The Gardens South Annual HOA Meeting will be held on Saturday, November 19, 2011 at 10 a.m. at the Lexington Hotel (previously Holiday Inn) on Bluff St. We encourage all owners to attend this important meeting during which many issues concerning the HOA will be discussed.
Property owners are welcome to attend the monthly Board meetings which are usually held at 5pm on the third Tuesday of each month at the offices of Condominium Association Mgmt. on the corner of Tabernacle and 400 E. in St. George. If you have a concern or particular item to discuss, please notify the Mgmt. Company at least a week in advance so that they can schedule time on the agenda. Call to confirm the meeting time and date as occasionally the meeting date must be changed in the event of a conflict.
Wednesday, August 17, 2011
Property Tax Notices ... the good and bad news
Property owners recently received the property tax assessment notices from the Washington County Assessors Office and those within Garden South should have noticed a nearly 50% reduction in the market and assessed values. The County Assessor has discounted the values to reflect the depressed market values caused by the uncertainties and extra costs that property owners are expected to incur as a result of the landslide. I noticed that the owners of Building M may want to formally appeal the value of their units next year to further reduce the amount of taxes charged as the Assessor has not recognized the condemnation action in the current values. You can learn more about the appeal process by pressing HERE.
The good news is that we will all pay less property taxes this year. The bad news is that is property values in Gardens South are WAY down, even more than the market in general making it very difficult for owners to sell, especially if they have a mortgage. There are about 14 owners out of the 111 that are seriously delinquent in the payment of their HOA fees and this is affecting the ability for the HOA to meet its monthly obligations. Unlike the federal gov't which can issue debt or print more money, a HOA is a small government that must spend no more than it receives. The total of non-payers and late payers has created about a $5,000 per month short fall in operating revenues. The Board voted to temporarily use for operations some of the funds that would otherwise be deposited into our savings account for future repairs and maintenance until such time as the monies owed to the association can be collected which now total nearly $40,000 in receivables. The HOA Board will have no other choice but to raise fees or cut services in order to protect the interests of all property owners.
The HOA is granted legal authority to file and foreclose a lien against any property that is delinquent. Even those in the two condemned buildings M and L are required to pay HOA fees because it is viewed as a monthly tax or assessment that is used to pay the obligations for the common ownership of property. Those who dismiss their mortgage obligation by foreclosure are still are liable for the HOA fees and a personal judgment is often sought even after a foreclosure is filed.
There is another problem that may arise as a result of the recent property devaluations by the County Assessor : In order to form a Special Assessment District and sell bonds to finance the costs to permanently stop the landslide, investor lenders look for at least a five to one ratio of debt to assessed value. The total assessed values (which is less than the market value) for Gardens South Condos and the commercial properties (Dairy Queen, Knights Inn Hotel, Claim Jumper, Pier 49 Pizza, etc.) was approximately $10,000,000 last year. This year the total valuation has dropped to about $5,500,000 which may make it more challenging to obtain financing. Of course, once the landslide is stabilized and property damage is repaired, values should rebound (and taxes increase) as a result of renewed market confidence.
The good news is that we will all pay less property taxes this year. The bad news is that is property values in Gardens South are WAY down, even more than the market in general making it very difficult for owners to sell, especially if they have a mortgage. There are about 14 owners out of the 111 that are seriously delinquent in the payment of their HOA fees and this is affecting the ability for the HOA to meet its monthly obligations. Unlike the federal gov't which can issue debt or print more money, a HOA is a small government that must spend no more than it receives. The total of non-payers and late payers has created about a $5,000 per month short fall in operating revenues. The Board voted to temporarily use for operations some of the funds that would otherwise be deposited into our savings account for future repairs and maintenance until such time as the monies owed to the association can be collected which now total nearly $40,000 in receivables. The HOA Board will have no other choice but to raise fees or cut services in order to protect the interests of all property owners.
The HOA is granted legal authority to file and foreclose a lien against any property that is delinquent. Even those in the two condemned buildings M and L are required to pay HOA fees because it is viewed as a monthly tax or assessment that is used to pay the obligations for the common ownership of property. Those who dismiss their mortgage obligation by foreclosure are still are liable for the HOA fees and a personal judgment is often sought even after a foreclosure is filed.
There is another problem that may arise as a result of the recent property devaluations by the County Assessor : In order to form a Special Assessment District and sell bonds to finance the costs to permanently stop the landslide, investor lenders look for at least a five to one ratio of debt to assessed value. The total assessed values (which is less than the market value) for Gardens South Condos and the commercial properties (Dairy Queen, Knights Inn Hotel, Claim Jumper, Pier 49 Pizza, etc.) was approximately $10,000,000 last year. This year the total valuation has dropped to about $5,500,000 which may make it more challenging to obtain financing. Of course, once the landslide is stabilized and property damage is repaired, values should rebound (and taxes increase) as a result of renewed market confidence.
What's happened lately?
