Dear PBNA Members:

We hope everyone had a wonderful Easter weekend. Thank you to the approximately 130 members who attended our 2025 Annual Meeting and Litigation Update on April 15. Our agenda was to bring the community together to find a mutually beneficial path forward among the various resident groups and the developer.

As promised, attached is a link to the video of the meeting: 

https://vimeo.com/1077293640?share=copy#t=0

As many of you are already aware, one day after our meeting and one week after residents asked the town to clarify the Bluffton noise ordinance, at least seven Palmetto Bluff homeowners received suspension or warning letters from Montage, PB Club and/or PB Preservation Trust. We will continue to work to bring our community together to support the resolution of the current disputes to protect the value of our investments in Palmetto Bluff and promote and protect the original vision of our community. We intend to hold follow up discussions and meetings to answer any questions you may have from the meeting.

In order to make sure we fulfill our mission and continue to respond to the needs, size and complexity of our growing community, we are requesting that any members interested in joining the PBNA board volunteers contact us.

Please feel free to forward this newsletter to other PB property owners. Also, please let us know if you have further questions; you can reach us by email at pbna2020@gmail.com.

Thank you,

PBNA Volunteers

Cathy MacKinnon, John Meltaus, Frank Riddick and Allen Roth

Dear Members,

Many thanks to the roughly 130 members who attended Tuesday’s PBNA meeting.  We hope you found it informative and welcome your feedback.

A few things:

• We expect to post the video of the event next week after our videographer has a chance to clean up the recording.  Christian will only edit for sound and video quality; nothing of substance will be edited out.
•  A huge shout out and thank you to Jim Scheider and Ian Ford for their informative remarks and Q&A.
• Also, thanks to Geoff Block for offering to discuss potential lawsuit # 1 settlement options with PB property owners.  You can contact Geoff at 917-941-1980 or at geoffblock@me.com.

We want your input and feedback regarding 2025 priorities and next steps, including any information sessions (in-person or zoom) you would find helpful.  Please let us know by contacting any one of the volunteer board members or email us at pbnabluffton@gmail.com.

In the meantime, please encourage your neighbors and friends who are not already PBNA members to join.  As our speakers emphasized Tuesday, there is value in numbers.  While we have nearly 250 households (and ~450 individuals) as members, more would be better.   Any of us are happy to engage with folks who may be skeptical of our mission and intentions. 

Thank you,

Cathy MacKinnon

John Meltaus

Bob Morette

Jay Parker

Frank Riddick

Alan Roth

Subject: PBNA 2025 ANNUAL MEETING—SAVE THE DATE,  April 15, 2025 Good evening from beautiful Palmetto Bluff. Spring has sprung and we are excited to send this email as your reminder to “SAVE THE DATE” for our 2025 PBNA Annual Meeting of the Members on April 15, 2025! Below please review the tentative agenda, subject to change due to the fluidity of various legal proceedings currently presiding over our beloved community. GOOD NEWS: There is great momentum bringing all homeowners together to ensure our Community and our Club is stewarded in a responsible, by-laws driven direction AND, by original design and intent, to mutually benefit our developer and every single homeowner – whether you bought 20 years ago or last month! Welcome to the 2025 PBNA Annual Members Meeting Who: Palmetto Bluff Neighborhood Association, Inc. (PBNA) What: 2025 Annual Meeting of Members Where: River Road Lodge Pool Lawn  When: April 15th 4:30 p.m. EST Friends & Neighbors Interested to Join: ALL WELCOME with caveat: only PBNA members eligible to vote on BOD nominees Please encourage all friends & neighbors to visit PBNA website: www.pbnabluffton.com and click “join” Membership Fee has been reduced to $1 until further notice Welcome, Mission and Priorities for 2025 -- (5 minutes) Allen Roth and Jay Parker Active & effective counterbalance to the active & well-funded ownership & management Keep members informed of community developments Provide resources and referrals for members Advocate for member interests with developer Revitalize PBNA for strength in numbers  Waive Member Dues for 2025 to $1 Election of Directors -- (5 minutes) John Meltaus Introduce Current BOD: John Meltaus, Bob Morette, Frank Riddick, Allen Roth Elect Director Nominee(s): to serve three-year, overlapping terms Nominee(s): Cathy MacKinnon and Jay Parker for term(s) expiring December 31, 2028 Q & A Community Discussion -- (40 minutes) Cathy, Allen and Jay Prior to 4/15/2025, please email suggestions you believe SHOULD BE part of our Mission and Priorities for 2025. We look forward to a robust and healthy discussion of your suggestions and answering your questions regarding our GREAT COMMUNITY! PBNA2020@gmail.com PB Governance and Legal Issues Education -- (40 minutes) Ian Ford, Counsel to Plaintiff(s) Lawsuit #1 & Lawsuit #2 (Mandatory Membership Waiver) Jim Scheider, retired attorney and Co-Author original Palmetto Bluff Declaration of Recreational Covenant  John Meltaus and Frank Riddick BOD PBNA                    PB Governance Organizational Chart; PB Club Declaration of Recreational Covenant; Authority conveyed by homeowner deeds; Local Jurisdiction for security issues explained including emergency/nonemergency situations SSP vs Plaintiffs Lawsuit #1 Update SSP vs Plaintiffs MMW Ruling & Update SSP vs POA Demand Letter on the horizon Update  Given the importance of these matters, we have invited participants in Lawsuit #1 and a representative of Petition signers to discuss where there is common ground uniting all stakeholders (Plaintiffs, Petition Signers, MMW lawsuit, POA demand letter, PBNA, MAC and those who choose to remain unengaged) in order to have leverage with our developer and the direction of OUR club and Community.  Thank you, PBNA Volunteers Cathy MacKinnon, John Meltaus, Bob Morette, Jay Parker, Frank Riddick and Allen Roth If you have friends and neighbors who are interested in joining, please tell them to go to our website, www.pbnabluffton.com, and click “join”.

