Questions of Victor Gardens Future

The Board Advisory Group recently asked questions of CPDC regarding the future development and the state of Victor Gardens Community Association (the master HOA).  With discussion of a new owner, “The Beard Group”, these questions are just as relevant now as they were before.  The Board Advisory Group is interested in finding answers to these questions.  Below you’ll find a outlined list.  Homeowners are encouraged to add to or discuss anything you see below by using the “Comment” features.

1)Questions about Victor Gardens East’s new owner “The Beard Group”

a)What other residential developments has the Beard Group been recently involved with?

b)Are there plans to build houses by individual builders or all one builder?

c)Who will control the VG Architectural Review Committee?

d)How does the new ownership affect the VGCA?

i)Does the new owner affect the makeup of the Board of Directors?

ii)Who will have controlling interest on the Board of Directors?

iii)What changes will be made with new ownership? 

iv)Who will control the VGCA budgets?

v)Will Community Development Inc. remain as community managers?

e)Does the new ownership affect the percentage of lots "sold" (in regards to homeowner control of the VGCA)?

f)How does the new owner view the original vision of VG’s “master plan”?

i)Will the new owner follow or modify this plan?

g)Will the new owner complete the construction of the developer’s unfinished projects? 

i)Permanent Postal Stations for residents on Grantaire Lane?

ii)Landscaping, irrigation, park structures, benches on Grantaire Lane’s cul-de-sac?

iii)Trail connection (over a bridge) between Grantaire Lane lots and Pratt’s Creekside Villa lots?

iv)Street connection of Garden Way & Val Jean Blvd. near wetlands/pond area.

h)Does the new owner have a marketing plan to sell lots and build appropriate homes?

i)Is there a budget for marketing?

(1)Sales Office/Brochure Boxes?

(2)Website update?

(3)Builder Signs?

(4)Lot ID signs?

(5)Advertising?

2)Questions about CPDC's current involvement in Victor Gardens.

a)Does CPDC only own 14 unsold lots in the Single Family Village?

b)Does CPDC still own other properties within the overall VG site?

3)Questions about CPDC’s future involvement in Victor Gardens

a)Will the current financial health of CPDC affect VG in the near future?

i)Please address how financial status of CPDC’s other developments might affect VG. (Towne Lakes, Inspiration, Glendalough, Mayo Woodlands, Harmony Village, etc)

(1)Is VG in better or worse financial shape than those other developments?

(a)Example: Recent news reported foreclosures and Sheriff’s auction in Inspiration.  Is VG’s remaining 14 lots next?

(2)Are more defaulted CPDC loans in VG's future? 

b)Will CPDC still be represented on VGCA’s Board of Directors?

4)Questions for VGCA’s Board of Directors about the VG’s future

a)Homeowners are concerned about the current housing market’s effect on the future character and value of VG:

i)Who will control the Architectural Review Committee (ARC) in the next year?

ii)How will the ARC scrutinize new homebuilding and landscaping?

(1)Which architectural and landscape guidelines will be used going forward in the remainder of VG’s Single Family Village? 

(a)The “West of Clearwater Creek” standard?   -or-

(b)The “East of Clearwater Creek” standard? 

b)Homeowners are concerned about VGCA’s budget issues:

i)How will the Board prevent unpaid invoices causing vendors to stop servicing VG?

(1)Will the City turn off VGCA’s water?

(2)Will Early Bird stop mowing common areas? 

(3)Will the pool be cleaned, etc?

ii)What are the Board’s plans for paying off old debts?

(1)Negotiate with vendors?

(2)Payment Plans?

iii)How will the Board adjust the budget for next fiscal year?

(1)Increase income with “developer contributions” & financial help from builders?

(a)Does the Board intend to ask the new VG East owner to make “developer contributions”?

(b)Does the Board intend to ask Pratt, Ryland, David Bernard, etc. plan to make “developer contributions”?

(2)Will the Board have to cut amenities next year?

(a)Pool?

(b)Neighborhood Activity Center?

(c)Annual plantings / garden budget?

(d)Fountains?

(e)Mowing?

(f)Snowplowing?

(g)Other?

c)What is the status of townhomes not currently under a sub-association?

i)Will those units be consolidated into an existing sub-association or begin another sub-association?

