Sunmark Property Acquisition

The property 1850 Lake Whatcom Blvd – Zillow Link Here

  • The property had been on the market on and off for 6-years.
  •  The asking price was increased in of May 2022 to $1,850,000
  1. On May 10, 2022 a select group of SVCA Directors (Harris, Tischleder, Cope, Bowens, Shahan, Voldt, Alyanak and Van Der Polder) were observed inspecting the Sun-Mark Property.  Seven Directors constitutes a quorum and no notice had been given to the membership of a scheduled Quorum meeting.  A member fishing at Lake Louise observed the directors entering and touring the property, snapped pictures of their tour, and raised questions to the BOD and membership.:
    • No notice of this meeting was provided to the members, as required by RCW 64.38.035 and the Bylaws. In holding this secret Board meeting, the HOA and the individual Board members violated their duties and obligations under RCW 64.38.035 and article III, section B of the Bylaws.
    • We understand the Board claims this was not a formal BOD meeting because the Board staggered the visit time on that day. It would appear the Directors sought to avoid the notice requirements in violation of their duty of good faith. Many members have explained that the lack of transparency is their biggest concern about the Boards’ actions regarding the Sun-Mark Property.
    • Whether the Board members visited at the same time or not does not change the fact that the members were entitled to notice.
    • No record of any real estate discussion can be found in any Board agendas or meeting minutes prior to the May 10th illegal BOD meeting.
  2. The only discussion and vote had in open session regarding the acquisition of the property occurred on 5/19/22 at a Special Board meeting which had been given less than the required 48hrs notice. You can watch the YouTube Video Below.
    • Aj Tischleder stated the following: “…discussed purchase with the attorney due to the seller wanting privacy of transaction until the Board was prepared to make an actual decision on the property and the attorney felt that we were in our rights to begin the discussion in closed session to determine what additional information would be needed by the Board to have an open session discussion and make an actual formal decision on purchasing the property or not.”
    • The Board, after hearing arguments and pleas from the membership (54 of which attended) made and approved the following motion: “Motion to move forward with the purchase if the property 1850 Lake Whatcom Blvd at a purchase price of $1,527,750 utilizing a loan with a 10-year term and allocating $500,000 from the 2021 Operational surplus to be used as a down payment on the loan.” – Van De Polder and Harris opposed, everyone else in favor.
      • Inspection – conducted and paid for out of Operations.
        • Not posted or made accessible to members.
      • Appraisal – None
      • Cost Benefit Analysis – None
      • Building plan and Purpose – 5/19/22 BOD meeting, Director Bowen stated “first we buy, then we make the plan.” No plan existed when the decision was made to purchase the property.
  3. Subsequent to this meeting, Director Kim Harris (Treasurer at the time) resigned 5/22/22 and posted the following on social media, “I have resigned from the Board as treasurer and executive committee member because my values and beliefs are no longer in alignment with this board. Please remove my name form the recall petition.”
  4. As of 7/13/22 the Board moved to approve a corporate resolution to borrow $2,150,000 from CIT bank to include the property purchase and the refinance an existing loan paid out of CRRRF funds.

May 19, 2022 Sudden Valley Board of Directors Special Meeting


Why are we pursuing a $1.5M real estate investment without a vote of the membership?

The members have not ratified a budget to include this purchase, as required under RCW
64.38.025(4). Our Restrictive Covenants Section16 states, “…to charge and assess its members on an equitable basis for such additional recreational or other facilities as shall be duly authorized by it’s membership for the mutual benefit of all its members.”

FACT – The HOA Board is required to investigate and inquire before taking action on behalf of the HOA. RCW 24.03.127, RCW 64.38.025. The BOD rejected the need for a Cost Benefit Analysis during the May 19th meeting stating it was not necessary. Further, during the same meeting, the Directors discounted the need for an appraisal.

Director Tischleder stated they have consulted with legal counsel.  As we have seen, they also consulted with Legal Counsel on the transfer fee (June 30, 2021 Memo Richard Davis to BOD) and chose to ignore Counsel’s advice.  A legal memo from the SVCA Attorney stating this is not in violation of the RCWs has never been seen nor posted by this Board.

Question – Isn’t purchasing this building the same as the sprung structure installed in Area Z in 2018?  No.  The basis for the purchase was directly tied to replace Barn 6 as stated in the original capital request. A replacement building was required after multiple Engineers determined the building unsafe.

  • The sprung structure came with zero maintenance backlog.
  • The sprung structure is smaller than Barn 6 and cheaper to maintain.
  • The sprung structure was not an additional facility.

Purchase of the sprung structure occurred after several months of open public discussion by both the Finance Committee and Board of Directors: Treasurer’s Motion to the Board #5 – Demo of Barn 6 and Purchase and Installation of a Sprung Structure –

“As requested by the SVCA General Manager and reviewed and recommended by the Finance Committee, I move that the Board of Directors approve a CRRRF allocation not to exceed $532,069, this includes $47,085 contingency, taxes, permitting, design/bid, and construction, for the demolition of Barn 6 and purchase and installation of a sprung structure.”

Question – Isn’t purchasing this building the same as how a prior BOD purchased Whispering Cedars Court? 

No.  Whispering Cedars Court is platted on SVCA land.  The residents of that street were required by original Plat map to maintain their own street, the only such agreement in SVCA.  The residents have always paid full dues (including Capital Roads).  The BOD agreed to allow dissolving the Street Association after the residents paid to bring their street up to 100% maintenance standard.  Upon completion, the Board agreed to accept the road.

How are we expected to pay for this?

Out of Capital Dues.  We have added in costs (60-year-old building) and not balanced the equation with increases in income.  Additionally the BOD voted to terminate the Capital Reserve Holding Fund (1/4 of 1% sales price of homes sold in Sudden Valley), return the $1.2 – $1.375M of collected funds, and stop collecting, claiming they were following legal advice. Furthermore, this year alone the BOD deferred ~$4M in both Roads and Capital work while giving away $1.2 to $1.375M of capital monies, spending additional resources on a new building.

The Recreational Special assessment is expiring as it enters its 5th year. This assessment allowed for member access to both pools, the gym, funding for parks and trails, and funding for the rec department. Instead of making this assessment increase permanent and continuing the free use of amenities to members, this Board has chosen to purchase a building without proof of inspection, appraisal, Cost Benefit Analysis (or any other analysis), financial impact review or even a plan for its use; what’s the rush?

Why was there only 1 discussion held in open session? What was the rush?

FACT – Based on our review, only 1 discussion was had in open session and that was 5/19/22. Review agendas on the SVCA website and watch meetings on YouTube.

In a cumulative manner, the Board has acted in bad faith by its secret and careless spending of
HOA money.

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