Country Club Purchase Agreement – Assessment Impact?

Somersett United
Somersett United

 

Now that the Country Club Purchase Agreement has been concluded, a question has arisen as to what effect this may have on homeowner assessments going forward. Let’s consider the following:

  1. During the homeowner presentations the BOD advised that repayment of the $2.7M loan amount would cost homeowners about $9/month worth of assessments (for 15 years), which could further decrease as Somersett build-out continues.
  2. Homeowners are still paying $15/month in assessments on the previous Country Club amenities agreement, which was not renewed after December 31, 2014.
  3. Items 1 and 2 above result in a $6/month net gain for the Association or approximately $180K/yr.

Given the preceding, it is fair to ask where this apparent surplus will be applied.  A decrease of $6/mo in homeowner assessments or application to some other common area budget item?  Perhaps someone from the BOD or Finance Committee, who follow this blog, can provide some clarification in this regard.

A related question posed by a homeowner at the February 25th BOD meeting centered on what alternatives has the BOD addressed in the event of a purchase agreement default by the Country Club and how would they impact future assessments? It became apparent that the BOD has not yet definitively addressed this outcome.  The homeowner listed some possible uses and suggested the BOD hire a consultant to evaluate alternate plans and associated costs.   Some may consider this premature, but given the financial struggles the Somersett Country Club, and other Reno Golf Courses, have incurred in the past, a default may indeed happen sooner than later, if at all.

In a previous presentation by the BOD they estimated for the Association to continue to maintain and operate the golf course would cost homeowners between $65/mo and $85/mo in increased assessments.  At the February 25th BOD meeting in response to the homeowner comments discussed above, the BOD indicated it would only cost homeowners between $1/mo and $2/mo to maintain as green space only.  SU believes the later to be significantly underestimated.

February 25th BOD Meeting Recap

Somersett United
Somersett United

Reference:  February 25 BOD Meeting Agenda

 

The following is a summary recap of the more important issues covered in the reference BOD Meeting. Attendance consisted of about 17 homeowners, a disappointing turnout.

Items 2 and 8 – Homeowner Comments:

  • Private Street Gates have been inoperable about half of the time. Therefore the BOD should consider some credit/rebate to those homeowners who pay extra for this service. No commitment on the part of the BOD.
  • Given the frequency in which private gates are left open for long periods of time (e.g., construction purposes) can affected homeowners be advised of such occurrences so they can take other security measures? The Association Manager stated they will find a way to advise affected homeowners of any such occurrences.
  • Now that the Association owns the vacant lots adjacent to the Town Center retail buildings, can some action be taken to clean them up so they are no longer a community eyesore? BOD advised they will look into a solution.
  • Given the current and future issues facing our growing community, It was suggested the BOD meet monthly in open forum instead of bi-monthly. No commitment on the part of the BOD
  • What is the status of the $25K contract given to Hansford Economic Consulting for an Amenities Assessment and Planning Process? All deliverables under this contract had a target completion date of February 20, 2015. The BOD advised a report had been generated and will be posted on the mysomersett.com website.

Item 3 –  Committee Reports:

  • The Communication Committee reported they are looking to a revamp of the mysomersett.com website to make it more homwowner oriented than marketing/sales oriented. The committee will be visiting Tahoe Donner webmaster and IT personnel to get best practice ideas.
  • The BOD president stated that the Country Club Purchase Agreement requirements have been completed (Escrow closed) and homeowners can now take advantage of the Country Club facilities/amenities as described in the Purchase Agreement. These include: 1) use of dining room and pro shop at member rates, 2) free use of bocce ball courts, 3) free use of the back synthetic surface driving range, 4) use of front grass area driving range for $10/day, and 5) 4 foursome rounds of golf per year at equity member guest rates.

Item 6.a) – Litigation Review:

  • A homeowner property damage issue was taken care of via SOA payout to the homeowner.
  • The lawsuit filed against the SOA regarding the CC&R Amendment voting process, and Country Club Purchase Agreement by association, has not yet been resolved. However, the BOD president indicated they are in the final stages of reaching a settlement agreement with the plaintiffs and expects closure in the very near future.

