Posted by “Somersett Homeowners Against the SGCC Purchase Agreement”
Somersett Owners are now receiving ballots for vote on the proposed SGCC Purchase Agreement. We urge all not to vote until you have all the facts and opposition viewpoints. In the ballot mailings the BOD has taken the liberty to present dialog for its approval without including any opposing viewpoints or opinions. Some will be forthcoming, and by Nevada Law they must distribute to the same audience. In the interim, consider the following and share with fellow homeowners via the following download: Don’t Vote until you have all the facts
Arguments Against Approval:
- Access to SGCC Amenities (for a fee): Since most homeowners are not golfers, bocce ball players or would consider eating at the SGCC a priority, these amenities have little value to the community. In a recent homeowner survey, SGCC amenities were far down the list. Whereas expanding the existing TCTC amenities and water facilities (e.g., an indoor swimming pool) were considered high priorities. The BOD has gotten their priorities wrong.
- $2.75M Bank Loan ($4M over 15 years at 5% interest): Purchase price for the SGCC land and water rights is $2.75M. To accommodate this, the SOA will secure a bank loan to be repaid by homeowner assessments over a 15 year period. The SOA will then lease back (90 year lease term) to the SGCC for $2200/year. During the 90 year lease term, the SOA will receive approximately $200K in revenue from the SGCC. Not an acceptable return for a $4.0M investment.
- Impact on Assessments: The BOD emphasizes that the proposed purchase agreement will have no impact on assessments. This is very misleading because they base this on the current $15/month going to the SGCC (i.e., under the current lease agreement) as being superseded by the bank loan payment, which they state will cost homeowners less than $15/month. However, the fact is the current lease agreement will not be in effect beyond December 2014. Therefore, the $15/month assessment reference becomes moot. Disapproval of the proposed purchase agreement should result in homeowner assessments being decreased by $15/month.
- Default by the SGCC: If the SGCC defaults on the lease terms, the SOA has no current plans on what to do with the acquired land and water rights. To continue to operate as a community golf course would (by BOD estimate) require an increase in monthly assessments of $50-$70. To maintain as a green belt, costs associated with landscape and water facility maintenance, irrigation, land damage, improvements, etc. will undoubtedly add to homeowner assessments.
- Drought Impact on Water Rights: Whether or not the acquired land could continue to remain as a green belt is speculative. As in Las Vegas, drought conditions may dictate whether the irrigating of 220 acres of open land is affordable, desirable or even permissible.
- Common Area Usage Problems: Adding 220 acres of green space to the association’s common area, much of which is directly adjacent to homes, could constitute a significant homeowner nuisance factor by those using it for their own pleasure at the expense of others.
- SGCC Clubhouse Construction: Strangely, the proposed purchase agreement does not include the new clubhouse the SGCC intends to build (presumably with the $2.75M of SOA funds) or the land on which it stands. Upon default, this property remains with the SGCC for the exclusive use of their members to do with as they wish. The caveat being that the SOA has the first right of refusal should they wish to sell.
- Win-Win or Win-Lose? The Country Club has stated that with 400 dues paying members (~200 of which are equity members) they are solvent and membership is growing. If this is true then why the need for the proposed purchase agreement? It makes no sense at all. Perhaps the reason being that the SGCC needs the money to subsidize building of a permanent clubhouse.
This is a bad proposal, not supported by sound economic principles or community benefit. Therefore, we strongly urge all Somersett Homeowners to vote to DISAPPROVE the proposed SGCC Purchase Agreement.