Rezoning Informational Meeting 1 MCA Responses to Questions and Comments

MCA Responses to Questions and Comments From the Nov 20, 2014 Rezoning Informational Meeting

What could happen to The Meadows over the next decade?

We live in a 40+ year old golf course community. We are one community; it is not “them” (TMCC) and “us” (MCA). Our community is interwoven with 3 golf courses; the majority of our 3500 homes have a golf course view; all property values benefit from the golf course staying beautiful. The continued success of TMCC is vital to The Meadows and the MCA.

We are situated in the best location in Sarasota. We have the benefit of a short drive to the arts, culture and beaches of the best small city in America. New development has boomed all around us, causing our property values to keep up. Upcoming events will enhance those values more, and make The Meadows a desirable place for new residents.

However, many of our homes and buildings, especially at the Club and shopping village, are old and in need of maintenance; some are obsolete. There is massive competition in housing and in the golf industry. Rounds of golf are down, nationwide, and are expected to be even less. Membership is down. The Club is losing money each year. Maintenance is being put off. The Club must do something to reinvent itself or, in the near future, all Meadows residents could suffer.

The new arrivals in Florida may be reluctant to move into a community with an uncertain future. It may be reasonable to assume that there may be less demand for older homes on poorly maintained, public golf courses. However, it is reasonable to project that they will buy up homes along fairways and build new ones; two at a time in some cases, and build one nice new house where two have been. This is being done over and over in other areas that are booming. Rising property values generally stimulate such redevelopment.

There are very few places to develop and revitalize The Meadows. There appears to be little appetite for the Club to build condos on the golf courses. We can’t redevelop the Shopping Village; we don’t own it and the owner has rejected all of our efforts to acquire it. We can’t develop under the power lines. We don’t want to build on our sports field/playground area. We want to preserve our nature trails and exercise course. Existing neighborhoods would have to decide for themselves, with coordination from the MCA, if Rezoning Informational Meeting 2 MCA Responses to Questions and Comments redevelopment is desirable. We even want to preserve the vast majority of open space along 17th Street.

We have selected the very few areas where something can be constructed to strengthen TMCC and the MCA, and which won’t significantly impact the beauty and quality of life in The Meadows.

Of course, if the zoning goes through, and a resort/hotel is built, no one would deny that there will be activity in the Club area; but there is now on numerous occasions. Longmeadow was built to accommodate much more traffic than we have now, and the Club used to have many more members.

Also, if residential units are built back behind the corner of Longmeadow and Highlands Bridge Road, good design should limit their visibility through the trees. Maybe there will be a few extra cars on the roads from those units. Those things cannot be denied; however, the alternatives of doing nothing could affect all property values and quality of life much more.

Who owns the properties?

The club owns the Club area. the MCA owns the 9.2 acres on 47th Street, a portion of the northwest corner of Longmeadow and Highlands Bridge Road and the corner of 17th and Hammock Place.

How do the MCA projects help the Club? Why are we doing them? the MCA portion of the rezoning may not directly help the Club; at least not in the very short term. These projects would make the MCA stronger financially to keep assessments down in future years. The great infusion of cash to The Club can help with needed maintenance and capital projects.

If the MCA had to assess all MCA members in the future, our assessments would increase 30% to 45% just to offset current needs at the Club. To bring TMCC to higher, top notch standards with new buildings and other needed capital improvements that number would surely increase.

Was the November article inaccurate?

The November issue of The Meadoword article was written at a time when a developer was interested in building a hotel at Longmeadow and Highlands Bridge Road on MCA property. Rezoning Informational Meeting 3 MCA Responses to Questions and Comments

The current proposal is to rezone for a future resort/hotel, or multi family units, in the existing club area where there are many other buildings and parking lots.

While some interest has been shown, there is no developer involved in any of the projects. Proposals may be taken should the rezoning go through. If no acceptable proposals are received because of either unfavorable market conditions or because the MCA and the Club find them unacceptable, then no development plans will move forward.

