In light of the Somersett Owners Association’s (SOA) investment in the Somersett Golf and Country Club (SGCC), which totals approximately $5M to date, as well as potential future liabilities, SU considers the SGCC’s financial health to be of interest to many Association members. Hence the following that summarizes the SGCC total revenue and expense data for the years 2010 thru 2015. This data was obtained from the SGCC’s IRS Form 990 submittals, which due to the SGCC’s non-profit status, are publically available. Note that the 2015 financials represent the first since the SOA’s purchase and leaseback of the SGCC property and water rights. SGCC 2016 financial data will not be publically available until as late as June 2017.
|Year||Equity Members||Total Revenue||Total Expenses||Revenue Less Expenses||SOA Contribution||Notes|
- 2010 – Year the Developer (Somersett Development Company) accomplished early turnover to the SGCC Equity Members.
- 2011 – First year SGCC was run entirely by Equity Members.
- 2012 – In late 2011, the Developer controlled BOD voted to divert $15/month of homeowner assessments (i.e., SOA Contribution Column) to the SGCC via a “Lease Agreement” in exchange for some SGCC access amenities. Agreement was to run for three years starting in January 2012 with optional 3 and 4 year renewal periods. Main purpose being to subsidize the SGCC’s operating losses.
- 2013 – In mid 2013, a draft complaint was generated by the Nevada Real Estate Division challenging the legality of the aforementioned Lease Agreement. Complaint alleged the agreement required CC&R amendments and homeowner vote. Complaint filing was placed on hold to give parties time to negotiate a new agreement and CC&R amendments to be voted on by all homeowners.
- 2014 – Final year under original SGCC Lease Agreement, new agreement subject to homeowner vote was negotiated and subsequently voted on by Association members.
- 2015 – CC&R Amendments and SGCC Purchase Agreement approved by owner majority vote. Under the Purchase Agreement, the SOA purchased the SGCC land and water rights for $2,750,000 with a subsequent leaseback of the land and water rights to the SGCC at a base rate of $1000/year (subject to escalation factor) plus an additional rent of $1200/year (fixed amount). Lease term is for 50 years with two 20 year renewal periods at the sole option of the Country Club. The $2.75M was obtained by the SOA via a 15 year bank loan to be paid back via homeowner assessments. Per the new Purchase Agreement, Association members continue to have access to certain SGCC amenities as described by the following link (extracted from Exhibit C, Section 10.3 of the Purchase Agreement): SOA-Access-to-SGCC-Facilities
For those of those who may wish to delve into the financial details, a copy of the SGCC’s 2015 IRS Form 990 may be accessed via the following link:
Per their financial statement, “The members of the Somersett Country Club, Inc. voted in December 2015 to use the cash from the sale to build a new facility to improve member experience per club bylaws.”