Here in one place are several news articles about the FOA and ArrowCreek from the end of January and beginning of February 2015 about taking the two 18 hole ArrowCreek Golf Courses private on May 1 2015:
Page with FOA news coverage about taking both AC golf courses private
Photo Time!
Yesterday’s sunset was breathtaking given the evening’s topic of conversation – fire abatement.
Some ArrowCreek residents were curious about my ArrowCreek Fire photos from August 2000. So, here are a few. The first four are photos I took yesterday. No fire abatement has been done on these HOA Common Lands nestled between the streets of houses, so you can see how the desert has grown back in the 14.5 years since the fire. The rest of the photos are from August 2000. You can click on the photo to make it pop bigger (at least on the computer – I’m not sure if it works if you are viewing on your phone).
With these first couple of photos you can see how the ArrowCreek Fire was actually bigger than just ArrowCreek.
Today I had to change a belief I’ve had for a very long time.
For as long as I can remember I have repeated the story of how the ArrowCreek Fire occurred right as we were in the process of buying our lot in ArrowCreek. It was a great story of how lucky it happened before there was a house on the lot and how more than half of it had burned and, and, and….I always put it in 2001.
Today the ArrowCreek Fire came up again in a discussion about fire abatement. I googled ArrowCreek Fire 2001. I found a list of fires from the Reno Gazette Journal archives stating “August 2000, ArrowCreek Fire: Lightning causes a racing brush fire that consumes nearly 3,000 acres and damaged six homes in south Reno.”
“That can’t be right!” So, I looked at another item that my google had returned.
Here is an article about a fire restoration grant. That will have truth. I remember returning a letter granting permission for restoration people to be on our property (even though we never saw any new plants).
“The largest project area belongs to the Arrowcreek and Skinner Fires). The Arrowcreek Creek Fire of 2000 burned through 2,788 acres of land. The Skinner Complex Fire of 2008 (AKA East Lake Fire) devastated 960 acres of land. ARRA funds will employ a minimum of 16 people in varying job titles and skill sets on the Arrowcreek Project and a minimum of 18 people in varying job titles and skill levels on the Skinner project. The proposed ecosystem restoration project will include defensible space principles near development, the mapping and eradication of noxious and invasive weeds that will be competing with the native plants, the planting and reseeding of native shrubs and trees for wildlife habitat improvement, water quality improvement and soil erosion control and reducing the risk of repeat wildfire in the region.”
….Hmmmmmm…”No, I know it was 2001!” So, I looked at another item from Washoe County Board of County Commissioners and another from FEMA.
“Nevada Arrow Creek Wildfire (FM-2316)
Incident period: August 1, 2000 to August 5, 2000
Fire Management Assistance Declaration declared on August 1, 2000
August 2, 2000
News Release
Federal Funds Authorized To Help Fight Nevada Wildfire
Washington, D.C. — Federal funds have been made available by the Federal Emergency Management Agency (FEMA) to help Nevada battle the uncontrolled Arrow Creek fire located in Washoe County.”
..and another Galena Volunteer Fire-Rescue – well, they should knooooooooooooooooow, oh, wow, here’s a photo…
Gee, looks like I was mistaken about the year. I know I took pictures, too. I’ll have to root them out. So, I delve into my storage of paper photographs… “Oh, my God! They ARE from 2000, not 2001!”
“But…but…I SWEAR we closed in 2001!!” Where ARE those papers….. So, Ron digs through the data.
“We closed in 2000!”
“Well, I’ll be! …Guess I have to change my story! I have to admit that I was wrong! I now have new data that proves I have to change the way I have always looked at it for a very long time.”
“Hmmmmmmmm…”
Mindy Sipin (LPGA T&CP) has announced her Junior Golf Schedule as she knows many families plan their summers ahead. The all day Kids Camps fill up quickly, so if you are interested in these golf “summer day camps” for any of your children, please reserve your spot ASAP.
The Club at ArrowCreek is offering a Junior Golf Program for the upcoming 2015 season. This program is available to all juniors 5 years and older. A wide variety of schools will be offered – from introducing the game of golf for the beginner to the young adult wishing to play competitive golf. The emphasis will be on making learning fun while focusing on the fundamentals of the game.
