Rebuttal to the BOD?’s August Question of the Month

The August Question of the Month to the CCHOA Board is:
Who owns, uses and/or leases the 500 sq. ft. building used for landscape and the CCHOA?

The correct answer to the above question is: Circle C Landscape, LLC and Full Circle Management, LLC use and lease the 500 sq. ft. office space.

Does it sound strange that if you read through the entire Board?’s answer, you won?’t see any mention of these two tenants? Why was the Board so reluctant to mention these two companies?’ names? The answer is very simple - the Board has engaged in something called ?“conflict of interest?”.

Circle C Landscape, LLC is owned by Susan Hoover, our former Secretary/Treasurer.

Full Circle Management, LLC is the offspring of Castle Realty Management Services, LLC. Castle Realty Management Services was owned by Steve Bartlett, our current Vice-President.

Now let me point out some deceptive comments in the Board?’s answer.

BOD:
The Developer built and paid for the Circle C Swim Center, Circle C Grill and Post Office Facility. The development company owned the pool and paid for all of the operations of the pool for 11 years, and 1/2 of the expenses for one year as the pool ownership was being transferred. The pool, plaza, grill, bath house and all related land were part of one single lot and one single site plan. The cost of operating the pool for more than 10 years was over $1,500,000.00. The cost of building the pool and all related facilities was over $1,000,000.00. The cost of the grill equipment was approximately $75,000.00.

LISA:
The swimming pool is one of the main marketing tools and a veneer for selling houses in Circle C Ranch. The cost of building and operating the pool was a typical business investment and operational expenditure for the developer. Circle C homeowners should not feel indebted to the Developer for using its swimming pool. For example, I won?’t feel indebted to IBM for spending so much on its facilities and research when I purchased its computer because the profit in the selling price of the merchandise has already offset the expenses.

Circle C Developer, Gary Bradley, has made a tremendous amount of profit reselling lots to the builders. All the other developers have to account for Cost of Land, but Gary Bradley does not have that cost because Gary Bradley acquired his Circle C land for ?“free?” at the expense of the taxpayers. Gary Bradley borrowed $53 million to develop Circle C Ranch and the loan has never been repaid. Therefore, I consider Mr. Bradley the ?“smartest?” and ?“luckiest?” developer on this planet!

(see Part II below)

Rebuttal (Part II)


BOD:
All of the above facilities were part of a single site plan. For a land transfer, this area was not subdivided. As part of the terms of the donation of the pool?…?…?….

LISA:
What? Donation of the pool?!

The swimming pool facility was transferred to us by ?“Over-priced lay-a-way Sale?”; it was not a donation as the BOD claimed. The BOD called it as a ?“donation?” in order to fool the Internal Revenue Services to avoid paying Capital Gain Taxes. Please read my Investigative Report #1 at http://www.BeatGreedyBoard.com for details.

According to the Auditors?’ Report dated 12/31/2000 and our financial statements for years 1999 & 2000, Circle C homeowners were charged $218,727 in operational costs and capital improvements of the pool. These charges were incurred by the homeowners before we owned the pool. The ownership of the whole facility was transferred to us on 2/28/2001 with a market value of only $111,000. Since we had paid more than twice the amount of the market value of the property before we received the ownership, I considered it was an ?“Over-priced lay-a-way Sale?”.

Of course, BOD would ague that the amount of $218,727 was operational expenses, not the cost of the facility. Hello, homeowners: Would you pay maintenance expenses for your houses for two years before you owned them?!

But, of course, Internal Revenue Services will have to determine whether this transaction is qualified as a DONATION or not.

BOD:
All of the above facilities were part of a single site plan. For a land transfer, this area was not subdivided. As part of the terms of the donation of the pool, Phoenix Holdings retained the right to lease the 500 square foot office?…?…..

LISA:
To make the above statement more clear and blunt, it means ?– we, homeowners, should pick up all the expenses for the whole facility, but the Developer retains the right to lease and pocket the rent. Hello! If this is not a blatant rip-off scheme, I don?’t know what that is!

BOD:
The alternative was for the development company to give the pool to the City of Austin and turn it into a public pool?…?…The Board felt that it was in the best interest of the community to retain ownership of the pool?…?…

LISA:
Let me analyze and see whether it is really in homeowners?’ best interest or in Gary Bradley?’s best interest to retain ownership of this pool:

SWIMMING POOL OWNED BY HOMEOWNERS

BIG WINNER: Circle C Developer, Gary Bradley
-Transferred the ownership of the pool to the Association by ''donation'' to avoid paying Capital Gain Tax.
-Retains full control of the pool, but pays no expenses.
-Grossly overcharges homeowners for operational & maintenance expenses through Circle C Swimming, Ltd., a company owned by the Developer.
-Uses OUR pool to make big bucks (approximately 300K just in the Year of 2002 alone) by owning a swimming team, and only let the homeowners share the crumb of $10,100.

