Kiawah Island Property Owners Group

Chapters

KPOG History

A History of the Kiawah Property Owners Group from 1981-1995
written by Thomas U. Greer

The purchase of the amenities by Virginia Investment Trust (VIT) in July, 1993, was reported in the last installment. The December, 1993, issue of Talk had an article, "Spotlight on VIT," which profiled VIT’s two key executives, Bill Goodwin and Beverly Armstrong. The article explained the VIT organization and some of the plans for Kiawah’s amenities. Prem Devadas was given the responsibility for managing VIT’s Kiawah holdings, other than the golf and tennis operations. It was announced right away that Osprey Point would not be sold to KRA to become a private course. Instead, VIT planned to build a new, large clubhouse at that course.

The same issue of Talk covered a November 15th cocktail reception hosted by Chris Cole, former Landmark executive who stayed with VIT to manage golf and tennis during their transition into Kiawah. At this meeting, Prem Devadas and Chris Cole made presentations, in which attendees learned of VIT’s concept for the "sports card." This concept evoked a strong negative reaction among property owners present over the planned increases in the sports card costs. (Attendees at that reception will recall the angry comments and at times rude conduct of some of the unhappy property owners. VIT probably remembers it for the lesson learned - never serve free drinks without any food available, especially when announcing unpopular information.

As mentioned in the previous installment, Herb Ailes, Chairman of the Men’s Golf Association, led the negotiations with VIT principals over sports card costs. KPOG fell into a back-up role, but reported all the details in Talk. A letter-writing effort to Bill Goodwin was initiated, and VIT proved willing to listen and to make adjustments. The sports card plan was modified somewhat and cart fees were adjusted to help preserve existing, organized golf programs - the Kiawah Ladies Organization of Golf weekly tournaments on Tuesdays, the Men’s Golf Association Wednesday "blitz" and Sunday couples’ golf. Five thousand cart fees were waived by VIT in support of these programs for the 1994 calendar year.

A learning process took place. VIT learned a great deal about the things that were important to Kiawah property owners. Property owners learned what a "good deal" they had under Landmark, particularly during the bankruptcy stage when there were no increases in the price of the sports card. They also quickly learned what costs were at comparable east coast resorts. When the dust settled, most golfers and tennis buffs accepted the new sports card, though not without some grumbling. A few joined Oak Point instead. The non-resident property owner got the worst of the arrangement, and follow-on adjustments to their costs had to be made later.

In the midst of all of this, two days before Christmas of 1993, a fire burned the new KRA Beach Club facility to the ground. It had been open less than a month.

Although not part of KPOG’s history, the saga of the Ocean Course might be of interest. When the amenities were bought by VIT, by law the Ocean Course was withheld from the auction to give conservation groups the exclusive right to bid on it for the purpose of protecting coastal property. Thus the Resolution Trust Company (RTC) continued to operate the Ocean Course, while environmental organizations maneuvered to bid. KRA and VIT each lined up behind different environmental groups to get into the fray.

One of these environmental agencies, the Low County Open Land Trust of Charleston, initiated an action in July, 1993, involving Kiawah property owners. Representatives of the land trust contacted Fred Peck through property owner Nancy Aust, and asked to have the trust’s president, Nancy Hawk, come talk to Kiawah property owners about the Ocean Course sale. On short notice Fred gathered a group of island leaders representing KPOG, the town and KICA to meet with Ms. Hawk.

The trust was backing a plan to buy the Ocean Course and establish a world-wide membership club which would make the course available to Kiawah residents for "low greens fees." The proposed owners would follow a set of environmental rules for the ocean-front property. The RTC had established a requirement that whoever purchased the Ocean Course would have to reserve 22,000 rounds a year for the owner of the Kiawah amenities. The trust objected to this requirement, which would interfere with its plans for the course, and asked for Kiawah property owners to support the trust’s efforts. At the meeting, when property owners asked who was backing the trust to put up the kind of money necessary to purchase the Ocean Course, they were given the names of two investment organizations no one had heard of before, but Ms. Hawk would not disclose who the backers were behind these organizations.

Fred Peck offered to initiate a petition to the RTC in favor of the land trust, which was well-received by the trust representatives. However, after the trust representatives departed, attending property owners discussed the meeting among themselves and found they were divided on the action to be taken. Several backed Fred’s petition suggestion, but others opposed getting involved at all on the basis of not having enough information about the trust, its plans and its financial backers.

