Information for the HOA’s New AECC
Below is information given to the new Architectural and Environmental Control Committee (AECC) from the Plantation HOA’s old AECC.
Greetings new Board! Thank you for volunteering your time & energy to steer our HOA through some very tough times. What follows are 7 topics you may want to have knowledge of, to help bring you up-to-speed:
Future AECC challenges
Evaluation of Nov. 9 letter from Gustafson’s attorney Hancock
Brighton east sub-district proposal
Fact or fear mongering?: Does proceeding with the Declaratory Judgment irreversibly doom the HOA to spending $250k - $500k in legal costs, as claimed at the annual meeting?
Know who you are dealing with
Big Picture: Gustafson's real game with the golf course
Conundrum for the new Board
FUTURE AECC CHALLENGES
The previous AECC studied our Master Declaration, and the history of our HOA, in more detail than you can imagine, and concluded:
it is recorded so it legally binds to golf course land. Mr. Gustafson admitted he received a copy upon course purchase because county land records show it as an encumbrance on the land he bought,
FAR more likely than not, it applies to the golf course,
Mr. Gustafson disregards its applicability, and worse, he extends absolutely no "basic good neighbor courtesies" to homeowners severely impacted by his plans
The outgoing AECC favored action to assertively help homeowners whose property rights were getting bulldozed and trampled, and stood to lose substantial property value, from golf course build-out plans. We interpreted the Master Declaration as instructing our actions to be a contractual duty to homeowners.
The Tuesday night Board elections suggest a majority of homeowners are not in favor of helping harmed homeowners or abiding by the contractual terms bound to their properties. We presume the new Board will withdraw the Declaratory Judgment action and replace it with nothing of substantive help to any present and future damaged homeowners. Since our convictions appear unsupported by HOA members, we are resigning our positions. Our records and documents are being handed over.
A new AECC will have immense challenges. How can it, in good conscience, impose AECC processes and standards on trivial projects of homeowners when the HOA and a majority of homeowners are satisfied to overlook enforcement of those same rules and standards on huge projects by the largest landowner within the boundary the covenants bind to? Scurrying around swatting houseflies while completely ignoring the loose lion stomping around inside the house seems absurd. But to inform you of AECC "housefly" issues yet to be dealt with—at the end of Plantation River Ln. erected a fence with security code gate around his property without submitting an AECC application or contacting anyone on the AECC to provide advance notice or seek approval (although he provides that gate code to homeowners and generously allows them to cross his property, which is much appreciated by many). Nevertheless, he conducted that project the same way Will Gustafson has done his. On a cul-de-sac there is a wrecked car in a driveway, been there a long time and people are complaining. Other owners have done considerable landscaping and installed fencing without AECC reach out or engagement. AECC volunteers are needed that are willing to swat flies while turning blind eyes to the lion feeding and soiling inside our house. Of course, it may become increasingly difficult to enforce any AECC processes on anyone if the HOA blatantly "turns a blind eye" to the massive projects of the largest landowner within the boundary the AECC standards apply to. It might be best to just admit the incongruence now and abandon silly attempts to swat any more flies. Selective enforcement targeting those who can least afford to challenge covenants is not a good look. Probably wouldn't hold up in legal court, or moral court. It certainly impacts our willingness to entertain any future AECC intervention in affairs on our personal properties, and on the counsel we give other neighbors concerning the importance of complying with AECC rules.
It may be prudent to pass the above information to any new AECC candidates or homeowners who may have already volunteered to fill the vacancies.
EVALUATION OF NOV. 9 LETTER FROM GUSTAFSON’S ATTORNEY HANCOCK
No doubt you've seen the Nov. 9 letter from Gustafson's attorney, Nicole Hancock, concerning arguments as to why our Master Declaration does not apply to golf course land.
Nicole's letter is 4 pages but the core arguments supporting her claims are in just 1.5 pages: in 6 consecutive paragraphs beginning on page 2. Her first two and foremost arguments (short, about 1/3rd page) make the grand claim that our CC&Rs, in whole, do not apply to any of the lands they specify (or the lands they are recorded against in county land records), because:
the authors/"grantors" did not own any of that property at the time of CC&R recording. She claims grantors did not get deeded ownership until 2 years after recording (and the real landowners at the time of CC&R recording somehow permitted our CC&R restrictions to be recorded for their land). This implies that in 1978 grantors had no authority or legal standing to bind the land with our CC&R terms, AND that 2 years later once they gained full ownership, their choice to leave the prematurely recorded encumbrance standing upon their land was not within their rights or authority.
the CC&Rs were "incomplete" and "preliminary" at time of recording (but she does not explain why recording of an incomplete contract makes it invalid or unenforceable, nor what remained to be completed? She evidently is able to read the minds of grantors 46 years ago and knows they had in mind to write more, and with her clairvoyant powers can surely tell us what more they had in mind to write.)