Also offered are Kids Camps which will include golf, tennis and swimming instruction.
These camps are sure to be a fun filled week for the kids!!
Click here for more information. This information page is also reached by clicking on the “Local Favorites” link in the black menu bar below the photo of ArrowCreek at the top of every ArrowCreek411 webpage.
….from rgj.com Guy Clifton, RGJ 6:08 p.m. PST January 30, 2015
The Club at ArrowCreek, formerly known as ArrowCreek Country Club, is going back to its origins, making both its 18-hole championship courses private, effective May 1.
“That’s the way the club started out years ago,” said Gary Pestello, chairman of Friends of ArrowCreek, the group of 36 investors who bought the ArrowCreek Country Club from the Federal Bankruptcy Court in October 2014. “We believe you cannot be all things to all people. We’ll be the only 36-hole private club in Northern Nevada.”
The Friends of ArrowCreek turned of the clubhouse and both courses is now overseen by Arnold Palmer Golf Management. The legendary Palmer was the designer of the Legend Course, while the Challenge Course was designed by John Harbottle and 1979 Masters champion Fuzzy Zoeller. Both courses opened to private membership in 1999 in South Reno.
Since 2006, the Legends Course has been open to the public, while the Challenge Course has been private. The new ownership and management team felt it was counterproductive to have a private course with a public option, said General Manager Jayson Peterson.
He said the membership packages, which include no initiation fees, were designed to be attractive to current players. The private membership will give all members access to both courses, the clubhouse and club functions.
Peterson, who came to the job with Arnold Palmer Golf Management, said there is also an emphasis on improving the condition of the course, which had lapsed in recent years.
“The club has gone through some financial hardships over the past few years,” he said. “With the new ownership and new management, we have a solid agronomy plan and we’re bringing more recourses when it comes to maintaining the course from a product and labor standpoint.”
A variety of membership packages are available, including $250 per month for people living outside the ArrowCreek community and $230 per month for those who live in ArrowCreek.
For more details on membership at The Club at ArrowCreek, call 775-850-4471.
RE: UPDATE ON THE DIRECTION OF GOLF
Dear ArrowCreek Homeowners:
Several key events have occurred in the last ten days that require an update concerning the potential acquisition and/or operation of “The Club At ArrowCreek.”
CLICK HERE to view/print the most recent update on the direction of golf.
Sincerely,
The ArrowCreek HOA Board of Directors
ACHOA Responds to Resident’s Purchasing Golf Course Questions posted on January 24, 2015 on ACHOA Associa website as Member_Letters_and_HOA_Responses
The questions are restated with the response below.
Date: Saturday, December 27, 2014
Re: Purchasing Golf Course
To: Board of Directors, ArrowCreek HOA
Dear Sam Fox,
Please make sure that each Board Member get copy of this email.
Also I would like to request an official response which acknowledge receipt of this email and signed by the Board.
Here is my opinion on the subject:
50%+1 or even a Super Majority vote is not satisfactory for this fundamental change of our homeowners’ association – in my opinion this requires 100% of all eligible voters to approve or not approve the purchase of the Golf Course.
The reason is very simple: to avoid the risk of multiple lawsuits. If the HOA is sued, each homeowner is being
sued.
You cannot force any single resident of ArrowCreek to own or engage in a Joint Venture without his/her consent
(vote).
Also:
The voting ballot should state the following:
– I understand that HOA proposes the purchase of a “bottomless money pit”: the Golf Course
– I understand that my fee can be increased by the HOA Board without any vote by the home owners to cover the costs of the Golf Course
– I understand that I, as part owner, will be responsible for any and all costs necessary to maintain the Golf Course and the Club House
– I understand that, as part owner, I will be liable for any debt accrued by Golf Course
– I understand that the increase of the HOA fee does allow me to eat at the Club House and participate in social events, but does not include the right to play golf
– I understand that Golf Course Joint Venture most likely will be losing money because the Golf Course has never been profitable
– I understand that any lawsuit against the Golf Course and the HOA will directly affect my lifestyle, because all legal fees will be paid by all ArrowCreek residents in some way
– I understand that I, as part owner, will be paying salaries for all people working at Golf Course and I will be liable for any workers’ comp suits and disputes
– I understand that I , as part owner, will be liable for any injury of any person on the Golf Course property, for any theft or damage of property on the Golf Course property
– I understand that high, uncapped HOA dues may make it difficult to sell my house.