The petition was subsequently hurriedly initiated by a group of individuals (as opposed to sponsorship by any organization such as KPOG or the town), and directed to the RTC, protesting the reservation of 22,000 rounds of golf for the resort owner. It took the position the RTC plan would not result in the property being managed in an environmentally sensitive way. One hundred and nineteen property owner signatures were obtained on the petition.

The Low Country Open Land Trust then took its case to the town council, asking the town to support its efforts to purchase the Ocean Course. The town council refused, stating they believed it was in the best interest of Kiawah and its property owners for the course to remain a public/resort facility rather than a private club.

Eventually, it came out that a key financial backer of the trust was then-Kiawah-property-owner Bill Gilliam. Many property owners who signed the petition felt they had been misled by the land trust. As things progressed, the trust first severed its relations with Gilliam and later dropped out of the bidding. VIT and KRA then joined hands, affiliated with the Audubon Society of New York, and bid on the course. The intent was for the Audubon Society to take title and then convey same to KRA and VIT, with each owning 50%. (Some conservation requirements were to be included.) On September 14, 1993, the RTC contracted for the course to be sold to the VIT/KRA/NY Audubon consortium for $27 million.

In the meantime, the SC Coastal Council notified the RTC that the Ocean Course builder had improperly destroyed 4 acres of wetlands and had failed to set aside 40 more acres for preservation as promised. This happened before the RTC closed on the course with the consortium. In addition, national environmental organizations began to question the status of the Audubon Society of NY, which was distinct and different from the National Audubon Society. Sale of the course was delayed and eventually nullified; the RTC remained in control. Shortly after, the tenuous partnership between KRA and VIT, formed for the purpose of purchasing the Ocean Course, came apart and each vowed to gain ownership at the next auction. (It was not until May, 1995, in another auction, that VIT finally became the owner of the Ocean Course.)

The 1993 fall quarterly KPOG meeting contained the first reference to a new potential problem - the expansion of the Atlantic Littleneck Clam Farm into the Kiawah River. This matter became of considerable interest for the next six months, especially to property owners living on the marsh. The threat of having unsightly stakes and buoys marring the view from Kiawah caused a concerted reaction in opposition. Property owner Stan Stanton became an expert on the propagation of clams and was a vocal member of the property owner opposition.

Under the leadership of the town, and with support from both KPOG and KICA, a compromise was worked out in April, 1994, with the SC Coastal Council and the clam farm. The clam farm was permitted to put pens into stretches of the Kiawah River most removed from Kiawah, with the stipulation that they would not attempt to expand those operations in the future into waters closer to Kiawah. This solution seemed to satisfy all parties.

Also at the quarterly meeting, KPOG Assistant Secretary Wendy Kulick questioned the way KPOG was conducting the voting to fill a vacant director’s position and to amend the by-laws. Wendy’s concern, which had been taken to the president prior to the meeting without resolution, was that the by-laws stated members could only vote "in person or by written proxy," and yet the ballot mailed to members made no provision for them to assign their proxy to anyone. Because this effectively precluded them from voting, non-resident members were being disenfranchised, according to Wendy. Following a determination that the ballot did not comply with requirements of the by-laws, a motion was made and passed to invalidate the balloting and submit new ballots. Thus, the oversight was corrected and the proper use of proxies has been used in all KPOG balloting since.

In late November, 1993, KICA reported that a survey sent to all property owners proposing the addition of a new Beach and Recreation Center to the Property Owner’s Pool facility showed that property owners favored the concept, but by a slim 51% majority. The next step would be an official referendum on the issue, to be conducted as part of the 1994 KICA annual meeting. KRA had agreed to donate some land surrounding the pool complex, which would be required for the expansion should the referendum pass.

At the KPOG quarterly meeting conducted on December 13, 1993, Jimmy Smith reported KPOG membership had grown to over 1100. John Brislin, chairman of the Research Committee, reported on a meeting with Fennell Company, which was planning to raise the cost of solid waste pick-up as much as 25% in 1994. John’s efforts were directed toward reducing the proposed increase, using a comparison of the lesser charges in place at Seabrook as his major argument.