Dear PBNA member: Mandatory Membership Waiver.  As you may recall, in May 2023 South Street Partners (SSP) unilaterally “waived” the requirement that Palmetto Bluff property owners be members of the PB Club.   This was done without a member vote as required by section 4.2 of one of our keystone documents, the Recreational Covenant.  Five residents (Plaintiffs) challenged this change and SSP (the defendant) agreed to an expedited legal process using a referee.  The referee issued a ruling on Friday, March 14th.  The referee decided in favor the plaintiffs, agreeing that SSP did not have the legal right to make this change without a member vote.  The ruling stated: “I find that the provisions of the Charter and the Recreation Covenant we intended for the mutual benefit of the Developer and the Owners and thus, the mandatory membership requirement could not be unilaterally waived by the Developer.” This ruling is important as it underscores the need for our developer to act in accordance with the documents, which we all agreed to when we bought our properties here in Palmetto Bluff. What’s next?  In short, we don’t know.  SSP has the right to challenge the decision and potentially appeal the decision to the South Carolina Appeals Court.  They could also choose to rescind the waiver.  A third option is they could put this matter to a member vote which requires a majority to property owners to agree in writing to the change.  Other options may exist. The ruling is a public document; let us know if you want a copy.  Annual Meeting Notice.  We are excited to let you know that the Palmetto Bluff Neighborhood Association, Inc. (“PBNA”) will hold our Annual Meeting of Members on April 15, 2025, at 5:00 p.m. local time, at Wilson Lawn and Racquet, 30 Leila Bell St., Bluffton, SC 29910. The purpose of the meeting is to elect members of our Board of Directors, following which we look forward to an opportunity for members to discuss our community, the many wonderful things that deserve our support, and opportunities for improvement.    PBNA directors serve three-year, overlapping terms.  The nominees are: Term expiring December 31, 2028:  Cathy MacKinnon and Jay Parker Over the past year, the Board has worked to keep members informed of developments, advocate for member interests with management, and revitalize the PBNA. The Board has waived member dues for 2025, and the balance sheet of the PBNA is essentially a small amount of cash used primarily for maintenance of the website. We have heard from many members that they would like to participate in an open discussion regarding our community but will be away.  We are looking into online participation and will report back. Again, we are pleased to bring members together for a broad, constructive discussion, and we look forward to seeing you. Sincerely, Palmetto Bluff Neighborhood Association, Inc.  Current Board Members: Cathy MacKinnon, John Meltaus, Bob Morette, Jay Parker, Frank Riddick and Allen Roth If you have friends and neighbors who are interested in joining, please tell them to go to our website, www.pbnabluffton.com, and click “join”.

Dear PBNA Members,

Today, we sent the following letter to the governing board of our POA, the Preservation Trust.  We are trying to work with the developer and management to find a better solution.   Please feel free to share this email with your friends and neighbors.

-------------

March 12, 2025

VIA EMAIL AND CERTIFIED MAIL

Henry Armistead 

Gray Ferguson

Mark Polites

Jordan Phillips

Board of Stewards of the Palmetto Bluff Preservation Trust, Inc.

11 Village Park Square 

Bluffton, SC 29910

Re: Village Green Policies

Sirs

We awaken to your attention the ongoing problems surrounding construction and outside events on the Village Green and the failure of the Board of Stewards (the “Board”) of the Palmetto Bluff Preservation Trust, Inc. (the “Trust”) to address the legitimate concerns of many members and to carry out its duties under the governing documents of the Trust.  In this case, beyond adopting incomplete policies ostensibly to balance use and enjoyment of the Village Green, we believe the Board has failed to ensure that even those policies were followed.  Further, it was reported to many members and some of us that the Board instructed Palmetto Bluff security not to enforce the Village Green and Surrounding Areas Policy.  Many members found last week’s events to be shocking, disturbing and grossly at odds with the reassurance that you proffered during the January Preservation Trust meeting, and the Board now needs to address the members with more than a dismissive, vague and hollow response.