BIG LOSERS: Circle C Homeowners
-Received ownership of the pool on paper only.
-Have no control of using the pool, but have obligation to pay all the expenses.

(See Part III below)

Rebuttal (Part III)

IF SWIMMING POOL IS OWNED BY THE CITY OF AUSTIN

-Homeowners will be free of paying the expenditure for maintaining the whole facility; we will also be free of paying for capital improvements, equipment and furniture. Thus our association fee could be reduced by at least 30% - 40%.
-The city would not use the pool as a money making machine by owning a swimming team; thus the whole pool would be used by us for recreation.
-The city would probably charge an entrance fee around $2-$3 for each visit, and the fee collected would be used for maintaining the facility.
-If the city would operate any swimming programs, the fee collected would be used and off set the swimming team expenses.
-The city would lease the office space and grill facility at a fair market value rent, and the rental income would be used to maintain the building or credited to the city?’s general fund to benefit all taxpayers.

BOD:
A lease for the office was signed with Phoenix Holdings until 2011. The rental rate is $100 per month. The use of the space is related to activities in Circle C Ranch, including landscape, management, committee meetings and the swim center manager?’s office. The CCHoA pays no maintenance and no improvements?…?…?…?… Based on our calculations, the taxes and utilities for the 500 square feet of space total $500 per year. We received $1,200 in income, and have used that to maintain and upgrade the space at no cost to the CCHoA?…?…

LISA:
What? CCHoA pays no maintenance??? The taxes and utilities for the 500 sq. ft. office space were paid by the rental income of $1,200??? This is surely a bold lie!

This two-room office is leased to Circle C Landscape, LLC and Full Circle Management, LLC for only a fraction of the fair market value of the rent and the rent was pocketed by the Developer/Phoenix Holdings. Circle C homeowners paid the property taxes and utility bills for the whole facility of 5919 La Crosse Ave. including this 500 sq. ft. office. I have copies of all the tax statements, utility bills and check stubs of CCHoA.

Full Circle Management, LLC and Steven Bartlett?’s Castle Realty Management Services not only charged us $35 - $55 per hour of regular homeowners?’ services, these two companies also charged us $55 per hourly rate for the Board?’s voluntarily services, and they also charged us for the services which should be the expenses of the Developer, Gary Bradley. I have copies of all the itemized billings of Castle Realty Management Services from January through October 2002 to prove my claim. In the period of these 10 months, CCHoA funneled $103,061 into Castle Realty Management Services.

Here is my question:
Circle C grilling facility was leased to Jaime Arevalo, the owner of Circle C Caf?© & Catering.

Circle C homeowners have also paid property taxes for this part of the facility.

Who has pocketed the rent? Let us see the lease agreement!

One Homeowner's Reaction


Subj: Re: Rebuttal to the BOD's August Question of the Month to the CCHOA Board
Date: 8/28/2003 10:03:35 AM Central Standard Time
From: *********@hotmail.com
To: BeatGreedyBoard@aol.com
Sent from the Internet (Details)



Right you are on the swimming pool being built as a marketing tool to sell
homes---at the first homeowner's meeting I attended in 1989, Gary Bradley
told us that he had the swimming pool built as the first amenity (which I
appreciated as a homeowner since Austin was going through a bust at the time
and amenity promises were not being fulfilled in other neighborhoods) in
order to attract homebuyers to the model homes that were situated nearby.
His plan was as he explained to the homeowners in a '90 meeting was that a
prospective homeowner would drive by the elementary school, drive by the
child care center, and then drive by the pool, and then BINGO!, the buyer
signs on the dotted line at the first model home! The ''look how much I have
done for the homeowner'' doesn't fly when the real motive is ''look how much
profit I have made''---which I do not begrudge as long as it isn't out of
homeowner's dues. The sweetheart deals that were set up are annoying at
best---the fact that Steve B. is getting one penny for the pool is really
upsetting---I sent a message in to the info center asking if this was true
and I have not received a reply. I went down to city hall & courts to fight
for Bradley (the bankruptcy was part of the S&L downfall which was not his
fault & he did not abandon Circle C as other developers were doing with
their neighborhoods during that time so there was loyalty on the part of the
homeowners to finish the master plan).