Dear Members:

This is a follow up email to our message last week regarding South Street Partners’ (SSP) May 31 email announcing a major change to the structure of the Palmetto Bluff Club (PBC).   This email addresses five topics:

1)       Why do we think this is an important matter?

2)       What can concerned property owners do (procedurally)?

3)       Exactly which amenities will a property owner lose access to if they resign their membership?

4)       Beyond local management, with who else can you share your concerns?

5)       What is the heart of this matter?

Why is this important?  First, as your PBNA volunteers, you should know that the PBNA intends to maintain our “just the facts” posture. That said, we continue to believe the unilateral change (without a member vote) to make PBC membership optional is a very significant change with major potential downstream consequences.  Based upon what we have been able to understand, we do not believe SSP has the authority under our governing documents to make this change without a majority vote by property owners.  The relevant document is the 2003 Declaration of Recreational Covenant for Palmetto Bluff, which 1) makes membership mandatory; and 2) has a clear amendment process. 

• Mandatory Language.  Mandatory membership is mentioned several times in the Declaration.  One example is Section 2.2 which states “…Covenant to Maintain.  The Owner(s) of each Residential Unit shall maintain the Community Membership issued for their Residential Unit …as long as they hold title…”
• Amendment Process.  Section 4.2 states “…this Declaration may be amended only by an instrument signed by the Club Operator and by Owners of a majority of the Residential Units and by the Founder…” (emphasis added). 

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.

We understand that concerned property owners should formerly register their complaints under our Community Charter’s procedures within 30 days of SSP’s May 31 email.

At this point, no one knows how many PBC members will resign their memberships and the resulting financial impact of those resignations.   The onerous “re-joining” terms (whether by a current owner or a new owner) will influence near-term decisions.  Regardless of short-term impact, the longer-term consequences may be considerable if SSP establishes that they can make major changes without adhering to our foundational legal documents. 

What can be done?  Under our Community Charter, the first formal step to contest an action by the developer is to begin a “alternative dispute resolution” process, which can be initiated with or without the help of lawyers.  The steps are outlined in Chapter 18, which you can find on the Member website (click the POA-Preservation Trust tab, and then click on Governing Documents).  Individual property owners alone, or with other property owners, can initiate such a process.  Based upon many conversations, we expect one or more parties to initiate formal disputes.  Interested property owners are arranging a call with outside counsel, and we will communicate details as we learn next steps.

Exactly which amenities are involved?  Palmetto Bluff is a complicated community with the POA/Preservation Trust, PBC, Montage, SSP’s commercial operations (RTs, Buffalos, Boat Club, etc.) and the Conservancy.  Two things can help:  1) pasted below is a matrix detailing which amenities are part of PBC; and 2) there is a FAQ on the PBNA member website that offers additional detail. 

To whom can I express my thoughts/concerns?  In our email last week, we provided the local management contacts (Gray Ferguson and Rob Duckett) but many members have asked for the contact information for the SSP partners.  We encourage you to email SSP’s managing partner, Patrick Melton, to request an in-person Town Hall meeting so that we may properly ask questions and share our concerns.  You may recall that at the last Town Hall, held on November 15, 2022, he pledged that they will hold Town Halls when they have important news.  The SSP partners’ emails are:

Patrick Melton pmelton@southstreetpartners.com

Jordan Phillips jphillips@southstreetpartners.com

Chris Randolph crandolph@southstreepartners.com

Will Culp wculp@southstreetpartners.com

What is the heart of this matter?  Different people have and will likely continue to have different opinions and thoughts about whether anything should or can be done.  Clearly, as mentioned above, the first step is to conduct a Town Hall with the Palmetto Bluff property owners.  In addition, we see two paths:

• One option is to simply contest SSP’s legal authority under our documents to make membership optional without a member vote.  If this is successful, SSP would have the option of conducting a member vote (per our documents) or reverse the change and reverting to mandatory membership.  If a majority of members approve of eliminating the membership requirement, then we will have spoken as a community. 

• Another option is to press for making the PBC a member owned not for profit.  While member ownership and associated governance is the likely outcome for most communities as they become largely built out, Palmetto Bluff is only one-third developed and “turnover” to residents is probably many years away.  In the meantime, many property owners want to find a way to better align the interests of PBC members with its owners and operators. 

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”.