After the evacuation of Building M, many are wondering what has happened behind the scenes during the past six weeks. The recommendation from the geotechnical engineers was to immediately remove the north building of Knights Inn hotel and construct a large berm of compacted earth at the base of the hill where the hotel now stands and also in the parking lot behind the Dairy Queen. Picture an ice cream scoop where a bite has been taken out of the front of the scoop... the weight of the remaining ice cream tends to slide down to take it's place. By placing dirt, and we're talking A LOT OF DIRT (600 truck loads), at the toe of the slide, the extra weight is expected to dramatically slow the movement of the slide.
After six weeks of meetings, emails, and discussions to resolve legal and practical issues, draft agreements with the various property owners, obtain easements, etc. we are just now thinking that it might possibly happen. Bids were recently obtained from several excavation contractors and the cost of demolition and building the berm exceeded $100,000. The City of St. George has been very helpful in trying to reduce this cost and may even agree to help loan some of the funds to accomplish the demolition.
The City has decided it may be best for them to take charge of the demolition portion of the job to save money and seek repayment from the property owners involved through property taxes. It has been decided to tear down at least the south half of Building L in addition to the hotel building. A structural engineer from Las Vegas was hired by Gardens South last week to inspect the north half of Bldg. L and he determined that the building is still structurally sound and could be repaired. The city building dept. is in the process of making their own inspection this week and will decide if they agree with the engineers observations. Tearing down any or all of the condominium buildings will do nothing to slow the movement of the landslide as the weight of the buildings is nothing compared to the total weight of the saturated earth that is actually causing the earth to move.
A temporary water line has been connected to service Building N and will need to be either buried or somehow freeze protected (sand bags?) before winter sets in. A major concern is whether or not the slide has damaged the main sewer line that services not only Buildings N, M, & L but also service the upper tiered buildings including P & Q. If the sewer is damaged, this will be a major expense to repair and will delay the occupancy of M and L owners. The other utilities (gas, electric, water, phone, and cable) are relatively secure and easily re-connected to Building M.
Assuming the legal and financial issues can be resolved soon, the demolition and construction of the berm will the first physical attempt to slow the landslide and attempt to halt the damages to property. It will take several months of observation to determine if the earthen berm is successful in halting the slide. This is viewed as a temporary, stop gap measure and is not expected to be the ultimate solution. However, if it appears that the slide has stopped as a result of the berm construction, we will approach the city to inspect the facilities and re-attach utilities to allow residents of M to re-occupy their homes. Realistically, this will not happen until sometime next year. Owners who wish to enter their homes in the meantime to remove personal possessions must obtain permission from the city building department to do so. The city and HOA are concerned about the safety issues of condemned buildings and will not be responsible if anyone is hurt as a result of trespassing or entering Buildings L and M.
After six weeks of meetings, emails, and discussions to resolve legal and practical issues, draft agreements with the various property owners, obtain easements, etc. we are just now thinking that it might possibly happen. Bids were recently obtained from several excavation contractors and the cost of demolition and building the berm exceeded $100,000. The City of St. George has been very helpful in trying to reduce this cost and may even agree to help loan some of the funds to accomplish the demolition.
The City has decided it may be best for them to take charge of the demolition portion of the job to save money and seek repayment from the property owners involved through property taxes. It has been decided to tear down at least the south half of Building L in addition to the hotel building. A structural engineer from Las Vegas was hired by Gardens South last week to inspect the north half of Bldg. L and he determined that the building is still structurally sound and could be repaired. The city building dept. is in the process of making their own inspection this week and will decide if they agree with the engineers observations. Tearing down any or all of the condominium buildings will do nothing to slow the movement of the landslide as the weight of the buildings is nothing compared to the total weight of the saturated earth that is actually causing the earth to move.
A temporary water line has been connected to service Building N and will need to be either buried or somehow freeze protected (sand bags?) before winter sets in. A major concern is whether or not the slide has damaged the main sewer line that services not only Buildings N, M, & L but also service the upper tiered buildings including P & Q. If the sewer is damaged, this will be a major expense to repair and will delay the occupancy of M and L owners. The other utilities (gas, electric, water, phone, and cable) are relatively secure and easily re-connected to Building M.
Assuming the legal and financial issues can be resolved soon, the demolition and construction of the berm will the first physical attempt to slow the landslide and attempt to halt the damages to property. It will take several months of observation to determine if the earthen berm is successful in halting the slide. This is viewed as a temporary, stop gap measure and is not expected to be the ultimate solution. However, if it appears that the slide has stopped as a result of the berm construction, we will approach the city to inspect the facilities and re-attach utilities to allow residents of M to re-occupy their homes. Realistically, this will not happen until sometime next year. Owners who wish to enter their homes in the meantime to remove personal possessions must obtain permission from the city building department to do so. The city and HOA are concerned about the safety issues of condemned buildings and will not be responsible if anyone is hurt as a result of trespassing or entering Buildings L and M.
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