The sticking point for me on this whole proposed Garden Club sale and lease-back deal has been the Oversight Committee created to control the property sale proceeds. The terms of the deal require an endowment to be set up at the RSF Foundation. Let me explain.
The distribution from the earnings of the Endowment of $2.369 million (based on a sale price of the two-year-old appraisal) would be about $140,000 per year based on 6 percent earnings minus administration fees.
The proposed sale lease-back terms create an Oversight Committee of five members consisting of: two sitting members from the RSF Association board, two sitting members from the Garden Club board, and the remaining member to be a current member from the RSF Foundation board.
Questions and problems as I see it:
First, how are the sale monies being transferred from the
buyer(RSF Association) to the
seller(the Garden Club)?
Second, the Garden Club is forever giving up its right to its sale proceeds of $2.369 million and its earnings on that money in exchange for a 10-year unknown market rate lease for the Shoppe, an unknown lease term on the small office/garage space, and only 15 days per year use for Garden Club events,
andif the Association decides to change the Garden Club future use, i.e. availability or non-availability of the facility, only the RSF Association, members would vote and the Garden Club will have
no sayand will have to vacate within 12 months. What happened to the Garden Club’s usage of the facility in perpetuity?
Third, the endowment and its earnings are the Garden Club’s funds, so why shouldn’t it be the one solely deciding on the endowment’s annual distribution?
Fourth, what are the terms of the endowment? Is this a permanent endowment or non-permanent?
Fifth, there is a major problem with the language that was proposed regarding the Oversight Committee. The Oversight Committee has a direct conflict of interest in that you cannot have board members of one entity that are also members of any of the other entities involved on the committee. i.e. The Garden Club board members are almost all RSF Association members, the Foundation board members may also be members of the RSF Association, and the RSF Association board members may be members of the Garden Club and/or the RSF Foundation.
I don’t know who is coming up with these proposals but this is wrong. We need to see the financial data and cost projections to understand the fiscal impact to the residents and show everyone the money trail so they can see the entire transaction of this sale…long overdue.
RSF resident and Garden Club member