The 332 Acre High Gap Property was part of the 2016 Land Deal, which most residents in hind-site feel was a very bad decision considering the $9.4 Million dollar price paid. The 2016 Land Deal was rolled out in a rush, announced to the Big Canoe community in the February 2016 Smoke Signals. By February 6th of that month the ballots had been sent, and by February 26th the voting was closed. It was rush, rush, rush, no time to reasonably discuss, nor investigate the facts. In retrospect we are finding out that much of what we were told in the lead up were fraudulent misrepresentations, and that the Appraisals and Price Valuations were grossly overvalued.
With this 2018 High Gap Deal, residents are once again being informed in last second fashion of a new fantastic opportunity, with 3 rushed Town Hall meetings (all within 5 days), and then an immediate decision “next week” by the Board, all within the space of two weeks. This is not transparency, and based on what we now know about the 2016 Land Deal, this is probably not a good idea. This article will explore some of the facts and issues.
Fact 1: The High Gap Property, as considered here and as part of the 2016 Land Deal, consists of 2 parcels, Tract B1 & Tract B2. Tract B1 is the 175.46 acre southernmost piece of High Gap Land and runs behind the Sanderlin Mountain and Red Fox Lots. It IS under the Big Canoe Covenants. Tract B2 is a 156.86 acre square shaped parcel that represents the northernmost piece of High Gap Land. It is NOT under the Big Canoe Covenants. Below is a visual representation:
Fact 2: There are 2 access points to the property(s). Tract B1 is accessed by the existing North Ridge Trace. Another access point is from Monument Rd (there is a small connecting piece of the property that enters from Monument and runs across the back of the Lots up on Deer Ridge Run), and could be used to connect to the higher elevation Tract B2 land. Below is a blowup of a Plat that shows the existing Monument Access.
Fact 3: Tract B1, which is under the BC Covenants cannot be put into a Conservation Easement, unless 100% of the property owners agree to the change. This is according to Phil Anderson and the POA. Legal Reference for this is Ga Law, OCGA § 44-5-60(d)(4).
Fact 4: The POA’s original plan was to work with High Mountain Investors & 5 Rivers + Robert Keller / Atlantic Coastal Conservancy (ACC) to try and get the land into a Conservation Easement, because the economic tax incentives are clearly defined for that type of deal. A Conservation Easement would Permanently Protect the Land. See Fact #3 for why that isn’t happening.
Fact 5: When they realized that they couldn’t do the deal through a Conservation Easement, they came up with the current scheme to do it as a “Charitable Gift”. The POA is now selling the land through a new complex mechanism to High Gap Investors & 5 Rivers (involving credits etc), and then they are giving it as a “Fee Simple” charitable donation to Robert Keller / ACC. According to answers provided at the 1st Town Hall, the Tax Incentive “Reward” is a massive one-time tax write off for wealthy investors. The “Pump” in the Tax write-off will come from excessively inflating the value of the donated Land by Appraising it at it’s maximum inflated value as “Development Potential Land” – estimated to be 20x to 30x what the POA is receiving for the land (an estimated $1,000,000 – or $3000/acre).
Fact 6: Since it is a Fee Simple land sale, Robert Keller /ACC (the new Owner) can then legally do whatever he wants with the land in the future, with no restrictions. But he “pinky promises” that he will never sell it for huge profit to Developers in the future. He could though, and we couldn’t stop him. Tract B1 could be developed to the highest maximum density allowed by zoning code, but would have to be developed according to POA Standards since it is under the BC Covenants, but it could be developed and the lots would be absorbed into the Community. Tract B2 is not under the Covenants, and could be developed to the maximum allowed potential in any way a greedy developer may choose. This could include clear cutting, high density, even building an “Amicalola Lodge” type of retreat if they wanted. But Robert Keller has “Pinkie Promised” that he won’t ever sell to developers.
Fact 7: The parties will NOT do the deal if conditional restrictions are put on future development of the land. This conveniently allows them to develop it in the future, in the event of “a broken pinkie promise”. Their explanation is that they intend to value the charitable donation via highly inflated Appraisal mechanisms that will be based on the maximum Development Potential (even though they are “pinkie swearing” that they will never do that), and thereby soak the Tax Payers of the United States with a massively inflated Tax Write Off. If we put restrictions on the land, then it will decrease the development potential, thereby decreasing the appraisal value, and thereby decreasing their write off. The POA, 5 Rivers, and Robert Keller/ACC do not care about the moral ethics of such a deal – but we should trust them. Pinky Promise! (just no actual legal documents to formalize it!)
