A Big Canoe property owner for 23 years, Michelle has requested that her op-ed on the Board approved $1.25 million Chimneys project be posted on bcmatters.org. Thank you Michelle for providing additional insight and knowledge on this very important issue. (Patricia)
As a real estate broker working in commercial and residential properties for 45 years as well as a former member of the Finance (FC) and Capital Contribution Fee (CCF) committees, my thoughts on the proposed Chimneys project follow:
1. Large Unbudgeted Expenditure
a. Adding this project to Budgeted 2022 Cash Flow increases the negative cash flow to ($1,800,000).
Comment: At the time of the BOD vote, there were no planned offsetting expenditures announced to cover this shortfall, nor a discussion of the source of funding negative cash positions.
Comment: Multi-year cash flow projections are a part of budgeting/planning and should be made available to the community.
2. Lack of Continuity by the BOD
a. In the process of approving the CCF, it was publicly stated that the community preferred no debt.
b. Approved soon thereafter is a $15 million line of credit (LOC), rationalized because owners want to keep the community in good condition.
Comment: The reversal of BOD position on debt is highly concerning – there is a lack of institutional memory and continuity from board to board, at best.
3. Excess Fund Raising
a. The CCF, the 10% increase in assessments, continuing debt reduction assessment, annual cash flow provide up to $40 million in new cash over 10 years.
b. All of this is against a Master Plan of less than $25 million – ostensibly the reason for the LOC, CCF and assessment increase.
c. This is before drawing on the $15 million LOC – so $55 million is available for doing a $25 million ten year plan.
Comment: Could our BOD be drunk on money?
4. Changing Processes Reduces Transparency
a. The immediate past-president of the BOD stated that the requirement to get owner vote on expenditures above $1.0m is costly and hampers decision making.
b. Shortly thereafter, the distinction between capital spent for maintenance and expansion/replacement was established, thereby permitting expenditures above $1 million without owner vote for maintenance items.
Comment: Having no vote requirement has led to intentional opacity, as compared to the transparency repeatedly mentioned in election campaigns and BOD communiques.
Comment: The first action of this BOD after the policy change is a $1.25M unbudgeted expenditure, having little publicity prior to a closed meeting vote. On whether to reopen discussion– only 2 BOD members appreciated the gravity of this decision.
Comment: Current policies made to expedite large expenditures are misguided without having some well-intended communication and involvement protocols in place.
Comment: Three readings are required for Rules changes, yet there is no required advance communication for a $1 mil plus “maintenance” item.
5. Flawed Land Use Plan
a. The Land Use Plan excludes the Chimney’s, the BC real estate office and retail building from the definition of Village Core.
b. The BOD employs this fact to proceed with the Chimney’s renovation without having solved the Postal Facility re-design or material parking shortages throughout the Village.
Comment: Costly ramifications of a flawed plan are now apparent.
Comment: Logically, it is sensible to make individual project decisions in the Village within the context of a comprehensive Village plan. In what context (other than needing meeting space) was the Chimney’s decision made? What related information has not been explained to the community?
6. Project Cost and Definition
a. The cost of “maintaining” the Chimneys appears to be over $300 psf to include gutting and rebuilding. (Requests for detailed information have gone unanswered.)
b. This exceeds higher-end new construction cost – including land and foundation – both of which exist here.
c. An alternative design to preserve the character of the building with cost of $300k has been rejected.
Comment: These costs suggest there could be a complete tear down and rebuild, i.e. a “replacement”?
Comment: Calling this project “maintenance” is suspect given the extent of work and should be revisited in any case.
7. Design Comments
a. The community was previously assured the Chimneys would be re-designed as an eating/event venue, for far less.
b. Current design as 6 meeting rooms does not provide flexibility over time. ($200,000 per room!?)
c. The omission of conveniences for use as an event space is seriously flawed (sink, refrigeration, etc.)
d. Covering up the chimney inside the building shows a rejection of preserving the character of BC mantra.
e. This is an extraordinary error considering “saving the character of Big Canoe” is so often used to rationalize spending, policy changes, rules, and regulations.
8. More Plans Afoot
a. The BOD and GM have begun planning and spending for redesign of the Clubhouse.
b. And, possibly at a cost of $2 million over earlier provisions.
c. Clubhouse “needs” in the Master Plan are characterized as “maintenance/expansion”.
Question: How is THIS going to play out?
OPINION
- Past events have engendered mistrust of our BODs and Management, and it is perpetuated with this controversy.
- The Chimney’s project is on a scale with the worst of actions, second only to the hurried land purchase of 2016.
- This matter is about setting visible protocols to ensure representative, accountable management of the community.
REQUEST
- Property owners, please get involved and hold our representatives accountable.
- Urge a halt to the project until the BOD redresses the entire matter and openly involves the community.
Notes: Additional Recommendations
1. Each newly constituted board makes material changes to previously established planning. There can be an improved “on-boarding” of new BOD members, as evidenced by a comment of a new member, the lack of continuity from BOD to BOD and breadth of issues undertaken by the BOD.
2. There are 150+ BOD policies to guide BOD actions, not the least of which address ethics and communication. There needs to be an established parliamentarian to guide the BOD.
3. The BOD and GM, as well-intentioned as they may be collectively, have little knowledge of real estate planning, development, construction, management, etc. Over the years, millions have been spent on consultants. There should be established a real estate committee of INDEPENDENT, OUTSIDE real estate professionals to advise our BOD.
. . . . .
Michelle Toups
160 Disharoon Drive
michelletoups41@gmail.com
Good article, Michelle.
I am whole heartedly against destroying the villages. No closing off chimneys or replacing floors. We have lived here 13 years, and want to preserve what we have. I knew when they hired the Bobby Jones company, they would want to make our community a resort. They will do it if we old timers don’t fight them. Let me know if you need any support.
Wanda and Ed Forman. 420 Falcon Heights
Extremely well said.
The BOD need to be impeached.
Thank you, Michelle. Do you by chance have the prior history of “expansions” to the club house? Since I have lived in BC (13 years), I believe there have been at least two, each over two million, plus a re-do of the kitchen, a sprucing up of the golf powder/locker rooms.
There have been several opportunities for BC to have become debt free during the time I have lived here. Each time the Bod has found a way to not only not payoff the current loans but have forced us deeper into debt combining old and new debt. Is there any value in increasing real estate debt? Do we gain an advantage from the buyer’s point of view, or to the seller’s bottom line?
Property owners should have the final say in an expenditure of this magnitude.
Thank you Michelle….. we truly need a “ Rise Up” movement as Property owners… your article and research was outstanding… this out of control spending and the inconsistent decision making by the rotating boards needs to change… Are GM has his own agenda…certainly not that of the property owners….again thank you and let’s get your article posted for all on our BC website and Smoke Signals as well!