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Early Turnover Agreement in Principle - September 3, 2008
After a long and exhausting struggle, we now have a signed "Agreement in Principle" for the early turnover of Gulf Harbour Golf & Country Club (click this link). Don Shapiro signed it on behalf of all the Early Turnover Committee members, who have worked so hard on this effort, on September 3, 2008. Now our work really begins, but we are confident that our membership has the people and skills to accomplish a successful turnover on January 1, 2009. The Committee is working hard on a list of important tasks that need to be accomplished as soon as possible, and we will keep you posted as we go through this process. The first order of business will be a membership vote to accept or reject this agreement. The agreement is also contingent on acceptance by the Chapter 11 bankruptcy court. Please review the Agreement in Principle as we are enthusiastic about our opportunity to get a clean break from WCI and I hope you all share that enthusiasm.
UPDATED HISTORY OF OUR EARLY TURNOVER NEGOTIATIONS
Almost from the inception of Gulf Harbour many of us have realized that WCI was not going to operate Gulf Harbour Country Club in the best interests of the members, but only in the best interests of WCI, increases in annual fees, decreases in services. So, a little more than two years ago, we initiated an effort to see if we could find a way to accomplish an early ownership turnover of the Club from WCI to the Membership. At that time, our stated objective was to accomplish an early turnover without an assessment or dues increase directly attributed to the early turnover.
You will recall that in the fall of 2007, the Membership was asked to vote on an offer from WCI for a two year early turnover that basically would have cost us $3.7 million. (This was down significantly from their initial offer of $12.4 million). At that time you voted to follow our recommendation to reject the $3.7 million offer, but also asked that we continue discussions in the hope that we could get a better deal. If this agreement is not approved by the membership any further negotiations would appear to be futile. WCI will remain in possession for only another year before turnover. The incentive to "get them out" lessens as the year goes on even if they will continue to control the sale of memberships. We cannot pursue legal action while WCI is in Chapter 11, so without approval of this agreement we believe we will have the worst of all worlds i.e., WCI in control and we would be helpless to do anything about it except join the crowd in the Bankruptcy court.
Since that time, the members of the early turnover committee have spent countless hours involved in continuous back and forth discussions, meetings, offers, and counter offers with WCI. Many of these discussions were pledged to confidentiality by both parties so we could not communicate our progress or frustrations to you. We are now at a point in time when we would like to bring you up to date on where we now stand and what we are looking for in the future.
In a letter dated March 26, 2008, WCI offered to turn the management of the Club over to the Membership early (June 30, 3008) for $2,000,000. In addition, WCI included a number (7) of preconditions including, but not limited to, full indemnification of all claims that the Club may have against WCI.
We responded on April 15, 2008 with a counter offer of $1,350,000 for the remaining unsold inventory of equity memberships. We included a listing of our own 33 conditions in a 4 and = page response.
WCI's answer was an unambiguous NO.
After that round of discussions fell apart we all decided to simplify the situation by revising our offer to have turnover occur early but on December 31, 2008 rather than June 30, 2008. In addition, we suggested that early turnover occur by the book i.e., as if all the conditions that would be required for a December 31, 2009 turnover date would occur one year earlier. Remember we were also faced with the fact that the contractual turnover, WCI would keep the outstanding Sports memberships until they were sold (at any price) or for no more than 3 years after that last Paramount unit sold. We knew a clean deal has to include all golf and sports memberships. After three more months of what again seemed like never ending negotiations, we asked ourselves: What price would we support paying WCI for a totally clean deal?
This would be a number that would include all the individual economic, legal, and Membership issues that had been allowing negotiations to become nit-picking and non productive-no breakdown for individual items, just one number take it or leave it. This would include all inventories, Accounts Receivable, all unsold Memberships, WCI's Management Contract for 2009, any pending legal action, and everything necessary to get them out once and for all. The number also had to be affordable and meet our objective of no assessment or dues increase and be attractive to WCI.
