Silver Beach Improvement Association Purchase of 196 Crystal Spring - - PowerPoint PPT Presentation

Silver Beach Improvement Association

Silver Beach Improvement Association Purchase of 196 Crystal Spring Ave. April 5, 2014

Silver Beach Improvement Association

Agenda

Review Opportunity & Timeline of Events History of the Tea Room

• - Pros & Cons of Purchase

Specifics of the Purchase

• - Financing Options
• - Questions/Details Still To Be Addressed
• - Voting Process

Next Steps Q&A

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Silver Beach Improvement Association

Ground Rules

35-45 Minute Presentation Please hold questions until presentation is over The conference call has been muted to avoid disruption Questions will be done orderly, lining up to use the mic so people on

the phone can hear

Questions from people on the phone will be done via email, submitted

to newsilverbeach@gmail.com

Let’s be respectful, don’t talk over each other or have side

conversations

Everyone will be given a chance to speak and to be heard Let’s respect each others opinions and understand we all have different

vantage points

We will stay as long as needed until all voices have been heard

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Silver Beach Improvement Association

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Silver Beach Improvement Association

The Role of the Board and The President

• Do the due diligence on the potential property acquisition
• Present the facts as I see them
• Give an unbiased opinion
• Allow all members of the association to voice their opinions
• Lead the Board to produce a motion for the association

members to vote on

• Get out of the way and let the members of the association

decide if they want this property

• If approved, assure that the purchase is successful and nothing

hurts the long term viability of the association

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Silver Beach Improvement Association

Timeline of Events

February 2014 – Ryan Hutchins received communication

from Jeff about potential for a Sale

Late February 2014 – Ryan and Jeff discussed the parameters

• f the sale

March 1, 2014 – Winter Board Meeting – Board voted in

favor of negotiating the purchase of the property

March 5, 2014 – Ryan and Michael McCarthy met with Jeff

Gummow to tour the property and negotiate a deal

March 6, 2014 – Letter of Intent Sent to the Gummows March 8, 2014 – Executed Letter of Intent received from the

Gummows

March 12, 2014 – P&S Emailed to the Gummow’s attorney

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Silver Beach Improvement Association

Timeline of Events

Anticipated Dates

April 5, 2014 – Executed P&S April 5, 2014 – Meeting with SBIA Members April 7, 2014 – Board Meeting to Approve Vote April 11, 2014 – Mailing of Voting Materials April 30, 2014 – Voting Closed May 1, 2014 – June 15, 2014 – Due Diligence June 15, 2014 – Bank Commitment July 2, 2014 - Closing

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Do you remember…

The square dances (and, gasp, the rock ‘n roll

bands of the 60s)

Tea and Dinners being served upstairs The sheet of paper at the general store you

could sign if you didn't have money with you

The famous doughnuts and fresh baked

muffins

Your post office box number The soda bar Pinball, pinball and more pinball Carving your name into the table (we wont

tell)

The jukebox (with disco tunes blaring) TRICS ice cream (yum) Bands playing on the roof Friends, friends and more friends! NO PARENTS!

History of the Tea Room

How it all began…

• 1921 the Florence General Store was opened

by Fritz and Florence Lindskog

• 1923 an outdoor beer garden was added

(after prohibition ended!)

• 1926 Post Office opens
• 1934 began holding dances upstairs
• 1948 the Lindskogs sell the Tea Room to the

Cunninghams

• 1980s Tea Room sold to Gail Roycroft and

Joanne Leasure

• 1987 Tea Room sold to the Gummows

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Silver Beach Improvement Association

Pros of the Purchase

Prevents anyone from developing the property

Preserves the history of the Tea Room for future generations Property can be used to its fullest extent including tea room, beach

storage, store, association events

Expense reduction - Inclement weather rentals Possibility for public restrooms / outside shower Potential revenue stream for the association (yoga classes, babysitting

services for events, etc. )

Potential outside eating area Expanded use of Tea Room including

General Store Prepared Foods Coffee and Light Breakfast Family Beach Storage

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Silver Beach Improvement Association

Cons of the Purchase

Increase to dues and/or special assessment Liability with operation of store Risk with flooding and hurricane damage/High Cost of

Insurance

Having to use Tennis Court Property as collateral Loss of Members Association Burden of Running Store and or being a

Landlord

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Silver Beach Improvement Association

The Deal

Purchase Price - $855,000 $5,000 Refundable Deposit Additional $35,000 Deposit payable 5 days after positive vote .381 Acres 5,195 SF Closing Date – 7/2/14 (60 Days After Vote)

Gummow’s to Rent Unit until 9/1/14 @ $2,500/mo

All Tea Room Equipment Included Select Tea Room Memorabilia Included

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Silver Beach Improvement Association

Dues Comps from Similar Associations

Popponesset Beach Club - $400 Summer (Raked Beaches,

Security)

Wild Harbor Estates - $750/Summer (No guards, security

• nly)

Wild Harbor Yacht Club $150/Summer (Use of Boat Ramp) Megansett – $1,400/Summer (Plus $1,500 Bond per family) Seascape – Nye’s Neck - $500/Summer (guards and roads) – swimming

lessons extra!

