ALI-ABA Course of Study Resort Real Estate and Clubs: Formation, Documentation, and Operation November 13-14, 2008 Savannah, Georgia PROGRAM FACULTY PARTICIPANTS FACULTY BIOGRAPHIES STUDY MATERIALS TABLE OF CONTENTS Page xvii xxi xxiii VOLUME 1 PART ONE ESTABLISHING THE RESORT GOVERNANCE S TRUCTURE 1. Overview of the Resort Structure Making the Whole More Than the Sum of the Parts 2. Establishing the Resort Governance Structure 3. Roles of Tax Exempt Organizations in Resort Development 4. Resort Governnance Questionnaire 1 11 17 25 PART TWO ANCHORING THE RESORT: HOTEL MANAGEMENT AND OPERATIONS 5. Hotel Management Agreements 6. Development and Redevelopment Issues for Hotels 43 49 PART THREE PROTECTING THE LENDER 7. Lender Concerns in Financing a Resort Project 53 Study Materials 55 Attachment 1: Description of Resort Mixed Use Property Encumbered by a Construction Loan 61 Attachment 2: Provisions for a Lease Subordination, Non-Disturbance and Attornment Agreement 66 Attachment 3: Collateral Assignment of Declarant's Rights 68 Attachment 4: Sample Loan Covenants, Conditions and Representations Binding a Mixed-Use Condominium Developer 73
Attachment 5: Declaration Provisions for the Benefit of First Mortgagees in a Mixed-Use Condominium Project Featuring a Hotel 78 Attachment 6: Insurance Clauses in a Mixed-Use Condominium Declaration Featuring a Hotel 81 8. Assignment and Subordination of Purchase and Sale Agreement 9. Collateral Note for Financing of UDI Interest 10. Complaint for Foreclosure of Lien on UDI Interest 11. Assignment of Project Documents 12. Collateral Assignment of Sales Contracts and Deposits 13. Excerpt from UCC Security Agreement: Description of Collateral 14. Opinion of Borrower's Counsel Regarding Timeshare Vacation Club 15. Timeshare and Resort Development Financing By Sandra G. Porter 91 105 111 117 125 129 133 141 PART FOUR DEVELOPING AN AMENITY S TRATEGY 16. Developing and Implementing an Amenity Strategy 17. Declaration of Recreational Covenant for Springfield Cottage Lots 18. Membership Agreement for Springfield Cottage Golf Membership 153 161 173 PART FIVE ADDRESSING AFFORDABLE HOUSING NEEDS 19. Affordable Housing in Resort Areas 179 By James L. Cunningham Study Materials 181 Exhibit A: Purchase and Development Agreement 184 Exhibit A-1: Excerpts from Annexation Agreement 216 Exhibit B-1: Breckenridge Affordable Housing Strategy 219 Exhibit B-2: Employee Housing Restrictive Covenant and Agreement 241 Exhibit B-3: Affidavit Relative to Employment 258 Exhibit B-4: Appreciation Limiting Promissory Note 259 20. Affordability Covenant 261 21. Affordable Housing Mitigation Agreement 265
22. Aspen/Pitken County Employee Housing Guidelines 275 Table of Contents 278 Study Materials 280 23. Town of Breckenridge Workforce Housing Plan 285 24. Town of Vail Ordinance Adopting Commercial Linkage Policies 25. Town of Vail Ordinance Adopting Inclusionary Zoning Policies 26. Town of Vail Ordinance Regarding Deed-Restricted Employee Housing Units 27. Town of Vail Council Resolution Establishing Fee-in-Lieu of Providing Employee Housing 28. Town of Vail Employee Housing Guidelines (October 19, 1999) 295 311 323 335 341 29. Town of Vail Master Deed Restriction for the Occupancy and Resale of 355 Employee Housing Developments Study Materials 357 Exhibt A: Legal Description 370 Exhibit B: Permitted Capital Improvements 371 Exhibit C: Option To Buy 372 30. Vail/Eagle County Housing Needs Assessment 375 Table of Contents 376 Study Materials 379 PART S IX RELATIONSHIPS AMONG RESORT COMPONENTS 31. Relationships Among Resort Components: Golf and Residential 32. Golf Reservation Agreement between Resort Hotel and Golf Course Operator 33. Declaration of Reciprocal Easements and Garage Operating Agreement 34. Grant of Easement for Preservation of Black Bear Travel Corridor 35. Agreement for Food Concession 385 391 399 427 443
36. Agreement for Optional Recreation Benefits 37. Indemnification Agreement for use of Parklands 38. UDI Ownership Summer Recreational Facilities Club Agreement 455 461 465 PART S EVEN ADMINISTRATION OF THE RESORT ASSOCIATION 39. Resort Governance and Administration 469 40. Declaration of Covenants, Conditions, and Restrictions for Beachside 475 Table of Contents 477 Study Materials 481 41. By-Laws of Beachside Community Association, Inc. 563 Table of Contents 565 Study Materials 567 42. By-Laws of Quechee Lakes Landowners' Association, Inc. 589 Table of Contents 592 Study Materials 595 43. Articles of Incorporation of Stowe Mountain Lodge Condominium Association 635 44. Winter Mountain Lodge Condominium Rules and Regulations 45. Sample Provisions for Managing Use of Common Facilities 46. Sample Vendor Contract for Resort Guest Services 639 653 657 VOLUME 2 PART EIGHT BEACH CLUBS, BOAT CLUBS, AND MARINAS 47. Beach Clubs, Boat Clubs, and Marinas 48. Beach Club Use and Access Agreement 49. Beach Club Community Member Acknowledgment and Agreement 50. Lake Use Rules 665 671 685 691