If either of these two claims were to hold up, then our CC&Rs apply to NONE of the land they specify, including none of our homeowner properties, and the HOA has no standing to exercise any AECC authority over anyone or demand dues from anyone. Because these two claims are so "far fetched" and consequences so problematic/disruptive/misaligned with decades of HOA operation and dues collection (and thus extremely unlikely to be upheld) her remaining arguments (about a full page of stuff) all instantly flip to the presumption that our CC&Rs do indeed apply to course land, and she then weaves a path claiming the golf course land is subject to the least possible AECC restrictions. Amazing. Will Gustafson has persistently and sternly insisted our CC&Rs simply DO NOT apply to his land, but here his attorney spends one full page arguing "they do", but in a limited way.
(It's also informative to note what argument for MD "inapplicability" is completely absent from Ms. Hancock's rundown. For over 2 years Mr. Gustafson has trained his homeowner supporters and others to repeatedly recite: "since the golf course owner is not a member of the HOA (hence, no voting rights or dues obligations), HOA rules do not apply to them". Given the thoroughness of Ms. Hancock's 4 page letter, it is evident she concluded this argument will not hold water. Indeed, the Master Declaration language makes it clear its rules apply to all landowners within the land boundaries it specifies, and separately, some of those landowners may be HOA members which then imposes additional obligations and confers certain rights. Other landowners may not be members, free of member obligations as well as member rights. To both types of landowners, the rules apply. Criteria for HOA membership and criteria for subjugation to rules are separate and distinct. This is no doubt a large reason why Ms. Hancock did not adopt this false and worn out claim routinely repeated by Mr. Gustafson and his recruited supporters.)
So, because Ms. Hancock's two arguments are so far-fetched and preposterous (for why our Master Declaration is wholly inapplicable to any/all landowners), she invests far more energy in 1 full page of weaving through our Master Declaration to come up with an explanation for why golf course land may be entitled to limited AECC oversight. Her long argument relies on the endpoint contention that the golf course is land classified as "Commercial Area" (which has an explicit definition on page 7). Our CC&Rs define 5 distinctly different land "classifications", two of which are "Commercial Area" and "Residential Area". Once land is classified as a particular type, it triggers restrictions on uses (section 5.15). Obviously a residential use is different from a commercial use. Nicole's choice to argue "the golf course is a Commercial Area" is because section 2.09 appears to suggest such areas limit AECC controls solely to fencing/landscaping alterations. But she either fails to fully grasp how the Master Declaration "works" on "Commercial Areas", or she ignores how it works. She declines to reveal that a "Commercial Area" (page 7) is established by the recording of a Supplemental Declaration (as was done for George's Cycles and D&B...two of several examples that overcome estoppel claims). However, Ms. Hancock declines to explain why there is no such Supplemental for the golf course, and how it could be a "Commercial Area" without the necessary instrument declaring it as such. The purpose of the Supplemental, as those with D&B and George's, is to call out all the other restrictions/permissions agreed between the HOA and the area owner, which are not spelled out in AECC standards (because those standards are targeted at residential homes and have many incompatibilities with Commercial uses). The Supplemental documents agreements between Commercial Area owners and the HOA on features not covered by residential standards...things like running a storefront businesses out of a structures, signage, lighting, parking, uses (no "Satin Dolls", no porn shops, no bars at our subdivision entrance)… So, despite no such Supplemental existing for the golf course, as the CC&Rs require, she nevertheless claims the golf course is somehow classified as a "Commercial Area" and thus she claims is shielded from full AECC standards and controls due to 2.09. But she ignores the additional Commercial Area restrictions to be agreed in Supplementals, and fails to explain why, if the golf course is a Commercial Area, there is no recorded Supplemental designating it as such (as there are on other properties). And, she declines to reveal that any golf course owner would persistently seek to avoid designation as "Commercial Area" because once so designated it restricts permitted uses. If she is going to claim it is subject to our MD, but it is "Commercial Area", then it is also subject to the rules for "Commercial Areas" which include prohibiting residential uses in Commercial Areas, and giving the HOA power to approve the Supplemental Declaration which authorizes the creation of the area.
So, with her claim that the land is indeed subject to our CC&Rs, and that it is a "Commercial Area" as defined in those CC&Rs, examine the impact of this on the new Brighton "East Sub-district" proposal.
