep the course and equipment inshape if they do not reinvest the money. The long term lease that will be signed with our HOA is a token and a lose / lose for the homeowners. We will be paying more interest on the loan to purchase than we will be collecting in rent. Not a very bright investment.

    There needs to be a plan on how to use the land and the cost to maintain as a green space. Not saying the course will close this year but probably will in the next five years so develope a plan and a cost estiment for future planning. The BOD is charged to look out for our best interest and it appears they are not. It is not in our best interest fot the HOA to operate a golf course.

  3. Hello, Somersett United! It is ArrowCreek411! Is the Somersett Owners Association incorporated in Nevada? Are your Articles of Incorporation signed by the Nevada Attorney General? If they are, everything you’ve explained above is allowable under NRS82 as a corporate board of directors – totally unrelated to NRS116… Unfortunate for us pee-ons who get stuck paying for it… UNLESS there are any other possibly limiting phrases in your Articles of Incorporation.

  4. Yes, indeed!

    Why did the Board not approach the Declarant to see if we could just acquire the reverter rights in exchange for the “missing $1,000,000” from our reserves and the $1.2 million diverted “ilegally”* to a private country club?

    * The Developer Board “lease” is under investigation by the RED and the NV AG’s office.

    Why did the HOA Board insert a clause 3 9 which “forgives the developer ” monies listed above that may be due to all the homeowners?

    This last minute addition was not mentioned in any of the board mailings (or those from proponents of the purchase of the CGC Country Club receiving $2.75 million). The lease back provision for 40 years at a nominal fee – with no early cancellation penalties – takes all the value of the deal away from the community.
    Over 35% of the votes were cast before “opposition” views were disseminated by the Association – in yet another violation of NV law by our Board.

    Yes, we were all surprised when the Board decided to buy a golf course rather than re-negotiate an access agreement with a private country club – per the AG’s stipulation.

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