Without such a disclaimer any voting should be forbidden as six month later there is going to be chaos: people will stop paying HOA fees (most likely the ones who vote “NO”) and challenge everything in court over and over again. I will not be surprised if members of the HOA Board of Directors get sued for bringing this disaster to a very nice community. Each lawsuit against the board is a lawsuit for which all homeowners as members are liable. When the assets of the HOA are exceeded by such litigation, the members have to make up the difference.
There is a very good (important) reason why a HOA is a non-profit organization and we want to keep this way.
The ArrowCreek Communications Committee has been tasked to respond to your questions and comments in the letter forwarded to the ACHOA Board of Directors on December 27, 2014. Your letter forwarded in an email follows [precedes here] the responses provided. The responses provided are from both the ACHOA Board of Directors and the ArrowCreek Community Club Committee (ACCC).
Each member of the ACHOA Board and the ACCC received copies of your letter.
The ACHOA Board appreciates the time you committed to developing and communicating your concerns about the potential Ballot concerning the acquisition and potential operation of “The Club At ArrowCreek.” As we all know, the potential acquisition and operation cannot occur unless the ACHOA members vote for the proposition.
1. “100% of all eligible voters to approve or not approve the purchase of the Golf Course, to avoid the risk of multiple lawsuits. If the HOA is sued, each homeowner is being sued.”
The ACHOA Board are fiduciaries and shall act on an informed basis, in good faith and in the honest belief that their actions are in the best interest of the association, The ACHOA Board members are required to exercise the ordinary and reasonable care of directors of a corporation subject to the business judgment rule. [Nevada Revised Statute 116.3103] Taking the legal advice of “fifty percent (50%) plus one (1) of the Owners” from Board legal counsel does avoid liability for the ACHOA Board.
In addition, the ACHOA Board of Directors are required to purchase Insurance Policies as per NRS 116.3113 to 116.31138. Such policies have been annually purchased and the cost of defense and any legal obligated to pay judgments are paid by the insurance policies. The ACHOA members are insureds under these policies. Therefore, all ACHOA member Homeowner policies with their HOA assessment coverage are excess above the insurance policies procured by the ACHOA.
If an ACHOA member(s) pursue a lawsuit against the ACHOA, the ACHOA Board and the ACHOA members for voting for or against the Ballot proposition, such lawsuit will be basically suing ourselves. The purchased ACHOA insurance policies will respond and provide the necessary defense for the ACHOA, the ACHOA Board and any named ACHOA members in the law suit. However, as long as all NRS policies and procedures are followed by the ACHOA Board in providing oversight to the Ballot process, the probability of a law suit is reduced.
2. You cannot force any single resident of ArrowCreek to own or engage in a Joint Venture without his/her consent (vote).
The ACHOA Board and ACCC agrees that no resident can be forced to acquire or own “The Club At ArrowCreek” or engage in the operation of “the Club At ArrowCreek” without a proper secret Ballot of the ACHOA membership. This is a requirement of the NRS and the ACHOA Board will follow the statues and regulations that apply to Ballot questions proposed to the ACHOA membership.
3. The Ballot should state specific or disclose certain informational items. Without such a disclaimer any voting should be forbidden as six month later there is going to be chaos: people will stop paying HOA fees (most likely the ones who vote “NO”) and challenge everything in court over and over again.
The ACHOA Board and the ACCC agrees that all Ballot information provided with the Ballot should provide full disclosure of positive and negative information concerning the acquisition and operation of “The Club At ArrowCreek”. Legal counsel advice will be provided to determine all appropriate disclosures for a proper secret ballot. The ACHOA Board and ACCC believe that several of your statements may be included in the disclosure. It is too early to determine which if any of the statements will be included.
