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•Do Nothing 

•Fix everything  

•Sell the Golf course and develop the remaining property  

Blog:  SeattleNetwork.net

Glen Acres Options 

Do Nothing 

•Management on a crisis basis.  We have no feasibly responsible fiscal plan in place.  Ignore the history that has brought us to this position of fiscal distress 

•Do not repair the walkways that are current slip hazards, the pool, the Jacuzzi, the workout room or the tennis courts unless it is absolutely required.  (Because the pool was drained, we had to pass a county inspection.  Next year in order to keep the pool open we need a lifeguard, new, higher fencing and another inspection.  It may still be leaking.) 

•Wait until the lender is ready to repossess the clubhouse before making a plan to pay the mortgage.  The only source of revenue is the homeowner.($133,000, which has a balloon payment in 2011.  There is no plan in place to pay this outstanding loan.) 

•Risk loosing the existing golf and social members due to lack of open facilities and disrepair of what remains. 

•Keep the clubhouse closed with no restaurant facilities indefinitely or use the cabana as our ONLY refreshment counter for the social and golfing members. 

•Convince an outside firm to take over the restaurant and bar facilities.  We have no disabled bathrooms or entrance; this will have to be addressed. (In order to “seal the deal”, give away the store and bill the homeowners for the necessary repairs and upgrades that will be required to open.  Now that it is closed it will require county health inspections we were not subject to before and we may run into issues like the new “rules” we must adhere to in order to reopen the pool next year.) Require a detailed plan of action and a business plan from the tenant and make sure they are adequately insured and bonded.  Require a contract stating the liabilities transfer.                The business model is broken. How does this solve our problem? 

•We all ignore the pressing financial issues, the need for a feasible plan and wait for the clubhouse roof to decay further, the wiring to catch fire, the slip and fall hazards to generate a lawsuit or for our vendors to cut us off.  Sooner or later everything here will be unusable, the property values will be in the toilet and then…maybe someone will come by and may consider taking the burden off our shoulders at a bargain price.   

•Deal with the ongoing management of our assets as we have for the last 12 years.  Wait until someone screams loud enough or you can’t ignore him or her any longer or something breaks.  A committee of unqualified but dedicated people who have volunteered their time (The Trustees) will meet (when they are in town) to decide what to do because “we” do not have the funds. 

• The Trustees have ignored the professionals who have told us over and over that the business model is broken.

(Please ask for copies of the professional recommendations made in writing by Ron, Simon, the 5 Hour wonder and John Roberts, among others.)

Not a solved problem.  

 •Wait for a miracle and pray.   

Fix Everything
(Money for this will come from the homeowners) 

•New clubhouse roof          ($400,000)

•New plumbing ($300,000)

•New Heating & Air Conditioning ($200,000)

•Asbestos removal($250,000)

•Rewire the clubhouse  ($150,000)

•Repave the parking lot and remove problem trees ($150,000)

•New Kitchen  ($300,000)

•Repair the surrounding walkways  ($125,000)

•New Pool & New Jacuzzi    ($150,000)

•New Tennis Courts           ($  50,000)

•Repair the watering system on the golf course        ($850,000)

•Purchase new golf course equipment          ($300,000)

•Fund a Capital Reserve for future needs       ($225,000)

(There are no funds set aside for these repairs and replacements.  The Trustees recently voted to give the money the homeowners makes on the cell tower to the golf course for repairs.  Glen Acres does not currently have a long-term reserve fund or a plan in place that is adequate to cover these facilities and their ongoing care and operation.  We have been operating on a crisis basis for a very long time.) 

•Cost:          $3,450,000 ÷ 225 = $15,333 each

(Building a new facility would make more sense with this cost for the needed repairs.  Once this can of worms is open, expect this figure to increase 12-15% for unforeseen repair and infrastructure issues. These facilities have been neglected and are in serious disrepair.)

 •Begin monthly Capital Reserve for clubhouse, golf course and facilities. Contribution from each homeowner.   $85/month each per homeowner F

ix everything (continued)
(Money for this will come from the homeowners) 

•Re-assess the monthly minimum to create a reasonable monthly budget to run the facilities, staff them and provide professional, experienced management for the restaurant, the clubhouse and the facilities as well as the golf course - $350/month each per homeowner

(We will need a business plan laid out for the clubhouse, bar & golf course so that they can survive as a business, budget for labor and materials and maintain the property with a sound monthly budget.  Presently the Trustees are not required to make a profit with our assets. We either continue doing the very same things we have done and end up in this situation again, or we radically change our actions and plan for success.  How can we plan?  We still do not have a balanced accounting of the last 2 years to compare it to…so we will be forced to go back to doing the same things we did before and hope for a different outcome.)