The Board trumpeted the adoption of the Village Green policies at the Trust meeting held just a short while ago on January 27, 2025, and posted the policies on the member website.   Despite these policies, repeated, clear-cut violations have been reported by members to us over the past several days, including:

 ·      Contractors working in the tree canopy.

• Trucks parking and unloading other than on the River House side of the Green.
• Workers parking other than in designated parking lots.
• Undue blocking of streets surrounding the Green.
• Possible continuation of work after 8 p.m.

These violations are in addition to the unfortunate cutting of at least two trees on the Green. We continue to be concerned about the potential unlawfulness of that action.

To exacerbate the violations, it is our understanding Montage security and other personnel present at the site have not prevented violations from arising or ensured in a timely manner that all policies are followed.  Preservation Trust security staff, paid for by the resident-members of the Trust, have refused to address the violations directly, reportedly under instructions from you.

Board of Stewards

March 12, 2025

Page 2

In addition, Gray Ferguson reported earlier that protective chain fencing would be installed around the Wilson ruins.  This has become another unfulfilled promise.

We would like to believe that the Board did not adopt these policies as mere pretext, with no real intent of ever enforcing the policies or giving due consideration to the interests of the resident members of the Trust.  This letter is not intended to be a precursor to more litigation, but rather an invitation for the Board and Developer to listen to members, work collaboratively towards a solution, and think through some of the obvious shortcomings of the present situation.

The Board and Developer should work with the Members to create viable Village Green Policies.

We would like to see the Board and Developer work constructively with members to arrive at a viable and clear set of Village Green policies that are well-communicated and enforced. PBNA is willing to sit down with you in furtherance of this objective, promoting and balancing the Developer’s business interests and the members’ peaceful use and enjoyment of the community.

The policies that you adopted are somewhat arbitrary, vague and incomplete, and they depart from the community standards applicable to other contractors. In terms of just the construction, a suggestion is there be a Village Green plan showing the required setbacks around the Green perimeter for structures and stakes to clearly avoid any tress, ruins or other important features. The venue sizes simply must be managed to avoid these incidents. The venue should be staked out prior to construction and agreed upon, just like all our homes.  These are obvious steps, and the absence of these safeguards gives the impression that the Board wants to cede to Montage leeway to construct whatever structure it wants to construct.  That is unacceptable, as is the unilateral adoption of “policies” purportedly to balance member interests, without member input.

Let us know if you would like to arrange a meeting.

The Board needs to communicate what penalties have been imposed for the recent violations and what is being done to prevent violations.

The Board must strictly enforce these policies against Montage, its contractors, and its guests.  The Board should have a zero-tolerance approach to violations.  We would like your written reply specifying in detail (i) what steps the Board will take to prevent violations from arising in the future, for example, advance communication of height, size and set back restrictions to wedding planners and vendors, and inclusion of this information in Montage marketing materials, and (ii) what sanctions, fines, suspensions and other repercussions have been enforced against Montage and its management, employees, and vendors as a result of the egregious transgressions over the past several days, as well as over the prior weeks.

Board of Stewards

March 12, 2025

Page 3

The Board needs to communicate to members what exactly is the authority, required actions and required inactions of the Preservation Trust security, so members will know when they have protection and when they do not.  

At this point, we are not sure what the standing instructions are for the Preservation Trust security team, and specifically when and to what degree that team is or is not protecting members, their property and their interests.  While the assumption has been that the Preservation Trust security team must be looking out for members, it is possible that the team has been instructed not to act in certain situations, or to prioritize the interests of the Developer, Montage, or hotel or outside event guests over those of the members.  It would be useful to know if the team is instructed to prioritize covering up bad behavior from outside guests.  To avoid uncertainty, the Board needs to clearly articulate to us the authority, requirements, priorities and limitations of the Preservation Trust security team.  

Specifically with respect to outside construction and events on the Village Green, please articulate whether Preservation Trust security are authorized and required to enforce the policies in the event Montage security and other personnel, whether or not present, do not ensure all policies are followed.  This has become an immediate source of frustration for some members.

More generally, given the concerning attitude of Montage and what seems to be an apparent order to Preservation Trust security to stand down at outside events, we are concerned with the safety and security of the members of our community.  In your reply, please indicate what if any authority and direction Preservation Trust security have and must follow in an instance where an outside vendor or outside partygoer acts in an unruly or unlawful manner. Also indicate whether you have considered whether Montage, at its cost, should be required to arrange for a Bluffton police detail to be present during the entirety of outside events on Wilson Village Green.  

The Board is responsible for setting policies that ensure Preservation Trust security is here to protect us. We would like to know if the security team’s instructions differ from our expectations or limit the team’s efforts towards member safety and security.

Conclusion.

Without even addressing the adequacy or fairness of your policies, you have self-published incomplete policies and then failed to enforce them.  Given the seriousness of these matters, particularly our safety and security concerns, we must insist on better communication from you in your response to this letter.  Please be clear and truthful in your response.   