Our number is $1.0 million. We made a $1.0 million offer for everything plus a maximum of $100,000 for the Club's actual remaining inventory on December 31, 2008. WCI's negotiators seemed to be extremely interested in this new clean deal approach and were apparently planning to present it to WCI's top management with their recommendation for approval.
Then came August 4, 2008 and the declaration of Chapter 11 Bankruptcy by WCI. The impact of this action would soon become apparent.
As background, let's look at how WCI calculates the value of continuing to manage Gulf Harbour through 2009. Their calculus (not ours) includes operating income of $1.5 million for 2009, $600,000 to $700,000 in Accounts Receivable, and an inventory of unsold memberships worth at least $1,000,000. This totals over $3.0 million. Why would WCI even consider something only one third this amount? The committee believes the threat of law suits by the Club was a serious motivator in getting WCI to the table. However, WCI was in the process of learning exactly what Chapter 11 can do for them.
They soon found out that Chapter 11 protects them from their creditors AND from the law suit currently in place against them as we were notified of an automatic stay by the Bankruptcy Court. Also any future legal action would be a get in line situation. Our fear was that this new, kind of protected, environment would cause them to reconsider the entire concept of an early turnover of Gulf Harbour.
Since filing Chapter 11, WCI has responded with some new demands which have now made what was a clean deal into a slightly messy deal. Even so, we are now able to present to you, The Membership, an Agreement in Principle which WCI has officially accepted. A summary of this agreement is linked here and is subject to (your) Membership and Bankruptcy Court approval.
The question before us is: Do we cut the cord now and deal with the problems we inherit on our own, or do we wait a year and hope that some continued legal action will create a better turnover environment at that time?
Only the Membership can answer this question. Therefore, we plan to hold a Membership vote very soon. On your ballot, you will be asked to choose between authorizing your elected Board Members to approve the agreement with WCI for an early turnover. The alternative will be to reject the agreement and to continue to pursue legal action against WCI and likely negotiations to purchase the outstanding sports memberships. We cannot pursue legal action against WCI as long as they are in Bankruptcy. They will probably be in bankruptcy for at least another year.
As a Member, each of you has a responsibility to make up your mind based upon the issues and values you consider most important. This Committee unanimously believes the Early Turnover Proposal is the best long term solution for the future of Gulf Harbour and recommends that you vote for its acceptance.
Please let us know if you have any questions.
Your Committee for an Early Turnover Frank Caroselli Russ DeVries Don Shapiro Bob Ostrom Bill Rheaume Jack Banahan
Response to WCI's March 1st letter to the membership - March 15, 2008
Gulf Harbour Golf & Country Club
March 15, 2008
Dear Fellow Members,
Your Committee for an Early Turnover would like to take a minute of your time to respond to a letter that was recently sent to you by WCI, dated March 1, 2008.
First of all, we can only guess as to what motive WCI had in sending this letter to you. We do know that a fellow member has filed a lawsuit against WCI, Inc. and the WCI Employees’ who sit on the Club’s Board of Governors, personally as individuals, over a number of issues, which are broadly discussed in WCI’s letter. Our thinking is that their letter is an attempt at posturing their rhetorical position with the Membership prior to actual legal proceedings, and to lower your expectations for our annual meeting to be held on March 31st at 5:00 p.m. in the Clubhouse.
Second, a number of statements and claims Mr. D’Alessandro made in his letter really require explanation or clarification from WCI. Maybe they will be addressed at the Annual Meeting.
We would love to respond or debate each of the contentions raised by their letter. Unfortunately, a published response would enlighten WCI to the details of our position on the issues that are being contested in the lawsuit. This free “heads up” is something we do not want to do, but trust us; their claims are totally without foundation and will be exposed in court.
In the meantime, we can ask you to consider the following:
1) WCI has indicated that they (WCI) have spent $2,750,000 on capital expenditures since 1999. Records that they have provided to us indicate that they have spent $2,616,000. Of this amount, about $1,800,000 came from the 10% to 20% retained by WCI upon the resale of memberships. An additional $418,000 came from the transfer of 1% of revenues to the capital reserve in accordance with the Membership Plan Documents that we all signed. Thus, most (nearly 85%) of the money that WCI spent on capital items came from the Membership, not from WCI. Further, accumulated depreciation to date approximates $7,500,000. WCI has only spent $2,616,000 on replacement and refurbishment (almost a $5,000,000 shortfall), and we have nothing in the capital reserve for the future.
