September 13, 2025

Subject: Community Update

Dear PBNA Members:

We hope you have had a great summer, and we wanted to report on various topics.  There is much good, many areas of significant concern, and seemingly an absence of communication between the developer and members towards a common good (resulting in litigation).  Also, earlier this summer, several of your volunteer board members met with our Mayor along with the town manager and staff.  So, we want to share what we learned as well as to highlight some other areas deserving attention.

This newsletter addresses:

1. Lawsuit Status
2. Areas of Community Concern
3. General State of Developer-Member Relations and Paths Forward

Executive Summary

Litigation.  Two lawsuits by homeowners against the developer remain active.  Lawsuit # 2 was decided in favor of the homeowner plaintiffs requiring mandatory membership in the club and prohibiting SSP from changing the Recreational Covenants without following the amendment process.   The lawsuits have arisen in part due to an absence of a dialogue and working relationship between SSP and the members. 

Big issues face the community, many of which are seeing little to no action, or slow progress.

• Traffic entering PB from May River Road
• South Wilson erosion
• Golf Club pricing, division and uncertainty
• Noise, weddings, corporate events and the Village Green
• Club rule changes (in favor of SSP) without notice or discussion
• Gag order on members and “suspension” threats
• EMT and Town Police resources
• Club and Trust financials and possible trust-but-verify audit

Henderson Park – SSP – Member Relations.  There is room for improvement.  Curious if Henderson Park or SSP have any interest, or what might encourage a bit more mutual respect.  It would be a suboptimal but necessary result if the only path toward a dialogue was filing more litigation in the face of unilateral action.

A Deeper Read:

Lawsuit Status.

Lawsuit #1 (Broader Club Governance Issues and Short-Term Rentals):  As we previously reported, SSP continues to pursue legal efforts to force arbitration of this lawsuit.  SSP appealed to the South Carolina Supreme Court the previous decisions in the South Carolina trial court and the SC appeals court which denied SSP’s claims that the case should be arbitrated, among other related issues.  The South Carolina Supreme Court has agreed to hear SSP’s appeal, and currently there is no hearing date set.  Therefore, the important issues raised by this lawsuit with respect to the governance and management of Palmetto Bluff and related entities remain outstanding and unresolved.

(For those of you unfamiliar with the case, the lawsuit had its origination in the developer, SSP, curtailing the rights of those members who had purchased short-term rental properties.  It then developed into a larger dispute over community governance.     The lawsuit was filed in 2022, and it appears the developer may have been charging the PB Base Club and the PB Preservation Trust with large portions of the defense costs (which are effectively paid by members through our dues).   After three years and much money arguing about where to resolve claims as opposed to resolving the claims themselves, there remains no resolution of these important issues.  Given the time and money spent, and in the interest of a more harmonious community, the PBNA would encourage SSP/Henderson Park to come to the table and negotiate a resolution to this lawsuit.) 

A few takeaways.

• Two courts have stated that just because something is written into club documents, that does not necessarily mean those provisions are enforceable.  The law trumps the club documents.  On this particular matter, the South Carolina Supreme Court will decide on South Carolina legal and policy grounds whether these specific community matters go to court or confidential arbitration.

• The short-term rental issues have in practice been mitigated for now by putting private renters on parity with renters in the Montage/SSP program.  That status is undocumented and can be unilaterally changed by the developer at any time.

• We understand that parties were close to but did not achieve a settlement.

• Good faith negotiations might resolve this lawsuit, but for reasons we can’t fathom a settlement has not occurred. 

Lawsuit #2 (Illegal Waiver of Mandatory Membership):  Updating our July 3 report, this lawsuit is now closed.  On the final open item, the Special Referee ruled in favor of SSP’s request that the recission of mandatory membership not apply from the date of the waiver to the date of his decision (roughly March 2024-March 2025).  Therefore, any Palmetto Bluff homeowners who opted out of mandatory membership during those dates apparently do not have to be members of the Palmetto Bluff Base Club.  We believe this has the effect of creating and maintaining two classes of Palmetto Bluff homeowners and the loss of dues. The plaintiffs in this case strongly disagree with this aspect of the ruling, which creates negative financial and other consequences for Palmetto Bluff including the potential for additional future litigation on these issues.  The appeal window for this lawsuit has passed so the decisions stand.  The potential member vote on mandatory membership, and other unrelated issues proposed by SSP, has not moved ahead.  There has been no communication to Palmetto Bluff homeowners on the next steps on the proposed vote.