Board of Stewards

March 12, 2025

Page 4

Due to your fulsome outside event calendar and potential for our safety and security risk, we require your written reply by the close of business on Friday, March 21, 2025.

Sincerely,

Palmetto Bluff Neighborhood Association, Inc.

Current and Pending Board Members:

Cathy MacKinnon

John Meltaus

Bob Morette

Jay Parker

Frank Riddick

Allen Roth

Dear PBNA Members,  Below is an overview of the Feb. 12. 2025 South Street Town Hall meeting with members. If you have any questions or want to take a deeper dive please click here to see the attached document. Also, SAVE THE DATE: April 15th PBNA Meeting – open to all PB Residents - More details to come We’re waiving our 2025 membership fees, go to https://pbnabluffton.com/ to sign up and stay in the loop. Development Update: No new PB Base Club amenities will be built until lawsuit is settled SSP Suggestion floated of building a new/seperate club for new amenities (Nothing confirmed) Crossroads: New Fitness Amenities Complex rough design provided New Fitness Amenities Complex will not be built until lawsuit is settled Suggestion floated that new Fitness Amenities Complex could be built prior to lawsuit settlement if SSP were to establish it (and thus bill it) as a separate club (fee) SSP building residential cottages near putting green Anson: Coore Crenshaw golf course progressing with irrigation completed on 7 holes No details on membership status or pricing Temporary Clubhouse to be built first Permanent Clubhouse will be similar to May River golf facility but will not be a “true member” (SSP words) Clubhouse Targeted opening date 1st quarter 2026 Montage Hotel Update: SSP building (clearing has begun) new event facility at Montage (SSP owns Montage) to alleviate "pressure" off Village Green – owned by Preservation Trust & funded by PB Members Location is behind (both) Montage Spa and Flame Pizza truck. SSP said no limit exists regarding the number of weddings per calendar year Cell Tower: Tower structure has been built but electrical & other infrastructure not ready No commitment provided for when it’s operational Real Estate: Real estate prices and sales of new lots and homes up 19% in 2024 (180 closings) Other specific sales detail enclosed in this newsletter PBNA commentary: assuming all 180 new homes joined “The Club” @ $50K fee = $9 million in revenue not accounted for on PB Club Balance Sheet PB Club & Operations: Organizational data, number of members, data on (optional) for-profit clubs (Golf, Shooting, Boating) and commercial operations (such as employees of SSP) provided Buffaloes Restaurant turned back to Montage to manage PBNA commentary of fact: For those that don’t know, SSP terminated agreement with Montage (2021/2022) to manage PB Club and various other commercial operations PBNA commentary of fact: PBNA requested overall and by entity organizational charts to determine whether collective “Club” is being run efficiently; whether overhead and other costs are being allocated to the Preservation Trust (POA) and PB (base) Club fairly b/c this directly impacts the DUES MEMBERS MUST PAY. To date: we have not been able to obtain this information PB Preservation Trust (POA) and Design Review Board (DRB): First ever POA meeting that included members was held January 27, 2025 PBNA commentary of fact: this was a Board of Stewards (BOD) meeting – not an annual member meeting – which should be held annually in the 3rd quarter of each fiscal year according to POA By Laws   Please see this section of attached newsletter for critical issues raised at that 1/27/25 meeting DRB reported 1,154 completed homes; 224 in design review and 132 under construction (implying there are approximately 1,510 Base Club Members) Member Issues and Concerns: Please see attached document for details. Question and Answer portion of meeting (ended poorly with a PB employee insulting members), please see attached document for details Montage Weddings on Wilson Village Green: SSP working with Montage to put tighter controls on weddings/events  SSP (Gray Ferguson) confirmed they increased village green day rental fee from $3K/day to $4K/day SSP would not commit to limiting number, size or duration of weddings/events PBNA commentary of fact: Wilson Village Green is owned by POA but managed for “the mutual benefit of its members (PB homeowners) by SSP. Utilizing POA assets for the benefit of maximizing the value of Montage is effectively transferring value out of the POA (PB homeowners) and arguably a breach of their fiduciary duty under SC Law. Please see PBNA Letter #12 date 1/12/2025 for more information on this subject. Member Annual Dues Increases: Member dues will continue to increase at a rate above inflation Palmetto Bluff Base Club is a PRIVATE, for-profit entity (BUT it is not supposed to charge members fees above operating expenses)  PBNA commentary re: Base Club No new base club amenities have been built since 2017 Membership increase = 855 in 2017 to (estimated) 1,510 2025 Dues increased by 79% from 2022-2025 Dues increased by 292% (9% increase/year since 2012) PBNA Commentary: Given the significant increase in DUES, is it reasonable for members to want/expect new base club amenities?" Settlement of Member Lawsuits: SSP commented on the lawsuit “on the advice of counsel we can’t answer the question(s)” Attendees did not appear to be satisfied with SSP responses to questions concerning lawsuit PBNA commentary: SSP appears to have little incentive to resolve the matter b/c litigation could be providing SSP with excuse to not build member amenities; additionally, significant portion of SSP legal fees is charged and paid for by PB members through POA and Base Club annual dues Role of Member Advisory Committee: SSP expressed interest in expanding role of Member Advisory Committee (MAC) to be active conduit for member concerns and recommendations to SSP PBNA commentary: Concern about MAC member neutrality – member volunteers are selected by fellow members but they must be confirmed by SSP or PB Club management PBNA-Your Invitation To Participate: Currently looking for new BOD members to serve 3 year terms PBNA Objective: community communication, member sounding board, facilitate positive change in our community via a seat at the table with SSP PB Community is growing quickly, need to be sure it grows in a way that takes homeowners into account alongside the profit margins of SSP SAVE THE DATE: April 15th PBNA Meeting – open to all PB Residents - Details to come Please see https://pbnabluffton.com/ to sign up and stay in the loop - Membership fees waived for 2025 PBNA Volunteers Bob Morette, Arian Ellis, Helen Ryan, Ford Bartholow, Frank Riddick, and Allen Roth. If you have friends and neighbors who are interested in joining, please tell them to go to our website, www.pbnabluffton.com, and click “join”.

