The Sunland Golf Club is asking for financial help from the Sunland homeowners again. Have you ever felt like saying, “Here we go again?” Back on January 27, 2010, over eight and a half years ago, I wrote an article entitled Is the Sequim Sunland Golf Course Going Bankrupt?
Why that title? Because the rumor mill in Sunland was asking that question, and the local newspaper was asking that question, and everyone was getting nervous. I called the club manager and told him I was writing an article and wanted to make sure I had all the facts correct, and he refused to talk to me and said goodbye.
Sunland Golf Course Issues
So I wrote a very carefully researched article, interviewed the Sunland HO President and a couple of other involved Sunland residents, and I read the newspaper articles and gathered information about the golf club. That resulted in the article I wrote in 2010 about the Sunland Golf Club.
On April 10, 2012 I wrote an updated article in which I stated that it appeared that things had calmed down and the club was doing okay. I’m revisiting the subject today, because we are back to the Sunland Golf Club asking the Sunland HO Association for money. The idea being floated is that every homeowner be assessed an additional $300
per year to help the club survive.[Fred Smith, President of the SLHOA, reports that the proposed assessment is $354 over three years.] This is far more serious than most people realize, because in the attempt to get homeowners to agree to an increased assessment is a hidden threat.
The threat is the power of foreclosure. As assessment is not voluntary, and if you don’t pay an HOA approved assessment, they can get a judgment against you, and a judgment can be used to foreclose on a home. I know this because I was an attorney in Sequim.
In the 2010 article I wrote, “There are three logical resolutions to this dilemma: 1. all homeowners chip in, 2. Club members ante up and save their Club, or 3. The Club files bankruptcy and liquidates.”
We will dismiss the third option in this recent skirmish, because the club tells us they are not near bankruptcy. In a recent Sequim Gazette newspaper article dated August 15, 2018, the Sunland Golf Club apparently stated that they are not near bankruptcy, but that “finances of the club are on shaky ground . . . and uncertain.”
Isn’t it interesting that we are back to the first two options that were on the table 8 1/2 years ago, and the only viable option seems to be that “all homeowners chip in.” Deja Vu!
Call me skeptical, call me cynical, call me anything you want, but I think there are some legitimate questions that need to be answered. I’ve been involved in real estate brokerage starting in the mid-70s as a real estate broker, a real estate attorney, an author of many real estate books, including “The Seven Myths of Selling Your Home,” and I’ve been an adviser to homeowner associations. So when my nose starts to twitch on the subject of Sequim real estate, it justifies further investigation.
Anything less than full disclosure by all parties, anything less than complete transparency, and anything less than honesty and friendly discussion ought to be unacceptable to Sunland homeowners. A good litmus test for signs of selfish motives or hidden agendas is withholding information, refusing to answer questions, anger, retaliation, or personal attacks.
By the way, I’m not a newcomer to Sequim. I moved my family to Sequim in 1994. I’ve been watching Sunland since 1994, and I’ve shown many homes in Sunland and I’ve listed and sold homes in Sunland over the years. I’ll share that I was the number one selling real estate broker for seven consecutive years in Sequim. If you want proof of that, please read this article entitled Who Is The Number 1 Selling Agent in Sequim?
Sunland Golf Club Analysis
The answers you get in life are only good as the questions you ask, so I have a few questions.
Why is this burden being forced upon the SLHOA? Why are the Sunland homeowners being pressured to help the club financially? Pressure is the operative word. I heard about this because I got a call from a Sunland resident, and the Sequim Gazette did an expose on the front page of the newspaper on August 15, 2018.
Let’s do some simple math. The homeowners are being asked to pay for an increase in annual assessments in the amount of $354 over three years for each homeowner, all of which would go to the club. If there are 918 homeowners, $354 each would total $324,000 over three years to the club. There’s a question about the actual assessment proposed, because despite Fred Smith telling me it is $118 per year for 3 years, another Sunland homeowner has told me the proposal is $181. Has Fred transposed numbers? And another long time Sunland homeowner told me the proposed assessment has changed many times and is a moving target, but that it has never actually come up for a vote. So there is no firm number.
Why the club’s financial hardship the burden and responsibility of the Sunland homeowners? About 90% of Sunland homeowners do not even golf. [Less than 100 golf out of 918.]
The answer that the club (and apparently the SLHOA which seems to have sided with the Club) has apparently given to this question is that if the club has trouble or must close down, or file bankruptcy, property values would go down in Sunland, and people may have trouble selling their homes. [I know they said they have no debts and are not filing bankruptcy, but apparently they don’t have enough income to survive either. What happens to a business that doesn’t have enough income to meet expenses? Eventually, it closes its doors or it goes bankrupt.] But don’t miss the point that this is no answer at all. In other words, being told that there is a possibility that property values will go down as the answer to the question about why homeowners should help the club is not an answer–it is manipulation and intimidation.
Yes, there certainly is a cause and effect, but whose creating the cause and who is suffering the effect? Let’s be clear about this–the homeowners have no legal and no moral responsibility to save the Sunland Golf Club. If homeowners don’t agree to give the club $324,000 over three years, is the club going to hold this threat over their heads in the years to come?
In my 2010 article, I wrote: “The months long campaign by the Club would require all homeowners to contribute. What is the most persuasive argument that all homeowners should chip in to help save the Club? The primary argument is that property values will be negatively impacted, and some have suggested that property values could decline by as much as 30% in Sunland if the Club goes bankrupt. The Club has suggested that the fairways could become fields of weeds, or that the land could be sold and a developer could come in and put up tract homes.”
