Golf Course Knowledge – SGCC

“What does the SGCC do for the Community”

Perhaps Mr. Guderian’s inquiry from his “Golf Course Knowledge” post could have been better phrased as:

“What does the Community do for the SGCC”.

There is no question that the Somersett Golf and Country Club (SGCC) with its lovely green fairways and open space enhances the beauty of the Somersett Community, and possibly, although some may disagree as to what extent, property values as well. Also, as captured under Mr. Retter’s (“yogiwan”) comment, SOA owners do have certain access privileges to SGCC facilities. However, these did not come without a price. A brief history follows:

  • As originally conceived, the SGCC was owned and operated as a separate and independent entity from the Somersett Owners Association (SOA), with no SOA say over its existence, ownership or operation. Hence, Somersett owners originally had no access privileges to SGCC facilities.
  • In 2010, facing financial difficulties, the SGCC owner, Somersett Development Company (SDC), accomplished early turnover of SGCC ownership to its Equity Members, espousing some positive projections in doing so. However, revenue versus expenses for that year resulted in a $560K loss.
  • In 2011, the first year under Equity Member ownership, the SGCC’s financial woes continued, with a revenue/expense loss of $628K. To offset these losses, in December 2011, the SDC controlled SOA Board of Directors (BOD) voted to divert $15/month of owner assessments to the SGCC in exchange for some limited SGCC access privileges (i.e., the misnamed “Management & Lease Agreement”). The agreement was to begin in January 2012 and extend through December 2014 with subsequent three and four-year renewal periods. During this period, revenues provided to the SGCC via SOA owner assessments totaled approximately $1,235,000, which helped to keep it in the black.
  • Needless to say, this agreement sparked considerable controversy within the Community. A complaint was subsequently filed with the Nevada Real Estate Division against the SOA BOD, which challenged its authority to enter into such an agreement without owner vote. Also, citing violations to both the Somersett CC&Rs and Nevada Statues (NRS-116). After a considerable amount of wasted legal and bureaucratic time, the complaint was upheld by the Nevada Attorney Generals office with the remedy being for the SOA (under a now all owner BOD) to modify the original agreement, revise the CC&R’s accordingly and to submit it for owner ratification.
  • In subsequent negotiations with the SGCC, the original agreement was replaced by a “Real Property Purchase Agreement”, the CC&R’s modified to permit such purchase, and subsequently ratified in late 2014 by SOA owner majority vote. Under the approved agreement, the SOA purchased the SGCC land and water rights for $2,750,000 with a subsequent leaseback to the SGCC at a base rate of $1000/year (subject to escalation) plus a fixed rent amount of $1200/year. Lease term is for 50 years with two optional 20 year renewal periods at the sole discretion of the SGCC.
  • Since ratification of the Real Property Purchase Agreement, no subsequent financial dealings between the SOA and the SGCC have taken place. However, there is a potential issue regarding who pays for the Rockery Wall failures occurring on SGCC leased land. Some (including a former BOD member) belueve this liability (possibly as much as $500K) lies with the SGCC under terms of the Purchase Agreement. Currently all repair work is being paid for by the SOA via Common Area funding. Is there litigation in the offing?

SGCC Membership Status

  • After SDC turnover to the Equity Members in late 2010, Equity membership stood at 188 out of a 450-member target. Since then, equity membership growth has been rather slow increasing to 241 at the start of 2017. This does not include an unknown quantity of “Preview Memberships” for those wanting to “test the waters”.
  • Per the SGCC website (www.somersettgolfandcountryclub.com), Equity member dues for 2017 were set at $425/month plus a $150/quarter food and beverage minimum. Preview Memberships were  $250/month plus a $150/quarter food and beverage minimum. Monthly dues do not include golf cart fees. The SGCC is currently offering their equity memberships with “No contribution at this time”. How this may relate to any deferred payment was not published.  Note that the price for an SGCC equity membership ranged from $25K at inception to a high of $40K, only to drop drastically during the recession.

Comments Welcome

 

5 thoughts on “Golf Course Knowledge – SGCC

  1. It’s too bad Pulte – Del Webb chose to build a retirement community in such a high end neighborhood. $425 for club dues is about the same as my monthly mortgage payment. And, we retirees are responsible for subsidizing the golf courses. Canyon 9 has a $300,000 a year short fall which we pay for in addition to any money we pay (or have paid) to have the country club which most of us can’t afford to use.

    We help pay for some nice amenities for our rich neighbors because they think it’s our responsibility to ensure their good life.

    1. Dusty

      Most folks who live in Somersett don’t pay extra monies to belong to a Country Club – the last report on their membership I saw published – indicates that there are about 235 – presumably paying $425/month members. That is 7.5% of the residences belong … So the fees in the General expenses for monies given to the SGCC in return for their assets should be viewed as everyones investment in the ambience of our community. Golf has always been an integral part of the Somersett PUD (albeit initially separate) as the CGC greens snake their way through our community.

      Everyone knows this upfront – and if you don’t want to have golf in your community, one should live where it isn’t! Pulte (Del Webb)’ marketing tells them that for a large % of retirees – that they want to & have the time to play golf.

      The Canyon 9 is an amenity and we pay for it – even if we don’t use it. Just we pay for the TCTC and SC pays for the Aspen Lodge. Here the idea is to provide a focal point for community activities for all to enjoy, if they want to.

      The big question on the C9 is how to get more folks to use it, to take advantage of the breath-taking Sierra mountain vistas and enjoying our relatively fresh air (compared to downtown Reno). Perhaps we should be organizing nature walks around the C9, cross country runs and other activities which all can enjoy.

      1. When we bought in Sierra Canyon in 2004, there was no indication that non golf club members would be required to chip in so our elite could have their world class golf play ground. Country clubs I’ve been around were 100% self supporting – Peninsula Golf Club, Birmingham CC, Mountain Brook CC, Ponte Verda Club, … Those that were not went out of business.

  2. I don’t often get involved SOA trials and tribulations. how ever I do think that this history review was both appropriate and unbiased. As a ten year homeowner and non golfer I feel that the golf course is a necessary component of an upscale development such as the one we all live in. Anyone who has purchased a home here should have know at the time of purchase that there are no freebees. So, folks should stop their whining.

    1. Don,

      I would agree that there are many residents who consider the SGCC to be an intergral part of the Somersett Community and have no problem with past SOA Board financial actions on behalf of the SGCC as being justified to maintain our “upscale” Community standards. However, I do take exception to your last sentence wherein you use the terms “anyone”, “no freebees” and “whining”. I would contend that most owners, upon purchase, believed the SGCC to be a seperate entity and did not realize that a portion of their monthly assessments would eventually go to fund SGCC operations, therefore, providing a valid basis for dissent by many, as opposed to being described as whiners.

      Jim Haar

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