Note to readers:  While we applaud South Street Partners enhanced transparency provided in their Saturday night email to the PB community on the Village Green controversy, please know that there is much more to this topic of which all PB property owners should be aware.  We address these below.  Also, please know that in our effort to provide you with accurate information, on Friday we reviewed –consistent with prior practice—a draft of this email with PB’s Chief Operating Officer.   Dear PBNA Members, This newsletter touches on two topics: the Village Green in Wilson Village and the 2025 PBNA board. Wilson’s Village Green The use of the Village Green for weddings continues to be a source of irritation for many PB property owners for at least two reasons:  First, while the number of weddings has decreased slightly, the scale and duration of the events has grown dramatically, causing a myriad of lifestyle, access, and safety concerns.  This is the subject of much chatter, both within our Palmetto Bluff community and on social media.  In addition to the nuisance and safety concerns, many believe that property owners are not appropriately compensated for our inability to use and enjoy our “downtown” and marque park in a peaceful and orderly manner for significant amounts of time.  A further concern is that such events (and construction/tear down) are not sufficiently monitored, resulting in damage to our iconic live oaks and the Wilson Mansion ruins. Second, the Village Green is effectively “owned” by us, the property owners.  The Green is part of our common area property (including roads, bridges, etc.) that is directly owned by the PB Preservation Trust, LLC (our POA), and as such, we (via the POA) are reimbursed when the Green is used for non-POA events.  The primary outside events are weddings managed by Montage Palmetto Bluff (MPB).  For years, the developer has argued that our “quid pro quo” is the rental fees offset money that property owners would otherwise have to pay in POA fees.  Our objective is to shed more light on the second matter.  Three topics are addressed below—history, current economic arrangements, and potential conflicts/self-dealing by our developer, South Street Partners.   History.  For many years, our POA charged $1,000 per event for use of the Village Green, regardless of whether the Green was used for one or many days (for set up and tear down).  While the POA does not break out rental revenue for the Green in the annual audited financials, the 2024 POA budget estimated fees at $105,500.  This amounts to less than 1% of our POAs overall revenues (or about $65 to $75 per PB property owner).   In recent years the Village Green repair costs have averaged $35-40,000, so the net economic benefit of the rental fee income is approximately $40 per property owner.     Current Economic Arrangements.  After years of pressure from property owners, the rental fee paid to the POA was raised in 2024 from $1,000 per event to $3,000 per day.  For example, this means that for a wedding that uses the Green for five days total, the POA would receive $15,000 in revenue, which is a major improvement over the prior pricing arrangement.  With this, we can expect total annual site rental fees to increase to the range of $200k to $300k, which will represent approximately 1.4% of POA revenues, or roughly $125 per PB property owner per year.  Remember that the POA pays for all repair and resodding costs, so it is still unclear if the property owners receive any meaningful economic benefit under the new pricing arrangements. Montage Palmetto Bluff’s (MPB) list price for the Wilson Green rental is currently $8,000 per day, which provides a $5,000 margin over the “cost” of $3,000 per day paid to the POA.  This arrangement is a potential conflict of interest as SSP owns the hotel and directly benefits from the hotel’s profits while 92% of the POA’s assessment fees are paid by PB property owners. Potential Conflict of Interest/Self-Dealing.    As owners of the hotel, SSP receives all profits (or losses) from the operation of MPB.   While details of the contract between Montage and SSP are not known, typical hotel management contracts call for the manager (Montage) to receive 3% of revenue plus certain incentives.  For simplicity’s sake, let’s assume Montage receives 5% of revenue.  This means that SSP would receive $4,750 per day in profit as there are no incremental costs to them.   Many believe, including the PBNA volunteers, that this arrangement is wrong, and conflicts with the POA’s fiduciary duties to PB property owners.   The conflict is that SSP management controls the POA board but also runs PB overall in a way that maximizes SSP’s profits.  Under the terms of the PB governing documents, currently the POA is controlled and managed by SSP.  PB property owners have no input on POA policies regarding wedding locations and pricing.  PB management has defended these arrangements, arguing that there are other potential benefits to PB property owners from the weddings including the marketing of PB and the sale of additional real estate.  Clearly, these potential benefits are far greater for SSP compared to PB property owners.  Moreover, these potential benefits could be obtained by having weddings at other Palmetto Bluff venues including at Montage.  Most property owners with whom we have discussed this matter believe that the full economic benefit for rental of POA property should accrue to the POA.   Additionally, many believe the potential benefits of Village Green weddings to PB property owners are far outweighed by the associated costs, disruption, inconvenience, as well as security and safety concerns.  Further, this possible breach of fiduciary duty by the POA is part of the current litigation (initiated in 2022) against SSP and various PB entities. Closing Questions and Thoughts:   Our questions:  Why doesn’t the full $8,000 per day fee go to the POA?  Is the $8,000 per day fee still below “market,” given the higher pricing doesn’t seem to discourage frequent rental?  Since the Village Green is such a visible source of angst for property owners, why doesn’t POA break out the revenues and repair costs in their published audited financials?  Is our security team (which costs approximately $1,750 year per PB property owner) prioritizing Montage and wedding guests over residents’ safety, freedom of movement and quality of life? Lastly, most Palmetto Bluff property owners believe that the last thing we need is more litigation.  So, we urge SSP to change their pricing policies and put their fiduciary obligations to the POA and PB property owners first. 2025 Year PBNA Board We are near the end of our third year since the PBNA “reboot” and it is a natural time for the volunteer board to be refreshed.  While we have some great new candidates, we need more volunteers.  If you want to be an active part in informing, shaping, and protecting our amazing community's future please consider joining our board as a volunteer.   Please e-mail our Nominations Committee chair, Alan Roth, directly at ar08053@comcast.com Closing If you have any questions, please feel free to reach out to any of the PBNA volunteers:  Bob Morette, Arian Ellis, Alan Roth, Helen Ryan, Ford Bartholow, Eric Sutherland, and Frank Riddick. If you have friends and neighbors who are interested in joining, please tell them to go to our website, www.pbnabluffton.com, and click “join”.

