Since the announcement was made that the Property Owners Association intended to purchase 14 parcels from Cooper Communities Inc. for $2.6 million, several property owners have asked me to explain in detail why this purchase is in the best interest of the POA.
First a little background on the situation. At this time, the land leases for 12 of the parcels expire at the end of this year, one lease expires in 10 years, and one of the parcels has no lease at all. While typically renewed in five-year increments, many of these leases have been in place for years if not decades. The annual rent on these leases is $1 per year.
Towards the end of last year, the POA was approached by CCI asking if we were interested in purchasing these parcels. We know that we were not the only party interested in acquiring these parcels. These initial talks eventually led to the hiring of CBRE, an impartial, professionally licensed, national appraiser. The combined appraisals for all 14 parcels is $2,646,500. A map of each parcel and the corresponding appraisal is available on the POA's website under the title of "Preserving our Future." While I am not a professional appraiser, in my opinion some of the appraisals appear high, while others appear to be low, but when combined, I feel the $2,646,500 reflects a reasonable, fair-market value for these parcels.
Here is a partial list of the parcels that are not currently owned by the POA:
• Tanyard Creek Nature Trail
• Granton Park
• Loch Lomond Park
• The dock and boat parking at Lake Windsor
• The central practice area at Scotsdale and a quarter of the 18th green
• The right side of the main parking lot at Scotsdale
• The golf cart parking lot at Scotsdale
• Two maintenance buildings at Golf Central off of U.S. Highway 71
• The golf maintenance building for the Country Club
• The No. 14 green and No. 15 tee complex at Metfield
• The pump station for the Country Club
• Three quarters of the large parking lot at Kingsdale.
Several residents have asked me why an investor would be interested in purchasing these lots. While some of these parcels would be hard to develop because they are in the flood plain, many are prime locations for development, with Tanyard Creek or Scotsdale at the top of the list. Alternatively, a prospective purchaser could demand an exorbitant amount of rent from the POA on infrastructure which, in most cases, cannot be relocated or replaced.
Residents have asked why we did not request a long-term lease from CCI. We asked for this and were turned down. We asked if we could pay less than the appraised fair-market value and we were turned down. Keep in mind that CCI is a development company. Their business model since the founding of Bella Vista has been to purchase land, develop the land, and sell it at a fair profit. I personally harbor no ill will towards CCI for requiring to be paid the full appraised fair-market value on these parcels.
Additionally, residents have asked if there are other parcels we need to be concerned about. We performed a detailed survey of all CCI land holdings to ensure there are no other parcels with critical infrastructure. Our goal was to get everything accomplished in one transaction. There are four parcels that we did not see sufficient value in acquiring and we decided to not purchase them (i.e. the little-used cart parking lot adjacent to the cell tower at Highlands).
To bring you up to speed, at the May 18 public meeting, the Board of Directors voted to approve the purchase of the 14 parcels. On May 19, a formal purchase contract was executed with CCI. I anticipate the land surveys will be completed and the titles transferred within the next three to four months.
There is no denying that $2.6 million is a tremendous amount of money, but fortunately the POA has sufficient funds in our unallocated reserves to pay for this purchase. It is possible that some projects that were tentatively planned for the coming years may have to be canceled or delayed, but you can't spend $2.6 million without making some sacrifices.
In my opinion (and that of the Board of Directors), purchasing these 14 parcels will help preserve the future of the POA. Instead of someone else owning "our land," it allows the POA to control our own future. At the end of the day, this purchase is in the best interest of the POA.
If you would like more information regarding this purchase, I encourage you to come to one of my Coffee and Questions meetings held at 10 a.m. on the second Tuesday of every month and at 5 p.m. the fourth Tuesday of every month, both held at Riordan Hall. You can also email me at [email protected], call me at 479-855-5010, or call to arrange for a private meeting.
Thank you for your time on this critical issue.
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Tom Judson is chief operating officer and general manger of the Bella Vista Village Property Owners Association. The opinions expressed are those of the author.
Editorial on 06/21/2017