IMPORTANT: OUR VOTE AND OUR PROPERTY VALUES
Dear neighbors, friends and owners,
Hopefully this letter will serve to dispel any lingering myths that demolishing and building a new clubhouse will ultimately increase the property values of our units in YARCOBR. In reality, the complete opposite may be true and for the reasons outlined below.
As owners, you may now be aware that no figures or even estimated costs were included in the voting package to members. This absence of even a range of costs for renovating vs. demolishing is a glaring omission. It leaves blank the most significant and important information for owners to decide between the two options, and it leaves 366 members to ponder and speculate about the most crucial financial decision ever presented to them by this community.
As an owner, I can only base my projections on figures that were mentioned during discussions in the early stages of the "projects." Back then, the estimated cost of renovating ranged from 1.3 million dollars to perhaps 3 million dollars. On the other hand, initial estimates for demolishing and rebuilding were in the 10-to-11-million-dollar range. That was then. This is now. With the passage of time, since those earlier figures were circulated, there has been a seismic shift in our economy, which is impacting everyone and everything now, and likely for years to come. The results of these conditions are that costs of materials (if one can obtain them) have risen by some estimates by 30% or more. Labor, if it is available, has seen sharp increases in costs as well. Interest rates have been skyrocketing and noted economists see no end in sight. Furthermore, supply chain issues are expected to continue into the future. If all of these head winds are not enough, the loss of net worth for individuals with IRA's or those with diminished investments in the stock market, the timing could not be worse for a major super project such as demolishing and rebuilding the clubhouse. Such a huge undertaking based on the factors I just described could conceivably run as high as 15-to-16-million dollars or more with the potential for a 50-to-75-thousand-dollar assessment per unit.
Moreover, the loss of use of our clubhouse, unless we renovate, could span two-and-a-half to three years. With demolition, instead of having a venue for card playing, meetings, classes, events, etc., there will be a construction site with the associated dust, rubble, noise and interruptions to our community.
Importantly, the likelihood for a unit owner to ever recover the enormous costs of demolition and rebuilding are, at best, a pipe dream. Some have attributed the uptick in sales and sales prices in our community to the Chickee Bar "restoration." With all due respect, the real estate values and sales throughout the entire state of Florida have risen significantly over the past two years for one overarching reason--the pandemic. Subsequently, virtually every community experienced an increase in values across the board as Northerners flocked to every corner of our state regardless of the fact that their new locations may not have had a Chickee Bar.
In essence, if you plan to use and enjoy your unit, be aware that it is unlikely that you will ever recover a 50-to-75-thousand-dollar outlay in your lifetime and even in one's lifetime after you. If, on the other hand, you choose to rent your unit to others, the financial challenges you will face are enormous and will be exponentially multiplied. Additionally, with the specter of a potential recession looming, and after all the seemingly endless controversy which has deeply divided our community for the last three years, is this really the right time to embark on the most expansive and expensive period in our club's history? Understandably, doing nothing is not the answer. However, a well-planned, thorough renovation of our clubhouse will result in a fraction of the cost of demolition and rebuilding. Undoubtedly, renovating will return this amenity for our members' use in much less time than if we totally replaced it. These are just one man's thoughts regarding our vibrant community that is, and always will be, uniquely special.
Respectfully,
Michael Kaufman
Vice President and Director, Condominium Association G