The Joint Venture, not the ACHOA, will be responsible for all debts, expenses, and liabilities created by the operation of “The Club At ArrowCreek”. The Joint Venture will procure separate and proper insurance policies with the ACHOA as an additional insured on the Joint Venture’s policies to avoid any liability transferring to the ACHOA and its members. The Joint Venture will provide a five year pro forma for all ACHOA members to review and future annual budgets will be subject to approval by the ACHOA Board of Directors. This will be the basis for evaluating ACHOA monthly assessments in a transparent open process currently followed by the ACHOA Board of Directors. It is planned that the negotiated Joint Venture operating agreement will address any and all operating losses and any caps on capital calls. This is still pending in the negotiations.
The social and recreational aspects of the Joint Venture are still being negotiated. Access to those negotiated services will be provide to the ACHOA members and may include certain golf privileges. This is still pending.
The Board has a collection policy in place that dictates a fair and equitable procedure to be followed for the collection of delinquent monthly assessments. The collection policy is on the ACHOA website for your review.
As for potential challenges in court concerning an affirmative or negative vote of the membership, at best this is speculative since all disclosures will be transparent and any information requested by the ACHOA members will be provided. The ACHOA Board of Directors have procured the necessary insurance coverages to provide defense for such actions. These are normal business expenses anticipated within the ACHOA budget process. Please see the 2015 approved budget on the ACHOA website.
4. I will not be surprised if members of the HOA Board of Directors get sued for bringing this disaster to a very nice community. Each lawsuit against the board is a lawsuit for which all homeowners as members are liable. When the assets of the HOA are exceeded by such litigation, the members have to make up the difference.
The ACHOA Board of Directors are required to purchase Insurance Policies as per NRS 116.3113 to 116.31138. Such policies have been annually purchased and the cost of defense and any legal obligated to pay judgments are paid by the insurance policies. The ACHOA members are insureds under these policies.
If judgments exceed the procured limits of coverage, the NRS requires that the ACHOA Board of Directors assess the membership for the shortfall. At this point in time, all ACHOA member Homeowner policies with their HOA assessment coverage will be triggered and the ACHOA member will be reimbursed to the limits of insurance purchased in their homeowner’s policy. Many ACHOA members are
procuring $25,000 to $50,000 limits to cover this contingency for both catastrophic property and casualty losses in their home owner’s insurance policy.
5. There is a very good (important) reason why a HOA is a non-profit organization and we want to keep this way.
The ACHOA Board of Directors understand your commitment to keeping the ACHOA as a not-for-profit entity. Unfortunately, if the ACHOA members vote for the acquisition and operation of “the Club At ArrowCreek”, the Board of Directors and ACCC have been told by tax experts and legal counsel that the ACHOA will need to become a “For-Profit” entity as allowed under the NRS. This will be a consideration in the vote by the membership.
ACHOA Board of Directors
ACHOA Shares ACHOA Member Letter dated Dec 31, 2014 which was also posted to the Voices to the Webmaster Page on Dec 31, 2014.
To the Pros and the Cons of the HOA potential purchase of The Club at ArrowCreek and the HOA,
I love ArrowCreek and I will probably vote yes on the proposition, at least that’s my thought right now. My problem is that I hate to see all the animosity and anger that is beginning to brew in ArrowCreek. It is getting worse instead of better. I think ArrowCreek has the potential to be the prime residential area in Reno. The people here are awesome. I love the folks I meet at the gym, walking the circle and surrounding streets, the golf club, all the social activities that I am involved in, etc.
Charlie (former owner of ArrowCreek) has run the golf club into the ground over the past 7 years. He went into bankruptcy in Jan. 2014 and several (apparently 36) friends and neighbors formed the Friends of ArrowCreek (FOA) by investing money. I know several of these folks, some have a lot of money and some do not. I do not have a list of these folks nor do I want one. I feel that it is none of my business where people invest their money as long as it’s legal. I don’t want people to know where I invest my money either (I am not an FOA investor). Some of the FOA have talked about the concern of how hostile the negative folks are and don’t want to be known for fear of retaliation. Several months ago the FOA proposed that the HOA buy the course, but the HOA does not move that fast and that is part of the reason that the FOA was formed and fought Charlie in court to win the club. A very comprehensive study was done earlier this year and I saw the presentation at an HOA meeting, it showed that the country club was important to our neighborhood, whoever owned it was irrelevant. The FOA never intended to run a golf club on a long term basis. This was a stop-gap or bridge loan to help save the club and preserve the value of our neighborhood until the HOA could/would purchase it (that was their hope). They have partnered with Arnold Palmer Golf Management to run the club. This would be a joint venture with the HOA. The Arnold Palmer group has been successful with similar ventures and the potential for profit is probable.