(For those of you unfamiliar with the case, SSP/the developer attempted to unilaterally waive mandatory membership in the PB Base Club for all property owners.  For the many reasons discussed in the developer-member forums, this was generally not seen as good for the community or property owners.   A group of property owners challenged the waiver, undertaken without a member vote to change the Recreational Covenants, arguing that that change was unauthorized and unenforceable under those Covenants.  The Special Referee assigned to the case ruled in favor of the plaintiff homeowners and determined that SSP’s unilateral waiver of mandatory membership, which is included in the PB Recreational Covenant for the mutual benefit of the developer and the members, was illegal and unenforceable.)

A few takeaways:

• Very importantly, the Special Referee ruled that the developer cannot unilaterally change this fundamental Palmetto Bluff document without following the amendment process.  That process includes a member vote in certain circumstances.

• Instead of making the Club whole on lost dues, the developer asked the special referee to not only forgive back dues, but to allow the approximately 71 memberships that opted out to stay out – costing the Club an estimated $667,400 a year in dues. When considering whether the PB Base Club does not make a profit as well as the appropriate level of member PB Base Club dues, this lost revenue and the allocation of the aforementioned legal costs are significant factors.  

• South Carolina law likely does not allow mandatory membership in a for-profit club to be bound to homeowners’ property.

• We have been advised that South Carolina also likely does not allow mandatory member joining fees that must be paid to a third party, a separate for-profit club owned by the developer.  

• SSP attempted to make the club structure legal, by first trying to unilaterally waive mandatory membership and then proposing a member vote on an amendment to the PB Recreational Charter to allow non-mandatory membership (among other changes).

• As recently displayed, the collective wisdom of most PB homeowners is that mandatory membership is a good thing.

• Some members have suggested that a reasonable alternative might be to convert the Club to a not-for-profit entity, like the Trust.

• Joining fees need to go to and stay in the Club.  The money is needed for operating expenses, repairs, improved member offerings, and a capital reserve.  

• • The Golf Club, Shooting Club, Boat Club and Equestrian Venue are separate for-profit private businesses owned by the developer.  Members have a choice of whether to join. 

Lawsuit #3 (breach of fiduciary duties by Trust stewards appointed solely by SSP):  It is our understanding that this lawsuit against the Palmetto Bluff Preservation Trust (Trust) and its Board of Stewards is proceeding to discovery.  We will provide additional updates as they become available.

(For those of you unfamiliar with the case, the suit alleges breach of fiduciary duties by the Board of Stewards of the Trust, in part by allegedly paying one-third of the legal fees in lawsuit #1 and by allegedly diverting funds from the Trust to Montage and the developer in connection with wedding and corporate events on the Village Green. 

The developer controls the Trust and appoints its board, consisting of SSP personnel and club management employed by SSP entities.  The developer owns the hotel facilities, which is a for-profit business and not part of the PB Base Club or Trust.  SSP has directed the Trust to rent the Village Green for $1,000 to $3,000 per day for hotel events and related set-up and breakdown.  The Trust pays for maintenance, upkeep and resodding of the Village Green.  The Trust financial statements do not show whether this results in a gain or loss for the Trust.    All other revenue from these events (upcharge for Village Green, catering, hotel rooms, private sales, etc.) apparently go to Montage and SSP.

The Trust is a non-profit corporation and subject to South Carolina non-profit corporation law which is clear that, among other things, the developer-appointed Stewards owe a fiduciary duty to PB homeowners.  We have been advised that Stewards on the Trust board that are not independent may be subject to a higher standard of care.  

Certain members have complained of late-night noise, unruly hotel guests, impolite conduct by hotel staff, and damage to the Village Green and trees.)

Areas of Community Concern.

