Afterthoughts on the 7-28-2015 Informational Meeting

By Shawn Townsell

Some of the responses and comments made by the realtors and members of the audience at the ACHOA Communication Committee Informational Meeting #3 held Tuesday, July 28, 2015, were based on premises that I think deserve a second look, and some things were left unsaid, that need to be brought up. Unfortunately, the format of our informational meetings with presentations, or the Q & As, does not allow any real discussion.

  1. Premise: “If we let the golf course go brown”: the primary premise here seemed to be that if the HOA does not buy the golf course (GC) and subsidize it, it will go brown.

    1st: The FOA owns the golf course: should the GC fail, it would be in their best interest to sell it in the best condition possible. The letter of intent expired; it never was a legally binding agreement to either party. The FOA has always been free to offer the GC on the free market and accept the best bid.

    2nd: The second possible brown course scenario would be: if we, the HOA, would buy a brown, meaning failed, golf course from the FOA. That would be a poor business decision, as that would be the 2nd failure of the GC.

    3rd: The third possible brown course scenario would be: if the HOA bought it, and the course failed under our management. WE DO NOT HAVE TO TAKE THAT RISK: WE DO NOT HAVE TO BUY THE GOLF COURSE.
  2. Premise: Letting the GC go brown by choice, after we bought it, will cost us more than keeping it green and buying the GC property and running it as the golf course is the cheapest option.

    1st: With currently around 500 members, the GC is still running at about $ 1M deficit. This was announced during the 2nd informational meeting on 7/7/15. Many of the new members are not AC residents. At around 450 members years ago, with higher membership rates, the yearly operational deficit was $ 1.5M. Current membership rates are attractive, but are only introductory, and not sustainable as past experience tells us. When, not if, the rates go up next year, the deficit will increase when members decide to play at cheaper courses or stop being social members. We have yet to hear real numbers. Current membership rates will not be what the Arnold Palmer Management Group will base its long-term business plan on and consequently valid figures will not be available until actual, calculated membership fees have been in place for a minimum of one year. Only then will we see an iota of the actual potential of “the business.” Everybody seems to be fixated on the $100 increase in HOA fee. What was not said and seems to always slip people’s minds is that we already know this will only roughly cover the yearly operational deficit, not the major capital investments and other costs of maintaining the courses and the club house. Leasing the GC to Arnold Palmer or some other management group, or hiring a management group will add management fees to the equation.

    2nd: The estimates calculated during the 7/7/15 meeting for the options of converting the courses back to native desert, keeping it watered and green, or converting it or parts of it into a park were misleading. What was not said was that: if we buy the GC property we would only have to deal with repurposing the actual courses (or parts of them) which represent about 1/4 – 1/3 of the approx. 500+ acres of GC property; the rest already is native desert land. The real numbers are yet to be shared with us.
  3. Premise: If we buy the GC, we will have stability within AC and thus stability of home values. An increase of the HOA fee to $300, or even up to $ 400 or $ 500 a month is cheap, especially for buyers from California. Some potential buyers may be lost with increasing HOA fees, but not knowing what is going to happen, is worse than a high monthly HOA fee.

    1st: again: What was not said was that if we buy the GC we will be responsible for any and all costs related to the GC: major capital investments, staff salaries/benefits, down to every item in the in the gift shop, the kitchen, and every plate and fork used at the GC, the list goes on – AND we will assume responsibility for fire mitigation on the GC property, AND assume all liability and resulting costs of litigation. This means we may face not only limitless raises in HOA fees, but also limitless special assessments. What was not said was that the future of the golf industry remains uncertain. I would say that buying the GC is the definition of unpredictability and instability.

    2nd: Losing a potential buyer may be of little consequence to a realtor, but it may mean everything to the seller, who, even in a recovering real estate market, is still lucky to get just one offer on his house.
  4. Premise: Letting it go brown will affect all home values in AC, because the standard for home values is set by the more expensive homes on the golf course.

    If we go by the numbers provided on this site from the Washoe County Assessor records: homes not adjacent to the golf course sell for at least the same $ amount/SqFt if not more when compared with homes sitting on the GC. The comps relevant to the buyer or seller are similar homes, similar size, and price per SqFt within a certain price range. Within that price range, the buyer has to decide where he gets the most for his buck and most of his needs and wants met. It does not matter what the bigger, higher end homes up the road cost. Each home has to compete on the market within its own class. What matters is if the added cost of hundreds of dollars in HOA fees, and thousands of dollars in special assessments is worth it for the buyer whether he buys a home on the golf course or elsewhere in AC.
  5. Premise: Letting it go brown will increase the fire risk and cost for fire mitigation/fuel reduction.

    This is the case only if the HOA buys the GC: a letter from the Fire Marshal was read by a resident to the audience confirming that according to NV law, while the GC property is owned by the FOA, the HOA is not responsible for fire mitigation, even if the golf club goes bankrupt.
  6. Premise: The Golf Course is the soul of Arrowcreek.

    The demographic study of our community paid for by all of us revealed that only about 20% of AC residents are golfers, 6% are social members, about 38% chose to live here because of the GC, and 32% actually use the GC. Based on these numbers the GC is only the essence of this community in the minds of the minority of AC homeowners.

Shawn T.

Advertisements
This entry was posted in ACHOA, ArrowCreek Realtors, Communication Committee, Home Sales, Home Values, Hunsberger Elementary, Reno Real Estate, Reno Realtors and tagged , , , , , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s