September 20, 2018 at 10:30 pm #4785
Editor’s note: I received the following letter from former board member Bob Burch following the posting of my opinion on why I felt making the restaurant an “Amenity” was in essence changing the use of the space and thus needed a resident vote of 51% to start the ball rolling. The article written by Bob is well reasoned and thought provoking. Your thoughts and feedback are welcome.
Why the restaurant is an amenity
By Bob Burch, former SCA board member
When the board decided to look at what to do with the restaurant space, I decided to take a look at this issue. Basically, I was looking to make the point that the restaurant was not an amenity. However, as I looked into this, it became apparent to me that the restaurant is, in fact, an amenity and has been considered as such since day 1 of SCA.
As you may know, the Board had been seriously looking at potential uses for the restaurant space. It is not my intent to discuss the potential uses. Rather, I want to concentrate on why we are even considering another restaurant. Some residents have raised the valid issue that all prior restaurants have failed for one reason or another so why would we even consider another restaurant? Actually, there are several very valid reasons for considering another restaurant.
First of all, the restaurant is an amenity, and this is important to the discussion of why we might need to have another restaurant. While you will not see a specific reference to the restaurant being an amenity in our governing documents, there are several ancillary indications that support the restaurant as an amenity. In the very early days of SCA, the Del Webb Public Offering Statements (POS) clearly indicated a desire to consider the restaurant an amenity. For example, in a POS dated 1/1/1999, the section under “Recreational Facilities” states the following: “The Community Center is planned to feature an outdoor resort style swimming pool and spa, indoor lap pool and spa, indoor walking track, exercise room, wellness center, fitness center, locker rooms, billiard area, rooms for arts and crafts, sewing, ceramics, multi-purpose card rooms, computer room, social hall including ballroom with a stage, administrative offices, restaurant and bar, indoor and outdoor socializing areas, tennis courts, horseshoe pits, outdoor amphitheater, bocce ball courts, outdoor ½ mile walking track, and sand volley ball court”.
Further, the restaurant was designed as a food and beverage area with an indication that catering would be an important part of the services offered. This is documented by the size of the kitchen area which is actually larger than the restaurant and bar area. Over the years, through the Association’s Reserve Studies and Reserve funding requirements, the equipment in the kitchen has always been the responsibility of the Association to maintain and replace as necessary. If Dell Webb did not intend for the restaurant and bar to continue in operation after all lots were sold, there would have been no need to establish a reserve fund for the equipment.
Now that I have established that the restaurant is an amenity, we need to look at how this definition impacts decisions relative to the restaurant space. Section 7.9 (Change of Services and Use of Common Area) discusses what would be required for the Board to change the use of the restaurant space from a restaurant to another amenity, such as, meeting rooms, etc. This Section states that the Board has the power and right to terminate provided services or to change the use of portions of the Common Area with the consent of a Majority of the owners. Any such change would be made by a Board resolution stating that: “(a) the present use or service is no longer in the best interest of the Owners, (b) the new use is for the benefit of the Owners, (c) the new use is consistent with any deed restrictions and zoning regulations restricting or limiting the use of the Common Area, and (d) the new use is consistent with the then effective Master Plan”.
Section 7.9 further clarifies that if the Board resolution states that the change will not have an adverse effect on the Association and the Owners, the Board may give notice of the change to all Owners. “The notice shall give the Owners a right to object within 30 days of the notice. If less than 10% of the members (715 members) submit written objections, the change shall be deemed approved . . . “. If more than 10% of the Owners object to the change, then the resolution would need to be submitted to the Owners for a vote. For the resolution to pass, a majority of the Owners plus one (3,573) would need to vote to approve the re-purposing.
It should be noted that the Board cannot simply say that “the change will not have an adverse effect on the Association and the Owners”. The Board would need to document this statement by obtaining appropriate opinions and reports from third party experts to support the resolution. The bottom line is that our governing documents set a very high bar for making changes to amenities.
