Dear Members:

Last week, a South Street Partners (SSP) email announced a major change to the structure of the Palmetto Bluff Club (PBC) by making membership optional.  Until now, membership in the PBC has always been mandatory. 

This is a very significant change with major potential downstream consequences. 

In addition, SSP promulgated new PBC and amenity access rules, procedures and fees for visitors using Short Term Rentals (STR).  

Like you, your PBNA volunteer leaders have many questions around these policy changes.  This email focuses on the PBC membership change, and we are sharing our current understanding.  We will update you as we learn more. 

In the meantime, we encourage you to reach out to

Rob Duckett (rduckett@southstreetpartners.com ) and

Gray Ferguson ( gferguson@palmettobluff.com) with your thoughts. 

Understanding and Concerns

• The change fundamentally undermines one of our key governing documents.  The 2003 “Declaration of Recreational Covenant for Palmetto Bluff” makes membership mandatory and states that PBC will be operated for residents’ benefits.  As stated in section 4.2, this Covenant "may be amended only by an instrument signed by the PBC Operator and by Owners of a majority of the Residential Units and by the Founder…” (emphasis added).  No vote occurred.

• Management asserts they are making this change as a “waiver,” under section 4.5.  Initial legal conversations suggest this section does not give SSP unilateral authority to make such a substantial change.  Rather, it is a technical provision essentially stating that past failures to enforce rules (e.g., late fees, etc.) does not prohibit them from enforcing rules going forward.

• Making PBC membership optional may drive significant and rapid escalation of PBC dues, especially if many property owners resign their memberships. 
• • Since there are many property owners who do not have completed homes, or live here part time, the potential loss of dues revenue is unknown and could be significant. 
  • In addition, there are 110 properties paying PBC dues by people who already own another house/lot and are paying dues on those properties as well. This change may lead them to drop the redundant memberships. 
  • Further, rapidly escalating dues may compel more members to resign, creating a negative spiral which could threaten the PBC’s viability.

• Many residents have told us they believe making the PBC optional will fundamentally alter the nature of Palmetto Bluff, by creating two classes of residents, which is not consistent with the vision they bought into when deciding to purchase property here. 

• This change opens the door to SSP selling non-resident PBC memberships.

• Making PBC membership optional may address one key issue in the on-going litigation brought by a group of PB residents known as PB Advocates, but it may simply create additional litigation.  For background regarding this on-going litigation, please refer the FAQ we published last year on this topic. You can find it on www.pbnabluffton.com in the member section under FAQs.

• Elimination of the membership requirement makes bulk lot sales more economic and feasible.  While SSP is on record at a recent Town Hall that they have no plans for bulk sales, many believe it was an important component of their initial business plan.  For background on the bulk sales matter, please refer to the FAQ on this topic located in the member section at www.pbnabluffton.com.   

• Elimination of the membership requirement also makes land speculation here more attractive and less risky.  By avoiding the upfront joining fees, land investors can acquire lots more cheaply, and their cost of carry is lower due to the absence of annual PBC membership dues. 

Please let us know if you have further questions; you can reach us by email at pbna2020@gmail.com

PBNA Volunteers

Bob Morette, Arian Ellis, Helen Ryan, Ford Bartholow, Eric Sutherland, Richard Cedrone

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”.