Beard Group Expected to be New Owner of VG East

In an email today from Homer Tompkins, President of CPDC explains that Pete Scherer will not be the new owner of the remaining VG East lots in the Single Family Village.  Another developer “The Beard Group” will purchase the lots.  Mr. Tompkins email is reprinted below:

“Mark, the new owner for VG East (26 lots) will be The Baird Group and not Pete Scherer.  The Baird [Beard] Groups offer has been accepted by the Bank and closing is tentatively scheduled for the 7th of February but no exact date has been set.  I am not authorized to represent them as the new owner of these lots but I have taken the liberty to provide them the letter you sent to me with questions in hopes that I could get them to attend any meeting requested prior to closing.  At this point, they are still in their due diligence of their contract.  On Friday, they met with Pat Brinkman, our HOA attorney to gain an understanding of VG’s Master and Single Family Traditional neighborhood HOA and how its run.  I will visit with them on Monday as well as our attorney to make sure we all understand how a new owner of 26 lots is affected by the existing agreements. 

 

We are proposing to the Baird Group a 60 day turnover transition to help assist them in gaining a full understanding of all responsibilities and on going obligations to the community and the City.  They are excited about owning these lots and are appreciative of the opportunity and very respectful.  I know they have had conversations with several of our existing and previous builders so indications are that they will continue the traditional neighborhood vision that we began.  But I would like to introduce them to the community as soon as possible so everyone can hear from them directly.  In regards to HOA shortfall, I do believe they will help contribute to back due amounts and honor the responsibilities moving forward but they can not be responsible for all shortfall because they are only purchasing 26 lots and should only be held responsible for their pro rata share.  We will need a meeting with them, Len Pratt and ourselves to address the balance of HOA shortfall and commitments moving forward. 

 

I have no control over the Banks decision on who they sell the lots to that were foreclosed upon.  The bank bids in the debt at the amount owed and then sells the Sheriff Certificate to the new buyer.  Even though there is a redemption period for me and any mortgage/lien holders affected by the foreclosure, it is virtually impossible to believe that anyone will repurchase the lots for the amount bid in at the Sheriff sale, so therefore I believe The Baird Group will become the new owners of these lots.  At this point, we are early in our understanding of their firm but they represent themselves as knowledgeable developers who understand and appreciate the value of Victor Gardens and are excited about being apart of it.  Nothing at this point has raised any red flags and I believe they will continue the vision of housing styles but obviously, they are at a much lower cost point than we were in the lots and could offer the lots for less money if they wanted.  The important thing in my mind is not the price of the lots but the architectural consistency of maintaining values in the neighborhood. “

 

- Homer Tompkins

Links

A Few Links of Interest:

VICTOR GARDENS COMMUNITY INTRANET

Some detailed information can be found there. Username and password are required.

CITY OF HUGO

Recently updated.  Includes future comprehensive plans, development updates, maps, and City government-specific information.

VICTOR GARDENS GABLES ASSOCIATION

A website for Victor Gardens’ Gables Association residents.

VICTORGARDENS.COM

Our neighborhood’s

original marketing website

The Citizen

Hugo's Official Newspaper

Washington County Official Site

Recycle your Christmas Tree

Gene’s Disposal Service of Hugo will be accepting Christmas trees for recycling this year.  Current Gene’s customers, including VG’s Single Family Village, will be charged a small fee (less than $5.00) for picking it up and recycling it.   Please call Gene’s office at (651) 426-1224 for arrangements.  They’ll note your address and pick it up on their next trash-day visit.

Rice Creek Watershed District to Survey Victor Gardens Groundwater

The City of Hugo has been working with the Rice Creek Watershed District on homeowner’s sump pump and groundwater questions.  Bryan Bear, Hugo’s Community Development Director, reports that a District crew will be conducting a groundwater survey (possibly in mid-January).  They’ll take measurements of the pond and other wetland elevations.  Mr. Bear may also schedule a meeting with concerned homeowners.  When the meeting is scheduled, an announcement will be made.

Recent Financial Statements Released

Gina Lampe, our Community Manager forwarded me six recently updated financial documents.  Please see the “Financials” page for all of the downloadable PDF documents. 

CPDC & Pratt’s other neighborhoods

This might be of interest to some of you who are not familiar with CPDC’s or Pratt’s other residential developments.

Mayo Woodlands, Rochester, MN

Hidden Springs, Two Harbors, MN

Harmony Village, Rosemount, MN 

Inspiration, Bayport, MN

Towne Lakes, Albertville, MN

Liberty on the Lake, Stillwater, MN

List of Pratt neighborhoods

Other News: Blog article about Inspiration, Bayport

The excerpted article below was reprinted from the Housing Bubble Blog:

This Collapse Was Based On Psychology DECEMBER 2, 2007

... The Pioneer Press from Minnesota. “Homer Tompkins’ development company, Contractor Property Developers Co., has entered into a voluntary mortgage foreclosure agreement with MI Bank in Minneapolis related to 50 developed single-family lots and 129 undeveloped lots at a high-end development called Inspiration, Tompkins said.”