PB entrance and Route 46 Intersection.  No news of progress here.  In addition to the SSP intersection studies, Beaufort County commissioned a 2023 traffic safety study of the Route 46 Corridor from the Rt 170 circle to Old Miller Road.  The Report highlighted that our intersection is an issue but there are two worse ones.  The study presented numerous options for these State controlled roads, which have since been taken up by the three-county Local Area Transportation Study, which makes recommendations to the SC Dept of Transportation.  In any event, apparently no state or local funds are available for the projects, pending another State Transportation Bond issue (funds from prior bonds have been exhausted). 

A town resource has indicated that an open issue is who pays for any construction – the developer as a condition to future permitting, or state funds?  Further, the study leans towards a traffic circle versus a stop light, which further complicates a resolution of this issue.  As noted in the July 2025 MAC meeting notes, “Gray Ferguson stated that Club management was reaching out to Town of Bluffton and County officials to see if they would support SSP on the installation of a stoplight, at least as a temporary solution, or otherwise accelerate the project.”  Our best guess: resolution is years away unless PB management and/or our POA, the PB Preservation Trust, puts significant energy behind this.  We will continue to monitor any developments.

Town of Bluffton Noise Ordinance.  As you may recall, there has been on-going concern over weddings and other events on the Village Green, and one unresolved issue is whether the Town of Bluffton’s noise ordinance applies to Palmetto Bluff.  The Town’s rule states live and amplified outdoor entertainment is allowed from 12:00 p.m. (noon) to 10:00 p.m.  During our Mayoral meeting, we learned that 92 percent of the homes in Bluffton are “behind the gates” and certain town resources take the position that the Town’s Noise Ordinance, as written now, does not apply to these communities and accordingly the local HOA (or POA in our case) is to control and monitor the noise ordinances within each individual community.  The Bluffton police will not typically respond to noise complaints.  We have to rely on our Security Team to enforce the POA/Montage noise limits in place that we believe creates an imbalance and needs resolution.

Club Rule Changes and “Gag provision”.  Several residents brought to our attention that the PB Club Rules and Regulations have been extensively revised and contain a provision in the Discipline section stating that members may be disciplined for “making disparaging, derogatory or defamatory remarks about the Club, Club associates or Club ownership, including by email or in social media…(emphasis added).”  This ban on social media posts appears to be contrary to the US Consumer Review Fairness Act of 2016 that prohibits companies from contractually banning truthful, if negative, social media posts about company goods and services.  While we understand other communities may have enacted such bans, the legality of these gag orders has not been tested in court.  We encourage our membership to become familiar with this legislation and its intent.  We will issue a separate more detailed letter on this topic shortly.

Several residents have also brought to our attention that the Club, Trust and/or Montage have purported to suspend members or have threatened to suspend members because of public commentary.  We are aware that certain members have insisted on hearings where they have been represented by legal counsel and have contested the alleged facts and asserted infractions.   Any practice of threatening suspensions to squelch good faith discussion or debate would be Unamerican as well as likely illegal and would need to change.

EMT Coverage.  As long-time residents will remember, our local fire station used to have Emergency Medical staff stationed here 24/7.  With the completion of the New Riverside Station, this EMT resource was moved there.  Many residents have expressed a strong desire to have EMT capability inside PB.  We believe this is a priority as our population grows and our new neighbors are increasingly farther and farther away from the New Riverside station.  We are working on a task force to define and address the needs.  Stay tuned.

Police.   Confusion exists regarding what is a police matter, a Club security matter, when the hotel “security” team can act, etc.  Further confusion exists as to what the standing instructions are to the on-campus security staff in terms of deference to developer, hotel, and hotel guests, particularly in cases where member interests diverge.  Further confusion exists as to the level of training, authority and weapon-carrying authority of the on-campus security staff.  We will investigate and report back.

Audit of PB Base Club and Trust Financial Statements – Trust by Verify?

Management has pointed out that, under the Club documents and SC law, members have a right to audit the PB Base Club and Trust financial statements although the Trust already completes an annual audit by a third-party audit firm.  The PBNA is considering undertaking an audit of the PB Base Club and requests feedback on whether PBNA members would like an audit completed and whether they would help fund the cost.

Golf Membership Pricing and Division – Next on the Tee is Tier II

Ownership announced its new golf membership plan, categories and pricing on August 6.  While folks are curious to see and evaluate the new Anson course, and understand that the developer’s intent is to reserve some memberships for future lot buyers, the general reaction heard from Golf Club members is that the current Tier II members have not been treated well or provided with reasonable options. 

