MY WAY OR THE HIGHWAY! BUY IT -- OR ELSE!

An Opinion By Jan Bergemann
President, Cyber Citizens For Justice, Inc.

Published July 15, 2010

One can only feel sorry for the folks who bought their dream home in the sunshine in the Tampa Bay Golf & Country Club. For years this community has been plagued by a never-ending legal war that has not only frustrated the homeowners, but has kept many attorneys employed. Court rulings and pending lawsuits were the talk of the town at social events and owners had a hard time figuring out if they were actually a member of the association or not.

Frustrated owners testified in front of the House Select Committee on Condominium & Homeowners Association Governance in Tampa in February of 2008, complaining about the way they were treated by the developer and the people in charge.

Last year the war reached a peak when homeowners and the Falcone Group, who owned clubhouse and golf course, fought over ever-increasing dues. One of the owners even accused the developer of reckless spending and asked: "Are Retirees Being Fleeced?" The residents even voiced their grievances in a video: Pasco retirees at work against fee hike that props up golf club. And the war escalated when it turned out that quite a few of the owners were not obligated to pay any dues since they were not even members of the master association in the first place.

Everything seemed to be fine when the properties changed hands and Starwood Land Ventures bought the undeveloped lots at a bankruptcy auction. In April 2010 Starwood consultant David Ivin told homeowners at a meeting how great it will all turn out. Homeowners went home happy after the meeting, hoping that the tide had finally turned [See: Homeowners might buy golf course]

But it seems that this meeting was only the honeymoon of a marriage that quickly turned sour. The next meeting brought the owners back down to earth and to reality, when Starwood representative David Ivin issued a warning to the owners present: Buy the golf course and clubhouse or else! If the homeowners association doesn't approve the $3.75 million deal, things will get ugly.

But the conditions offered surely were anything but friendly: According to Starwood Land Ventures there is an offer on the table to lend the association $3.75 million to cover the golf club purchase and closing costs. The terms -- a three-year, interest-only loan at 9.5 percent! In other words: My way or the highway! It became immediately obvious that the new developer wanted the undeveloped lots only, not the many legal problems they bought in the bankruptcy sale. But bargains come with the GOOD -- and the BAD. [See: Homeowners face tough choice]

Some owners felt they were back to where the former developer left off and voiced their concerns about this "deal." The sad example of many bankrupt golf courses all over Florida would make owners think twice before burdening their finances with a business venture that doesn't seem to have much future. Don't forget, once the owners buy clubhouse and golf course they are liable for all the bills for maintenance and upkeep.

For the owners opposing the purchase, not much has changed. Only now the threatening letters don't come any longer from attorney Steven Mezer from the Tampa law firm Bush Ross. Now the letters come from attorney Christian O'Ryan from the law firm of Pennington, Moore, Wilkinson, Bell & Dunbar. But considering the threats against the owners who don't like to be taken for a ride, only the letterheads have changed. The attitude of the developer and their attorneys stayed about the same.

In order to give owners not much time to think about the pro and con, the Tampa Bay Community Association, Inc. quickly called a meeting to vote on the purchase for Friday, July 16, 2010 at 10 a.m. As expected, owners quickly contested the legality of the meeting for various reasons. I think it's absolutely ridiculous to call a vote if you haven't even decided yet who is eligible to vote.

It's obvious that the purchase of golf course and clubhouse surely isn't a good business. Since the new developer is in it for the money, they surely would keep it if there was money to be made. And recent numbers from the PGA show that a golf course is anything but good business, considering that the cost of maintaining a golf course has doubled in the last seven years and the number of golf players is rapidly declining. All in all: BLEAK FUTURE for golf courses. If you still think buying a golf course is good business, just read the articles on this Web page: GOLF CURSES! Like a member of a CDD board in Jacksonville said: "A golf course is the first step to bankruptcy court!"

Despite the fact that there are actually three questions in front of the "voters" -- whoever might be eligible -- there is only a straight YES or NO vote: "MY way or the Highway!"

Approval to add Club Facilities and associated personal property to the CommonAreas of the Association;
Approval to obtain mortgage loan financing for the acquisition of the Club Facilities in the principal amount of $3,750,000 with an interest rate of 9.5% and 3-year term; and
Authorization of the Board of Directors to direct the officers of the Association to execute, adopt, negotiate and finalize any and all documents required in connection with the addition to the Club Facilities to the Common Areas and related mortgage loan financing.

According to the mailed-out invitation, proxy voting is allowed. But I had to wonder that they allow proxies to be sent by e-mail, considering that the DBPR ruled that e-mailed recall petitions can’t be used since it’s too easy to tamper with e-mails. But considering that this vote comes only 17 days after the meeting where Starwood representative David Ivin issued the warning that "there will be problems if the owners don’t purchase the golf course and clubhouse,” the folks behind the scenes obviously don’t care how they get their necessary votes.

No matter the outcome of the vote, lawsuits will continue to fly. This community has more problems than a street dog has flees!

But, hopefully, cooler heads will prevail and the owners will finally understand that buying clubhouse and golf course will make their homes collateral for any liabilities created by this venture with an unforeseeable future. The times are long past when a golf course was an attraction for potential buyers. It's actually a turn-off for many new retirees coming to Florida. Golf surely isn't one of the priorities of the Baby Boomers!

But the new involvement of the law firm Pennington, Moore, Wilkinson, Bell & Dunbar in this venture makes me rethink my ideas about the people interested in pushing S 1196 that contained this addition:

FS 720.31(6) An association may enter into agreements to acquire leaseholds, memberships, and other possessory or use interests in lands or facilities, including, but not limited to, country clubs, golf courses, marinas, submerged land, parking areas, conservation areas, and other recreational facilities. An association may enter into such agreements regardless of whether the lands or facilities are contiguous to the lands of the community or whether such lands or facilities are intended to provide enjoyment, recreation, or other use or benefit to the owners. All leaseholds, memberships, and other possessory or use interests existing or created at the time of recording the declaration must be stated and fully described in the declaration. Subsequent to recording the declaration, agreements acquiring leaseholds, memberships, or other possessory or use interests not entered into within 12 months after recording the declaration may be entered into only if authorized by the declaration as a material alteration or substantial addition to the common areas or association property. If the declaration is silent, any such transaction requires the approval of 75 percent of the total voting interests of the association. The declaration may provide that the rental, membership fees, operations, replacements, or other expenses are common expenses; impose covenants and restrictions concerning their use; and contain other provisions not inconsistent with this subsection. An association exercising its rights under this subsection may join with other associations that are part of the same development or with a master association responsible for the enforcement of shared covenants, conditions, and restrictions in carrying out the intent of this subsection. This subsection is intended to clarify law in existence before July 1, 2010.

The obvious party with a vested interest was initially Representative Maria Sachs, the House sponsor of S1196 (H 1317). Her husband, Peter Sachs from the law firm of Sachs Sax Caplan, made lots of money. The firm represented boards trying to buy golf courses or make membership to golf courses mandatory. According to my information, they didn't win one case -- meaning that this new addition to FS 720.31 would be very helpful for future lawsuits of this kind.

But since the main pusher behind S1196 was Peter Dunbar, I may change my opinion. At first I thought that Peter Dunbar was so interested in changing the community association laws in order to be able to publish a new revised edition of his books The Homeowners Association Manual and The Condominium Concept. But after looking into the above story, I see that his motivation for pushing S 1196 may have been much more human: $ signs -- helping out a new influential client of the firm.

It seems that none of the folks that push for changes in community association law are ever motivated by the great goal of making Florida's mandatory community associations more peaceful and more desirable to live in.