During the past few years as the club became less and less desirable, people left. They canceled their memberships, events had fewer attendees, and the place was beginning to get run down. I remember a realtor telling me that she didn’t want to show ArrowCreek properties to new clients because of the state of the club and the unknown as to whether or not it would stick around. Mind you I am sure they never turned anyone away that wanted to see ArrowCreek. ArrowCreek is marketed as a gated golf course community and should remain as such.
Both sides are using scare tactics and getting way too emotional. I understand being passionate about a subject but can’t we all be adults and respect each other’s opinions? Opinions are meant to be shared but not necessarily accepted. You will never get all the people on one side, it just isn’t possible. But what is really right for ArrowCreek? We don’t really know. We can only research, gather facts and make that decision on our own, not because someone brow beat us. Let’s share the same FACTS. Not myths. Not numbers that have been skewed by statistics, you can make a number anything you want it to be if you use the right formula. There is no house in Reno that has gone up 43% (per info from meeting at the residents club and on the website arrowcreek411.wordpress.com). I know there was an asterisk next to the 43% but no one looks at that. There was also talk about your home would become collateral if the HOA bought the course, well, you home already is collateral if you belong to the HOA, nothing changes there. Let’s not try to fool each other. Let’s come together and let the people of ArrowCreek decide what is best. Again, based on facts. The people here in ArrowCreek want their voices heard but they also want us to do this as adults as opposed to bickering politicians that slant everything to one side. I have heard from several on both sides of the fence about how ugly this fight is getting and it is pulling ArrowCreek apart. That is not what we want. Whatever vote prevails should not drive us to be divided as residents.
There was talk at one meeting about the Kool-Aid, don’t drink the Kool-Aid. I have a better idea; let’s not make the Kool-Aid to begin with!
Is there room for negotiation? Yes. The increase of dues by $99 is big. We have a lot of young families and $99 can really impact their budget. What are they getting for the increase? Since the club has been turned over to the FOA there seems to be a renewed excitement. Old members that left under Charlie’s regime have come back. Events are better attended, often to capacity. Maybe that increased dues number can be lowered to something more tolerable. Maybe offer more amenities to the residents for their increase. Maybe they get some limited golf rounds or reduced cost of play on both the Legend and the Challenge. Maybe if this club is successful enough we can get our HOA dues reduced. I don’t know the answer but let’s work together on it.
Could ArrowCreek really turn brown? Maybe. Charlie had the course on the market for 3-1/2 years and didn’t get any bites. The FOA and many residents are concerned that if the club does not become profitable soon then it may turn brown. Many of the investors are not prepared to put up any more money. If the FOA winds up bankrupt and had to walk away, then yes, the course will probably go brown. Will all of us do what we can to prevent that, I hope so. But it is a possibility and should not be presented as a threat or a myth, just a fact. The FOA are not interested in running the club without the HOA buy in. Without Arnold Palmer, the FOA is not experienced at running a club and if they are unable to sell in a reasonable amount of time, then it would be bad news for the courses. There are a lot of possibilities.
What happens to the club house? Will it sit empty? Broken windows, graffiti? Kids hanging out, drugs, drinking? Possible. Not a threat or a myth, but possible. We are a gated community but we are not as secure as some might think. You can drive in the back road, although you are not supposed to. We have approximately 20% renters in ArrowCreek. Many are here because they want to be in the school system. That means kids and kids with friends. Are most of them responsible, yes, I like to believe that. All of them? Probably not. That could mean anything, but no guarantees. We have had problems with graffiti and vandalism in the past. There have been break ins. Our community is not immune to the problems in society. The good news is we are out of the way so it helps to secure us just by location. If we are united we can minimize the troubles, but divided makes the risk that much higher. Keep on mind, in this scenario the HOA won’t own this property so it will not be patrolled or secured by our security.