BRIGHTON EAST SUB-DISTRICT PROPOSAL
The Brighton proposal is purely and entirely a "Residential Area". Residential Areas do not require any Supplementals and are a distinctly different classification from "Commercial Areas". Nicole spends one full page arguing that the golf course is indeed subject to Master Declaration rules but, within those rules, is a "Commercial Area" entitled to limited HOA controls. But then along comes the Brighton plan for a portion of golf course land, and that plan is entirely a "Residential Area". Obviously, it's not a Commercial Area plan. Simply put, it's not the type of land use she spends 1 page arguing is entitled to limited restriction. As a "Residential Area", the 10-acre Brighton land is subject to full AECC control, there is no doubt. Further, section 5.15 specifies "permitted uses" of the various land classifications, including "Commercial Areas". And, of course, "Residential" as in the Brighton proposal, is not a permitted use for "Commercial Areas". Can you imagine what a judge would say to this ridiculous stumbling and inconsistency? Then, too, Gustafson, in the June 28 meeting with the AECC assured that once any residential dwellings were built on golf course land, they would become subject to our CC&Rs and its construction quality rules and dues obligations. But AFTER Brighton construction is done, WHY? does the land it sits on magically become subject to our Master Declaration, when he claims that the very same land is exempt from the rules while its undergoing the residential planning, design, and construction? Do you see the absurdity? Somebody at the Nov 21 Brighton plan debut needs to stand up and ask if their homes will become part of the HOA and subject to MD/AECC rules? And when Will verifies they will, people need to ask why they are not subject to Residential Area design & construction controls when they are being built, but magically fall subject immediately upon completion?
Of course, attorney Hancock could fall back on her first two arguments to attempt to explain why the Brighton land is simply not subject to our CC&Rs at all, which relies on the far-fetched claim that our CC&Rs apply to none of our lands. Ms. Hancock, Mr Gustafson, and Brighton are stumbling over themselves. Can you imagine a Judge's view of this?
FACT OR FEAR MONGERING?: DOES PROCEEDING WITH THE DECLARATORY JUDGMENT IRREVERSIBLY DOOM THE HOA TO SPENDING $250K - $500K IN LEGAL COSTS, AS ANNOUNCED AT THE ANNUAL MEETING?
At the annual meeting, a lawyer in the back of the room confronted Wyatt Johnson alleging legal costs for the Declaratory Judgment could be "north of $250k", likely as much as $500k. That claim is preposterous and just fear mongering because it ignores how court actions really work. They proceed on a path shaped like a funnel or wedge. Beginning at the wide end, the opposing parties submit arguments. The judge evaluates those and then inevitably poses questions that require answers. And, there may be disputes to resolve over facts or evidence, and motions/objections raised by the parties along the way. Each of these steps where the judge responds produces intermediary findings and rulings, which "narrow" the action and tighten the focus. At each intermediate finding/ruling, the parties get clues to the judge's mind and assess those impacts on odds of success. Each of these steps by the judge presents a "checkpoint" for the parties to evaluate findings, consider impacts of the new information on likelihood of prevailing, consider the wisdom of proceeding, and to re-assess costs of proceeding. As the court process proceeds through the funnel, converging toward an end answer, there are many such checkpoints and off-ramps to assess circumstances, risks, and avoid unwise expenses. It's how the process works. It is a gross misrepresentation to paint the picture that initiating a DJ action will irreversibly commit the HOA to huge sums of money. That claim is nothing but fear mongering, and the lawyer in the back of the room conveniently declined to explain the realities of how a court action works. It's a garbage claim intended to inflame mass fear. The court process is NOT like jumping off a 10M diving platform where, when you take the small first step, you are irreversibly committed to the full terror of the whole trip. The court process has checkpoints and off-ramps.
KNOW WHO YOU ARE DEALING WITH…
You may already have some idea, given the broken promise to Fair Oaks & Charleston homeowners that development along State Street would be limited to 12 acres and would not encroach on their back yards, and given the overt disregard of homeowners nearest the pickleball pavilion.
BIG PICTURE: GUSTAFSON’S REAL GAME WITH THE GOLF COURSE
You may not realize the "big picture" of Will's likely game with the River Club. He tells his club members and homeowners he can be trusted to save the golf course. But he broke his promise to the Charleston and Fair Oaks owners to limit State Street development to 12 acres...not so trustable. He also repeatedly informs everyone the course is worth far more developed instead of remaining as a golf club. His plans already cannibalize 3 holes (10, 11, and parts of 8 & 16). In the recorded June 28 meeting with AECC members you can hear him flatly refuse to perform any action assuring the course could remain undeveloped. He says he would never record any sort of deed restriction, nor sell any "option for first right to purchase" to club members (which of course would have a price based on operating the land as a golf club). He tells gullible club members and homeowners that he turned down an offer from Tommy Ahlquist, advising that Tommy wanted to develop the whole course...and that he (Will) saved it from Tommy. Or did he just preserve, for himself and his heirs, the development returns sought by Tommy? If he indeed wants to save it, why is he so forcefully opposed to recording documents that assure preservation? Here's a more likely big-picture of what is behind Will and the golf course.
