Rancho Santa Fe Association board approves resolution to purchase RSF Garden Club

By Karen Billing

The Rancho Santa Fe Association Board of Directors voted Feb. 6 to approve a resolution to buy the RSF Garden Club for $2.4 million, following nearly a year of detailed negotiations. Held before a large crowd at the RSF Garden Club, the purchase was approved by a 4-3 vote.

“It’s been no secret that I had my severe and sincere reservations about this transaction,” said board president Ann Boon, who was one of three dissenting votes along with directors Heather Slosar and Craig McAllister. “But as the community’s vote was in favor of this transaction, I will give my full efforts to support the administration of the transaction to its fulfillment.”

The directors voting against the sale were a reflection of some public sentiment that since negotiations have continued months past last year’s community-wide vote, the conditions of the sale have changed enough that it should be voted on again.

“It now seems to be that the deal we voted for then is not the same we’re voting for today,” McAllister said. “For the sake of transparency, I believe the community should have the right to understand what the details of the deal is now and then vote on it again, this time being fully informed.”

The directors who approved moving forward with the resolution feel that the changes were not material and do not require another vote.

“I feel that we still completely meet the intent of the vote last year and I continue to support moving forward,” director Jerry Yahr said.

The RSF Garden Club’s executive vice president Steve DiZio concurred.

“The documents that we’ve fine-tuned accurately represent what we told the community we were trying to accomplish,” DiZio said.

Over the next 30 days, residents have an opportunity to oppose the sale by gathering a petition signed by 100 members. The petition would trigger another vote, an approximately $7,000 expense.

“The Garden Club facilities help define our community and are a key amenity that sets us apart from other communities,” said RSF Association Manager Pete Smith, noting that the Garden Club — which was founded in 1926 — has been around longer than the Association.

Since the beginning the RSF Garden clubhouse has been a social hub for community gatherings and used for events, including concerts, meetings, eighth grade graduations and family weddings.

“The intent of the sale is for the Garden Club to be preserved for the community in perpetuity,” Smith said.

Smith added that over the years it has been difficult for the Garden Club to find volunteers to take on the task of maintaining and managing the facility. Thanks to the leadership of the club board and Helen and Steve DiZio, they have turned the club around and have it on strong financial footing but in order to protect the clubhouse as a valuable community asset, the club could no longer afford to operate independently.

Smith said the Garden Club first approached the Association eight years ago about getting help to maintain the facility. Serious talks began three years ago.

Last April, the Association conducted a vote in which 667 of 785 votes were in favor of the sale. Currently, the Association has a potential of 3,200 voters but only about 1,800 are registered to vote.

The Garden Club will continue to run its retail shop, maintain its office space in the building, and has 15 days priority use per year (the rest of the year the club has the same options for use as anyone else in the community). The sale will allow the parking lot at the club to be turned over to public use.

Proceeds from the sale will go 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 nonprofit organizations.

Some residents at the meeting still questioned whether purchasing the club was the right decision for the Association.

“I think it’s a very shortsighted, poor use of money,” said Kim Eggleston, noting that it does not make sense to purchase the building and create more overhead costs.

According to Smith, the Association currently has sufficient money in the Community Enhancement Fund to complete the purchase and continue to maintain the facility.

The projected balance of the fund in June 2014, following the purchase, would be $3.5 million. The ongoing annual operating cost of the club would be $55,000 and can be covered by funds currently allotted to the Community Enhancement Fund. In the current fiscal year the Association allocates 2.5 cents or $995,000 out of the total 14-cent assessment fee to the funds.

RSF resident Marion Dodson said she wants to make sure the sale is the right deal for the Garden Club and said she feels the whole deal is a conflict of interest, almost like “insider trading.”

RSF Association Director Philip Wilkinson said he did not understand the suggestion of conflict of interest as he is not a member of the Garden Club, nor are any of the board members. Additionally, Greg Hillgren, of the Rancho Santa Fe Foundation, asserted that they have “significant guardrails” against conflict of interest.

“It’s a long-standing policy that no acting member of the Association board can be a Foundation board member,” Hillgren said.

As to the question of the deal’s fairness, board vice president Rochelle Putnam said that through the negotiation process, both sides have been well protected, if not “excessively” so. Additionally, any question of fairness will get further review as the purchase documents will next be submitted to attorneys for a fairness appraisal then must be approved by the attorney general of California.

Others at the meeting continued to offer their support of the Garden Club sale to preserve the facility as a community asset.

Jim Ashcraft, a former RSF Association board president who worked in commercial real estate, said that a 6,000-square-foot-facility at the center of town with 34 spaces is a “great buy.”

“Parking is this community’s gold,” Ashcraft said. “We have to be forward-thinking and we should buy it and grab the opportunity.”