2) The amounts WCI has claimed as capital expenditures have been in dispute every year since 2000. Incredibly, they include expense items such as sand for the golf course bunkers. Clearly, this is not the definition of “capital” expense in our opinion.
3) We estimate that sales of memberships over the nine years amounts to nearly $30 million. When WCI talks about absorbing losses during the early years, they forgot to mention they were making a fortune selling memberships that more than offset any operating losses.
4) You, the Members are being held hostage with the current number of 17 unsold golf equity memberships which enables WCI to continue to (Mis) manage the club until December 31, 2009. The truth is that the Early Turnover Committee has tried to purchase WCI’s inventory of unsold golf equity memberships since early December of 2007. This is one of the scenarios that would trigger an early turnover. Unfortunately, WCI continues to refuse to sell the LAST membership to us until January of 2009. This will allow them to continue to benefit from the positive cash flow that Gulf Harbour provides through the entire year of 2009, and one can only wonder how our services and facilities will suffer.
5) It is correct that one of our earlier member communications alleged that $500,000 had been cut from the 2007 budget. This was a slight misstatement. It should have said that “actual” expenses of our Club for 2007 were reported by WCI to be almost $600,000 less than the expenses were for 2006. That’s right! WCI cut $600,000 from payroll, insurance and other expenses in 2007, while claiming (in their letter to the Membership) that expenses were going up in order to justify another increase in dues to $8,000 for Golf and $2,950 for Sports. We were flabbergasted! We wrote three formal letters to WCI, all requesting an immediate roll back of the dues. They refused. Either way, WCI ended up with a lot of our money in their pocket as services and maintenance declined due to the severe cost cutting. We have formalized a letter (at their request) to review the issues that we found with the 2007 financial statements and now that they have the letter, they refuse to meet with us,
6) The membership did reject the option to purchase up to 25 Golf Equity Memberships in 2002. Of course, they forgot to mention that the members would have had to pay nearly $2.0 million within 60 days of an affirmative vote, and the cost to carry that expense would have to have continued until all 375 memberships had been sold – more than likely, they would have dragged their feet and the sale of the 375th membership would occur sometime around December 31, 2009.
7) We have one other dues comment. Their letter mentions “…the guidelines for setting annual dues.” Regardless of the guidelines (which are actually spelled out in the Membership Plan Documents), the WCI Governors have taken the position that: “Here are the dues for 2008. If you don’t like them, then sue us.”
8) It is true that the Management Agreement entitles WCI to a management fee equal to Club operating profits. However, operating profits have been extraordinarily high due to some unreasonable and, in our opinion, unconscionable actions on the part of WCI. The governing documents require that member dues be comparable with other similar clubs in southwest Florida. An analysis done by the Finance Committee concluded that Golf Members dues should be approximately $7,300 and Sports Member dues should be approximately $2,300. The actual levels provide unreasonable profits. Further, in order to maximize profits, WCI has decreased expenses as mentioned in Number 5 (above). The point is that if dues were at appropriate levels, adequate service was extended to the Members, Club facilities were properly maintained, and Capital Reserves were properly funded, we would have no issue with the resulting operating profits WCI would receive,
Finally, we would invite any Member who may wonder about quality and WCI’s maintenance of your club, to walk into the Club’s Offices and just look down.
Sincerely yours,
Frank Caroselli Russ DeVries Bob Ostrom Fran Weinaug Bill Rheaume Jack Banahan Don Shapiro Attention: WCI… Please Leave… February 15, 2008 On February 11, 2008, one of our fellow members, John Teerling, filed suit in Lee circuit court after WCI controlled officials refused in December to sell him all of the remaining 40 memberships for $1.4 million, the full asking price of $35,000 per golf membership as of the date of his December offer. The complaint specifically names WCI Communities, Inc., Edward Sanabria, Edward D’Allesandro, and Edward Weber as defendants in this case.