Nancy Aust and John had previously briefed the town council on the results of their solid waste study and also on details of the state-mandated recycling program scheduled in 1996. This program included efforts to reduce solid waste by 50%. Brislin indicated voluntary efforts toward recycling had not proven effective in the past, and hence he recommended a mandatory recycling program for Kiawah. The town had contacted KICA about taking the lead in the state’s solid waste program, but reported that KICA "seems unwilling to do this." (Subsequently, the town took the initiative in this matter, which resulted in the island-wide program involving all property owners which began early this year.)

At this meeting, councilman Roger McLaughlin reported on town activities. He covered current topics of interest including town regulation of cable TV on Kiawah, status of the Johns Island Garden Parkway Committee efforts, town hall planning, progress on the town’s comprehensive plan, and the latest town budget.

Tom Winkleman reported on KICA activities, which included the decision to institute a commercial vehicle access fee beginning in 1994 to raise funds for the KICA reserve fund. Tom described the compromise reached by the board, wherein KRA would vote only 3 of its 4 votes on the use of reserve funds, thus giving property owner directors an equal vote on their use. Concurrently, reserve funds were set aside for resurfacing Governor’s Drive. (Property owner directors were reluctant to create a large reserve fund so long as the KRA majority controlled the use of the funds. KRA directors were anxious to effect the costly resurfacing of Governor’s Drive, rather than patching. Thus, the compromise described was struck.)

Herb Ailes reported on his efforts to negotiate with VIT on the cost of golf for 1994, mentioned earlier. Neither VIT nor property owner golfers were totally satisfied with the end result, which would seem to indicate a reasonable compromise had been reached.

The February, 1994, Talk contained an interesting article by Carl Obern on a three-hour cruise to Botany Island taken by the Naturalist Club. Talk in its early issues of 1994 showed how POPS had grown over the years. There were articles on the Friendship Committee (which helps property owners in need of various types of assistance), the Newcomers’ Committee, a Cancer Support Group, efforts to compile a blood donor data base for Kiawah, a call to form a stamp club, the Garden Club and finally the medical equipment clearing house. There was a lengthy article on Alternatives by Gloria White and an article on a Comprehensive Health Care Committee conducting a survey on Kiawah and Seabrook regarding the need for a continuing care facility.

Talk continued to cover the waterfront. The March ’94 issue gave the first notice of problems of leaking plumbing in homes having polybutylene pipes and fittings, and told those with problems who to contact for remediation. On January 5, 1994, Chris Cole resigned as Director of Golf and Tennis for VIT. Tommy Cuthbert subsequently became Director of Golf, and Roy Barth, Director of Tennis, with both reporting to Prem Devadas.

The 1994 annual meeting of KPOG was held on February 21st. Vice President Nic LaLumia ran the meeting in the absence of Fred Peck. Membership had grown to 1120, an increase of 70 members over the previous year. John Brislin reported on the activities of the Research Committee. Their study of real estate sales produced the average price of Kiawah sales in 1993: home - $386,000; lot - $190,000; villa - $165,000; and cottage - $133,000. Forty-five percent of buyers were from southern states, over half of those from South Carolina. Twenty-seven percent were from the northeast, primarily New York, New Jersey and Pennsylvania.

Townsend Clarkson, CFO of KRA and also KICA president, was invited to address the meeting on the KICA referendum to change the covenants to permit institution of a "contribution to reserve" fee on real estate transfers, to be paid by the buyer to KICA at the time of closing. Townsend gave the background and need for this step and recommended approval of the referendum at the March KICA annual meeting. Townsend estimated this fee would provide between $1.7 and $1.8 million over 10 years to the KICA reserve fund.

Laura Pulleyn, property owner director, gave a report on KICA at this February meeting. She updated attendees on beach parking and the background behind the vehicle access fee. She also reported on the objection raised by property owner directors at a recent KICA board meeting over KRA running a real estate office in a model home on Glossy Ibis, in violation of the KICA covenants and town zoning regulations for that area. She reported the town had notified KRA that the office had to be closed. (Shortly after the meeting KRA did, in fact, with great reluctance, close the real estate operation on Glossy Ibis.) Laura also covered the referenda included in the upcoming KICA annual meeting: 1) bringing Eugenia Avenue property owners into KICA; 2) real estate transfer fee reported above by Clarkson, and 3) the vote on the proposed Beach and Recreation Center.

