WRONGDOING #2- 5919 LaCrosse

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WRONGDOING #2
Real Estate Property at 5919 LaCrosse Ave.

Circle C Developer built the above property in 1988. This property includes the Circle C Swim Center, Circle C Grill, 500 square feet Office Space and the Post Office Facility. The swimming pool is one of the main marketing tools and an amenity for selling houses in Circle C Ranch.

The ownership of the above whole property was transferred to the Circle C Association on 2/28/2001 with a market value of $111,000. CCHoA?’s former Directors of the Board called the transfer a ?“donation.?” However, evidence proves otherwise; it was more like an ?“Over-priced Lay-a-Way Sale.?”


THE FOLLOWING ARE THE FACTS:

1. The Association collected a special swimming pool assessment of $60 per lot in 1999 and $70 per lot in 2000 for a total of $309,222 from the homeowners and the builders.
2. In the Years of 1999 and 2000, two years BEFORE the ownership of the property was transferred from the Developer?’s Phoenix Holdings to the Circle C Homeowners Association, the Board of Directors funneled totally $218,726 ($51,416 in 1999 and $167,310 in 2000) into Phoenix Holdings. The Board stated that those amounts were reimbursements for the costs of capital improvements, repairs and other operational expenses. Who in the world would pay maintenance expenses and capital improvements two years in advance before owing the property?
3. Based on the Travis County Appraisal District Property Information, the Market Value of the property at the time of the transfer was $111,000.
4. The Board classified this transfer as a ?“donation?” in order to help the Developer to avoid Depreciation Recapture and Capital Gain Taxes. In other words, our former Directors were knowingly and intentionally helping the Developer to commit TAX EVASION. At the time, Steve Bartlett was the Vice President of CCHoA; he was also the top employee of the Developer?’s two companies ?– the President of Alien, Inc. and the Vice President of Phoenix Holdings.



WHAT HAPPENED AFTER THE ASSOCIATION BECAME OWNER OF THE ABOVE PROPERTY?

In the past six years, Circle C homeowners have been charged the following amounts for the capital improvements, repairs and operational expenses. The actual amounts of the expenses were much higher because property taxes and insurance were not included in the following amounts.

2004 - $297,385
2003 - $316,401
2002 - $256,192
2001 - $261,329
2000 - $167,310 (before the ownership was transferred)
1999 - $ 51,416 (before the ownership was transferred)


BIG WINNER: Circle C Developer
1. The Developer retains full control of the pool, but pays no expenses.
2. The above capital improvements, repairs and operational services were handled by the Phoenix Holdings, Alien, Inc. and Circle C Swimming, Ltd. which are all owned by the Developer. They operate as a business monopoly in Circle C Ranch.
3. The Board of CCHoA leased the above facilities back to the Developer?’s Phoenix Holdings for a tiny fraction of the market value rent, and almost all the rent was pocketed by the Developer.
4. The Developer uses our swimming pool as a money making machine by owning directly or indirectly a swimming team, making approximately $300,000 annually. The revenue of $300,000 was estimated by one homeowner who was familiar with the swimming team enrollment; actual amount was unknown.

BIG LOSERS: Circle C Homeowners
1. The Association received the ownership of the pool on paper only.
2. Homeowners do not have much control using the pool, but have the obligation of paying ALL capital improvements, repairs & operational expenses, property taxes and insurance.
3. Homeowners have been overcharged the expenses and capital improvements because all these were handled by the companies owned by the Developer.
4. Homeowners received little or no rent from the facilities which are leased back to the Developer by the old Board.


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WRONGDOING #2 continued


THE FOLLOWING ARE THE RENTAL INCOME RECEIVED BY THE ASSOCIATION IN THE LAST FOUR YEARS:

RENTAL INCOME FROM SWIMMING POOL:
(Rental income related to the swimming team)
2004 - $30,000 (from UT Longhorn Aquatics)
2003 - $30,000 (from Circle C Swimming, Ltd.)
2002 - $10,000 (from Circle C Swimming, Ltd.)
2001 - $0

RENTAL INCOME FROM 500 SQ. FT. OFFICE SPACE:
2004 - $3,200 (part of it was from P.O. Boxes Rental)
2003 - $0
2002 - $0
2001 - $0

The office space is leased back to the Developer?’s Phoenix Holdings by our former Directors of the Board for a tiny fraction of the market value rent. According to the original lease agreement, the rent was $100 per month for ten years, and the rent of 2001-2003 was pocketed by the Developer, Phoenix Holdings.

***Guess who used the Office Space?***
The office space was used by Castle Realty Management Services, a company owned by Steve Bartlett from July 2001 through November 2002. During that period of time, Steve Bartlett was the vice president of the Association.

In November 2002, Full Circle Management was formed. This company is owned by Susan Hoover, former Treasurer of the Association. Since then, the whole office space has been used by Susan Hoover?’s two companies ?– Full Circle Management and Circle C Landscape, L.L.C up to this day.


RENTAL INCOME FROM POST OFFICE BOXES:
2004 - $? (See above Office Space Rental Income)
2003 - $0
2002 - $0
2001 - $0

RENTAL INCOME FROM CIRCLE C GRILL:
2004 - $3,512.52
2003 - $0
2002 - $0
2001 - $0

This grilling facility is currently leased to Circle C Caf?© & Catering, owned by Jaime Arevalo. Ken Rigsbee, another former Treasurer, has revealed that Circle C Caf?© & Catering pays rent by a percentage of the business?’ gross income. I believe that the Developer?’s Phoenix Holdings has pocketed the rent.


HOW TO ASSESS DAMAGES IN THE LAWSUIT:

STEP #1 ?– Revenue from the swimming team
I will ask my lawyer to conduct a thorough investigation started from 2001. I wanted to sue for every dime of the stolen revenue. Since we OWN this swimming pool and we have paid all the expenses, we are entitled to 100% of the revenue.

STEP #2 ?– Rental Income from Circle C Caf?© & Catering
My lawyer can find out the exact amounts of rent that Jaime Arevalo has paid Phoenix Holdings for the last four years. I wanted to sue for every dime of the stolen rent. Since we OWN this grilling facility and we have paid all the expenses, we are entitled to 100% of the rent.

STEP #3 ?– Rental Income from 500 Sq. Ft. Office Space
I will ask my lawyer to obtain several market rental estimations from the outside property management companies. The highest estimation will be used for the claim. Since we OWN this Office Space and we have paid all the expenses, we are entitled to 100% of the market value rent.

STEP #4 ?– Rental Income from the Post Office Boxes
I will sue for every single dime of the stolen rent that had collected by the Phoenix Holdings for the last four years.

STEP #5 ?– Overcharged Expenses
All the capital improvements, repairs and operational services were handled by or through Phoenix Holdings, Alien, Inc. and Circle C Swimming, Ltd. The Association has been grossly overcharged by the Developer?’s business monopoly. I will sue for every dime that the law allows.

In addition to the above, we, the plaintiffs, could also recover Exemplary Damages.


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