Insert Note: Robert Keller is infamous nationwide as having created one of the nation’s most controversial Tax Haven Networks for wealthy investors by hyper-inflating land values, then soaking the Tax Payers for the excessive tax subsidies. I highly recommend that anyone interested read this incredibly long and detailed article on the process, and Mr. Keller’s involvement. CLICK HERE FOR STORY. It is of note that the Board of the local, and highly reputable, Mountain Conservation Trust asked Keller to resign as a result of his questionable methods.
“Cody Laird, then one of its directors, says Keller was proposing accepting easements with “excessive appraisals” that went “against the IRS guidelines.” He adds, “It’s something we didn’t want to do as a board.””
FACT 8: Obviously, our Big Canoe POA Board is neither burdened by such a moral compass, nor has any shame in involving itself in this type of questionable activity – especially when it can get it’s paws on a cool $1,000,000 to put into an unrestricted slush fund, which it will use to continue the uncontrolled spending spree that is ongoing the past few years.
Fact 9: The High Gap Property was presented to the Property Owners as valued at $1,500,000 by Norton Associates before we voted to purchase it. The official Appraisal by CBRE valued it at $2,000,000. The actual amount paid for this 332 acres, out of the $9,400,000 total land deal was only $594,692 (see the PT61 filed as part of the sale which establishes the legal purchase price). The difference in valuation was passed on to other parcels for property appraisal manipulation purposes. For instance we paid 48% over presented valuation for the Commercial Round-about Tract (valued at $505K – but we paid $749K), and $300,000 Per Acre for Sconti Point. They used this scheme in the Potts Mountain Conservation Easement Deal (also involving 5 Rivers and Robert Keller / ACC). Actually, the entire 2016 Land Deal helped pump that Potts Mountain Appraisal Value which they reaped huge tax breaks from in a Tax Scheme similar to what they are suggesting for High Gap. My guess is that that was part of the original goal of the 2016 Land Deal from the beginning. Did anyone notice how fast that Conservation Easement deal came together, and the entire “we’re developing and/or selling Potts Mountain to a Developer” fell apart once we closed that $9.4 Million deal? They got what they wanted – a huge Appraisal Point on a recent local sale. The $300,000 per acre Sconti Tract, and the $52,000 per acre Round-about Tract were used to help pump that Appraisal. Believe it or not – there is a coordinated and calculated intelligence behind every single move these shadow investors (and our Board) make.
Fact 10: We did NOT pledge the High Gap land as collateral on the $10,500,000 Loan we made to acquire the property in the 2016 Land Deal, because the Banks were not going to allow it (having more common sense than the POA and realizing that the property could never be sold for that amount if needed to cover the loan). Instead, we pledged all of our Amenities to cover the purchase this land.
Fact 11: As the High Gap Property (and Round About Property) are not pledged as collateral on the note (which the Property Owners are stuck paying off till 2025), the POA doesn’t have to put any sales proceeds towards paying down the Note, and indeed they have stated that they intend to put the money into an account which they can technically do whatever they want with, and spend anyway they wish. They say that they plan on waiting until April 2019 to tell us what they plan on doing with the money. But they will NOT use it to pay down the debt assumed when we acquired High Gap as part of the 2016 Land Deal – and this is contrary to what the Finance Committee presented to Property Owners leading up to the 2016 Land Deal Vote (Click to Read Full 8 Pg Smoke Signals Special Edition – Quote Below from Pg 8)….
Fact 12: In the 1st Town Hall Meeting, Phil Anderson stated, “We’ve had no less than 5 attorneys involved in this, 3 of which represent the POA”. Once again the POA is spending untold monies on legal studies and manipulations – before even running the idea by the Property Owners to see if it is something we want. Internet Task Force Deal, Water Deal, Troon Management Deal, and most recently the Spa & Golf Course Remodel are all projects that never materialized (or may not materialize in the case of the $2.5 Mil+ Golf Course remodel) — that we spent untold 100’s of thousands of dollars on in legal fees, consulting fees, and engineering studies.
Fact 13: Unrestricted Guests of Robert Keller / ACC will now be allowed access through the Gates of Big Canoe. Again, we have a “pinkie swear” from Robert Keller that this will not be abused, but there has been issue avoidance on any idea to limit that access in any way via legally inserted restriction.
Fact 14: The Developer never gave up their rights on High Gap when they sold it to us. See Exhibit B of the Warranty Deed that transferred High Gap to the Property Owners Association. It is also important to note that many of the Players (Investors) involved here are all the same shadowy shell company members of Big Canoe Company LLC (the Developer). So make no mistake – we are still getting in bed with the Developer on this one. Different names, but many of the same people – like “High Mountain Investors”.