Dear PBNA Members, This newsletter is an update to our February 2024 email regarding on-going disputes, which have now broadened out to include community-wide emails and a recent petition effort by several property owners.  The three separate dispute streams are: ST Rental/PBCA Litigation.  As you may recall, litigation was initiated in 2022 between the group known as PB Community Advocates (comprised partly of, but not exclusively of, owners of properties in the short-term rental areas).   This litigation continues, and given the nature of the litigation, little new information is publicly available.  Two key pillars of this lawsuit may already be moot (e.g., amenity access by short term renters, and mandatory membership in a for profit club) but a third key pillar involves the governance and structure of what is now referred to as the “base” Palmetto Bluff Club.  The PBCA has circulated community wide emails articulating their arguments and points. Mandatory Membership Waiver.  Last July, a group of property owners submitted a formal complaint regarding SSP’s unilateral announcement last May to make PB Club membership optional.  Per our governing documents, this was the first step in a formal dispute.  The heart of this complaint is that SSP, in making such a fundamental change to PB Club membership, was required to use the amendment process, outlined in section 4.2 of the Recreational Covenant, and obtain a majority vote by the property owners.  This was not done.   Petition effort.  As many of you may know, a third group of PB homeowners is circulating a petition and holding meetings amongst PB property owners who have expressed an interest in learning more about the first lawsuit and its potential consequences.  The leaders of this effort (Jim Grant and Julia Butler) plan to send a community wide communication to share with the balance of the community what was discussed in the neighborhood meetings.  They are advocating for settlement or withdrawal of the PBCA-backed litigation.   Further, their petition is intended to thwart the plaintiffs’ attempt, down the road, to have its lawsuit certified as a class action.  More on this below. Lots of points and counterpoints are being asserted and we will not attempt to address each one.  Please remember that many points and arguments are being expressed by the interested parties in a manner which best supports their goals.  Consequently, there is a risk of more heat and smoke but not a lot of light and clarity.  In our earnest effort to shed some light, here are some points which may be helpful: Despite all the handwringing about how the disputes are hurting property values, there are no data to confirm this assertion.   All of us receive real estate transaction updates from PB Real Estate as well as from independent brokers which continue to show record prices on virtually all metrics.  Of course, if conflicts continue and/or amplify, and with increasing publicity in the newspapers about the lawsuits, this risk no doubt exists.  It is worth noting that lawsuits in planned communities are not uncommon, here in SC and across the US, so Palmetto Bluff is not notable in this regard.   The market, and not the absence of litigation, will likely be the biggest driver of new amenity construction.   SSP has approximately 2,300 lots yet to be developed, platted, and sold.  The only way they will continue to transform raw forest land into million dollar lots is through easy to access top tier amenities.  This is evidenced by the construction of the second 18-hole golf course and the Anson Marina.  Regardless of the litigation, SSP may choose to make any new amenities separate from the base PB Club, much like they did with Crossroads.  SSP has a fiduciary responsibility to their investors to make the decision they believe to be in their best economic interest.   The second legal action involving the waiver of mandatory membership will likely be resolved by the end of summer or early Fall.  As the property owners and SSP have agreed to a streamlined legal process whereby a special referee (already chosen by both SSP and the property owners) will rule on this question.  If the special referee rules in favor of the property owners, SSP’s waiver will be reversed.  SSP will then have the option to either 1) restore the mandatory membership requirement; and/or, 2) seek the written consent of a majority of PB property owners.  SSP also could appeal, as they have done in the other lawsuit, which would prolong the matter.    The lawsuit brought by PBCA seeks to be a class action but is NOT a class action yet.  The plaintiffs’ complaint alleges that they are “representatives” of the “Property Owners Class,” defined as “all owners, including former Owners, of residential property units…within the past twenty years…”  There may come a time—unclear when but could be two to three years hence—when a judge (not yet appointed…) could be asked to certify the lawsuit as a class action.  If the judge certifies the case as a class action, then at that time, each property owner would have a choice to remain in the class or to opt out.  Remember, this lawsuit is still in a procedural stage (court vs. arbitration) and nothing has been argued or discussed in court yet on the merits of the plaintiffs’ arguments. The potentiality of the current lawsuit turning into a class action is a significant (and uncertain) financial cloud over SSP.  This cloud, we would imagine, would be an incentive for SSP to settle.       Where will this end?  We don’t know but some current thoughts: While they disagree, arguably PBCA has already “won” two key points in their dispute—short term renter access and the allegedly “illegal” structure of a for profit club being mandatory (which may be reversed).  Their key remaining arguments revolve around PB Base Club structure (for profit vs. nonprofit), governance, and such.  The “bid-ask” spread between the plaintiffs and SSP is immense, and we don’t see any easy solution short of constructive compromise.  Apparently, this has been tried several times and has failed.  While we are not sanguine that this will change easily or quickly, we hope we are wrong. Nonetheless, we firmly believe that settling the PBCA backed lawsuit is in the best interests of the Palmetto Bluff community and hope that the defendants and plaintiffs can find a way to do so. As with the other recent “grassroots” efforts (e.g., Grace Club, Moreland cell tower) to keep Palmetto Bluff a special place, we are grateful that our neighbors continue to step up to work together as a community.