ArrowCreek is the best place to live. Let’s not turn this into a civil war. This really is small stuff in the grand scheme of life, so let’s not sweat it. Let’s come together as the great community that we are and share our thoughts, concerns and facts. Let us all make the right decision for ourselves and for ArrowCreek based on the same facts not myths and scare tactics. Why do we have two camps? Why are we so divided? We should be one regardless of how we feel or wish to vote. There should be one shared web site. There should be unbiased meetings. How about a mediator? Unbiased mediator to run all organized meetings? Just my thoughts and concerns, but I don’t believe I am alone in these views.
Thank you,
Malcolm & Elizabeth Heaven
This third response in the ACHOA Associa Website January 24, 2015 Posted Responses is already captured here: CNA Questions ACHOA Spending from January 17, 2015.
ACHOA Responds to Resident’s FAQ Questions posted on January 24, 2015 on ACHOA Associa website as Member_Letters_and_HOA_Responses
The questions are restated with the response below.
Sent: Wednesday, January 14, 2015 9:23 AM
Subject: Re: ArrowCreek HOA FAQs about the HOA Purchase of the Club at ArrowCreek
ACHOA board:
I have questions and cons to be added to the FAQs.
Why does the Board believe 2 golf courses can be profitable at ArrowCreek? What research was done to show 2 courses will be profitable? Why was closing one course not an option? Assuming 2 courses are purchased, what will be the liability and cost to homeowners, if 3 to 5 years from now, one of the courses has to be closed? Prior owners never made a profit with 2 courses in 15 years. Golf is a declining activity. More golf courses are closing than opening in the US. Younger generations do not have time for or interest in golf because it takes too much time away from their lifestyles.
The golf courses purchase effort by FOA and ACHOA has focused on a narrow, very limited solution considering only the present dilemma. It seems to be an effort to draw in all AC homeowners now to spread the liability for potential problems later.
Longer term risks and possible costs of ownership should be considered and explained fully to the homeowners. Play the “What if” game; what if 2 courses are not profitable? What if a fire sweeps over facilities? What if an earthquake causes substantial damage to a course? What if water costs skyrocket? What if Arnold Palmer bails out or demands renegotiation?
Best solution today while avoiding risk to the homeowners is to let FOA own and operate 2 courses for 3 to 5 years and see how things play out. If all goes as FOA says, everyone will be happy. If not, in 3 to 5 years, AC homeowners will have a great deal more information on which to base actions.
Response from HOA on 1/20/15:
The ACHOA Board of Directors appreciates the time and thoughtfulness of your questions. We are anxious to answer all of your questions. Indeed, we are asking ourselves many of the same questions you pose. However, some of your questions cannot be completely answered at this time because the ACHOA Board and ArrowCreek Community Club Committee (ACCC) have not completed their negotiations and due diligence. The ACHOA Board and ACCC want to provide to all ACHOA members complete information for the ballot proposition concerning the proposed acquisition and operation of “The Club At ArrowCreek.”
1. Why does the Board believe 2 golf courses can be profitable at ArrowCreek? Why was closing one course not an option?
The ACHOA Board and ACCC as part of their fiduciary due diligence are examining the optimum operational size for the golf courses. The cost to operate 18 Hole, 27 Hole and 36 Hole Community Club course are being examined at this time. Numerous Pro Forma Budgets are being developed for each of these scenarios. Included in this analysis is the potential impact of certain golf course areas being returned to native areas (brown or green) and/or allowed to be dormant for subsequent refurbishing and use. Included in that analysis is the impact to home values created by such closures or dormancy. Please note that the most expensive proposition is the 36 Hole scenario but anything less may create a larger potential liability for the community since several ACHOA members lots may no longer have a view of the golf course and their home value may be impacted. These ACHOA members will want a strong say in what goes dormant or brown and if not allowed to participate in that decision, lawsuits could occur.
Remember that all ACHOA members purchased homes in a golf community and they expect to sell their homes in the future with the golf course still in existence. That is a dilemma the community must face. Does the ACHOA community want to control the destiny and decisions concerning the use of the 544.6 acres or does the ACHOA community want others to control the community’s destiny.