Options for doing nothing, a threat?

You have heard and seen the current status and projections for TMCC.

We have an obligation to consider the various options available. If the Club operates at a loss each year, eventually there will need to be some changes.

The likelihood is that maintenance will be cut to the courses, buildings and equipment; that will affect the property values of everyone in The Meadows. All courses could become poorly maintained public courses, and the private club would be no more.

The state law (Chapter 720, (6)(a)) allows a homeowners association to assess all its members for “recreational amenities, whether owned by the association, the developer or another person.” In legal language, “person” means “corporation,” such as TMCC. So it appears that the law allows the MCA to assess all members for TMCC maintenance. We do not want to exercise that option, unless there is a majority of property owners that want to support the Club financially.

Thirdly, the idea that units can be built on a golf course, whether or not the residents like it, is close to home. Forest Lakes Country Club on Beneva sat vacant with high grass and weeds for years; now a developer is restoring most of the course but some units are going to be built where part of the course used to be.

We think the alternative of doing this rezoning will be less intrusive than what might happen by doing nothing. It removes one key hurdle in a process giving the MCA and Club more flexibility should new circumstances call for relatively quick action.

Shopping center has vacancies; is there too much office space available?

It was suggested that there is a glut of office/commercial space in our area, including our own shopping village. Our shopping village has some long-term anchor tenants such as the dentist, travel agency, Mona Lisa, the bank, the hairdresser and more. We have tried to buy Rezoning Informational Meeting 4 MCA Responses to Questions and Comments it several times, overtly and covertly, but it is not for sale at any price. There are very few (major spaces) vacancies.

Also, the big Click Booth buildings up on Honore were cited as being vacant. They were for a long time. However, there appears to be businesses there now, and if the economy continues to improve, the building are projected to fill up.

If we are able to get a rezoning for the corner of 17th and Hammock Place, we will have appraisals done to verify the cost and need of office professional space. If the studies show there is no need for that type of space we will not seek proposals.

Explain funds to be made, what might be done with them for both Club and MCA ... How much, how long?

The asking price for a nearby 3-acre hotel site(vacant land) is $2.6 million.

A conservative estimate of the value of this rezoning to The Club is that they could make $1,000,000, perhaps more, selling some acreage to a developer to build the resort/hotel in The Club area. There might also be some significant, additional annual income from the resort and the possibility of new members. The Club stands to make another $800,000 or more, if condominium units can be built in The Club Area.

If the MCA sells the 9.2 acres on 47th Street for single family homes, and land for “ tennis villas,” south of the tennis area, we stand to make over $1,000,000. Additionally, we will make over $100,000 per year in annual assessments from all of the properties being rezoned, once the buildings are complete. Don’t forget that Kobernick and The Club pay annual assessments to the MCA based on their values. When those values go up, the MCA gets stronger. That should keep assessments down for many years.

Assessments to all owners?

The state law (Chapter 720, (6)(a)) allows a homeowners association to assess all its members for “recreational amenities, whether owned by the association, the developer or another person.” In legal language, “person” means “corporation,” such as TMCC. We do not want to exercise that option.

Assessments to newcomers?

Our documents do not require individual owners to join the Club and all properties are individually owned in The Meadows. Our documents do not allow our Board to make changes that affect the voting interest (based on value of property) of our members. Rezoning Informational Meeting 5 MCA Responses to Questions and Comments

Requiring owners who want to sell, to require their buyers to join the Club, would make a “cloud” on the title and make sales more difficult. This would obviously affect the value of the property, and also, the voting rights of the owners.

Units to be built near the corner of Highlands Bridge Road and Longmeadow?

The rezoning request put forth by The Club and MCA is for up to 34 units to be built on this wooded 5 acres. the MCA will have control over what is to be built. We will only approve quality construction, saving as many trees as possible, with mature trees to remain as a buffer on both streets.

