- How will the annual lease payment be funded?
The annual lease payment of $170,000 will be funded by the Community Enhancement Fee, with no impact on the residential assessment.
- How will redevelopment of Dunes House Lane be funded?
Redevelopment of Dunes House Lane would be funded with the Repair and Replacement Fund with an estimated cost of $600,000.
- How will the conversion of the tennis courts be funded?
Conversion of the tennis courts for parking would be funded with the Community Enhancement Fee with an estimated cost of $260,000.
- How will the costs for equipment and furniture for the second floor and rooftop be funded?
Initial costs for equipment and furniture for the upper floors would be funded with the Community Enhancement Fee and is estimated to cost $150,000.
- What about additional expenses?
Any additional expenses would be absorbed by the Operating Budget, resulting in no anticipated impact to residential assessment based upon financial assumptions.
- How do we pay for it?
Lease and Initial Improvements
We will pay $170,000 per year to access a 4,600 square foot oceanfront facility, plus the costs to upfit the facility (audio/visual technology, furniture, etc.). Included with the annual lease are roughly 40 dedicated, owner-only parking spaces adjacent to the North Gate. To create this parking, we will pay $260,000 to convert these two tennis courts to barcode-controlled owner-only parking. These fees will be paid from the Community Enhancement Fund which collects ½ of 1% of the purchase sale price from the buyer when a Palmetto Dunes property is purchased.
- Will the lease payment increase during the term of the lease?
Yes, per the agreement, the lease payment has a 5% escalation every 5 years.
Base Lease per year
1 thru 5 $170,000 6 thru 10 $178,500 11 thru 15 $187,425 16 thru 20 $196,796 Total (20 years) $3,663,605
- How long is the initial term of the lease?
The initial term of the lease is for twenty (20) years. The Association has two (2) options to extend the term of the lease for an additional five (5) years each, for a grand total of 30 years.
- What happens after thirty (30) years?
Both parties agree in good faith to discuss extending the lease for additional terms.
- Can the Association terminate the lease?
Yes. The Association may terminate the lease after the tenth (10) year with ninety (90) days’ notice with payment of a termination fee equal to one years of the existing base lease amount.
- Can the Association sublet the POA space?
Yes, with consent from Greenwood.
- Will the Association incur any other expenses besides the annual lease payment?
In addition to the annual lease payment, we must also pay to operate our facility, including separately metered utilities, regular second floor and rooftop cleaning, insurance, our share of property taxes and building maintenance as well as a POA staff member to manage our clubhouse. These expenses are expected to be $120,000 per year, and they should be, at least partially offset by the rental of our facility to owners and Greenwood – resulting in no increase to the annual assessment. Maintenance and replacement of upfits to the facility (audio/visual technology, furniture, etc.) will be funded by the Repair and Replacement Fund.