2. What research was done to show 2 courses will be profitable?
Research is ongoing at this time. Actual costs for running Community Club operations are being developed from other operating 18 Hole, 27 Hole and 36 Hole Golf courses in the United States. This information is coming from Arnold Palmer Golf Management and other Golf service providers that manage golf courses. The key driving elements for profitability of any golf course operation have been the Member Dues (Golf and Social), the non-membership play, cart fees, driving range, merchandise sales, and banquets. That is being analyzed at this time.
The ACHOA Board has also been contacting other Arnold Palmer run Community Clubs to complete its due diligence. The ACHOA Board has contacted the President at Skyline Country Club in Tucson, Arizona and Prescott Lakes in Prescott, Arizona to determine current community results. Both organizations have provided positive feedback about the relationship with Arnold Palmer Golf and discussed their profitability status. Further due diligence will be conducted.
3. Assuming 2 courses are purchased, what will be the liability and cost to homeowners, if 3 to 5 years from now, one of the courses has to be closed?
This is a very good question. The ACHOA Board and ACCC are examining the multiple scenarios that could occur over a five year period of time. The ACHOA Board and ACCC believe that a five year window of time should provide an excellent window to determine profitability of such an operation.
The closing or dormancy of one golf course will still carry with it operating expenses. The sprinklers system maintenance, cart path maintenance, weed and grass control, water costs, employment costs, and Reserve Fund assessments must be evaluated and those related costs assessed in the ACHOA Member Monthly Assessments. This is just not a simple closure process.
The ACHOA members along the course that is closed or dormant may have significant issues concerning the impact on their home values. A very precise voting and approval process will need to be established within the operating agreements and governing documents of the ACHOA to address this issue of dormancy and closure.
The ACHOA Board and ACCC are developing contingency plans to deal with the varying operating profit and loss scenarios facing the Community Club operation. These contingency plans will be presented to the community before any ballot initiative will occur.
4. Prior owners never made a profit with 2 courses in 15 years. Golf is a declining activity. More golf courses are closing than opening in the US. Younger generations do not have time for or interest in golf because it takes too much time away from their lifestyles.
The ACHOA and ACCC are very familiar with your statements and similar statements concerning a golf course operation. The ACHOA and ACCC however, are examining the possibility of creating a Community Club that operates and provides multiple experiences within the community. If other, less financed golf courses in the Reno area should close, as your comment about decline in U.S. golf activities implies, that would make the surviving “Club At ArrowCreek” a more attractive golf property and ACHOA members home values would increase.
The ACHOA Board and ACCC are examining other communities that have made the conversion to a Community Club operations that included golf as one of the activities. The collection of this information has not been completed and will be an important element of the due diligence reports provided to the ACHOA members for their consideration.
The ACHOA members will need to decide who should control the destiny of the 544.6 acres in the middle of the ACHOA community. Do the ACHOA members want to make the decisions on how to operate and control the use of the land or do we want to let other entities to control the community’s destiny. That will be an individual decision for each ACHOA lot owner.
5. The golf courses purchase effort by FOA and ACHOA has focused on a narrow, very limited solution considering only the present dilemma. It seems to be an effort to draw in all AC homeowners now to spread the liability for potential problems later.
The ACHOA and ACCC appreciate your comments concerning a broader vision of the impact of 544.6 acres sitting in the middle of the ACHOA community. The ACHOA Board and ACCC are examining numerous expansions of services and associated costs if the Residents Center becomes a component of the Community Club Concept. The ACHOA and ACCC are examining the best methods of providing access to the 544.6 acres with recreational trails, snow shoe areas, cross country ski areas, sled areas, picnic areas, food service at residents center, potential cover for swimming pool area, etc. The ACHOA and ACCC hope that the independent survey that will be soon conducted within the community will shed further light on the broader approach for a Community Club.
The effort is not to spread the debts and operating losses of the Golf Course operation among the ACHOA members. The effort by the ACHOA Board and the ACCC is to determine the viability of enhancing the ACHOA Community Experience while maintaining or improving homeowner values. In addition, the ACHOA Board and ACCC believes it is better that current and future ACHOA members pay for the acquisition over time through a loan in lieu of a one-time special assessment paid by current ACHOA members.
6. Longer term risks and possible costs of ownership should be considered and explained fully to the homeowners. Play the “What if” game; what if 2 courses are not profitable?