Back in early December, just weeks before Teerling tendered his offer, the Committee for Early Turnover made the same offer to purchase all of the remaining Club memberships, and that offer was also rejected by WCI. Although Teerling is not part of the Turnover Committee, or a participant in its ongoing efforts to negotiate and turnover of the club, the Turnover Committee is monitoring John’s case and supports the merits of all six counts outlined his complaint.
While the Turnover Committee continues its efforts to negotiate an orderly turnover and transition with WCI, the Committee is currently focused on holding WCI accountable for the unreasonable 2008 dues increases, which exceeded the average of the clubs WCI listed as “comparable” by almost $700 for 2008. Your Committee’s are going forward to initiate legal action and remedy as provided in the Club’s By-Laws.
Click here for a copy of the Teerling Complaint
Below is a copy of the recent article regarding WCI and Gulf Harbour that ran in the News Press.
WCI sued by resident of Gulf
Harbour A Gulf Harbour resident is suing WCI Communities Inc. in an attempt to get the company to turn over control of the community's country club. Chicago businessman John Teerling filed the suit Monday in Lee circuit court after WCI officials refused in December to sell him the remaining 40 memberships in the upscale south Fort Myers club for $1.4 million - the full asking price of $35,000 apiece. The company's motive, he said, is to delay turnover of the country club because until then, WCI is entitled to keep a lucrative contract to manage the club. "It's called corporate greed," Teerling said. "They should have been out by 2007 by my buying the memberships." Instead, he suspects WCI will continue to stall on selling golf memberships until January 2009, which would let the company keep the contract through the end of that year. Under the contract, members get control at the end of 2009 whether or not the memberships are all sold. The lawsuit asks for unspecified damages for Teerling and also for WCI to refund to the club the entire management fee taken during 2008 and 2009. In 2007, WCI made $1,150,000 from the contract, according to the lawsuit. WCI chief executive officer Jerry Starkey could not be reached for comment Tuesday. Holding WCI Accountable for 2008 Dues Increases - February 2008 Not a day goes by lately that members don’t ask about the unfairness of our 2008 club dues increase. Every one of you received a letter from WCI explaining how our dues increase was necessary because of the rising operating expenses. Once the real numbers were reviewed, we realized that the club’s operating expenses actually went down last year by almost $500,000.00. However, the actual formula for calculating our annual dues, stipulated on our club by-laws, is the comparability of our annual dues as measured against other clubs in the area with similar amenities and services. The January 9, 2008 Members’ Minutes documented our position on this issue: “We have asked WCI to reconsider the level of dues for Golf and Sports Members for 2008. We believe the new amounts do not meet the “Comparability Standard” as required in the Club’s Membership Plan or By-Laws.” We were hoping to work on a compromise that would provide some relief to the existing Members while keeping WCI whole. This was in an environment when WCI gave a discount to 37 upgrading Members of nearly $187,000 while the existing Golf and Sports Members paid for this incentive with their dues increases. Unfortunately, WCI has refused to make any concessions even though the Golf dues at Gulf Harbour exceeded the average of the clubs WCI listed as “comparable” by almost $700 for 2008. It is clear that the second chance given WCI by their bankers has not changed the way they treat their “caught fish”. What follows, for your information, are links to two letters of recent correspondence with WCI, the first link below is the third in a series of letters sent to WCI by your Finance Committee. The second link below is WCI's response. At this time, the appropriate Club Committees have decided it's time to proceed with the legal action as provided in the Club’s By-Laws. We hope that you will continue to support us in this undertaking. Frank Caroselli & Russ DeVries
WCI Announces Completion of Amendment to Revolving Credit Facility and Term Loan - January 16, 2007