Wetlands? Green space and habitat reduction?

There are no wetlands northwest of the corner. The five acres are surrounded by two busy streets, tennis courts, and a canal/exercise trail. The habitat is too small, and too hard to access for permanent residence by large predators such as bobcats.

The green space requirement for new Planned Unit Developments is 30%; we were developed with 50%. So we have 100’s of acres more than required by new development. Even so, we will be affecting only an insignificant amount of acreage and trees will be protected, as much as possible, even if it means less units.

Hotel makes The Meadows public? Commercial?

The public has been playing golf on two of three courses for years. That is commercial. It is anticipated that guests at the resort would use the roads less than members of the public because they can walk to Club facilities.

Conference Center?

Someone mentioned conferences as if large groups would meet in The Meadows and clog up the roads. There is a market for small conferences and there are tens of thousands of them meeting at similar sized locations every year. Any small resort/hotel would only be able to host small conferences. This would be a great source of revenue for the resort and most likely TMCC would realize some income from this revenue stream. Conference guests would frequent the restaurant and conference rooms, play golf and tennis, and not use the roads to do those activities. Rezoning Informational Meeting 6 MCA Responses to Questions and Comments

Parking?

Experienced developers have looked at the size of the Club area and determined that there is room for sufficient parking. In any case, no development can be permitted by the County or the MCA that doesn’t have adequate parking.

Building size and height?

Building size and height will be limited by county and MCA requirements for landscaping, parking, setbacks and space needs of Club amenities and operations. It could be a maximum of three stories; the mature trees, in the Club area, are taller than 3 stories.

MCA sites that, if entitled, can be kept for future construction, if there is no urgent need to proceed.

It is true that we don’t need to do anything once we have the entitlements from the county, and the MCA would not do anything unless it is needed to strengthen it financially. So, if is a need arises for additional revenue, to keep assessments down, we will be able to proceed with requests for proposals.

What is the Highlands Planned Unit Development (PUD)?

The Highlands Planned Unit Development was approved in the early 1980’s, some 7 to 8 years after The Meadows PUD. The Highlands includes most everything on Highlands Bridge Road except the corner east of the canal, and most everything out Hadfield except the Stable property. The Highlands was approved for 387 units, and all of them were built. The two PUDs were merged in the early 1990s.

The proposed rezoning does not include The Highlands PUD, only The Meadows PUD.

Not the farm by HG and SC

The 9.2 acres fronting on 47th Street, proposed for 12-16 residential single-family units, is not the farm property by Hadfield Green and Scarborough Common, once proposed to be brought into The Meadows. Rezoning Informational Meeting 7 MCA Responses to Questions and Comments

Why did the MCA make a $17,000 contribution to new driving range? What authority do we have to do that? the MCA did make a contribution to support the new public side driving range. Our documents allow our Board to take action for the health, safety and welfare of all residents of The Meadows. The new range is serving to bring in revenue from new public play. As said many times, the success of TMCC and The Meadows go hand in hand.

Who makes decisions? (See the Club’s fact sheet for TMCC process)

The Meadows Community Association Articles of Incorporation and Bylaws give the MCA board the authority to buy and sell land, enter into contracts and do what is necessary to protect the health, safety and welfare of the MCA members. Our Board acts as elected representatives of ALL MCA members.

What feasibility study was done?

The first phase of a feasibility study for a hotel/resort in the Club area was completed in October. the MCA and Club shared the expense, which was about $6000. The well-known and respected consultant interviewed hoteliers, public officials and studied the local market. The study concluded that a 70+ room, extended stay hotel, with kitchen facilities, at a reasonable average room rate, with a occupancy rate typical for our area, could be feasible.

The economy can change, demands can change, other hotels proposed to be built may or may not be built, more major events can come to our area, so when undertaking a rezoning of this nature, the MCA and Club have proposed asking the county for slightly more than expected, so that the market can dictate what might be built. That is why we are requesting a resort/hotel/multi-family zoning of 70-125 units.