Item 7.f) – Winter Creek Common Area Improvements:

This item pertains to an erosion/drainage issue in the Wintercreek community. A fix had been proposed with an estimated cost of $8K.  However, a long discussion ensued centered on that the $8K solution only represented a temporary fix and that a more permanent fix was really needed, with an estimated cost in the $40K range.  There were also access issues that needed to be considered.  Apparently when Lennar completes their build out, access to the affected area for repairs will be extremely limited. The BOD will get new estimates and reconsider the solution.

Except for Item 7.d), which was tabled, all other new business items on the Agenda were approved

February 25 BOD Meeting

Somersett United
Somersett United

The Somersett Owners Association Board of Directors (BOD) will be holding their open Board meeting on Wednesday, February 25th at 5:30 PM in the Canyon View Room at The Club at Town Center.  For those interested in attending, the meeting agenda may be accessed via the following link:

February 25 BOD Meeting Agenda

Items of particular interest include the following:

6.a) – Review of Current Association Litigation (no detailed listing, but should include the following)

  1. CC&R Amendment & Country Club Purchase Agreement Lawsuit
  2. Whisper Rock Owners Property Access Issue

7.b) – Ratification of written consent to approve SGCC Agreements.

7.d) – Review and Approval of Wintercreek common area improvements.

7.h) – Review and Approval of updated Gate Policy

Homeowners are encouraged to attend and ask questions or provide comments on any of the agenda topics or other issues of concern

Town Center Properties – What Next?

Somersett UnitedFor property location information, click on the Following:   Somersett Town Center

As reported previously, the vacant lots at the Somersett Town Center have been sold.  Buyers were Somercom, LLC and the Somersett Owners Association.  Details follow:

Parcel 232-051-10: 

This 34,900 sq. ft lot adjacent to The Club at Town Center (TCTC) was bought in June of last year by Somercom, LLC from Nevada State Bank for $150K.  Nevada Bank had acquired this property, as well as the property discussed below, at auction in 2011 following loan default by the Developer (i.e., Somersett Development Company).

 Somercom, LLC was formed in June of last year with Gary W Duhon as the Managing Officer.  It is believed that Mr. Duhon is also head of the Law Offices of Gary Duhon, Ltd., who specializes in Professional and Real Estate Law. It has been reported that Somercom LLC intends to build multi-rise condominiums on the property. To date no building permits have been found.

 This is the same property that the SOA had unsuccessfully tried to purchase for $210K in 2012.

 Parcels 232-051-16 and 17:

Totaling a combined 28,097 sq. ft., these lots adjacent to the Town Center commercial buildings were purchased from Doodle Properties #5, LLC by the Somersett Owners Association in late November of last year for $260K.  Doodle Properties had originally acquired the property from Nevada State Bank in 2011 for $211K.  It had been reported that Doodle Properties originally planned to build a Memory Care Unit on the property.

 With the loss of the property adjacent to TCTC, purchase of these lots by the SOA represents the best available choice for future amenity additions to TCTC.  The most frequently mentioned includes an indoor swimming pool. Club rooms and fitness center expansion have also been mentioned. However, to date no plans for property development exist.  Use of the property for amenities available to Sierra Canyon residents as well has not been ruled out.  Parking space availability is a potential area of concern.

 Regarding future amenity development for the SOA, at the August 27 BOD meeting, the BOD approved a $24,950 contract to Hansford Economics Consulting to perform a “SOA Amenities Assessment” study. Purpose being to: “Objectively analyze existing and potential demands on SOA amenities and provide recommendations for any changes to existing and planned facility offerings. Design and facilitate a process to create a five year amenities plan with short term and long term goals/projects”. The schedule called for submission of a draft report by November 24, 2014, a SOA response to the draft by December 19, and completion of all deliverables by February 20, 2015. Deliverables to include a planning workshop and development of a “Somersett2020 Amenities Master Plan”

It will be interesting to see in what manner this “Master Plan” addresses the Town Square Lot and Country Club purchases.  Perhaps the BOD or the Strategic Planning Committee, who originally recommended the study, can provide a status report, with findings and recommendations, at the February BOD Meeting.