Will (or Will and investors) bought the course from American Golf in 2018 for an incredibly low price, early reports were $3-4M, club financials were not so great. No matter the exact number, it was an incredibly low price. American Golf is far more than a golf course operator. Their larger purpose is holding real estate investment assets, operating them as golf courses to offset holding costs and return some earnings while waiting for far bigger paybacks from development or land appreciation. This is why from 2002 to 2013 Goldman Sachs was a majority partner in the purchase of American Golf. Goldman Sachs was NOT after green fees and pro-shop sales. American golf uses golf courses to cheaply hold land assets similar to a mini-storage business...except, they hold higher-end land. So, American Golf is certainly savvy about real estate investment. Why would a long savvy real estate holding company sell the Plantation course to Will so cheaply? Stupidity? Will's gifted negotiating skills? Internal corruption? Severely distressed property? Why? They sold it cheaply because they knew the land was encumbered by our Master Declaration, as did Will. They arrived at a low price because encumbered land is worth far less than unencumbered. American asked less because of the encumbrance and Will could lower their expectations because of it. Then, once purchased very cheaply, Will immediately sets to work to defeat the encumbrance (our Master Declaration), and if successful, reap huge rewards at the expense of homeowners. How huge of a reward?: A business valuation of the River Club, using estimated revenues and profitability results in a value purely as a business (undevelopable land) now around $12M to $18M due to Will's investments in the club, increasing membership, buy-ins, and dues. At 120 acres this is around $100k to $150k per acre. The 22 acres along holes 10 & 11, denying applicability of our CC&Rs and claiming no encumbrance, were optioned for $30M to Lincoln Property: $1.5M per acre. This is a 15x increase in land value if our Master Declaration encumbrance can be overcome. Well worth a $3-4M gamble for all 100+ acres. His plan is to defeat the encumbrance that is our Master Declaration, thus preserving all development riches for himself...at the expense of present and future homeowners. A majority of our Plantation homeowners appear to have chosen to aid his efforts rather than consider the legacy they could help deliver to our city and its future generations.
CONUNDRUM FOR THE NEW BOARD
The new Board is in a tough position. It's highly probable the Master Declaration, which the Board administers and has a duty to perform by, applies to the golf course. The language in the Master Declaration "contract" establishing this control, and the circumstances in play in 1978 motivating its authors to award control of golf course land to homeowners, are mutually consistent. They make undeniable sense. Additionally, the vehemence of Will's response to the DJ action is evidence he is highly fearful of its outcome. If he were confident in his position, he would welcome a DJ action that will affirm his beliefs. The evidence of MD applicability is really enormous. However, the Tuesday homeowner meeting suggests a majority of homeowners likely don't care whether the Master Declaration has legal standing over the course, they just don't want to spend money to enforce it...or to even ask the question if there is an obligation and standing to enforce it. On the other hand, the vote shows 30% of owners either believe it does apply or believe that the question of applicability should be answered. Many of those are homeowners having properties already injured by golf course build outs (pickleball), or who will suffer severe impacts from the Brighton plan. So, will the HOA Board turn its back on the homeowners facing injury? Will they put on the blinders and cover their ears and refuse to even ask what their duty is? If so, the Board becomes vulnerable to legal action for negligence from injured homeowners. The whole purpose of the Master Declaration is to protect homeowner interests. If the Board refuses to engage in protecting those interests, injured homeowners have clear basis for taking legal action. And many homeowners have already taken such action once. Donations to the Preserve Plantation effort led by David Leroy came from 150 households. A tiny consequence along the way will be that the Board, turning a blind eye to massive projects within MD boundaries, gives basis for homeowners to disdainfully ignore AECC controls of their small projects. But the larger risk is that the situation could easily lead to legal costs, one way or the other, for the HOA...but with greater exposure from a negligence claim. Should a group of injured homeowners take legal action against the Board and prevail, the Board's negligence would entitle those homeowners to recovery of legal costs...since the Board had the opportunity to clarify its duties but chose to "bury its head in the sand". The HOA could easily become liable for both sides of the legal costs, compared to just the plaintiff's side in the present DJ action. (Will's claims of frivolousness, of course, are ridiculous, as the attorney at the annual meeting explained: "it simply is not in any way frivolous to ask a judge to construe the law".). So either way the Board can find itself facing a legal action, and needs to proceed very carefully.
Good Luck. We hope this "transition download" is of value. Everyone will be watching what you do. Thank you for volunteering your time and energy to these challenges.