Dear PBNA Members,
This newsletter has six topics:
- Update and summary of ongoing litigation and mediation matters.
- Crossroads Golf
- Shout-outs.
- What we’re working on
- Our new PBNA Board Volunteers
- Final Thoughts.
1. On-going litigation and mediation efforts
As you may know, there are two separate disputes underway between property owners and PB’s owner, South Street Partners (SSP). The newer dispute involves the May 31, 2023, action by SSP to make membership in the Palmetto Bluff Club optional. The second dispute, led by homeowners who identify themselves as the PB Community Advocates, continues. Our understanding of the status of each is summarized below:
Mandatory Membership Waiver. Last July, a group of property owners submitted a formal complaint regarding SSP’s unilateral announcement making membership optional. Per our governing documents, this is 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 an instrument signed by a majority of Owners of residential units and The Founder. This did not happen. Instead, SSP relied on a waiver provision (section 4.5) to promulgate the new policy, essentially saying that they no longer would enforce the provision. A core motivator for these property owners is the need to defend owners’ legal rights now and prevent adverse precedents which may impinge property owner rights in the future.
As of last month, the mediation process concluded without resolution. Our understanding is that the parties may be discussing a shortened legal process for adjudicating the dispute. Overall timing is TBD.
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. However, there is nothing that would lead us to believe that we can expect a resolution any time soon. For brevity’s sake, a summary of the issues which we published in our Novenber newsletter is included in the APPENDIX below.
Caveat! Please remember we are not lawyers, and these updates are for informational purposes only and are notlegal advice; instead, all information, content, and materials in this email and on our website are for general informational purposes only.
2. Crossroads Golf
Like many of you, we are disappointed to learn that the new 9-hole golf course is not part of the base PB Club, despite the fact that most of the people we have talked with were under the impression that Crossroads was the next great new amenity for all Palmetto Bluff Club members. That said, SSP is a business and has the legal authority to set rules and fees. One wonders if future amenities will be part of the base Club or will require additional dues and fees.
Existing Golf Club members have expressed concern that—while they have no incremental initiation fees for Crossroads—their annual dues are now $4,000 higher per year. Importantly, if they chose to forego extending their Tier 1 membership to Crossroads, they forfeit the right to extend their membership to any new courses. This is viewed, at least by some, as coercive. Clearly the long waiting list for Tier 1 memberships provides SSP with significant leverage.
Please note that Golf Club membership categories have expanded from two to five:
- Tier 1 and Tier II members who sign up for Crossroads will now be members in what is now called Palmetto Bluff Golf Club.
- Tier 1 and Tier II members who do not join Crossroads will now be members in the May River Golf Club. Note that these members will/have forfeited their rights to automatically extend their memberships to any new golf courses without a new initiation fee.
- The new fifth category, Sports Membership, is for folks who only want to join Crossroads.
For more details, please review the documents under the Golf tab on our member website.
3. Shout-outs
While many of you are aware of important contributions by our neighbors, we wanted to applaud three in particular:
- Lee Leonard and Penny Baldwin Leonard for leading the efforts to Save the Grace. Leveraging their skills and passion for boating, Lee, Penny and others—along with the support by our owners--brought this majestic piece of Palmetto Bluff tradition and lore back to our community. And also, thanks to the 45 families who each contributed $5,000 and became founding members of the Grace Club.
- For the last year, Kent Flury has led a group of over 80 property owners to improve cell phone coverage in the newer neighborhoods. Working with SSP partner Jordan Phillips, there is commitment for a temporary cell tower as a new cell tower is built and becomes operational later this year or in early 2025.
- For the past several years, Bob Newbert conceived and planned innumerable Boat Club excursions and events. Bob did this with great cheer, patience and at considerable personal expense. Bob’s meticulously planned trips are no doubt responsible for driving the Boat Club’s popularity as well as many happy memories. Going forward, Wilson Landing will be planning and running Boat Club excursions, and they have big shoes to fill. Kudos to Captain Bob.