I have some ISSUES with this High Gap Deal:
ISSUE #1: The Board is rolling this out very quickly, and we are being told to Rush Rush Rush again, or this opportunity will pass us by. The representatives at the 1st Town Hall alluded to the possibility that the Tax Laws allowing this marvelous opportunity will go away next year, which is why this is so urgent. There is NO EVIDENCE that the Tax Loopholes that allow for this sort of deal are going away. They have been around for decades. We have a president in office that is one of the biggest beneficiaries of the loophole. The urgency is based solely on conjecture to manipulate support for a quick deal. My guess is that the real urgency is that the POA has earmarked the funds for something we don’t know about yet, and that the 5 Rivers Investors involved are enjoying a banner Stock Market year and need to write off some unexpectedly high profit taking this year. This is NOT the basis for sound decision making in the best interests of the Community. They are short-sighted, and based on special interest needs – NOT the interests and needs of the Big Canoe Property Owners.
ISSUE #2: I don’t trust Robert Keller. I talked to him about Potts Mountain after they got control of that land, and he is a closed book and refused outside opportunities or ideas. I do not think he will be open to working with our trails committees or other groups once the deal is inked, and he was pretty vague, noncommittal and resorted to “change the subject yuck-yucks” when that subject came up in the Town Hall. I am a good judge of character, and I don’t trust his. Neither did the Board of the Mountain Conservation Trust when they terminated him. We are putting our trust into this man on a “pinkie swear” agreement – not a legal one, not an enforceable one. This man will have 100% iron-fisted control over all of this 332 acres of land on our northern border. He will have access into our community for unrestricted guests. He will have the power to develop, or sell for development, this land. The development options would be unrestricted for almost 1/2 the land. But the POA Board thinks it is a good idea to trust him on a “pinkie swear” arrangement.
ISSUE #3: This deal is not the norm for Robert Keller / Atlantic Coast Conservancy. They normally manage and collect fees for land in Conservation Easement owned by others. High Gap will actually be owned by Robert Keller / ACC, but will have no management income associated with it to my knowledge, and may have a property tax liability. I can see the economic incentive for the investors that are donating the land for a tax benefit – but I cannot see the Robert Keller / ACC economic incentive – except that he will own a really good investment in a piece of development land – or that he will own recreation land that could host paid activities and include access to Big Canoe amenities as one of the perks. I will allow that he claims it isn’t the money for him. But Keller isn’t exactly a non-profit and altruistic boy scout either.
His direct compensation from the nonprofit he heads totaled $156,750 in 2015, tax returns show. But that’s dwarfed by the $602,432 he made from Environmental Research and Mapping Facility, a side business he operates that works exclusively for his land trust.
It’s easy to be a Selfless Yogi when everyone brings you food and places it at your feet. But in the Town Hall, they are claiming that part of the rush is that these programs that Keller manages are about to go away. I personally don’t believe that there is imminent chance of this, but if we take them at their word, and if the IRS does close these tax loopholes, and his funding source dries up – he will still have a valuable piece of development land. I really hope this deal doesn’t end up as a golden parachute for Robert Keller, and I hear that it has been sold for development due to necessity, or funding shortfalls. Another thing that disturbs me, is that some of the Investors involved are Developer related, the same Developer who retained all of his rights in this property, and could too easily step back in as a “rescue buyer” of the land once the POA and Tax Credits have been milked, and a looming recession passes, and Development Potential returns. These are people that make business moves with chess like precision and long term strategy, and it disturbs me that the Developer could still slither back in at some point in the future. One must ask, “WHY did they retain all of their development rights to the land”?
ISSUE #4: Tract B1 is under the BC Covenants. Robert Keller / ACC will technically be a property owner in the community with certain rights. In the 1st Town Hall Phil Anderson stated that they will give up their Class E votes, but what other expanded rights will they and their unlimited guests acquire. Will their guests get any special privileges, golf access, clubhouse access, or access to our “resort like amenities”, which will further strain our amenity system? What plans or package deals might they implement involving activities on that land that might include community amenities or access? And if the Board tells us there will be restrictions, will they share with us a preview of the exact legal language that will be included in the contracts?
ISSUE #5: Even if I was for the deal, I am adamantly opposed to feeding the POA Board’s current money spending addiction. The fact that they want access to this $1,000,000 dollars so badly that they are willing to enter into such a stupid deal is evidence of an addiction. They are ADDICTED to spending money. They don’t even know what they will spend it on, but their spending addiction is blinding them to common sense, good business practices. We are going to be making peanuts compared to everyone else, taking all the risks, have no protections in place, are opening up our borders to unchecked potential development, and are opening our gates to unlimited and unknown strangers. Making decisions this stupid is what drug addicts do when they need their fix. I will say it again, they are addicted to spending money. The last thing we need to do with this Addict is to put a big tempting bucket of slush fund cash under their control. That is not the way to break an addiction.