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Silver Beach Improvement Association

Financing Options for Consideration

All Options Will Have Increased Dues 3 Specific Options We Studied

• 1. Assessment and Increased Dues – 80% Loan
• 2. Selling of Bonds and Less Increased Dues
• 3. No Assessment and Increased Dues – 100% Loan
• At this point, we think Option #3 is the best
• No short term assessment burden

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Silver Beach Improvement Association

Option 3 – 100% Finance – No Assessment

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Increase in Dues

Current Membership 375 Members 216 Regular 64,800.00Increase Dues by $300 - T

• $500

135 Senior 13,500.00Increase Dues by $100 - T

• $200

31 Junior 10,075.00 Get Rid of Junior Level, $425 Increase Attrition

• 7,500.00

Assume we lose 15 full paying members Dues Increase Net Income 80,875.00

Silver Beach Improvement Association

Option 3 – 100% Finance – No Assessment

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Income

Ordinary Income Income 4010 · Additional Dues Income 80,875.00 See Previous Slide 4030 · T ea Room Income 55,000.00 $5,500/week at 10 weeks 4090 · Convienence Store Rent 3,000.00 2 Months at $1,500 4170 · NSBIA Store 3,500.00 Additional Store Sales 4180 · Association Functions 2,500.00 10 events at $250 - rental of upstairs T

• tal Income

144,875.00

Silver Beach Improvement Association

Option 3 – 100% Finance – No Assessment

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Expense & Net Income

Expense 5000 · T axes 4,751.45 2013 T ax (8.15) * Value of $583,000 6140 · NSBIA Store purchases 1,500.00 In addition to other budget 6140 · NSBIA Food purchases 33,000.00 60% of Income 6180 · Insurance - Flood 21,000.00 Quote 6180 · Insurance - Liability 3,500.00 Quote 6230 · Licenses and Permits 1,500.00 Health Permits 6270 · Professional Fees 1,500.00 Misc. 6290 · Mortgage 55,200.00 855k, 5%, 30 year fixed - $4,600 6300 · Repairs and Maintenance 5,000.00 Assume 5k a year, every year 6350 · Equipment purchases 3,000.00 Assume 15,000 ammortized over 5 years 6390 · Utilities 3,000.00 Assume 250/mo 6555 · Salary 8,600.00 11am -10pm, 7 days a week, 10 weeks - $10/hr + 2 people @ night 3 hours, T ,F ,S 6560 · Payroll Expenses 3,010.00 35% of Salary T

• tal Expense

144,561.45 Net Income 313.55

Silver Beach Improvement Association

Questions To Be Addressed….At Some Point

Do we rent out the Tea Room or run it ourselves? Do we rent out space for a general store or setup a

general store as part of the tea room operation?

Do we use upstairs as a clubhouse or rent it as an

apartment….or rent it out in the Winter?

Can we get volunteer labor to run the Tea Room? Permit – On Selectman’s Agenda in April Separate Legal Entity Created For the Purchase? Betterment for Sewer?

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Silver Beach Improvement Association

The Vote – 2011 Bylaw Revision

Membership

Full membership shall be limited to those people residing in the

area bounded by the property, formerly owned by the Silver Beach Improvement Association, Inc., presently owned by the Wild Harbor Yacht Club, from the inner harbor to Wild Harbor Road; then along Wild Harbor Road to Quaker Road; then along Quaker Road to the land known as Wild Harbor Estates; then along Wild Harbor Estates boundary line, but not including Wild Harbor Estates to Wild Harbor. These requirements for full membership shall apply immediately, but shall not pertain to those existing members in good standing who are now full members and continue to be full members in good standing. Full members shall consist of both the regular full membership and senior full membership levels.

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Silver Beach Improvement Association

The Vote – 2011 Bylaw Revision

VOTING RIGHTS None but full members in good standing shall be entitled to

vote at any meeting of the Association and each such member shall have a total of no more than two (2) votes per full paid membership house

Membership Levels:

̶ Regular Full Member – Full Voting Rights ̶ Senior Full Member – Full Voting Rights ̶ Junior Member – No Voting Rights

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Silver Beach Improvement Association

The Vote – 2011 Bylaw Revision

The Board of Directors shall have the power, in the name and behalf of

the Association, to acquire property other than real estate, to sell, transfer, lease, encumber and otherwise dispose of property other than real estate...

The Board of Directors may, upon majority vote, purchase and

mortgage or otherwise obtain real estate.

The sale of Association property requires a written, two thirds majority

vote for, in advance, by the members who are in good standing. The results of the vote must be kept by the Board of Directors for at least three (3) years in the Association safe deposit box, of a bank approved by the Board of Directors. Any such vote may be done in writing or by use of electronic means over the internet.

The Board of Directors shall determine the requirements for eligibility

and the amount of entrance or initiation fees, fix the Annual dues of all classes of members and levy assessments.

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Silver Beach Improvement Association

Closing & Next Steps

Questions and Answers

For People on the Phone – email questions to

newsilverbeach@gmail.com during the meeting

Next Steps

April 7, 2014 – Board Meeting to Approve Vote April 14, 2014 – Mailing of Voting Materials April 30, 2014 – Voting Closed May 1, 2014 – June 15, 2014 – Due Diligence May 4, 2014 – Announce Results June 15, 2014 – Bank Commitment July 2, 2014 - Closing

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