She went on to relate how KRA had announced their intent to vote their property votes and any proxies assigned to them in the upcoming property owner election to the KICA board. Ever since they purchased Kiawah in 1988, KRA had declined to influence the outcome of this election. Instead, they had given their votes to the leading candidate after all votes were in. Laura explained that in the 1993 election KRA had 527 property votes and 558 proxy votes, controlling 27% of all votes cast. (Author’s note: As part of the development agreement signed later in 1994, KRA pledged in the future they would not vote their Class A votes, including any proxies received, but they could continue to vote their Class B, C and D votes - their commercial and undeveloped land votes. In the 1996 election just completed, these B, C and D votes amounted to approximately 316. This figure did not include the votes individual KRA directors had based on personal property they own.)

The annual election of KPOG officers was not conducted at this meeting because there were still 5 more days in which proxies could be received, since the ballots had been mailed late. The nominating committee’s slate of officers was presented at the meeting as follows: President, Bruce Buchanan; Vice President, Wendy Kulick; Assistant Vice President, John Brislin; Treasurer, Jimmy Smith; Secretary, Pat Hipp; Assistant Secretary, Gloria Fasciano; and directors Browning Crow, Jim Piet and Peg Russo. (This slate was approved by the membership once all proxies were received and counted, soon after the meeting.)

VP LaLumia commented at the annual meeting on the difficulty the nominating committee had had in finding someone to run for the presidency. In the past the presidents had always run for re-election to a second term of one year, but Fred Peck had declined to stand for re-election. Bruce Buchanan came to the rescue when he agreed to serve for one year. Bruce had been president from 1991-1993, but had remained on the board as past president during Fred Peck’s year as president. Bruce had more than "done his share" for Kiawah, but he saw the need, and his decision, made at some personal sacrifice, was most welcome by all.

Almost the entire March, 1994, issue of Talk was devoted to the upcoming KICA property owner director election to replace outgoing director Tom Winkleman. Pictures of, and statements by, all four candidates (Sean Driscoll, Chuck Pollis, Bob Qualls and Bo Turner) were included. Each candidate was asked a series of questions, and the answers were published in Talk. KPOG sent this issue of Talk to all property owners to help them in their election decisions. As always, KPOG declined to support any candidate, in favor of continuing its role of presenting the views of all candidates objectively. The election was held on March 26 and was won by Sean Driscoll. At the meeting, Sean had the support of KRA’s votes and the proxies assigned to candidate Bob Qualls, who, immediately subsequent to his nomination and prior to the first vote, withdrew and threw his support to Driscoll.

On March 25, 1994, VIT held a reception for all property owners during which they introduced a concept for renovation and expansion of the existing inn complex, in order to generate and measure a reaction. The plan envisioned starting the renovation in September, 1994, with completion in the spring of 1995. These plans never got off the ground, primarily because of a conflict with KRA over the site. KRA sued to force VIT to build on the East Beach site. This conflict was resolved by the two parties in October, 1995. At this writing VIT is in development planning of a new luxury hotel at West Beach with 225-275 rooms and convention space. Their objective remains to have a 5 star hotel complex on Kiawah.)

When Bruce Buchanan became president of KPOG, he asked Wendy Kulick, his vice president, to oversee Kiawah Island Talk, as Ralph Magnotti had done when he was Bruce’s VP. There was concern on the board because the price of printing and distributing Talk had increased so much. Talk had exceeded its budget over the past year by $5000. When Wendy discussed the future with Talk’s managing director Nancy Aust, Nancy decided to resign, citing "philosophical and tactical differences in our respective approaches to Talk."  Nancy had served in her role as managing director for six issue of Talk, during which she emphasized the professional appearance of the paper. She provided her letter of resignation in her last issue - April 1994.

Bruce then appointed Wendy Kulick managing editor, a position she still holds to this day. Wendy immediately announced plans to sacrifice elements of appearance in favor of cost effectiveness and staying within the budget, citing the fact that the April issue had exceeded budget by 50%. In her first issue, Wendy asked for reader comments, to include input when there were delays in receiving Talk.

The next section of this history will hopefully be the last. It seems the present is flying by so fast it has been very difficult to write fast enough to have the past catch up to what was the future when I started. If you reread that last sentence, you’ll agree, I’m sure, that it’s time I quit!

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