Dear PBNA Members,

This newsletter addresses questions we have received regarding the annual dues from The Palmetto Bluff Preservation Trust (PBPT), which is effectively our POA (short for Property Owners Association).  The POA is governed by a Board of Stewards, which is controlled by our developer, South Street Partners (SSP).  A full description of this entity is contained in the “entities” FAQ on the PBNA website.  Given the confusion around the PBPT name, we will simply refer to it as our POA.

The PBPT owns, operates, and maintains the Common Areas (other than Club properties) and operates under our governing documents.  It is funded largely though mandatory annual assessments on property owners (amounting to $4,515 per property in 2022, $4,876 in 2023, and $5,315 for 2024), and commercial operations (e.g., Buffalo’s, RT’s, etc.), and if elected by the PBPT’s board of stewards, unsold platted lots.  Gate pass revenue and Design Review Board (DRB) fees are also significant revenue sources.  The most recent statements, for 2022, were finally released in February 2024.  You can access these 2022 audited financials on the PB Member website under the” POA-Preservation Trust” tab.

Observations on the 2024 budget includes:

• Assessments continue to rise despite having accumulated a surplus of $ 6.3 million from 2019 to 2022 (2023 was essentially a breakeven year for the POA).
• Given these hefty surpluses, SSP elected to change polices (effective 2022) so that it no longer pays assessments on their platted but unsold lots.  Under the prior accounting election, the developer contributed an average of $476k annually (2018-2022).  Under the new accounting election, SSP is responsible for any POA deficits, which are unlikely given high reserves and continued growth in sold lots and annual POA fee increases.  In effect, SSP has shifted nearly one half a million dollars annually on to current property owners.
• Implicit in this budget is an expectation of only 24 additional assessment-paying properties in 2024 vs. 2023, which would be the second lowest number of new lot sales since 2012.  Either the Board of Stewards are being conservative or SSP is pessimistic about 2024 new dirt sales.
• 2024 will be the first, recent year, in which reserve funds will be used to pay for repairs and maintenance.  Previously, repairs and maintenance were paid out of the annual PBPT revenues.  While there is much debate amongst property owners around the right level of reserves, we should all be aware that the POA plans to spend a portion of the reserve funds for the repair or replacement of our common assets in 2024.
• Our POA has budgeted to spend $ 383k for legal fees this year, most of which will likely be used to defend against the two legal actions currently underway.  Note that the PB Club has budgeted an additional $400,000 in legal expenses.  SSP is responsible for the remaining third of the estimated $1.2 million legal fees.  In sum, we estimate that property owners are shouldering approximately 65 percent of ongoing ligation defense costs.
• Of course, the POA’s costs grow as Palmetto Bluff becomes more developed and there are more roads, bridges, and lagoons to maintain.  In 2024, the only significant changes in the POA’s scope of duties are the addition of the new neighborhoods and the added inland waterway acreage which were formally “turned over” in March.