Were any hotel people consulted? The feasibility study addressed this. They were.

What is the approval process, and who pays?

With four distinct sites involved, and three entities involved — Kobernick, the MCA and Club — there is great opportunity for sharing the costs of this rezoning. Three of the sites involve the MCA — 47th Street, the northwest corner of Longmeadow and Highlands Bridge Rezoning Informational Meeting 8 MCA Responses to Questions and Comments and 17th Street. TMCC and Kobernick each have one site. The total cost should not exceed $80,000; TMCC and Kobernick’s cost should not exceed $20,000 each, and the MCA share, for 3 sites, should not exceed $40,000. There are pre-application and application fees to the county, additional review fees to the county, traffic studies and additional engineering studies regarding water, sewer and drainage, environmental, habitat and even historical resources studies to be paid for.

So far we have just had a pre-application meeting with county staff. We must go through a much longer process to get the rezoning, then through the site plan process before anything could be constructed. There will be a required neighborhood meeting at a later date, if we proceed, then planning and county commission meetings where public hearings are held.

I-75 noise?

There has always been noise from I-75 on the eastern side of The Meadows. There is a “drone” from the highway, mostly constant during busy times, but marked by the acceleration/deceleration of large trucks.

Long before the park was developed, the MCA contracted for a noise study by a firm from Tampa. They found the more significant noise was coming from Honore and mowing in The Meadows.

When North Cattlemen was built, some of the buffer plants on the east side of the lake were removed. According to the county, they plan in place to install more plants there in 2015, to help block some of the I-75 noise from coming across the lake.

Rezoning Q&A Country Club Questions

Is the Club in danger of failing in the next 12 months?

The club can survive; however, the issue is what it will need to do to survive and how that will impact the community. The club is faced with having to further reduce expenses to operate without an assessment. The expense reduction will include maintenance on the golf courses which will impact the out of play areas many of which are behind the homes that line the courses. This is necessary to provide the much needed funds to maintain equipment and buildings. Rezoning Informational Meeting 9 MCA Responses to Questions and Comments

So yes, the Club can survive, however a bad month of weather in the peak revenue season or multiple equipment failures will mean more cuts and eventually those cuts can affect the value of the Club’s property as well as the property bordering the Club. Without some change in the community make up such as new residential construction or even a possible hotel, the community will not attract new residents that are potential club members. The recent census puts the average age in The Meadows at 73, which is not a good demographics for club membership. The rezoning could invigorate the community and add a younger affluent element more inclined to join the Club.

What has the Club done to close its funding gap and cut the shortfall in its budgets?

Since the downturn in 2008, the Country Club has lost over 200 members. We have compensated by enhancing revenue and cutting expenses.

From an expenses standpoint the Club has: • Reduced expenses as much as $1.4 million annually, most of which have been in payroll. • Reduced staffing by over 20 employees including five from the golf course maintenance crew • Given only 2% in general pay increases over the past 5 years. • Reduced the General Manager’s contractual compensation by over 25% • Eliminated the Club’s contribution to the staff’s 401k • Negotiated changes to phone systems, supply contracts and other general expenses. • Closed the tennis shop in mid afternoons. • Closed the Center Court restaurant kitchen on slow evenings • Eliminated the staff at the Fitness Desk except in peak hours • Closed the Fountain View Lounge on Sundays and Tuesdays in the off-season. • Reduced the frequency and eliminated the maintenance of some out of play areas on the golf courses. • Reduced the frequency of fertilization and chemical applications on the golf courses. • Reduced the dollars for the maintenance, repair and replacement of equipment. • Eliminated the printed Meadow strokes newsletter and statements. From an income standpoint, the Club has: • Opened the Highlands golf course to the public year round. Rezoning Informational Meeting 10 MCA Responses to Questions and Comments

• Opened The Meadows golf course to Big Summer Card golfers. • Introduced a membership category to attract younger members • Opened the Centre Court Lounge to public golfers and residents • Built a driving range for public use to generate revenue and attract golfers. • Set up a public golf operation including a separate golf shop, sales personnel, websites and Internet marketing.