We understand that some golfers are now looking at non-PB options.  That is unfortunate for many reasons. 

We would have expected that ownership, having cashed the previous joining fee check, would have provided Tier II with the option of going May River/Crossroads only Tier I for a reasonable additional joining fee, or keeping what they have including unlimited additional rounds at the accompanied guest fee.  

We have heard from some golfers that they are hesitant to sign on given the economics, general principles of fairness and equity, absence of “true” private club amenities, uncertainty on clubhouse, a 4-5 mile dirt approach road, and potential for SSP to increase golf member dues in the future.  The decision may be forced before anyone has the chance to play  and evaluate the new course.

Given their support of the club, and our desire to see neighbors play golf together, we would like to see current Tier II members given options to upgrade to May River Tier I for the recent joining fee net of their prior fee or keep the current Tier II including unlimited additional rounds for the accompanied guest fee.  The golf course utilization chart on the member website shows the current year-to-date course usage at 25% of capacity.  There are 312 Tier II members.  Club management reports that 55 have elected to move to Tier I thus far.

Yet to be seen what the Tier II golfers do.  The sense of belonging and inclusiveness contemplated by PB charter documents is being severely strained by the SSP golf proposal.

Member-Developer Relations.

Impact on Property Values and Developer and Member Sales

Litigation, governance concerns, reputational issues around developer-member relations, pricing, offerings, lack of new amenities, and value proposition of the PB Base Club and the boating, golf, and shooting clubs may have a negative effect on property values and demand.  We are all for positioning PB as a high-end community, however, one would have to imagine that real estate offices at other communities are quick to comment on some of the goings on.  We would also like to see an inclusive community with something for everyone here.   At any point in time, half the homes will be below the median value; we would discourage the developer from pricing half the community out of PB offerings.

A Path Forward?

The answer will not be for one side or the other to simply capitulate, but rather for the sides to find a working relationship no matter how difficult.  We doubt that a “thank you sir may I have another” approach will be a widely adopted among the members. We intend to contact Henderson Park and report back. 

Given the significant issues facing our community and the potential impact on the value of homeowners’ properties, we would encourage all homeowners to join the PBNA and communicate your concerns directly to management and SSP.

Upcoming Preservation Trust (POA) meeting on September 22.  Prior to this meeting, we will email PBNA members a list of questions that property owners may want to ask, including remedial plans for the South Wilson erosion. 

As always, feel free to reach out to any of the PBNA volunteers.

Regards,

PBNA Volunteers

Cathy MacKinnon, John Meltaus, Frank Riddick and Allen Roth

July 3, 2025

Subject: Litigation Update

Dear PBNA members:

This email provides a short update on the two on-going legal disputes as well as a new, third lawsuit filed last week.  We’ll start with the latter.

Lawsuit #3:  After an unsuccessful mediation during the first half of 2025, four Palmetto Bluff residents filed a lawsuit against the Palmetto Bluff Preservation Trust (Trust), which serves as our POA. The complaint focuses on alleged breach of fiduciary duty and conflict of interest by its governing Board of Stewards, that is controlled by South Street Partners (SSP) and is comprised of only SSP representatives.  This lawsuit focuses on two principal matters: 1) misuse of the Village Green and the associated fees paid by Montage clients for weddings and corporate events; and 2) misusing Trust funds to pay for defense costs of non-Trust entities in the other litigation.  The plaintiffs argue that our POA is effectively transferring profit out of the Trust to the Montage Hotel (owned by SSP) and misusing its funds by paying one-third of the legal defense cost while the Trust is only one of twelve in lawsuit #1 and is not party to lawsuit # 2.  Some of the complaints in this lawsuit were raised by members at the January 2025 Trust Board of Stewards meeting and in a letter from the plaintiffs to SSP on February 19, 2025.  The lawsuit raises concerns with respect to how the Trust is being managed.