Going forward, what should property owners be concerned about, given where we are and SSP’s stated intentions?

• We can expect our assessments to continue to increase.   Given the POAs current financial cushion, we should expect that SSP will maintain their current election to cover any deficits vs. the alternative of paying assessments on their unsold but platted homesites.
• Further, many of our roads are nearing the point when they will need to be milled and repaved.  This will likely be a significant cost, which must be funded either through annual POA assessments or by spending down reserves (or both).  Either way, property owners will pay.
• While financial transparency has improved under SSP’s ownership, many questions remain regarding cost efficiency and allocations.  While we are comfortable about allocation methodology vis a vis the POA, allocations are a more significant component of the PB Club’s budget.  We will address this next.

We will continue to post observations of the financial information we receive from SSP and our POA.  If interested, we encourage you to read the prior analysis of 2016-2021 which is also on the PBNA website.  This report goes into more granular detail on the mechanics of how the PB Preservation Trust operates financially.  

The purpose of this email is to update you with the status of the various development activities that South Street Partners (SSP) currently have underway, as best we can understand by reviewing documents, speaking to the Town’s planning staff, and other knowledgeable parties.  This message addresses four projects: Long Island (aka Plat 25; Anson neighborhood), Block M-4 Subdivision, Block M-6 (both in the Moreland Forest/Crossroads area) and the new Anson 18-hole golf course.  Shout outs to the Town’s staff and Gray Ferguson for ensuring the accuracy of this message.

Background.  The overall development of Palmetto Bluff is controlled by the Planned Unit Development (PUD), which was adopted in 1998 (and subsequently amended a few times) which established the current 4000 housing units (or equivalent) cap.  Plans for new neighborhoods and features (e.g., roads, amenities) are NOT reviewed by the Town Council or Planning Commission; instead, they are reviewed by the Town of Bluffton’s Growth Management and Watershed team in a three-step process: 1) preliminary development plan application (a fairly high level review); 2) storm water permit (also involves the SC Dept. of Health and Environmental Control, or DHEC), and 3) final approval of the project or subdivision (very detailed).   New lots are platted and approved in the last step, and only then can the newly created lots be sold.

Long Island.  Last November, South Street Partners submitted a preliminary plan application (step 1, per above) for the development of Long Island, including 31 home lots, a neighborhood street consisting of permeable pavers, and the conversion of the existing earthen causeway into a 14-foot-wide road with two seven-foot-wide lanes.  The application also calls for traffic lights on either end of the causeway to allow the road to be closed as needed for emergency vehicles.  This preliminary plan was approved with conditions, and the Town staff has yet to receive the full storm water plan for review.  Given Long Island’s location, the DHEC review process is likely to involve their Coastal Zone Consistency team, which is generally considered a tougher process.   

The storm water permit sought by SSP will only address the runoff issues related to the road; per the current plan, each Long Island lot owner will need to satisfy the storm water abatement in their building permit process.  The stormwater submittal must assess the feasibility of this.  Given that Long Island is a narrow island with a high-water table, this may prove challenging (mitigated somewhat larger average 2.5-acre lot size).

While the stormwater standards involve many technical criteria, the two most significant ones involve 1) “routine” heavy rains (95^th percentile, or 1.95 inches of rain in a 24-hour period), and 2) 100-year storms (11 inches of rain in 24-hour period).  The first requires that this 1.95 inches of rainfall is retained on site, usually accomplished via Best Management Practices (BMPs), such infiltration basins, bioretention, etc.  The second, 100-year standard, requires that all storm water is safety conveyed through the site without causing damage/inundation to structures.  Furthermore, the stormwater plan must demonstrate that post-development stormwater discharge rates do not exceed pre-development rates for up to the 100-year, 24-hour storm, and the site must be designed to intercept and treat stormwater runoff to at least an 80 percent reduction in total suspended solids, 30 percent reduction in total nitrogen, and 60 percent reduction in bacteria.  According to SSP, this “decentralized” stormwater approach is a preferred BMP vs. the more commonly used centralized basins, ponds and such.

Block M-4 Subdivision.  This month, SSP requested the Town’s final approval (step 3, per above) of this new neighborhood which will consist of 81 lots on 79.4 acres.  Once this is approved, the lots will be available for sale.

Block M-6 Subdivision.  This month, SSP submitted a preliminary development plan application (step 1, per above) to the Town.  This neighborhood will consist of 26 single family home lots on 48.9 acres. 

New 18 Hole Golf Course.  SSP has conditional stormwater approval for the course (step 2).  Once SSP receives final stormwater approval from DHEC, final approval of the application (step 3) can occur.

PBNA Volunteers