•New golf course membership dues and new dues for monthly golf course use. See attached Seattle Daily Journal of Commerce article (To be determined by professional golf course management based on financially feasible business models, not the homeowners or the golfing homeowners.  Price per round would reflect current rates at like courses.  It will run in the red for many years.  Any business deficits would be assessed to the homeowners each year.)Google Golfing Trends and Golf Course Management. Read any facts recently published 2000-2007.

Estimated new golf course fees for membership to a BRAND NEW FACILITY & COURSE:Golf Memberships:  Initiation fee: $5,000 one time fee                                       

Monthly dues:  $300-$600/month

•Budget and plan for an aggressive and competitive 1 year marketing budget for the restaurant and golf course and someone to implement it.  $925,000 = $4100 each one time per homeowner

(This business model didn’t work before.  But many people claim they want nothing to change.  Do we have figures and records to use as comparison, so that we can make a plan that will work?) 

•Build in a yearly assessment to the homeowners for marketing until we have reached a specified membership goal. $1000 - $500/year each per homeownerThis may take several years with the present golf club membership trends. We must face these fiscal issues and challenges with proper education and marketing research as golf club owners and operators.   

Fix everything (continued)
(Money for this will come from the homeowners) 

New fees for homeowners to keep the property going:   

New one time assessment:                   $15,333 + $4100 = $19,433 each

New clubhouse monthly dues (No food minimums) $350/month each                

New GAHOA INC Capital Reserve contribution:    $  85/month each                       

New Golf Club Marketing Fund:      $  42/month each

Total:  $477/month for the golf & County Club membership Each of your condominium phase monthly dues would remain intact.   

For Example; Phase III homeowners pay from: $412-$512/month for their condo association dues

This pays for sewer, water, gas heat, gas fireplaces, gas stoves, gas dryers, gas BBQ’s, insurance for earthquake on the buildings.  A very small amount goes to a reserve fund. 

 Fixing everything and budgeting for the facilities we must maintain and a business we need to support would increase dues for homeowners.  

For Example; in phase III, the monthly obligations of a homeowner would change. 

$412-512/month for the condo association

$477/month for GAHO INC  

NEW TOTAL:  $889/month - $989/month 

 The entire burden of financing and maintaining the golf curse and the clubhouse remain our responsibility.  

How does this solve our problem?  

•Only those who can afford to write a check for $19,433 and who can pay the additional $447/month in assessments to run the clubhouse and golf course, fund the reserve accounts can afford to stay.  This supports the theory that only those who can afford to live here should stay.   The business will have adequate funding from the homeowners to operate it. The exception will be that reserve accounts and actual realistic figures will be in place to fund operations.    

•The property values will increase substantially due to newly repaired and operational facilities, the new golf course and specified upgrades.   

•Those who can not sell their condos due to the badly managed fiscal budgeting, lack of Reserve Account funds and the deferred maintenance on the golf course, facilities and infrastructure will have some hope of transferring title without disclosure problems at the point of sale. 

•We still have a broken business model, but we have allocated the funds necessary to run it as if nothing has changed since 1969.  We still have the issues with the uneven governance. 

THESE ARE ONLY EDUCATED ESTIMATES 

Sell the Golf course and develop the remaining property  

•Lower our liabilities 

•Repair everything 

•Have someone else pay for it 

Glen Acres –The solution  

•Hire an attorney and find out what we can do about changing the GAHO Inc non-profit status and what, if any, consequences would be incurred with the change. •Dissolve the non-profit so we can develop the remaining property to add more condos and/or sell the golf course.    •Hire a reserve fund specialist to review our reserve funds and tell us what to do in order to bring the funds to a reasonable balance for the future needs of the property. Phase by phase. •Reorganize the governing documents in order to bring all 7 separate condominiums into one entity.   •Come up with a plan and identify the issue we need to address to make a change that protects our interests and our property values. (This will solve the disparity between reserve accounts and the issues about uneven governance, as we would appoint Trustees from the entire body, not by phase.  By selling the golf course and restaurant/bar, we get out of the business of being “in business” without the management and expertise required to budget, plan and manage a business to break even or make a profit.  If you do nothing, we continue to be the ONLY source of money when the Non-Profit (Glen Acres Homeowners Inc.) isn’t “making it”.   Meeting with developers •Location, Date and Time•Glen Acres Homeowners•Attorney’s who have worked on issues•Chicago Title•Commercial RE agents•All RE agents who have sold property at the Glen over the last 5 years and their brokers  

There are developers identified who would like to meet with homeowners who want to consider selling the course and developing condos on our property.  These entities want to keep the golf course and would transform our community. 