Bonita Springs, FL (January 16, 2008) – WCI Communities, Inc. (NYSE: WCI), a leading builder of traditional and tower residences in highly amenitized lifestyle communities, today announced that the Company has successfully amended its Senior Secured Revolving Credit Agreement ("Revolver") and Term Loan Agreement ("Term Loan"). These amendments, which extend through June 30, 2009, modify, suspend or waive certain covenants and provide the Company with greater operating and financial flexibility to allow the Company to continue to manage its business during this industry downturn. The Company also reduced the total commitment available under the Revolver and the outstanding amount of the Term Loan, converted a portion of the Revolver to non-revolving status and agreed to increase the pricing on the loans. Jerry Starkey, President and Chief Executive Officer of the Company, said, "We appreciate the continued support of our senior lenders and believe that these amendments enhance WCI's financial flexibility to help navigate through this difficult market. The Company remains focused on generating cash flow to reduce debt and strengthen its balance sheet. We continue to aggressively reduce overhead and search for avenues to lower our cost of doing business without sacrificing the high quality of our products and services which WCI's customers demand and expect." For more information go to: http://www.wcicommunities.com
WCI Raises Limited Discount Prices - Memberships are now $38k for Golf - $7k for Sports. - January 10,2008
News Press Article - January 1, 2008
Country club coup at Gulf Harbour
A Gulf Harbour resident is trying to pry WCI
Communities Inc. loose from control of the south Fort Myers community's
country club by buying out the remaining golf memberships before today.
Teerling said that WCI sent him a letter last
week refusing his offer.
WCI President Jerry Starkey did not return
repeated phone calls. But if the company had sold the last remaining club membership by Dec. 31, it automatically would have triggered
turnover of club management to residents on
Jan. 1. With no sale, WCI continues to manage the club through the end of 2008
and if any memberships remain unsold by then, WCI keeps control through Dec.
31, 2009, at which time the members automatically get control.
The members have been trying to dislodge WCI
from its management contract since May 2006, but negotiations since then have
been fruitless, according to a report issued to the members Oct. 9 by the
Early Turnover Committee.
The developer has a long history at Gulf Harbour, which has more than 2,000 residents. One of WCI's predecessors, Florida Design Communities, took over the community in 1993 from Ramar Group, the original developer, which started it in 1981 but ran into financial difficulties in the early 1990s.
Member Buying Remaining Golf Memberships - WCI Balking? - December 22, 2007
From: Jwteerling To: jerrystarkey@wcicommunities.com richardneuman@wcicommunities.com Sent: 12/22/2007 2:10:49 P.M. Eastern Standard Time Subj: Purchase of remaining golf memberships Gentlemen; You have in your hands a deal from me to buy out the remaining Gulf Harbour golf memberships and turn the management of running the club over to the membership. The buying of these golf memberships by me is to be completed by December 31, 2007, and the club turned over to the membership on that date. I want a 60 to 90 day transition period for turnover and every employee on the pay roll at the time of turnover will remain employed by Gulf Harbour golf course, not WCI. I was told that WCI corporate discussed this proposal and even brought in your legal team to look at it. I was also told that there has been no determination made yet. There is not much time remaining on my proposal. I cannot understand why WCI can't make a decision considering the financial turmoil that the company is experiencing especially with the banks. I am returning to Florida December 29th and if my proposal is accepted, we can do the transaction on either December 30th or 31st. I was e-mailed from a friend this Saturday morning who lives in Gulf Harbour and was told that another sports member yesterday upgraded to a gulf membership. With the financial dilemma that WCI is in, why is WCI taking less for a membership than I am offering? I have to wonder what the shareholders of WCI would have to say, and that of course includes Carl Icann. Waiting for your response. JT Impact of WCI's Gulf Harbour Membership Fire Sale - December 21 2007 As of December, 21 the impact of WCI's membership marketing program are as follows:
One of our members has made an offer to purchase all of the outstanding golf memberships. WCI accepted his down payment and he is waiting to hear from them to make final payment. This purchase will terminate WCI's managment of the Club effective December 31st.