ISSUE #6: I am concerned of a conflict of interest, or a perception of conflict of interest, within the Board, ex-Board, Committee Members and/or family and friends that may have been granted investor access into the “5 Rivers Tax Investment Club” that may receive huge tax advantage in this scheme. At the 1st Town Hall they clearly stated that it was an exclusive investment group by invitation/approval only access. I believe it would be appropriate to see Affidavits and Statements from the Board concerning this matter.
ISSUE # 7: We were told that the reason we bought this land in the first place was to permanently protect it. This doesn’t accomplish that. Phil Anderson keeps harping back to the recommendations of the Land Use Task Force – that was set up AFTER we voted on the promises made, and which added to and changed the rational initially laid out to us. Add to that that this current plan doesn’t even use the profits to pay down the debt we just incurred in acquiring the land. It is a stretch to claim that this is being done as was laid out to us pre-vote.
ISSUE #8: I do not like losing control of this important land on our northern buffer. I really get a sinking feeling that in 1 year the Board also would have blown the $1,000,000 on part of a new golf course remodel we don’t need (instead of just budgeting to maintain what we have), and a sacred part of Big Canoe will be leveraged away forever just to feed the spending addictions of a short sighted Board. This is too important to Rush! I am tired of being told that this is a once in a lifetime deal. Which leads to #9…
ISSUE #9: This “Great Deal” for the property owners effectively can be summed up that we are selling our land for $3000 per acre. Hell, we paid an estimated $300,000 per acre for Sconti Point (Yeah, the insanity of valuing that property that high – based on appraisal comparisons to land in Buckhead still blows my mind – but we were told that was a rush rush great deal too). We were rushed to pay $9,400,000 for about 709 acres in the 2016 Land Deal, and now we are asked to rush to sell 332 acres of it (almost half of the toal land deal) for $1,000,000. All the other land in the area is asking $12,000 to $30,000 per acre. Why do we have to RUSH to sell OUR LAND for $3000 per acre? What the hell kind of great deal is that?
Closing Comments: At the 1st Town Hall I witnessed the majority of property owners expressing serious doubts about this High Gap Deal. I also got the clear impression that the Board has already made a decision to move forward, and that this is mostly a formality which they will simply use as “cover” for that eventual decision. But as I, and other property owners at the 1st Town Hall, have outlined, there are just too many bad facts & potential issues with this deal.
The 2016 Land Deal was rushed, and has tied up the finances of the community for the next 8 years. This Board spends money recklessly, without consideration of the wishes of the community. They offer no transparency into the multitude of special project planning, legal expenses, consultancy expenses, engineering expenses that they routinely engage in. These things add up! The recent Capital Funding Report to the Board by the Finance Committee, that everyone needs to read, indicates that they are planning to raise fees and implement increased dues. I recently received some confidential comments and letters from insiders about what may be coming. Here is a Scan of One Such Letter (anonymous) that I find to have serious merit if even partially true.
This Board is not acting rationally, nor in the best interests of the community. If they go forward with this purchase, then perhaps it is time to think on a bigger scale than just the upcoming Board Election – and start considering By-Laws Section 3.10 …….
Maybe the above is premature. Maybe it isn’t, and to at least start talking about the possibility may be what is needed to get the Board’s attention. In the end it comes down to how far the Property Owners are willing to put up with, be pushed around by, be manipulated by, and be openly disrespected by these Spending Addicted Board Members that are treating Property Owners as if they don’t matter; that are getting us deeper in debt at the front end of a looming recession; and that are making decisions that permanently and irreversibly impact the character of Big Canoe.
I’m sure that we can put together a well worded Petition of Members for the removal of the entire Board if the Property Owners ever get to that point.
I get calls and letters all the time saying that what I am doing is great. So far very few others are willing to stick their own heads up though. Something needs to change soon, before this Board enters into one bad agreement too far, that cannot be undone. And FYI… nobody yet has addressed the serious issues discovered in the Land Deal, and the Board’s seeming strategy is to simply keep quiet until people forget. Its a good strategy, because it is working. We need a Property Owner Task Force to investigate the 2016 Land Deal before we go selling any of the related property.
Sorry this was so long, but there is a lot going on here, and honestly I could go on much longer on many aspects, but I am tired of typing today, so this concludes my editorial rant 🙂 I hope you learned something valuable.
Peace,
-david hh / publisher
Big Canoe, GA 30143
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