(Photo by Calixtro Romias, The Record)
The Stockton, Calif. club is hoping for approval of an upcoming vote that would assess all homeowners behind the gates of the community, where currently only 30 percent are members, with a $50 monthly fee that would go directly to the club, raising an additional $560,000 a year. In return, all homeowners would become resident members with a range of access and privileges. The proposal reflects the need to address a “nationwide issue” for golf communities, says the club’s General Manager.
One of the most exclusive neighborhoods in Stockton, Calif. is in the midst of making a decision that will impact its future for years, The Record of Stockton reported.
It involves the Brookside Golf Community Association, the 937 homes in the gated area of the sprawling Brookside neighborhood that includes the private Brookside Country Club, The Record reported.
The Brookside Country Club and the homeowners association (HOA), known as the Brookside Golf Community Association, are separate entities, The Record reported. Not all residents who live inside the gated community are members of the country club, nor are they required to be.
A proposal that all homeowners who live behind the gates will have the opportunity to vote on soon calls for the assessment of a $50 monthly fee that would go directly to the country club, The Record reported. In return, the homeowners would be resident members of the club and would be allowed to dine in the clubhouse once a month; have access to the swimming pool, tennis courts and pickleball facility; eat at The Turn sandwich shop; participate in fitness classes; play four rounds of golf annually with paid green fees; attend three community social events per year; and get special rates on the banquet room.
The proposal prepared by the homeowner’s association attorney would amend its covenants, conditions and restrictions — also known as CC&Rs — and require a minimum of 478 yes votes, or 51 percent, to pass, The Record reported. Upon return of the ballots following a 30- to 60-day voting period, the HOA attorney will count the votes during a scheduled special meeting, and the country club will reimburse the HOA for all expenses related to the proposal.
The proposal notes that the fee would be fixed for the first three years and then subject to only cost-of-living increases tied to the U.S. Consumer Price Index in future years, The Record reported.
When the development was opened about three decades ago, The Record reported, people buying homes inside the gated community were not required to become country club members or support the golf course in any way.
Brookside developer Fritz Grupe wrote in a May 17 memo that the golf course “only needed to be paid for by the users,” The Record reported.
“Golf course lots brought a large premium, as did all those behind the golf course gated part of Brookside,” Grupe wrote. “Due to the golf course, lot values were from 50 percent to 100 percent higher than those in the non-gated areas, because living around that much cared-for open space adds value to all in the area.”
Grupe continued: “Due to the drop-off in the demand for golf, if Brookside were developed today, there would have been a mandatory level of membership required for all homeowners in the community. Or if we had to do it all over again, we would have made sure that all residents in the gated community supported the country club at some level of membership.”
During a moderated discussion with The Record, Brookside CC’s General Manager, Alecia Escajeda, explained that the latest proposal stems from “Brookside Country Club being proactive to preserve the future of the community, the club and the golf course.
“The Brookside Golf Community residents, the HOA board and the Brookside Country Club all need each other to survive and thrive in a climate where golf and memberships are declining, in order to sustain and maintain property values for years to come,” Escajeda said.
Citing a recent Wall Street Journal article, Escajeda told The Record that golf clubs inside gated communities cannot exist without the support of 70 to 80 percent of that community’s residents.
“Currently, there are 30 percent of [Brookside] residents that are members of the club,” she added.
The fee, if approved, would become a mandatory assessment on all 937 homes, raising approximately $560,000 per year, The Record reported. That breaks down, Escajeda said, to about $1.65 a day per home.
“If the proposed amendment passes, this required resident membership would protect and maintain home values,” she said. “It would maintain the safety and security and privacy of the community, and you would receive value-added benefit with the resident membership.”
But a number of homeowners have voiced concerns about the additional fee that, in effect, would increase their HOA dues by 39 percent, The Record reported. Their list of problems with the proposal was presented to The Record by homeowner Jay Bell. Many of the concerns are rooted in a lack of faith in how the country club is managed, and a lack of trust in the HOA board of directors, The Record reported.
Brookside Country Club “has serious financial problems that undermine its promises to improve facilities over the next 10 years,” Bell said. “The best information is that loan debt totals $4 million-plus and the sale value is in the $2.3 to $2.6 million range. Complicating the club’s financial challenges is an estimated $1.5 million in deferred maintenance for which the club has not saved, as is standard good business practice.”
Citing what he described as “a history of financial mismanagement,” Bell said “being underwater is an obvious sign of mismanagement.”
Escajeda responded that “the club is currently being managed successfully with the last few years, making a marginal profit while continuing to monitor financials on a yearly basis for ways to increase revenue and decrease expenses.”
As an example, Mike Dalton, the former chairman of the club’s Finance Committee, told The Record that Brookside’s food-and-beverage operations made a $200,000 profit last year.
The only option the country club considered to increase revenue was pursuing mandatory resident memberships for Brookside Golf Community Association homeowners, Bell said.
“Instead of pursuing solutions that would be more favorable to all Golf Community HOA homeowners, they are pursuing a solution most favorable to the equity country club members who wish to retain control of the golf course and clubhouse,” he said.
The proposal is the result of about three years of discussions and that several options were under consideration, including selling lots on the course to opening up the country club to the general public, Escajeda said.
“Brookside has been considering and discussing a proposed amendment change in requiring all residents to be members for several years and decided in 2018 that it was necessary to strategic plan for the future of the club and the community,” she said.
“We’re a small club; 937 homes are our market,” she added.
As for opening the club to the public, Escajeda said that would lead to an estimated loss of 25 percent of current club members who put a high value on exclusivity, The Record reported.
Homeowner Gunter Konold, who is against the proposal, said “no one wants the club to fail” while questioning why only one option has been presented to HOA members, The Record reported.
The country club provided all its financial statements to the HOA board of directors in June 2018, Escajeda told The Record. The HOA board then hosted two town hall meetings in September, inviting all homeowners to a discussion on the topic of requiring resident membership in the country club.
Before hiring The McMahon Group as a consultant, Brookside CC received the approval of the HOA board last July, The Record reported. Once on board, The McMahon Group hosted five meetings in February that, according to Escajeda, were “very well-attended.” Another town hall meeting on the proposal was held earlier in July that was hosted by the HOA board, The Record reported.
But Bell told The Record that he doesn’t believe those efforts were sincere.
“There is no record of independent due diligence by the HOA board on the true merits of the proposed CC&R amendment requiring Golf Community HOA members to join the country club,” he said. “The board’s sole focus as shown in meeting minutes has been on expending the amendment election process.
“It’s obvious the private club dug itself into a financial hole and members won’t dig it out, so taxing neighbors was the chosen option and no other options were seriously considered,” Bell added. The proposal is worded in a way, he said, that it serves as “a blank check, because it enables the HOA board to negotiate a contract with the country club without HOA member oversight.”
Escajeda noted that “this is not just a Brookside Country Club issue,” The Record reported.
“It’s a nationwide issue that is happening all over the world that golf is declining,” she said. “We have numerous articles that state case histories of what happens when a golf course closes. This is not our opinion. We do not want to become a statistic.
“For those Golf Community residents who are not in favor, make that decision to vote no on their ballot,” she said. “For those Golf Community residents who want to maintain their property values and support the community, to create a stronger and sustainable future, vote yes on the upcoming ballot.”
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