Can you say, “Deja Vu?” What is being said again now? That homeowners should chip in to help save the club, because if they don’t, property values could be negatively impacted.”
If the SLHOA does contribute $300,000 over three years to the club, for example, how much does that increase the business value of the Sunland Golf Club?
Let’s look at an example of a business that produces widgets. Let’s say they suddenly have an increase in their net income of $324,000. We’re not talking about gross income before expenses, we’re talking about net income. A boost in net income of $324,000 over three years could increase the appraised business value by a multiple of that number.
Let’s come back to the Sunland Golf Club vs. the Sunland HO Association. If the SLHOA hands the club $324,000 over three years, is not the association making a major investment in the club? Are they not increasing its value substantially, making it worth a lot more money, and making it much more sellable? Sunland homeowners have pointed out to Fred Smith and the board that this is probably an illegal transfer of funds since the SLHOA is a non-profit and the Club is a “for profit” company.
I learned as an attorney that judges don’t care what words you use or what you call something–they look at the substance of what is really going to happen. Who pays, and who gets all the benefits? The idea that the SLHOA would call this contribution to the Club a contract for mowing grass or anything else still does not change the fact that the homeowners are giving the club money. A horse of a different color is still a horse.
There is still one big question that remains. Will the Sunland Golf Club trouble, if unresolved, reduce property values in Sunland or make homes less sellable? This is not an easy question to answer, and no one can see the future, but much of the answer depends on how the club handles this conflict right now, and what they do in the future. Here’s what I will say.
The last time in 2010 when the club and the SLHOA had this “discussion,” many home buyers around the country emailed me and called me for several years asking about what some of them called the “big dispute” or the “conflict in Sunland.” I always encouraged them with good news that the club said their financial troubles were behind them, and I wrote an article in 2012 to that effect.
By the way, these prospective buyers did not learn about the dispute in 2010 and subsequent years from my blog article. They told me they found the Sequim Gazette article online, and some said they had talked to people in the area. So let there be no mistake about it–I have been Mr. Positive about this issue while stating the truth in my 2010 and 2012 articles. I have written over 2,000 articles on this real estate blog about Sequim real estate and issues effecting the sale and prices of Sequim real estate. I would have been remiss if I did not cover one of the most important real estate issues in Sequim–The Sunland Golf Club crisis.
Many retirees moving to Sequim have told me they do not want to be involved in a contentious homeowners association. Since I am only one of over 200 area Realtors, you can imagine that many other local Realtors heard similar concerns about Sunland for a couple of years after 2010.
It is very possible that the dispute may have effected home sales in Sunland, and may have effected prices. But don’t miss this point. That result was and remains exclusively the fault of the Sunland Golf Club, not the homeowners, although it appears the SLHOA has sided with the Club against the homeowners on this issue. The problem arose and people were talking about their concerns because of the club’s perceived demands at the time, and the way they mishandled the whole affair in 2010. It was a textbook case of a PR disaster for the club, and in my opinion Sunland homeowners paid the price.
There is another question that only comes to my mind because I learned how to dig for facts and ask tough questions on cross examination. I would like to ask this question:
- Who stands to benefit if the SLHOA does contribute a large sum of money to the Club every year by way of increased assessments?
Of course, in court the question has to be pressed, because the witness in such a situation always tries to avoid answering the question directly, or changes the subject. So I would press the question until I got an answer. I would also ask additional questions, like:
- Specifically who has an ownership interest in the club now?
- Do any of these investors with an ownership interest live in Sunland?
- Does the Sunland Golf Club have plans to sell the Club?
- Have you solicited the assistance of any Realtors to get the assessment approved?
- Have you talked with anyone about how the SLHOA contributions would increase the value of the club as a business entity, or how it would make the club more sellable?
These certainly are not comprehensive questions, but my intent is only to awaken your mind so you can think like a lawyer and see through the fog that is hanging over Sunland right now.
If someone associated with the club or anyone who is trying to assist the club get these assessments passed gets really angry with people who ask questions, you have to suspect they are angry because they have a hidden agenda. People who are honest, have integrity, and do not have hidden agendas that try to manipulate people do not get angry when tough questions are raised. Believe me, this is a reliable litmus test.
I hope this whole matter is cleared up quickly for the sake of the retirees who bought homes in Sunland and just want to live in peace. You are welcome to leave your comments to this article below. I will approve all comments whether they agree or disagree, provided they are not inappropriate. The Sunland Golf Club and SLHOA directors are all welcome to comment or correct me on any facts or share their solutions. [P.S. I welcome comments and opinions, but vicious attacks and hate are not welcome here. I’ll post them anyway, I just don’t think that is a productive way to address important issues.]
If you would like to read my original article, which provides a nice summary of all the players, go to Sunland Golf Course Problems. [I recommend the comments that people made to that article.]
I did an updated article in 2012, which you will find at Sequim’s Sunland Golf Course.
I recommend reading the comments below. It would be helpful if Sunland homeowners left comments and expressed their feelings about this whole affair. Already the President of the SLHOA has attacked me but did not answer any of the relevant questions I raised. I’d like to know what homeowners are thinking, apart from the ones who already told me they are very unhappy. Unfortunately, I’m told that only 10% of the Sunland homeowners even care to pay attention to these issue.
Possibly Related Posts:
- Port Ludlow Golf Course Lot
- Golf on the Olympic Peninsula
- Sequim’s Sunland Golf Course
- Sequim Golf Courses
- Sunland Golf Course Financial Issues and Homeowner Dispute