Info You Need Regarding the Golf Course Property Purchase
Regarding the Golf Course Property Purchase bulletin and ballot, we have quickly received many good questions and concerns that need to be addressed. Now that we know what most of those are, we can quickly do our best to address them. We are all facing a “first time” situation here, so please bear with us as we listen and work with you to try to provide what you need to know to help you. Here is all the information we have at this time to help answer the majority of question and concerns.
Fairway Investors, LLC bought the golf course 6 years ago for about $3 million.
Their asking price today is $7 million.
2008 CVEMM voted to spend up to $4 million to buy the property. No deal could be made.
2013 CVEMM has negotiated to $5.5 million. May have deal based on a list of criteria to being met, i.e, CVEMM obtains reasonable financing, Fairway keeps property clean, mowed, irrigated, insured until closing, etc.)
We serve 8,508 unit owners. We have no spelled out voting mechanisms in our documents like COOCVE or Associations and this purchase is a “one time” situation. So we are trying to learn from as many as possible of our 8,508 unit owners (one vote per unit) if we should proceed if we can gain agreement on this price and negotiate a loan rate to keep the loan impact amount reasonable for most owners to pay. This means an interest rate reasonable enough over a period of somewhere between 7 and 10 years to ensure the coupon does not exceed $10 a month ($120 per year maximum). May be helpful to know, the maximum time normally extended by a bank, to pay off a commercial loan like this, is 10 years.
To try to place this in perspective, the Bay Management recreation lease each of us pays every month right now is $101. Fifty dollars ($50) of that $101 is rent and will not change until the lease ends at the end of 2019. We pay this rent every year to the property owners (currently Holrod Corporation) just to use these facilities. The other $51 dollars a month of the $101 represents the operating budget and covers all the costs to run the property, including Bay Management Company’s management fee, insurance, all employees wage and benefits, care and upkeep of the recreation facilities (theatre, clubhouse, pools, tennis courts, etc.). So if we just look at the $50 monthly fixed rent we all pay today, that means all 8,508 units pay RENT (covers nothing) every year to the property owner of about $5 million dollars ($50 x 12 X 8508). By agreement in all our documents, we have paid this lease/rent since buying our unit and will continue to pay this rent every year until we sell, or until the end of the lease in 2019, whichever comes first.
So let’s compare:
2013 to 2019 unit pays $4,200 year ($50 mo x 12 mos x 7 yrs) RENT for use of recreation property.
TOTAL COST 8,508 units – $35 million ($5 million paid every year for the next 7 years)
2014 to 2020 unit pays maximum $1,200 ($10 mo x 12 mos x 10 yrs max) to purchase golf course property.
TOTAL COST 8,508 units – $5.5 million plus interest paid over 7-10 yrs.
Worst case, if you own in CVE for the next 10 years, you would pay (maximum) $1,200, or $120 a year to OWN an equal share of the 86 acres of land that runs through the middle of CVE for as long as you own here. This ends the threat of the property being left to deteriorate, like golf courses near by in Crystal Lake and Boca or commercial development happening right inside our village, like is happening in other communities, including adjacent to Century Village in W Palm Beach. We get to control our own destiny, secure the entry into our gated community, contribute to keeping our property value up and so much more. This is why we believe our COOCVE representatives overwhelming voted as they did and sent CVEMM the request to negotiate and purchase the golf course property. Please vote and tell us if you agree we should act behalf of all owners in CVE and try to accomplish this task.