After reading the above, some may say that the Board did not obtain a vote of the residents to initiate the legal action to have the Foundation Assisting Seniors leave SCA or that the Board did not follow the residents vote when we initiated the construction defect lawsuit against Pulte in the Liberty Center situation. In the case of the Foundation, the Nevada Real Estate Division determined that the Board did not need a vote of the unit owners as the litigation involved enforcement of the Association’s governing documents. In the case of the Liberty Center litigation, the Board relied on NRS 116.31088 (1) (e) to go forward with the litigation after not obtaining the vote of a majority of the residents to pursue the litigation. Both of these cases are significantly different from requiring a vote to change an amenity.
Hopefully the information provided in this article has answered questions you may have as to why the Association would, once again, consider a restaurant in the Anthem Center.September 21, 2018 at 2:46 pm #4789
In rebuttal to Bob Burch’s point of view, although he states his were formed on research he did on the CC&Rs and the standing of amenity vs. what is not, I’d like to state my opinion on this and invite others to sate theirs.
A few years ago, when John Leach was the association’s attorney, there was a meeting where he was assisting in revising parts of our CC&Rs “bringing them up to date etc” he said.. I was always under the impression that the owners had to vote on that.
I recall leaving the meeting, phoning the Legislative Council Bureau and asking one of their attorneys for their opinion and whether that could be done. I was told it could be brought up to date per new law, but not changed. I returned to the meeting and at the mike stated what I had just been told. My point is John Leach’s retort, and I quote “Ms. Goodman, that is just another lawyers opinion”….
That is how I feel about what Bob has written, because we know that the board can make resolutions to our rules, we know that, based on lack of vetting and the limited research that was already found on G2G, it does not look like these “tenants” are suitable. And we know that an HOA board MUST use “the good business judgement rule.” Accepting G2G is not good business in my opinion.
It is my opinion that changing the restaurant’s use to a full-blown financial amenity without hearing from the association’s owners, is in fact changing the purpose of the restaurant.
Although Del Webb ended up subsidizing Trumpets, that place was used to sell us homes. This time we are being forced to pay a huge part of the cost of running a private business and that is changing the purpose of the restaurant, thus requires a vote.
One can call an “amenity” any of the things we enjoy using living in SCA, however, they are NOT open to the public, the restaurant is, and we should not be forced to accept a financial liability of this sort without a voice.
I am not referring to a voice of a hundred people who raised their hands at a meeting, some because of peer pressure and fear of being criticized. I am talking about the voice of 50% plus 1, per the CC&Rs to place this issue to a vote of the owners, 7,144 of them,
THEN tell me the residents want this restaurant folly again.September 21, 2018 at 4:34 pm #4793DickParticipant
Mr. Burch is entitled to his opinion; however, we’d appreciate telling us what law school he graduated to make such a statement, unless it is the University of Adam Clarkson OR The University of Bull Sheet.
What it all boils down to is the fear that VERY FEW PEOPLE wanted anything to do with this restaurant deal once the the actual “sell out” provisions of the lease were disclosed.
Then to add insult to injury, more additional information on the G2G individuals involved ?
Is this guy actually going to support a belief that we must have a restaurant as an amenity knowing the vetting was at best, FLAWED in light of the recent disclosures?
That because of his belief that a restaurant is an amenity, the entire community must SUFFER CONTINUAL FINANCIAL LOSS YEAR AFTER YEAR AFTER YEAR ???
Rana, this individual is the same person who was supposed to be on a REMOVAL BALLOT which both you and I know, provided sufficient proof that the accounting firm that counted the petitions during the removal process, and REFUSED TO ACKNOWLEDGE THE POSITIVE PROOF that was presented to both the General Manager and Nevada Real Estate Division, to place him on that ballot.
Burch, and the Board to which he was a member, likely knew EXACTLY what was going on, and he didn’t say a word, did he?
Instead, he and the Board, STONEWALLED THE TRUTH to keep him off that ballot.