We make these shout outs as a reminder that we are fortunate to live amongst so many talented, caring, and energetic people who devote their time, talent, and treasure to make and preserve Palmetto Bluff a special place.
4. What we’re working on
After a long holiday season filled with fun, family and joint replacements, your PBNA volunteers have several things on our agenda:
- We will email a list of potential questions for SSP before the Town Hall
- We will update our historical analysis of our POA’s finances (Preservation Trust) once the 2022 audited financials are finalized and posted. Please note that we already have a four-year analysis and comparison of POA on the PBNA website, under FAQs.
- We are digging into the Club’s finances, which is a priority given the rapid acceleration of dues in recent years.
- Anson update
- Member survey
Please let us know if there were other topics you would like us to address. Fortunately, we have expanded the volunteer group, and we welcome having additional capacity and energy to further our mission.
5. New Board Volunteers
We are delighted to announce two new PBNA volunteers who are excited to help further our work.
Frank Riddick. Frank recently retired after a long business career as a CEO for private equity owned businesses. Frank and his wife Carol purchased property in Palmetto Bluff in 2012 and became full-time residents in 2017. The couple has three grown sons and two dogs.
Allen Roth. Allen recently retired after 40 years as a structural engineer focused on forensic engineering and strategic advising. After selling his engineering firm, Alan and his wife Kim Mazzei-Roth relocated to River Road in 2022. He enjoys tennis, fitness classes, bowling, swimming, and the bourbon/cigar club. He has three children and seven grandchildren who thoroughly enjoy vacationing in Palmetto Bluff.
6. Finally…. a few things in closing
· Please feel free to forward this newsletter to other PB property owners, and please help us drive awareness of PBNA’s mission and activities. While PBNA has over 228 households and 406 members, numbers matter so please encourage your friends and neighbors to join.
- Also, please help address any confusion your friends and neighbors have between PBNA and the litigation group that goes by PB Community Advocates (PBCA).
- For more detail on our mission, please go to our website: pbnabluffton.com. For any questions, you can contact us at pbna2020@gmail.com, or call one of the volunteers listed below.
- Please join us in giving a shout out to our website sponsors (which are displayed at the bottom our landing page), as their contributions help support our on-going efforts. In part due to their contributions, current PBNA members automatically renewed for 2024 for no cost.
- Also, 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, Frank Riddick, Allen Roth, 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”.
APPENDIX
ST Rental/PBCA Litigation. Both sides have lists of claims and counterclaims that may somewhat obscure the central issues. To us, the PBCA makes three key claims:
- Claim #1: The PB Club is inherently unlawful, as it cannot be both (a) a private for-profit company owned entirely by the developer, while at the same time (b) be mandatory for PB property owners to join and pay what the developer choses, without any rights. Response by SSP: Outside of the legal proceedings, SSP now has waived the requirement that PB property owners join the Club, so it is now optional, which may (or may not) render claim #1 moot. SSP’s legal authority to unilaterally waive Club membership is being challenged by a second group. Let’s call this the “mandatory membership waiver” matter.
- Claim #2: SSP changed the rules to prohibit short-term rental guests access to Club facilities, which PBCA viewed as an improper change of the rules. Response by SSP: Outside of the legal process, SSP implemented new access rules and fees for renters. This may (or may not) render claim #2 moot as well.
- Claim #3: Under the governing documents, the Club was supposed to be offered to the members for purchase at the time SSP acquired PB (under a right of first offer provision), and this unlawfully was not done. This claim also asserts that the Club should have a non-profit, mutual benefit company structure, which is common in the Lowcountry. SSP Response: In its FAQ, SSP pushes back on the legal basis of this claim and asserts it has continued economic interest in the Club amenities for which it has not fully reclaimed their value in marketing new lots. SSP has also stated that it believes the right of first offer was not applicable given the structure of the transaction.
There are a host of additional claims/assertions which we think are secondary. But, for those interested in more, we recommend you go to the respective source documents. Again, for further information, please email us or reach out to one of the volunteers.
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