In August of this year, the developer contacted the POA regarding the pending land/lot liquidations in order to give them a “heads up.” (1a) Awaiting more details, the board elected to withhold that courtesy from the property owners.
Since the revelation of this news there seems to be a lot of conversation from all sides of the issue coupled with confusion about the status of any remaining rights the developer might still have. No wonder . . . director Phil Baldwin was even confused at the October board work session when he boldly noted that the good thing about the liquidation was that the sale of all lots would get the developer, that he is actually presumed to represent, out of the picture and put us in control of our own destiny. (1b) Talk about twilight zone.
When later asked, the POA President acknowledged that in fact, the developer rights would not automatically go away with the sale of the developer’s remaining inventory.
Certainly for those of us who were present at the time of the much discussed 2016 land deal, any confusion is understandable as it was assumed that the $9.4 million transaction would put all property (excluding approximately 100 developed lots) within “Mother Canoe” under the control of the POA and that the developer’s influence would be limited to the Potts Mountain property located across Steve Tate Road. (2) How so totally wrong, this assumption turned out to be.
Among many things, we later learned that our very own Blackwell Creek in the heart of “Mother Canoe” was actually excluded from the transaction. (3) Eight months later this property was transferred to Big Canoe Utilities and later included in the sale of the water system. We also learned that no measures were taken or agreements reached that would require the developer to relinquish the 30+ retained developer rights spelled out in the January 2005 amendment to the covenants which state that “all specific rights of the Type “D” member shall end (1) two years after the date that the number of individual lots (improved and unimproved) on the POA’s assessment records is greater than 4,500, or (2) on such earlier date as the Type “D” member consents to in writing.” (4) The POA and the Company also agreed that 4,750 family dwelling units would constitute the maximum size of Big Canoe. Presumably this change was made in order to limit the number of homes that could be built to include the Potts Mountain property.
(There is actually some ambiguity as there is a conflicting reference within this same amendment citing Article III, Section 2 of the previous covenant dated March 1988 which “provided that Type “D” (developer) membership shall cease at such time as the Company has less than five percent (5%) of the total number of votes held by all Members of the Association …“) (5) The actual number of Class/Type D votes can not be documented by this writer, as that question was actually asked of management and others in July, August and October 2019 without an answer being provided.
As for the retained rights, one of the more significant rights was a topic of discussion at the August 2019 Long Range Planning Committee. At that meeting, POA management noted that there are potentially 1,057 additional developer lots ”if the Developer buys land contiguous to “Mother Canoe”. These potential lots are “totally beyond the control of the POA and totally under the control of, at this time, Big Canoe Company and Greenwood.” (6)
Other important rights include architectural control over commercial properties, public access to any inns or restaurants that might be built, right of first refusal, right to transfer or assign developer rights and the right to use POA data for marketing purposes . . . and on and on. (refer to amendment for more specificity) (4)
Later when Potts Mountain was placed into a conservation easement, it became obvious that there was nothing to trigger an end to the developer’s rights other than their voluntary relinquishment. Obviously these rights do have value, as the developer told the POA board in early 2018 that they were not interested in relinquishing those rights at that time. (1c)
While it is unfortunate that measures were not taken to cure this problem during the 2016 land transaction, the POA once again lost another opportunity in April 2018 when the board by consent, and without property owner discussion, unanimously agreed to approve an agreement that would relinquish all property owner rights regarding our water system as described in the November 29, 1984 trust deed. (7) (8) (9) This release will be executed by some yet unsuspecting future board in another 3 ½ years if Utilities, Inc. meets all key performance indicators. Like Blackwell Creek, release from this trust deed was probably crucial to the sale of the water system and could and should have been used as leverage to remove developer influence from our community for good.
Although these examples may be in the past, we also find ourselves faced with new opportunities. Consider this. As the editor of the Focus on Big Canoe website has noted on many occasions, there are significant discrepancies regarding the 2016 land deal and Sconti Point. Did the developer own Sconti point? Or was Sconti actually already owned by the POA? And why did the POA pay taxes on the property all those years? As bizarre as this might sound, without the requested plat, there does not seem to be documentation either way to validate the ownership of Sconti point. I have no idea what the answers are to these questions, but the developer’s “word” that it is so, simply does not suffice. Surely, if there is any possible chance that these suppositions are correct, our board owes it to the property owners to simply produce that plat. Imagine how valuable the discovery of the truth could go towards the relinquishment of developer rights if that is, in fact, what this community wants? And what if Hopkin’s conjecture is wrong? No harm would be done as that revelation would put an end to the Sconti story line.
In conclusion, unless something is proactively done or there is a a legal argument otherwise, it certainly appears that developer rights that affect the future of Big Canoe will exist into perpetuity unless a 4,500/4,750 POA lot count is achieved or the developer consents in writing. And how disheartening will it be when and if we learn that we purchased 730+acres in 2016 only to be replaced with the annexation of contiguous property and a new “Mother Canoe”.
It is my understanding based on research of public records and/or POA documents that the information in this article reflects the current status of developer rights. Should anyone have additional information or corrections to offer, please let me know.
Likewise, if you have questions or would like further discussion, I can be contacted at thepcrosses@gmail.com.
Patricia Cross
10438 Big Canoe
References:
(1) October 2019 Board Work Session Video at (a) 58:30 (b) 1:15:00 (c) 1:20:54
(POA Website>login>POA>Meetings>Videos>October 2019 Work Session)
(3) POA Board Meeting Minutes – March 21, 2019
(POA Website>login>POA>Meetings>Minutes>March 2019 Board Meeting)
(4) Amendment to covenants – January 18, 2005
(6) Long Range Planning Committee Notes, August 5, 2019, Pg. 2
(POA Website>login>POA>Committees>Long Range Planning Committee>Minutes>August 2019)
(7) Trust Deed dated November 29, 1984
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