Does anyone really believe the “coincidence” that his “sudden” departure from the Board, coupled with the Board choice of his replacement, Aletta Waterhouse, who had received 40% of the votes cast to remove her, followed by her loss at the ballot box shortly thereafter, wasn’t somehow contrived…especially after Burch made it known HE WAS NOT GOING TO RUN FOR REELECTION ????
For that reason alone, anything that would come from that individual’s pen would be SUBJECT AT BEST as to credibility.
He was and always will be “MACHINE”, a sad chapter of incompetence in Sun City Anthem history.September 21, 2018 at 5:30 pm #4794
E-mailed by Alan Weintraub
I’m sitting here in Johannesburg South Africa and after reading the article on Ranas’ blog I feel compelled to give you my opinion.
For Bob to suggest that this amenity is something that we needed and that the original documentation for this community included it has an amenity is ridiculous. An amenities something that is meant for the residents of the community.
An amenity should not be subsidized by the residents of the community and then be made available to everybody outside the community. This is a moneymaking operation that our board is considering. If this restaurant is open to the community as an amenity then all of the benefits of owning a residence in Sun City anthem should be open to everybody in the community. We should then have a community swimming pool. We should have community meeting rooms. We should allow outside people to come into our clubs and participate in all of our activities. That is an amenity.
If Burch thinks that you can call this an amenity, he is way out of line.May you could feature an article on what an amenity is.
Ok. Back to vacation.September 21, 2018 at 6:35 pm #4797GaryParticipant
In response to the entire discussion of whether or not the proposed restaurant maintains the status of being an “amenity” we say “so what?” Relative to being on the verge of making yet another huge mistake, this hyperbolic and distractive discussion is a waste of time and if carried to its logical extreme, the amenity issue will continue to be a major distraction … the real issue and the most important question being: Is opening yet another restaurant a sound, properly vetted and appropriately financed business decision that is desired and approved by a majority of SCA residents; or is it the product of misguided and emotional decisions made by a select few who have chosen to run roughshod over the residents’ wishes by refusing to even ask the question to find out what the majority really want?
The amenity discussion is mildly interesting yet totally irrelevant. For those who remember, it is reminiscent of the cleverly deceptive and distractive sophistry of Bill Clinton’s interview when he said, “It depends on what the meaning of the word ‘is’ is.” Seriously? Again, those capable of staying focused on the truly important issue are watching in dismay as this debacle unfolds and in response to the amenity issue are saying, “So what?” The posts are getting longer and the discussion is becoming increasingly tedious while the central issue gets sidelined. Could it be that that’s the strategy of those in charge?
Let’s stay focused on the real issue. If the majority wants this venture to happen and is willing to take the inevitable financial hit, then it should probably happen. We’ll have made our own bed … again … and again, we’ll have to lie in it. But if not, it should be squelched and the Board needs to step up, do its job and find some other creative and appropriate use for the space. But if anyone thinks the costs scheduled for absorption by the residents are going to magically get handled by someone else’s fairy godmother, think again and keep a close eye on your next few annual assessments to see exactly how much this will end up costing your household. From an intelligent business perspective, whether the restaurant survives or not (and it probably won’t) this proposal is a loser and every one of us will eventually bear the burden of paying for it. That said, we should all be given the courtesy of the opportunity vote on it and the majority opinion should prevail. We firmly believe the Board is resisting a fair, democratic process because they fear the answer … and we challenge them to prove we’re wrong by doing the right thing and bringing this volatile issue to a full community-wide vote.
If the Board feels so strongly that the restaurant idea is a good business decision, perhaps they should volunteer to stand financially liable for all losses so that the rest of SCA is held harmless. In exchange for their risk, I would even agree to let them keep the “profits” should there ever be any.September 22, 2018 at 12:46 am #4800Jim FurseParticipant
Referring back to the GM’s argument that we can’t get a majority to vote on anything. (The fact that we have so many absentee owners much of the time probably contributes to this.) I’m not a lawyer, but doesn’t the following quote of Section 7.9, which Bob Burch noted, indicate that the board can vote on “Change of Services and Use of Common Area” ? If so, doesn’t it also indicate that, if the board would vote to change, only 10% objecting to such a board decision would necessitate a vote by all homeowners.
