By Karen Billing
The Rancho Santa Fe Association has signed a letter of understanding to buy the Rancho Santa Fe Garden Club for $2,369,250. The letter of understanding outlines several terms, one not binding, for the completion of the purchase.
The planned purchase, the first from the newly named Covenant Enhancement Fund (formerly the Open Space fund), is the Association’s way of helping to solve the Garden Club’s struggles with the cost of maintaining the clubhouse as well as keeping the building as the valuable landmark that it has come to be in the village.
“I think this will be a significant day in perhaps the history of Rancho Santa Fe,” said RSF Association Manager Pete Smith during the March 21 meeting held on the patio of the Association office’s own garden, flowering trees serving as a scenic backdrop. “The desire to preserve this historic community icon for future generations has been a key factor of both the Garden Club and the Association as we looked for ways to combine resources to protect this property. It’s the intent of the agreement that the Garden Club property be preserved as a community asset in perpetuity.”
The purchase will also result in a way to give back to the community.
Proceeds from the purchase price will be deposited into a special Community Fund at the Rancho Santa Fe Foundation and an oversight panel will be in charge of awarding grant monies to the Ranch’s eight non-profit organizations, such as the RSF Community Center, Historical Society, Art Guild and Senior Center.
The average net annual return on funds managed at the RSF Foundation for the last 10 years has been a very positive 6.4 percent, according to Executive Director Christy Wilson. Based on a payout rate, established each year by the Spending Policy of RSF Foundation, which is typically between 3.5 percent – 5 percent, the amount of the new Community Fund money available to community groups annually could be as much as $152,000 annually.
“It’s visionary, it really is,” Wilson said of the endowment. “It’s worked out in a way to really benefit everyone.”
The proposed purchase of the RSF Garden Club will go out to a Covenant-wide vote that is purely advisory and not binding, Smith said. The advisory vote will be mailed to RSF Association members on April 5 and responses will be due back to the Association by April 30.
The sale will also involve a Covenant modification to allow for public use. The RSF Garden Club is currently zoned for a private or semi-private club use only. According to Smith, the first step in the re-zoning process is to notify two-thirds of the Garden Club’s surrounding property owners, who have so far been supportive. Once the Association has the neighbors’ approval for the proposed re-zoning, a notice about the proposed re-zoning will be sent to the entire Covenant membership, likely at the beginning of May. Covenant members will then have 30 days to file an opposition petition. If a petition is filed then a vote on the re-zoning will be sent out to the entire Association membership.
However, if all goes as planned, the purchase of the RSF Garden Club by the RSF Association should be final around June 30.
According to terms of the sale, the club will reserve certain rights to use the facilities and will continue to operate its “Upscale Resale Shoppe” under a 10-year renewable lease. The club’s parking lot will be made available for use by the public in the village area.
The Garden Club dates back to 1926 and since its very first meeting, the club has functioned as a social hub for the community and served as everything from the beginnings of the Village Church to a Red Cross unit in the 1940s, where residents and members made wreaths for soldiers in the hospitals. They still make wreaths to this day during the holidays, now to decorate the walls of the RSF Senior Center.
The money and land for the village clubhouse was donated to the club in 1975. The clubhouse has been a place for mahjong games, Cotillion, community meetings and events, and countless weddings. The Rancho Santa Fe School has held eighth grade graduations at the club for more than 50 years.
“The board feels very strongly that the Garden Club facility helps define our community and is a key amenity that sets us apart from other communities,” Smith said.
RSF Garden Club President Helen DiZio said members of the Garden Club have always worked hard to support the community and in the early years it was the place to be.
In recent years, however, the cost and time required to maintain the building has become a burden for club volunteers.
Last year the club held a workshop to discuss possible solutions for the club, such as selling the building, leasing unused time to an outside interest or entering into a partnership with another organization. Many in attendance at that workshop expressed opinions in favor for the partnership idea and nobody wanted to sell. An outside interest taking over would mean they could risk losing the clubhouse altogether.
Helen and Steve DiZio have been credited with revitalizing the club since taking it over in 2010, putting a social spark back into the club as well as turning things around financially, trimming overhead and boosting income from the Upscale Resale Shoppe.
DiZio said that tireless volunteer hours have been spent to manage the resource and so much of the emphasis has been on maintaining the clubhouse that they haven’t acted as a charitable organization as much as they could. With the Association taking the building over, it frees up the opportunity for the club to grow stronger and re-focus.
“I feel we have a very bright future,” DiZio said. “We have lots to do and we know we can have an impact and we’re very excited to do so.”
The RSF Foundation’s Wilson agreed with the sentiment that every community organization is now looking at a bright future with the help of this endowment.
“No one believes more heartily in the strength of these organizations than I do,” said Wilson. “This endowment will play a strong role in enhancing the strength of our nonprofits.”
Carla DiMare, president of the Rancho Santa Fe Senior Center board, questioned why the center can’t just receive its portion of the proceeds from the sale outright. She requested that the Association “take out the middle person”— she said the center can manage the money on its own and that it would be put to great use immediately.
Steve DiZio clarified that the endowment isn’t just an automatic handout to the organizations, saying there is a process to go through. Every year the organizations must present a proposal request for their funding needs and the panel will determine how best to allocate the funds. Funding authorization would require a super majority of four affirmative votes from an oversight panel.
The oversight panel will be comprised of five members: Two from the RSF Association board, two from the RSF Garden Club board and a member from the RSF Foundation board.
“It’s about enhancing our community; it’s not a band-aid for operations,” Wilson said. “This is an enhancement program, it’s important that we make that very clear.”
The criteria for the distribution of grants has yet to be established and Wilson noted that the endowment is not just from the RSF Garden Club sale proceeds — anyone can make a contribution to the fund to help benefit the community.
After the purchase, the Covenant Enhancement Fund’s remaining balance will be $634,000, which does not include the $1,600,000 net proceeds from the pending sale of the Osuna Ranch house, currently in escrow. In addition, the RSF Association will still have $1,020,000 in free reserves.
The $55,000 ongoing annual cost of operating the club will be covered from funds allocated to the Covenant Enhancement Fund, which is 2.5 cents from the 14-cent assessment rate. In the current fiscal year, that fund will generate $958,000.