“The company owes the bank more than $9 million on the original loan of $14.65 million, according to documents filed this month with the Washington County recorder’s office. The lots are headed for a sheriff’s foreclosure auction in Stillwater next month, Tompkins said.”

“City officials say 28 custom homes, 15 of which are occupied, have been built at the upscale 242-acre project that opened just as the housing market began its downward slide. Home prices ranged from the upper $300,000s to $800,000.”

“Tompkins blamed the slow sales on bad timing. ‘We’re in the greatest housing slump since the Great Depression,’ he said. ‘Consumers don’t have confidence in buying houses in today’s market. There are hundreds of these (voluntary foreclosure) agreements in process. I’m just one of them.’”

“Every time Mark Gergen heard it, he wanted to scream. This time, it came from a couple who looked like perfect customers, ready to buy a new $725,000 home. They had the money. They loved the house. It was all so simple, but then…’Is it the right time? We are just now, nervously, getting off the fence,’ the woman said. ‘It’s the news. It’s all so unstable.’”

“They left. Gergen sighed. He felt powerless against the onslaught of headlines and bad news that frightened customers away. ‘It’s that consumer confidence thing,’ he said, standing in an empty kitchen.”

“As a hotshot real estate salesman, he was called in to help revive a planned $1.2 billion development, the Spirit of Brandtjen Farms in Lakeville.”

“The 15-year project, which broke ground in 2004, was supposed to build 2,100 homes. But developers watched in horror last year as the entire operation ground to a halt, with only a handful of homes purchased.”

“In 2004, no one worried about consumer confidence. The market was booming, and home sellers laughed in disbelief as buyers rushed to bid against each other, pushing prices ever higher.”

“Then the market collapsed. It had nothing to do with the usual villains - high interest rates, lost jobs or falling wages. This collapse was based on psychology.”

“Tradition called on Gergen to help sell homes. When he saw the Spirit site, the project’s biggest flaw jumped out at him. It was the homes themselves. In the go-go years, three high-end custom builders had erected model homes as a gateway to the project. They were unique farm-inspired mansions. They cost up to $925,000.”

“They were impressive. But for homebuyers, there might as well have been a flashing sign reading ‘for millionaires only.’”

“It almost was impossible to show buyers a $900,000 home, then sell them a $500,000 home they could afford, said project manager Rob Wachholz. ‘There is a limited opportunity to sell $450,000-to-$500,000 homes. And when you get to $800,000 to $900,000, you are in some pretty rarified air,’ Wachholz said.”

“Gergen toured the models with potential customers. Afterward, he asked which one they’d choose, if money were no object. The favorite - none of the above. Instead, they picked a town house.”

“‘I said: ‘You’re kidding. You just went through 10 houses for $700,000 to $950,000, and you picked this? Why?’ said Gergen. The answers: Higher ceilings and more ‘wow’ appeal. ‘That told me a lot,’ Gergen said.”

“Once Tradition realized its mistake, the backpedaling was furious. The entire company refocused on one goal: Building less expensive houses that would still fit the luxury theme of the project. It wouldn’t be easy. The lots alone cost $139,000 to $257,000.”

“‘Who wants to buy a $400,000 small house?’ asked Don Nelson, of American Classic Homes, one of the Spirit homebuilders.”

“‘I just can’t build a $500,000 home,’ sighed Cudd saleswoman Kim Holmberg at another meeting. ‘Now, $2 million homes’ - she looked dreamily into the distance - ‘I can build those all-l-l-l-l day.’”

“The houses tweaked, the prices reduced, Tradition turned to the sales force itself. After sitting alone in model homes for months, who could blame them for being depressed? Yet the veterans knew no one would buy a house from a sulking salesperson.”

“At one meeting at Spirit’s clubhouse-barn, Charles Cudd salesman Tom Griffith addressed the group: ‘We have to be incredibly positive, regardless of how negative things are.’ In case anyone missed his point, he added: ‘Positive, positive, positive!’”

“As the Parade of Homes continued, Gergen and Gergen associate Julie VanDerostyne proved adept at getting names and phone numbers from potential customers. VanDerostyne asked one woman for her e-mail address. ‘Um, I dunno,’ said the woman.”

“‘We have social events,’ VanDerostyne said. ‘Um, I dunno.’”

“‘With free wine.’ Pause. ‘OK,’ the woman said.”