“Section 7.9 further clarifies that if the Board resolution states that the change will not have an adverse effect on the Association and the Owners, the Board may give notice of the change to all Owners. “The notice shall give the Owners a right to object within 30 days of the notice. If less than 10% of the members (715 members) submit written objections, the change shall be deemed approved . . . “. If more than 10% of the Owners object to the change, then the resolution would need to be submitted to the Owners for a vote.”September 22, 2018 at 1:17 pm #4801DickParticipant
Thank goodness common sense has finally prevailed.
As far as this ridiculous restaurant “giveaway” goes, the best way to explain the result:
DEAD IS GOOD !
Now let’s continue the “clean-up” and rid ourselves of the incompetents who not only proposed it, but those who originally supported it’s losing provisions, and especially those who voted to approve it, as well as a General Manager who obviously didn’t properly vet it.September 22, 2018 at 10:05 pm #4804Jim FurseParticipant
(Copy of email Erika Furse sent to Candace.Karrow@scacai.com)
A Restaurant or not in SCA? We have maintained for years that a full-service Restaurant up here is not sustainable nor viable. There are so many eateries in the vicinity with choices of meals and at reasonable prices. Casinos offer a multitude of Restaurants to choose from with the added benefit as a destination which is attractive to most people wanting to eat out occasionally –or to entertain friends or family members.
There is also the question of fairness to a Tenant It would not be right to lure a Restaurateur up here (who may have little experience or knowledge of what it takes to run a Food-Restaurant and make a profit) with promises that we know we cannot keep simply to accommodate a handful of residents. For those that do not understand the complexity of the restaurant business, following is an example of the process that needs to be considered to brake even financially and, at best, make a profit: First, a menu has to be put together, itemized by identifying how much of each ingredient goes into it. These items/quantities have then to be priced based on what he has to pay for them in the store. That will be his cost for just the ingredients. Then he has to consider all the cost of doing business [such as rent, insurance, taxes, utilities, etc with the highest cost-item being employment-related (65 % +, labor-intense business)]. The sums together give him the base to which he has to add whatever percentage to make a profit. At today’s cost of running a full-service food restaurant, in the absents of a guaranteed flow of guests (which could not be expected up here) and high demand of alcoholic beverages (about 30 % profit vs 10 % on food), could not be sustained, especially under the existing conditions mentioned above.
But, does that mean no restaurant at all? There is a large Senior community in Arizona which seems to have just the right solution. In a regular restaurant-setting, the residents, who want to have a brake from spending all the time in their home, can go there to read, meet neighbors, friends, family members, play games, and eat, sort of “a la cafeteria”. At one corner of the room, they have a set-up where they offer healthy salads, soups, sandwiches, all sorts of bakery goods and deserts, coffee, cappuccinos, hot chocolate, other beverages, etc., at very reasonable prices. Guests can spend there as long as they wish, even if the restaurant is not open.
What our Management and Board members have to realize is that they are in the employment of us, the home owners. Their duty is not to accommodate the wishes of some friends or a few neighborss, but to find out through proper channels of communication what the community as a whole needs. They are expected to weigh the benefits of a decision to all versus the potentially resulting higher financial burden to the home owners. It is safe to assume that a great many Seniors up here live on a fixed income and every penny counts.
As for the excuse of an “Amenity”, which translates into an Agreement, it was understandably used by Del Webb to attract and stimulate newcomers to the development. These necessities have long changed!
I hope that these thoughts are in someway helpful to the community, and I want to emphasize that the above is my personal understanding and opinion. Erika Furse, SCA resident
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