WCI Increased Fire Sale Membership Discount - Memberships are now $35k for Golf - $6k for Sports. - December 2007
Anyone considering the promotional offers might also think about holding off until the Members can take control of the Club. This may not be too long. At that time, prices (although there are no guarantees) would be more than likely comparable to what WCI is asking, BUT you would be purchasing - not from WCI - from some current Member on the resign list. Who would you rather give your money to?
According to WCI's COO, David Fry, told our representatives on the Board of Governors that WCI's latest marketing plan to discount Golf memberships from $85,000. to $35,000. and Sport memberships will go from $23,000. to $6,000. as of December 5, 2007. Our representatives to the Board of Governors were shocked and disappointed that WCI did not provide advance warning of such a plan and the fact that WCI did not give the members a chance to respond.
The decision by WCI to lower the initiations fees at Gulf Harbour has the potential to cost the current Membership over $21 million in market value. The initial sale of a golf membership at $45,000 may cost the member at the top of the resign list $31,500. The Club's ability to fund its capital reserve will also be affected and could reduce that funding by as much as 50%.
December 3, 2007 - Update: The newly
announced drop of initiation fees by WCI from $85,000 to $35,000 and $23,000
to $6,000 has not been signed off on by WCI management YET. However, it
may happen at anytime. Frank and Russ think it is good idea to get the word
out to you and your friends, that IF you were contemplating getting on the
resign list... do it ASAP. If you beat the deadline when WCI officially
drops the initiation fees it may provide you with future financial
advantages, by locking you in to the higher number in order to receive a
better future residual valuation. They think you should only do this if it
was your intention anyway.
2008 Dues - December 2007 The Board of Governors has been informed by WCI that the following dues increases will be effective for 2008:
November 6, 2007
Dear Equity Member:
We would like a moment of your time to report the results of the recent Membership vote concerning the issue of the “Early Turnover” offer from WCI, Corp. You will recall that this vote was taken following months of negotiations between the Turnover Committee and representatives of WCI. We were asking the Members to either:
1) Accept the $3.7 million offer subject to developing a yet to be determined Financing plan that would require a separate vote of approval by the Membership, or 2) Reject the current offer but keep the door open for a more favorable opportunity in the future.
Of the Members who voted, 210 out of 218 or over 96% of the Golf Equity Members and 371 out of 380 or over 98% of the Sports Equity Members voted to REJECT the offer from WCI but keep the door open for a more favorable opportunity in the future. While this vote is a clear statement in itself, we think that it should be considered in light of other facts and factors that will influence the direction that we will be taking in the future.
Eighteen months ago, the Membership voted (92%) to authorize the development of a plan to turn the Club over early. Clearly, you wanted to have a plan for early turnover. Since that time, we have tried to make sure that you would have the information and knowledge regarding the complex issues such as dealing with WCI’s inventory of unsold memberships, the ownership of the lakes, and the operating income WCI would forego by leaving two years early.
Your input from the vote, the Town Meeting, and comments made to us has caused us to conclude that, “The Members still want a plan for early turnover and independence from WCI. You just did not want the one that is currently on the table.” As a result we have prepared the attached open letter to WCI, Corp. that proposes the continuation and extension of negotiations with the objective being an acceptable plan for early turnover.
We wish to thank the Membership for their vote and their overwhelming support for this important issue. As is our practice, we will keep you informed as negotiations and plans develop over the next few months.
