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Possible Clubhouse Purchase

Overview:

  • Lennar is evaluating selling the Concord Station Clubhouse (“Clubhouse”) to third parties which is fairly customary once a community is approaching build out.
  • Pursuant to the Club Plan, each resident in the Community pays an annual fee to use the Clubhouse in perpetuity and for maintenance. The annual fee increases approximately 5.4% per annum until 2035 and then is level thereafter.
  • The Homeowners Association (“HOA”) holds an option to acquire the Clubhouse from Lennar pursuant to a prescribed formula set forth below.
  • The CDD is a better mechanism to acquire the Clubhouse because the CDD has access to low cost tax exempt financing
  • The Club Plan sets forth an Option Price which is the aggregate in place Club Plan Fees divided by the Capitalization Rate of 6%.
  • In the current year, each Resident pays a Club Plan Fee equal to $468 per annum.
    • Based on 1,516 Units in the Development, the Total Club Plan Fees for this calculation are $709,488.
    • Based on the current Capitalization Rate formula, the Purchase Price of the Clubhouse is $11,824,800 plus transactional and financing fees.  Like the Annual Club Fees, the Option Price increases by 5.4% per annum. 
  • There are a number of benefits to the District acquiring the Clubhouse.

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