Why doesn’t the Club get an auditor to come in and tell the Country Club where operations need improving?

The club has an outside auditor who reviews the Club’s financial records and operations and reports recommendations privately to the Board of Governors and Finance Committee. The club’s operations are also reviewed and compared with other area clubs to look for opportunities for savings. The majority of a country club’s operational expenses are in payroll (usually over 50%), golf course maintenance and the restaurant operations. The Meadows Country Club’s 2012 operations were compared using the figures published by RSM McCladrey the largest country club auditing firm in the US. The comparison figures used were for the Clubs in Florida and particularly in TMCC’s region. Below is a list of comparables for the major areas of the Club’s operations;

Average payroll expense per member, including benefits and taxes: • Southwest Region of Florida Country Clubs $6,600 • The Meadows Country Club $4,300 Average number of members per employee: • Southwest Region of Florida Country Clubs one employee per 5.2 members • The Meadows Country Club one employee per 9.1 members Average cost per hole to maintain a golf course with more than 18 holes of golf: • Southwest Region of Florida Country Clubs per hole maintenance expense $82,000 • The Meadows Country Club per hole maintenance expense $44,478 Average cost per acre to maintain golf courses: • Southwest Region of Florida Country Clubs per acre expense $11,400 • The Meadows Country Club per hole maintenance expense $6,477 Rezoning Informational Meeting 11 MCA Responses to Questions and Comments

Food and beverage Losses (typical for private clubs). The 2012 average per member loss in Florida country clubs was reported as: • Average in all Florida Country Clubs was $1,210 loss per member • Average in our Region was $790 loss per member • Average for The Meadows Country Club was $240 loss per member

The Auditor has suggested procedural improvements and has commented on the decline in membership as an issue the Club must address. The auditor has also commented on the fact that TMCC’s cost of operations are significantly lower than the other clubs they audit.

Why don’t they bring in a management company to get their expenses in line with their income?

There are three categories of management companies and at one time or another they have all been investigated by previous Boards and or Board members.

• Private club management firms rarely have the expertise or the interest in managing BOTH private and public golf operations. These are vastly different business models. As a result, private club firms do not generally have corporate staff that know the public business and cannot show any core competency. There are private club companies managing clubs in Tampa. However, these are fairly high- end clubs (the TMCC ex golf pro from the 1990’s is at one of them) and many of them are still struggling. In addition, none have ventured into our region because they require fee guarantees and commitments from the Club to spend what it takes to have a high quality club. The firm’s reputations are based on the quality of the Clubs they manage and their cost of operations for their clubs are higher when compared to TMCC. • Public golf management companies focus on “getting rounds on the golf course.” They do not have expertise in membership or in building value for the Club. They also do not generally have expertise in tennis, fitness or dining and will propose leaving management of those areas to the Club. Without adequate support and any focus on membership there are no examples we have been given of a public golf company that has taken a struggling private club and helped it regain its membership. • Rescue management companies are the choice of last resort, often used by banks when they foreclose; or for clubs who believe they have no other options. There is one in this area and they manage 4 clubs. At one well-known course, the golf course maintenance staff were terminated without notice (Sheriffs Deputies were present and long term employees were escorted off the property) and replaced by a crew Rezoning Informational Meeting 12 MCA Responses to Questions and Comments

less than half in number (at a much lower cost to balance the budget). The resulting conditions are not the conditions Meadows residents would find acceptable and are exactly what we are trying to avoid. Their track record shows no ability to turn a club’s membership around or to maintain the level of quality for the tennis, fitness and dining operations present when they were retained. However, what they do is cut the cost of operations to match the income after taking their management fee. The poor conditions at these clubs speak for the quality of the operations. So to again answer the question again “can the Club survive” the answer is it could survive for an extended period of time, under the same drastic conditions as the Club’s managed by this firm, is that what we all want?