Sincerely yours, Committee for Early Turnover Frank Caroselli Russ DeVries Don Shapiro Fran Weinaug Bob Ostrom Jack Banahan Bill Rheaume
Reading between the lines of the October 17th Board of Governors Meeting (read minutes) - October 2007
Membership to Vote on WCI's Last Offer... Important Town Hall Member's Meeting October 23rd, 7:00pm -
The early turnover committee recently mailed a letter (Turnover Letter To Members) (copy of Turnover Vote Ballot) and a voting ballot to all Gulf Harbour Golf & Country Club members explaining the progress of early club turnover negotiations, and the last offer presented by WCI of $3.7 million for an early turnover purchase of the club by the end of this year. Ballot's must be returned to the club by October 31, 2007. The turnover committee members are recommending that the membership reject WCI's offer. An important town hall meeting will be held Tuesday, October 23, 2007, 7:00pm, for all club members at St. Columbkille Catholic Church on Iona Rd. to discuss the upcoming vote, the background on this year's negotiations with WCI, and why the committee is recommending that the membership reject WCI's $3.7 million offer. Each of you will have to make your own decision based upon the desires, circumstances and factors that are of importance to you. Your vote will determine the future of how and when the Club is controlled by you. Every vote will count so please vote. Club Does Not Own Any Lakes According to Revised County Tax records - October 2007 Based on the documentation submitted to the Lee County Tax Collector’s office, a new STRAP No. has been assigned to the specific lakes: (i) part of Tract Q, (ii) Lake B-1, (iii) Lake Q, (iv) Aqua Range and (v) Lake Q-1 and the ownership designation has been changed to show ownership by developer WCI Communities, Inc. The new STRAP No. is 30-45-24-07-0000B.0050. The old STRAP No. 30-45-24-07-0000B.0010 remains in effect; however, the land assessed under this old STRAP No. now includes only golf course property and the club recreational facility. Sports for Golf -- Golf for Sports... Your Membership Can NOW be Swapped - October 2007
Whether you want to
exchange your equity sports membership for an equity golf membership, or swap
your equity golf membership for an equity sports membership, thanks to a July
vote by the Club's Board of Governor's it is now possible for any Gulf Harbour
Club member in to exchange or swap their membership with another Club member.
The rules affecting
these equity membership exchange transactions require that each member follow
the membership plan policies regarding the transfer of equity memberships, and
each member involved will be responsible for paying WCI the appropriate
retention fee for the membership you currently own. For example: If sports
member Smith wants to swap memberships with golf member Jones, each member
will be required to pay WCI 20% (founding members will pay 10%) of the
current membership fees respectively. Sports members will pay $23,000.00 x 20%
= $4,600.00. Golf members will pay $85,000.00 x 20% = $17,000.00.
Now Mr. Smith and Mr.
Jones may decide to swap their respective memberships for no additional
compensation to each other, or they may privately negotiate some mutually
agreeable additional compensation between themselves. Any additional monies
exchanged between the members privately has no impact on the fees due to be
paid to WCI.
If you're interested in
exchanging memberships you need to begin by finding a fellow Club member with
the type of membership you would like to exchange for. The two of you
should discuss the financial terms that both of you would accept in order to
make this exchange happen. Next you should notify the club membership office
in writing about your intention to exchange memberships, request specific
information from WCI on how the transaction will proceed, when payment to WCI
is expected, and ask them to provide specific information about how long it
will take to process your membership exchange. Our member representatives
to the Board of Governors believe we can expect an official announcement
regarding this issue after the October 16, 2007 Board of Governor's meeting.
