KPOG

  

 

Kiawah Island Property Owners Group

 

August 23, 2007 KICA E-Mail News Flash

 

KICA Member Open Forum - Tuesday, August 21, 2007

KICA hosted an open forum on Tuesday, August 21, 2007, from 7:00 - 8:30 pm; on the subject of the upcoming September 23 vote to apply covenants to off-island property, should the board purchase such property. Following is an overview of the questions and answers discussed at that forum.

Voting materials explaining the background and potential uses for the land were mailed on August 10, 2007 and may also be viewed on our Web site at http://www.kiawah-owners.org/property_proposal.htm . For a full picture, please review those materials and this Q&A, as well as the online presentation "The Association's Need for Land". We welcome you to submit additional questions to KICAadmin@kiawah-owners.org .

Absentee ballots/proxies are due at the College of Charleston no later than 5:00 pm on September 19, 2007.

Q. Who would be the owner of the new property?

A. Since it would be common property owned by all association members
(should the members approve the vote), the Kiawah Island Community Association, Inc. would own the property.

Q. Could this property be annexed to Kiawah Island?

A. Only the Town of Kiawah Island can annex property. The five directors present indicated that they had no plans to request annexation. Further, they would encumber such property with a supplementary declaration stipulating that the property is not and can never be known or characterized as Kiawah Island.

Q. There are few association members using boat storage (about 150). Why do this if so few are affected?

A. Each association member's covenants include the provision that the developer or association will provide boat storage. So, every owner of property and every future owner could be affected. The burden to meet the covenant is not removed because of low numbers of users.

Q. Why not lease instead of buy?

A. We have been actively looking into leasing the property we need. We want to keep all options open and leasing is one of them. If we find an opportunity to lease property for either the commercial pass office or boat storage, we will perform a financial analysis versus a land purchase with improvements. Leasing would not require a member vote, by the way.

Q. Why not include this in the strategic planning work that the association is now doing?

A. We are doing so; it has been part of the Amenity Planning Subcommittee's charter since its inception in March 2007. Also, the Environment (infrastructure) Planning Committee has stated it is not opposed to the board's idea.

Q. How much land is needed?

A. The best guess at this time for boat storage and commercial pass operations is 5-6 acres.

Q. We need more financial information to make an informed decision.

A. We do not have information on a specific property, so cannot yet
Provide that level of detail. Johns Island property generally is running $100,000 to $140,000 per acre, and prices rise more dramatically as one approaches the island. We presently estimate that improvements could cost $300,000 - $400,000. We have seen estimates of $1 million, but believe we can do it for considerably less. We are working to determine whether Seabrook Island, which may need both commercial pass operations and boat storage, would have an interest, as we do, in working together on this to benefit both organizations.

Q. Are my assessments going up 10-20% to pay for boat storage?

A. No. Also, boat storage users would pay for maintenance at boat storage via user fees, not the membership as whole.

Q. What is the developer's commitment?

A. The member directors believe that the developer is a partner in this endeavor. We have presented our opinion to him and have not yet received a reply.

Q. What covenant is being changed?

A. This is not a vote to change any covenant. It is a vote to allow the association to add the purchased off-island property to the plan of the covenants. As indicated in the voting materials, addition of the property and Supplementary Declaration of the Covenants would apply to a one-time purchase of land in the vicinity of Kiawah Island that may be used for boat storage, commercial pass operations and other services to be provided by the association or for other member use.

Q. Why do we have to place the covenants on the land?

A. It would allow association funds to be used for improvements, maintenance and staffing because, to effectively subject the property to the jurisdiction of the association and extend the application of the covenants to the property, the covenants require that a Supplementary Declaration of Covenants be recorded with respect to the property.

Q. What will it cost boat owners to store in a proposed new facility?

A. It will be priced at a reasonable market rate, and the storage facility will largely pay for itself by renting storage space.

Q. Next time, can we have this meeting before packets go out so we better understand the issues?

A. Standard practice is to hold open forums (eg, Meet the Candidates) after meeting materials are mailed, to first give members a basis of information, and allow time for more pointed questions during open forums. The board can certainly consider another approach, and future boards could take it under advisement as well.

Q. There is no provision for the approval to expire if this board does not purchase property. So couldn't a board several years hence still be looking for land to buy?

A. That is correct. However, this board is hopeful that a resolution can be reached before March 2008.

Q. Why not just get an option to purchase, and then bring a specific request to full membership for vote?

A. Owners of the type of property KICA needs are typically financially sophisticated. They are not likely to tie up a valuable asset for several months pending an unpredictable vote without substantial compensation. We have asked one property owner for a right of first refusal should he decide to sell the property and will probably be successful in obtaining this. However, as in any financial market, true "call" options are expensive and tend to go up in price dramatically as their exercise window lengthens.

Q. Isn't the timing poor to seek a vote, with resident and nonresident members traveling and unable to review the materials?

A. Due to our demographics, there are no perfect times at Kiawah. Those traveling for the summer generally are resettled by early September. The vote is three weeks from then, with absentee ballots/proxies due on September 19.

Q. Why not have the Town condemn property on island for the association's benefit (boat storage)?

A. Town condemnation could only be for the public good, not the good of a private organization like the community association.

Q. Why not use Rhett's Bluff, where the boat launch is, for boat storage?

A. A master plan for Rhett's Bluff is currently under consideration by the strategic planning environment (infrastructure) committee, but the committee is not envisioning the space is available for the 150-200 spaces we need.

Q. Why didn't the information packet include all the information detailing the interrelationship of covenant inclusion and property purchase?

A. It was and is the board's judgment that the vast majority of our members are far more interested in the actions being proposed and the rationale for these actions than they are in the arcane issues of community association legalities. As a result, our information packet concentrated on the "business" issues involved and did not include details of the extensive and technical legal analysis involved in implementation. While it is important that we get everything done properly and legally, KICA has competent counsel and staff that handle these issues well.

Q. Didn't the 2005 Development Agreement between the town and the developer require the developer to continue providing boat storage at Kestrel Court & Sora Rail Road?

A. It did, under the terms of the then-leases. The leases contained a termination clause, which the developer exercised.

Q. Doesn't the Development Agreement also require the developer to notify the town when he transfers property or services?

A. Yes, it does. The provision refers to the transfer of a property or service. The developer has not sold the boat storage sites, and is still performing the service, so the clause is not applicable.

Q. Why was this subject first presented to members at the July board meeting? What is the rush?

A. It wasn't. There was an extensive, public discussion regarding the need for boat storage at the March board meeting, as detailed in the minutes of that meeting (http://www.kiawah-owners.org/PDFs/Minutes/2007/March5minutes-approved-web.pdf).The board has been working since then on possible solutions and has determined that it will probably need to purchase land on Johns Island for this purpose. We saw no reason to wait a full year (until the March 2008 annual meeting) after we lost our storage facility to get started on a solution. This is a deliberate process and is in no way rushed.