The lawsuit is a public document, and you can download it from the Beaufort County Clerk of Court website, case # 2025CP0701551:  https://publicindex.sccourts.org/beaufort/publicindex/   

Lawsuit #1: This lawsuit was filed in 2022 by 14 residents on a range of issues, including short-term rental access (subsequently largely resolved), illegality of the PB Club legal structure and other issues.  SSP continues to pursue procedural matters, arguing that the dispute should be privately arbitrated vs. litigated in public court.   SSP lost in the initial court ruling and lost again at the SC Court of Appeals.  SSP subsequently petitioned the SC Supreme Court (SCSC) to accept a second (and final) appeal.  On June 25, the SCSC accepted the case, and we can expect this appeal to consume another 9 to 12 months.  This likely takes pressure off any settlement efforts that have been episodically pursued, unsuccessfully, for the last year by SSP/Henderson Park and the plaintiffs. 

Lawsuit #2: This lawsuit was in response to SSP’s May 2023 unilateral decision to make PB Club membership optional.  The legal authority to make such a dramatic change was challenged by five PB property owners.  This lawsuit argued that the controlling document has an amendment process requiring a majority of property owners to approve any substantive change, and this was not followed.  The property owners prevailed with a Special Referee who issued his ruling on March 14, 2025.  SSP responded in two ways.  First they have asked the Special Referee to rule on how to implement the recission; no decision has been rendered yet.  Second, SSP initiated a potential member vote on this matter, implicitly acknowledging the illegality of their unilateral 2023 waiver.  Following a series of small group meetings with members in June to solicit feedback and explain their rationale, to date SSP has not moved forward with a vote or provided information on if or when this might happen.

As always, feel free to reach out to any of the PBNA volunteers.

Regards,

PBNA Volunteers

Cathy MacKinnon, John Meltaus, Frank Riddick and Allen Roth

Proposed Community Vote June 4, 2025 Dear PBNA Members: The purpose of this email is a follow up to our June 2, 2025 email regarding the South Street Partners’ (SSP) Amendment Vote. We will cover four topics: 1. Suggested questions to ask SSP during the upcoming group meetings or to be sent directly to SSP, 2. A link to a recent Geoff Block letter that he requested we include, 3. A proposed zoom Town Hall Meeting and 4. A minor editorial website/email change. Suggested Questions  What are property owners getting in return for giving up mandatory membership? How does this amendment affect the ongoing litigation by the group of 17 property owner plaintiffs?  Will approval of this amendment extinguish the lawsuit, or can it continue? Why haven’t you settled the lawsuit? To date, the developer has funded new amenities out of their own pocket in order to drive sales of new developer lots.  Your proposal sounds like new amenities will be paid strictly by new and existing Club members via the joining fees and such.  Is that right?  That feels like a big shift in financial responsibility. What is the timing for delivery of the various new amenities?  What is the construction budget? Why not limit opt-outs to 2-3% of residents? How will the vote be conducted?  How will I know that it is independently counted?  When will the voting open?  Close? This will encourage more vacant investment lots; how do you propose to manage/mitigate? By asking for this vote, is SSP/HP acknowledging that the current Club structure is illegal? a. If so, what do you plan to do about the joining fees that have been collected to date under this illegal structure? b.  Do you anticipate a lawsuit by property owners who paid joining fees under this illegal club structure? Are you planning on selling off large tracts of land to other developers? What are the building standards - price point and quality? Will they be governed by the DRB and will the standards be the same as the rest of PB? Have you sold parts of Kiawah to tract builders? Under this amendment, the PB Club remains for profit? Right? If you sell all or part of the PB Club, do you plan to honor the ROFO? a. If the property owners exercise the ROFO right, then aren’t we paying for all the increment amenities twice? Has the SC Supreme Court decided to hear the SSP appeal? The recreational covenant contractually requires the Base Club to operate on a break-even basis, i.e, as a non-profit. You have said that repeatedly to us in written communications, at meetings, etc. If that is true, why don’t you want to convert the base club from a for profit LLC to a nonprofit entity like a mutual benefit corporation or a 501(c)(7)?  My understanding is that, if you did that, it would solve your biggest legal risk? Are there any downsides to members from a voluntary for profit structure? How would the club manage a disparate group of members and nonmembers? Are you currently shopping the property? Friends of mine in the PE world say you’ve reached out.  Geoff Block Letter A link to a recent Geoff Block letter that he requested we include can be found here Click here Zoom Town Hall To assist the members, we are planning a zoom Town Hall meeting on Monday, June 16th from 4 – 6pm.  Details to follow. Editorial Clarification The PBNA contact info is as follows: Website:  pbnabluffton.com Email:  pbna2020@gmail.com For any further discussions please feel free to contact any PB volunteer board member or send an email to pbna2020@gmail.com. PBNA Volunteers Cathy MacKinnon, John Meltaus, Frank Riddick and Allen Roth