Rick Newman takes over as the Club's new General Manager - September 2007 Rick Newman comes to Gulf Harbour from WCI's corporate management team. Rick has been with WCI for over 10 years, and at one time actually served on the Gulf Harbour Board of Governors for WCI. Negotiations move slowly and continue into September - September 2007 Our negotiating team believes they will have something back from WCI in the coming weeks that could possibly be their final offer from the current management team. If the terms are still not acceptable, it may not mean that the negotiations are over. Negotiations go to a higher level - August 2007 The member's negotiating team of Don Shapiro and Fran Weinaug met with David Fry, WCI's COO, and WCI's lead negotiator, Paul Erhardt late this month. Mr. Fry is the highest level WCI executive to meet with our negotiating team to date. Our team reports that the discussion was both cordial and informative for both sides. Terms of a potential early turnover were presented from both sides and Mr. Fry said he would consider their options and get back to our negotiating team in 2-3 weeks. Our negotiating team impressed the immediacy of this situation as they believe that if a deal is not forth coming by the end of the year, we should give up the early turnover idea and turn or attention to preparations to an inevitable January 1, 2010 turnover. John Gardner Resigns - August 2007 On August 22nd our club manager, John Gardner, announced to the Gulf Harbour staff that he had resigned and was taking a position as Club Manager at Quail West in Naples. Negotiations continue - Naples law firm hired on retainer - May 2007 To date our new negotiating team of Fran Weinaug and Don Shapiro have had two very productive meetings with WCI' s new lead negotiator, Paul Erhardt. Paul has provided previously undisclosed financial information to the Turnover Committee for analysis. While we're still a very long way from striking a deal, Don and Fran believe the improvement in cooperation and constructive dialog is putting the negotiations back on track. As a by product of this new tone of cooperation from WCI, Frank and Russ have seen convincing documentation issued by Chicago Title Company that shows ownership of the ownership of lakes that have been in question are in fact owned by WCI , not the Club. The next step is to have Lee County change the “Owner of Record” to reflect this new information. Thanks to the support of the membership with the recent creation of the GHG&CC Legal and Professional Expense Fund, last month the Turnover committee engaged the Naples firm of Porter Wright Morris & Arthur, LLP to help analyze, interrupt, and respond to early Club Turnover and by-law issues that Committee believes are critical to the best interests of our members. Committee members met with one of the Porter Wright Morris & Arthur's litigation attorney's who has experience dealing with Club turnovers, and specifically WCI club turnovers. The attorney has already provided the Committee with valuable insights into the Turnover process, he attorney stressed the need for our Club to tap into the expertise and talents of our membership to make the eventual turnover as smooth and successful as possible. To that end Committee encourages members to volunteer their services and time. The committee for early club turnover would like to remind all members that we could still use your donations if you haven't done so already. They are suggesting that all Golf Equity Members donate $150.00, and all Sports Equity Members donate $50.00. Checks should be sent to: Mr. Jack Banahan, 14888 Crescent Cove Dr., Fort Myers, FL 33908. More information is available on our web site at www.gulfharbour.net/club
Negotiators for Early Turnover of the Club Announced - March 16, 2006 Fran Weinaug and Don Shapiro will be the chief negotiators for the membership in future club turnover negotiations with WCI WCI Putting Money Back In Gulf Harbour Club Accounts - March 5, 2007 Thanks to the persistence of our Club Board of Governors representatives, Frank Caroselli, and Russ DeVries, WCI recently announced that it has decided to return the annual dues money they typically sweep into the general accounts of WCI back into the club's own checking account. For those members concerned about WCI's financial viability this action gives everyone hope that if WCI were to falter financially there would still be some funds in the club accounts to keep the club operational. For years WCI has violated the club's by-laws by transferring the approximately 4 million dollars in dues, paid by members at the beginning of each year, from club checking accounts into WCI's corporate accounts. At the annual meeting in February, Ed Sanabria, president of the WCI amenities division, explained that club bills and operational expenses were always paid from the WCI corporate accounts. At that meeting several members, including Fran Weinaug the chairman of the finance committee, pointed out to Mr. Sanabria that the club's by-laws specifically state that these funds must remain in a "club" account for the payment of operational expenses. It looks like the decision to create a legal and defense fund is paying dividends for the members. Thanks to the money voluntarily donated by club members to establish the GHG&CC Legal and Professional Expense Fund, Frank and Russ were in a position to tell WCI, in a subsequent Board of Governors meeting, that the turnover committee and the general membership are very unhappy about the co-mingling of our dues with their corporate funds, especially in light of WCI's recent financial woes. Frank and Russ made WCI aware of the fact that club members were retaining legal counsel and considering our options regarding this and other questionable WCI club management practices. Last week WCI announced it will be restoring membership dues to the club's accounts and suggested there may be more discussions about a potential early turnover in the coming months. The committee for early club turnover would like to remind all members that we could still use your donations if you haven't done so already. They are suggesting that all Golf Equity Members donate $150.00, and all Sports Equity Members donate $50.00. Checks should be sent to: Mr. Jack Banahan, 14888 Crescent Cove Dr., Fort Myers, FL 33908. More information is available on our web site at www.gulfharbour.net/club
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