The ACHOA and ACCC agree 100% with your comments. This group of volunteers is examining many possibilities and probabilities of the business risk associated with owning and operating “The Club At ArrowCreek.” The ACHOA Board and ACCC knows that all of that information will need to be provided to the ACHOA members prior to receiving their ballot on this important vision of the ACHOA.
Many ACHOA members agree that if two courses are not profitable, it is better for the ACHOA to own the 544.6 acres and control its destiny. At that time, the ACHOA members can determine what should be done with the un-profitable courses which reverts back to the brown and green options previously discussed by the ACCC.
7. What if a fire sweeps over facilities? What if an earthquake causes substantial damage to a course?
The ACHOA Board and ACCC do not disagree that catastrophic perils can impact “The Club At ArrowCreek.” The catastrophic perils above will be transferred to an insurance company through the purchase of golf course insurance procured by the operating entity. The insurance will be an operating expense of the operating entity and it will be primary and seek no contribution from the ACHOA insurance program. The ACHOA insurance would only be excess coverage at best.
The fuels mitigation program planned for ACHOA common areas will extend to the golf courses as well to limit the threat of wildfire sweeping though ACHOA. The ongoing maintenance of the fuels mitigation will be an ongoing expense of the operating entity.
8. What if water costs skyrocket?
The ACHOA Board of Directors and ACCC understand your concern over water usage. However, please remember that the ACHOA common landscape areas and “The Club At ArrowCreek” golf course areas are connected to a separate watering system. They are connected to grey water pumped up from the Washoe County Waste Treatment facility. There is an entirely different billing system and water system then the water that ACHOA members have connected to their homes.
The ACHOA Board and ACCC have plans to re-negotiate the water billing system with the county since the ACHOA and golf club are approximately 80% of the billing for this water. This negotiation will include long term grey water access contracts if possible.
9. What if Arnold Palmer Golf (APG) bails out or demands renegotiation?
The ACHOA Board and ACCC recognize this possibility and are addressing these issues in current negotiations. The terms and conditions of the operating agreement and joint venture agreement have not be finalized but termination and renegotiation clauses will be included in these documents like any business deal would include.
However, APG is willing to sign long term contracts with the operating entity and with the ACHOA in the joint venture arrangement. Currently 20 to 30 years are being discussed as the term or the relationship.
10. Best solution today while avoiding risk to the homeowners is to let FOA own and operate 2 courses for 3 to 5 years and see how things play out. If all goes as FOA says, everyone will be happy. If not, in 3 to 5 years, AC homeowners will have a great deal more information on which to base actions.
The ACHOA Board and the ACCC appreciate and understand your recommendation. The ACHOA Board under its fiduciary duty cannot do nothing as you suggest, The ACHOA Board and ACCC are obligated to conduct a full due diligence analysis and vetting of the business deal and present the results to the ACHOA members for their determination. Failing in this fiduciary duty can create significant liability for the ACHOA Board and the ACHOA Community.
The ACHOA Board and the ACCC has a duty to act and provide information to the ACHOA members on matters that impact the home values in the community and operational costs that impact monthly assessments. The ACHOA members purchased their homes in a gated golf course community with an expectation that their home values would remain stable or increase over time. The ACHOA members also expect that when they sell their homes a gated golf course community will still exist and it will improve their selling price.
It is not riskless to wait 3 to 5 years and see how “things play out”, as your question implies.
However, additional considerations must be presented to the ACHOA members if the community choses to not purchase the 544.6 acres. (1) Years from now, the cost of purchasing a thriving “Club at ArrowCreek” could be much higher. (2) The cost of financing future golf course purchase may be higher than today’s low loan rates. (3) If “The Club At ArrowCreek” failed to thrive, a land speculator might buy the golf course form the FOA investors in the expectation that the developer would be allowed to build hundreds of additional homes in and around our existing homes.
Lastly, the ACHOA Board and ACCC, from preliminary due diligence investigations, believe that the ACHOA community is better served to own the 544.6 acres within the center of the community. The ACHOA Board and ACCC believe that the acquisition and operation are the best option to examine at this time in lieu of waiting for a potential repeat of the 2014 Aspen Sierra bankruptcy.
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