Land Sale Special Election

SUMMARY

A Special Election has been set by the SROA Board to vote on a ballot measure related to a land sale between the SROA and SilverStar Destinations LLC (Land Sale Agreement). The ballot also includes an amendment of the Consolidated Plan of Sunriver to add language to allow for a sale of SROA owned land - any such sale is now banned by the Consolidated Plan. The sale involves five parcels as identified by the SROA totaling 6.38 acres of land (Land Sale Map). The total gross sales price is $2,553,780. Out of these proceeds the SROA is committed to spend up to $750,000 to construct a new traffic circle between Abbot Drive and a newly relocated Beaver Drive (this will be much closer to the entrance of Sunriver than the current intersection). This would make the net sales price of the transaction at just $1,803,780 - under $300K an acre, or less than $14K per allowed new residence!

The land may be purchased in stages, with SilverStar having up to two years to purchase at least $750,000 worth of land- this is Phase 1 of the agreement. This land is to be valued on a pro rata basis - at the gross sales price of $400,279 per acre. If SilverStar buys the land that the current Beaver Drive is located on it must relocate Beaver Drive to its old platt location at its own expense. However, although it must construct the new traffic circle, the SROA is obligated to pay for its construction out of the proceeds of the sale. SilverStar then has another two year period to complete the purchase of any additional property not obtained during the Phase 1 stage.

ISSUES

There are a multitude of issues surrounding the proposed sale and related Consolidated Plan amendment. Unfortuantely the format of the forums that the SROA is holding to discuss the Special Election ballot only allows for written questions with no follow on questions or verbal discussion. This does not allow for the open Q&A that all had hoped to discuss these important issues in public. Here are some of the most important issues:

Once this land is sold it is LOST FOREVER. This land is not being sold for some altruistic purpose, it is being sold to build high-rise high-density condos and to house part of a multi-story parking complex. There is a reason that the Consolidated Plan of Sunriver does not allow a land sale - to protect the land that belongs to all owners. This is specifically to restrict development, not to allow for an even larger degree of it! As stated by Ted Smith A.I.A. Sunriver Resident Architect and Development Manager during the early years of Sunriver (including the planning and construction of the original Village Mall) "Common land was intended to be and should remain sacrosanct. It was deeded to each property owner with his purchase and should not be taken away for any reason." (Link to entire Ted Smith A.I.A. letter)

There has been no independent appraisal of the property by the SROA. This is despite documents recently received by SaveSunriver.org (after a Demand Letter from our attorneys to the SROA Board) showing that SROA's own consultants who were hired to review the SilverStar's appraisers report stated the report was not credible. Subsequently then SROA Board President Scott Hartung stated an independent appraisal was was necessary and a "requirement for voter support of a land sales agreement." Additionally, SROA General Manager Bill Chapman wrote in his letter requesting an independent appraisal quote that "The SROA Board has a fiduciary responsibility to the Sunriver Owners Association to ensure fair compensation for their land." A proposal for an independent appraisal was received by the Portland based appraisal firm of Moscato, Ofner & Henningsen, Inc. and was approved and accepted by Bill Chapman on July 30, 2007 and a deposit for 50% of the appraisal price was made ($6,250 of the total $12,500 appraisal estimate). The SROA Board has never acknowledged that this appraisal was ever conducted, and we have no knowledge of if, and for what reason, it was called of. This has been and often asked question and the SROA Board has repeatedly defended their actions with regards to relying on SilverStar's own appraisal. These newly disclosed documents clearly show the SROA felt they had a responsibility to the owners to provide this independent appraisal and that the SilverStar's appraiser's report was not credible. However an independent appraisers report was never performed, or at least made public, and the SilverStar basis was used. The SROA Board still voted, by a 3 to 2 margin, to approve the Purchase Agreement with SilverStar.

The land to be sold is right at the entrance to Sunriver and will be among the first pieces of Sunriver property that a visitor sees. Currently it is open space with trees. If the proposed sale goes through, per SilverStar's currently published development plan, this land will house a multi-story parking structure and then rows of commercial and high rise condos (there are seven high-rise condos planned for the area between the Abbot House condos and Abbot Drive alone!). At least one individual from the First Impressions committee has spoken out against the proposal. This is clearly not the "first impression" we want to give any visitor to Sunriver.

As the terms of the sale are currently written it would be possible for SilverStar to buy only the property of the current Beaver Drive for approx. $750,000 and then relocate Beaver Drive. This would force the SROA to pay for a new traffic circle and pay the estimated $750,000 cost. This would leave the SROA with net proceeds from the sale of our land of $0!!!!

As mentioned earlier the Consolidate Plan of Sunriver currently forbids the sale of SROA owned property. It only allows for exchanges in order to protect Sunriver's, and likewise the owners, most precious resource - the land. To sell it at any price, and especially at this undervalued one, goes against the very foundation of what Sunriver was built on.

There is nothing in the agreement that requires SilverStar to build on the land or that prevents them from selling it to any third party - it only prevents them from transferring their option to buy the property (they can simply buy the property and then turn around and sell it to anyone they choose).

Costs for landscaping along the new Village Mall project are to be borne, at least in part, by the SROA. It calls for a cooperative effort for planning, design and other efforts related to the new landscape that will be needed after the intensive building takes place, but there are not clear statements as to the distribution of costs - or even if SilverStar is to bear any responsibility for these costs. These costs further reduce the net sales price for the property to be sold.

The sales agreement calls for space for a visitor's center to be provided as "additional consideration". However it should be noted that the visitor's center is currently run by the Sunriver Chamber of Commerce, not the SROA, and that the agreement only calls for space to be provided and for lease payments to be charged. What additional consideration is being provided by SilverStar here? Do they not want to lease property at market rates? This is a misleading statement within the sales agreement as this does not constitute any form of substantive additional consideration on the part of SilverStar.