Proposed Community Vote

June 2, 2025

Dear PBNA Members:

The purpose of this email is to provide additional background and context for South Street Partner’s email distributed on Friday evening May 30^th.  We will cover three topics: Background: Initial thoughts on critical issues; and What to expect from the PBNA going forward.

Background

Two years ago, SSP attempted to unilaterally make PB Club membership optional without holding a PB property owner vote as required by our Recreational Covenant. While there were likely multiple motivations of SSP to make this move, the legal authority to make this important change to our community was challenged in court by five PB property owners.  That lawsuit argued that the amendment process in the Recreational Covenant required a majority of PB property owners to vote to approve such changes were not followed. Therefore, the change to optional PB Club membership was invalid.

In those legal proceedings, the PB property owners prevailed, and on March 14, 2025, the Special Referee issued his ruling that the mandatory membership waiver by SSP was invalid.  It now appears SSP has accepted the court ruling and is proceeding with a vote by PB property owners to approve a change in PB Club membership to non-mandatory.  However, SSP is combining the non-mandatory membership vote with other unrelated amendments to the Recreational Covenant, such as repayment of costs usually paid by the developer to SSP from PB Club with interest, future Joining Fees to go to fund new amenities, and Financial Audits of the PB Club. None of which appear to be related to the non-mandatory membership issue.  In other words, SSP appears to be trying to create a quid pro quo to entice members to approve a fundamental change to the PB community.

Initial Thoughts on Critical Issues

We see several issues and risks associated with this amendment such as:

• Potential for an economic “death spiral” if too many property owners resign from the PB Club which will shift more and more costs to fewer and fewer PB property owners.  Other communities have had this problem when they suddenly made membership optional.

• Potential risk of bulk sale of developable land to national large-scale homebuilders.

While SSP may argue they do not plan to do this, they (or a new owner) may change their minds.  SSP’s original business plan called for bulk land sales of undeveloped lots.  Non-mandatory PB Club membership makes this far more feasible

• SSP could retaliate against members and potentially remove them from the PB Club

• SSP could sell PB Club memberships to nonresidents without limitation

• Potential to forever change the character, membership mix and culture of our community.  PB could become a group of itinerants and empty lot speculators

• Putting Joining Fees into the PB Club and providing Financial Audits of the PB Club appear to be required by SC law, and if so, not an incremental benefit to PB property owners.  In other words, the proposal offers something the community should already have.

In the petitioners’ organizers’ (who support the developer) earlier presentation to members of the community, they state “Mandatory and guaranteed membership in the Club and the recreational facilities, programs, services, and amenities provided by the Club increase the value of our property.”

Importantly, SSP has not articulated any significant benefits to PB property owners from a change to non-mandatory PB Club membership. The fact that in two years only 19 PB property owners have purported to have opted out of PB Club membership demonstrates this. If members have hardships, that can be addressed by the developer in more careful and direct ways.

What to Expect From the PBNA

We will continue to listen to PB property owners and research potential issues and related pros and cons. We anticipate sending out at least two additional emails:

1. Prior to the small June group meetings, we will circulate a list of potential questions which could be raised by PB property owners at the meetings.

2. After these meetings and prior to the vote, we will analyze any feedback and provide additional thoughts and information.

In our opinion non-mandatory membership is not in PB property owners' best long-term interests. This is a serious irreversible change for our community that has benefited from mandatory PB Club membership for 20 years.

For any further discussions please feel free to contact any PB volunteer board member or send an email to pbna2020@gmail.com.

PBNA Volunteers

Cathy MacKinnon, John Meltaus, Frank Riddick and Allen Roth

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: 

Palmetto Bluff Neighborhood Association 2025 Annual Meeting and Litigation Update on Vimeo

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.

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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”.