The Board will continue to look at the option of retaining a quality management firm, if there is one with a track record of improving clubs in our situation, which has not been the case thus far; especially as we get closer to the end of the General Manager’s current contract on December 31, 2015.

Why doesn’t the Club just improve its marketing plan to increase golf play and new memberships?

The club has both public and private marketing plans. Our private plans include: • A two-month free promotion for new annual members. This has gained us 32 new members in November. • The two-month free is also extended to members who upgrade from a lower dues category to a higher category. Such as from Sports to Tennis or Golf. • Members who left the Club a year or more ago are offered an incentive to return. • Existing members are hosting new community residents and the Club is offering the new residents a month’s free membership to get acquainted with the Club. • Members of the membership committee are working with downtown condo associations to promote membership. • The club places membership information in businesses, the hotels and golf stores around Sarasota and Manatee • We use on line marketing including Google and email marketing. • We use direct mail marketing • We have print ads in golf, business and tourism publications and television ads on ABC7. • We have membership ads on the GPS screens in the golf carts used by the public and we put printed membership material in the carts. Rezoning Informational Meeting 13 MCA Responses to Questions and Comments

The club’s public golf marketing includes: • Website for both the Highlands and Groves golf courses • Email promotions to over 6000 email addresses that have registered with us. • Promotional rack cards in hotels and golf merchandise stores. • Print ads in newspapers, magazines and tourist publications • Google search marketing • Direct sales to groups and golf tournaments promoting them to hold their functions at our facilities.

To give you a perspective of our market: • There are slightly less than 600,000 people in our Sarasota/Bradenton market. Publications show we have 68 golf clubs or facilities which have 82 golf courses. By comparison, there are 1.3 million people in Nassau County on Long Island where there are fewer than 30 golf clubs and facilities, some of which are struggling. • This is a very competitive market, especially in the off-season when prices are very low. Despite that, we have grown our market share of golf rounds on our public courses every year. • Our main issue is the same as other local clubs and that is the lack of people joining as Full golf members. • However, we have been able to attract new members in our Young Professional, Sports and Tennis categories; just not in sufficient numbers to offset the decline in Full members.

If the Club loses money in the summer and pays it all back after the season, and has stabilized at the current level of members, why are we doing this?

The club does lose money in the summer but historically has been able to recover most if not all of it in the season. However, because of the decline in membership, the Club has had to make up more of the shortfall every year by cutting maintenance and services in order to come close to balancing cash flow.

The key to the Club’s future is membership and a revitalization of the community will attract a new demographic which can energize and provide new opportunities for The Meadows and our membership. Rezoning Informational Meeting 14 MCA Responses to Questions and Comments

Are we being misled; doesn't the Club somehow lose 100s of thousands of dollars each year? How much does the Club expect to lose every year?

The club operates at a breakeven point to a slight cash flow loss, but to do so it has had to set aside facilities and equipment maintenance and not fund depreciation, which is a net income loss. This cannot continue or the conditions will deteriorate to the point it negatively affects all of our values.

The club needs a strategic plan

The club has a strategic plan, which was developed with many hours of planning by the Board of Governors with the help of an experienced moderator.

Can the Country Club Board of Governors make the decision to sell the land or do the members have to vote?

The Board of Governors cannot sell land without the approval of the membership.

The plan shows the back four courts being removed for housing. Would those courts be replaced?

Yes, new courts would be constructed behind stadium court next to courts 9, 10 & 11 where it is now overgrown with brush.

If a hotel is built where the Fitness Center is where would the Fitness Center go?

If a resort/hotel is to be built in the Club area, the fitness center could be in one of several places, depending on the proposal accepted. It could be in the hotel building, it could be over by the Centre Court Lounge or even on the east side of Longmeadow. All of that would be a part of any proposal and would be shared with the members before any decision were made.