Proposal –what we want 

•Tear down the existing dilapidated facilities and clubhouse.   •New Clubhouse with gas fireplace heating, solar panels, energy and sound efficient windows and lighting. •Meeting rooms, great room, stage and dance floor •Sauna, Jacuzzi, indoor pool and workout room with equipment •Women and men’s locker rooms with lockers and showers •Library and study with Internet connections •Replace the walkways around the property with natural elements that do not require labor intensive, ongoing maintenance.  Create a pathway that surrounds the property and allows owners to take advantage of the “open space”…dog runs, bike trails, running paths, etc •Replace labor intensive landscaping with low maintenance varieties.  Remove trees and shrubs that are damaging foundations or pose a future threat. (Find a nursery that will swap out plantings) •Replace all street lighting with solar and surveillance cameras 

What we want -continued 

•Port window and door package •Negotiate Metro transit connections •Become the “Green” example for building in South Seattle inner city redesign - find grants and special funding •Redesign, reposition and replace front and rear entries •All “issues” with current condo buildings would be identified and repaired: i.e., blacktop repairs or replacements, lighting and handrails, plumbing, window sill repairs, roofs, energy saving garage doors with proper insulation, etc. •Proceeds from the sale of the new Condominiums and Townhomes would be used to make these repairs listed above and to fill the reserve funds, as the specialist would advise. (i.e. $40,000 per footprint = 175 condos  x $40,000 = $7 Million)  Any residuals would be divided among the homeowners, if allowed by law (NON-PROFITS cannot distribute earnings).   (These 175 additional units were in the original plan when Kenny Leonard began building in 1969. Density allowed per square foot of land has changed significantly since 1969.) •More units may be allowed. Research and determine. (Estimate: 275 units will be allowed on existing undeveloped land) •Separate out the gas lines to each unit (where possible). •Add parking and storage that can be either rented or purchased by condo owners.  This becomes a new source of revenue for our condominium association. 

What do we do while the plan is being implemented? 

•Hire an outside, Off-site, professional management company with the proper credentials to run the property in the development transition-possibly the developer will assist. •Place identified nomenclature in the purchase and sale agreement that keeps the golf course property “open space”, but removes the burden of ongoing maintenance and repairs to the golf course and related facilities from the GAHO responsibility. •Remove all dues related to the golf course, clubhouse and facilities and their care from the monthly dues of homeowners. (Unless they are specifically deeded separately to the entire condo association, including new units, see below.) •Provide existing homeowners with a lifelong membership to the NEW golf course with no initiation fee.   •If homeowners want to use the course, they pay the monthly fee.  New members and newly built condo homeowners must pay a joining fee set by the new golf club owners.  Dues will most likely rise because it will be operated for profit instead of for the very few Glen Acres Homeowners who currently use the course (less than 10%) •New monthly dues would be defined for the new Glen Acres Condominium owned facilities. These funds are separate and are not for the golf course, they belong only to GAOHA condo owned properties. (Possibly, lower than what we currently pay)   •Memberships to the clubhouse, restaurant and bar would be on a “as desired” basis, those who do not want to join would not be REQUIRED to.  The “business” will belong to the new golf course owners. How does this solve our problem?•Significantly increases the property value of the existing condos•Lowers our condominium monthly dues significantly to realign them with the marketplace•Improvements to our existing property •New facilities that are in top notch working order•Solves the problem of reserve fund deficiencies and uneven care and allocation of funding for future needs.•Removal of old, dilapidated buildings and facilities that have reached the end of their life and have ongoing major repairs issues.•Removes the financial liability of the golf course and clubhouse as well as rising labor costs from the homeowners’ responsibility.

•Right of First refusal on New Condos.  Homeowners could negotiate exchange with developer.

•Negotiate “upgrades” for existing homeowners with the developer. I.e., new kitchens, bath upgrades, heating and air conditioning, etc.•Plan for a different demographic of buyer for our condos. 

The demographic of a Glen Acres Homeowner is very different from who purchased here from the original developer from 1969 – 1984. If it weren’t, all of the owners would be golfers who have purchased in the last 8-10 years.

(Perform market research on the baby boomer generation and the RE condo buying habits and “lifestyle” requirements of this demographic.  They are significantly different than what we currently have to offer.)•Removes the current and predicted ongoing market challenge of “Too many golf courses and not enough players.”  

“Over the last 5-6 years, the supply of golf courses has increased 2-3% while demand has been slack or in decline. In 2006, for the first time in 60 years, golf course closures outpaced openings.”

 –You have to be a good operator these days to be making money at this -  (Seattle Daily Journal of Commerce)  

Statements and numbers have not been verified

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