51. Marina Issues Checklist 701 52. Declaration of Condominium for Frog Pond Dock Condominium 707 Table of Contents 708 Study Materials 709 53. Rules and Regulations for Frog Pond Dock Condominium 747 PART NINE WINTER AND FOUR S EASON RESORTS 54. Winter Resort Issues 55. Special Issues in Ski Resort Developments 56. Sample Disclosures for Contract and Public Offering Statement 57. Gondola Construction, Operations, and Maintenance Agreement 58. Gondola Easement Agreement 59. Sample Disclosures and Easements for Winter Resort 755 759 765 771 787 795 PART TEN LIFESTYLE AND WELLNESS COMMUNITIES 60. Lifestyle and Wellness Communities 799 PART ELEVEN S TRUCTURE AND DOCUMENTATION OF CLUB MEMBERSHIP PROGRAMS 61. Structure and Documentation of Club Membership Programs 62. Checklist for Creation and Implementation of an Equity Club Plan 63. Checklist for Creation and Implementation of a Right-to-Use Club Plan 64. Membership Plan for Creekside Country Club (Equity Club) 803 811 817 821
65. Membership Policies for Cherokee Ridge Country Club (Non-Equity) 849 Table of Contents 850 Study Materials 851 66. Woodlake Golf Club Membership Categories and Privileges Chart 861 67. Request for No-Action Letter 68. Bylaws of Double Bogey Golf Club By Van A. Tengberg 69. Rules and Regulations of Double Bogey Golf Club By Van A. Tengberg 70. Clubhouse Reservation and Release Agreement 71. The Golf Club at Whispering Pines Golf Car Lease Agreement 72. The Golf Club at Whispering Pines Private Golf Car Trail Fee Agreement 73. Club Disclosure to Real Estate Purchasers 865 881 901 911 915 921 927 PART TWELVE INTERVAL AND FRACTIONAL OWNERSHIP AND EXCHANGE PROGRAMS 74. Interval and Fractional Ownership and Private Residence Clubs 75. Timeshare Management Agreement 76. Sample Letter Describing Timeshare Marketing and Sales Procedure 77. Declaration of Undivided Deed Interest Ownership 78. Membership Agreement for Non-Real Estate Timeshare Regime 79. Membership Agreement Neverland Vacation Club 80. Sample Deed for Flexible UDI Ownership 81. Architect's Certificate of Substantial Completion UDI Ownership Resort 82. Sample Timeshare Default Letter 933 939 949 955 971 983 999 1003 1007
83. Affidavit of Default 84. Stowe Mountain Lodge Termination and Release 85. Stowe Mountain Lodge Master Escrow Agreement 86. Stowe Mountain Lodge Unit Rental Management Agreement 1011 1015 1021 1027 PART THIRTEEN PRIVATE RESIDENCE CLUBS 87. Private Residence Clubs 1047 PART FOURTEEN CONDOMINIUM HOTELS AND OTHER REAL ESTATE 88. Structuring the Condominium Hotel 89. Securities Implications for Condominium Hotel and Investor Properties 90. Sales Practices for Condominium Hotels to Avoid Securities Violations By Richard A. Denmon and Robert S. Freedman 91. Condominium Unit Rental Management Agreement 92. Financial Disclosure Authorization for Accredited Investor 93. Condominium Development Checklist 1051 1055 1061 1067 1077 1081 PART FIFTEEN MARKETING OF RESORT REAL ESTATE 94. Marketing of Resort Real Estate 95. State Regulation of Subdivision Offerings & Haley W. Burton 1097 1105 96. Regulation of Internet Advertising of Land Sales 1129 HUD Memorandum Regarding Use of Internet for Advertising 1131 Opinion by Florida Department of Business and Professional Regulation Regarding Regulation of Timeshare Internet Activity 1135 New York Guidelines for Offers to Sell or Purchase Real Estate Securities on the Internet 1143 97. Visitor Questionnaire 1145
98. General Guidelines and Disclaimers for Advertising, Marketing Materials, and Displays 99. Regulation of Commercial E-mail 100. Regulation of Telemarketing and Telephone Solicitation 101. Sample Letter Outlining State Specific Requirements for Marketing Timeshares 102. Sample Tax Opinion for New York Condominium Offering 103. Sample Application for Rhode Island Timeshare Registration 104. Sample Application for Massachusetts Timeshare Registration 105. Limited Power of Attorney in Connection with Reservation Neverland II Condominium 106. Agreement to Purchase Real Property Neverland II Condominium 1149 1157 1163 1173 1179 1189 1197 1225 1231 PART S IXTEEN FEDERAL LAND S ALES COMPLIANCE IN THE CONTEXT OF RESORT DEVELOPMENT 107. Federal Regulation of Land Sales under the Interstate Land Sales Full Disclosure Act 1243 108. Interstate Land Sales Issues in Condominiums and Mixed-Use 1251 Developments Table of Contents 1252 Study Materials 1253 109. Summary of Recent Decisions Under Interstate Land Sales Full Disclosure Act 1267 110. Guide to Preparing a Statement of Record under the Interstate Land Sales Full Disclosure Act 111. List of Exhibits Required for HUD Statement of Record 112. Memorandum Outlining Requirements for Single Family Lot Exemption 1273 1311 1319
113. Checklist for Eligibility for Single Family Residence Exemption from HUD Registration 114. Memorandum Regarding Request for Exemption from HUD Registration Based on Substantial Compliance with Single Family Lot Exemption 115. Memorandum Regarding Advertising and Sales Practices under the Interstate Land Sales Full Disclosure Act 116. Summary of Civil and Criminal Penalties for Violations of Interstate Land Sales Full Disclosure Act and Regulations 117. Table of Contents for Property Report under Interstate Land Sales Full Disclosure Act 118. Reservation and Purchase and Sale Agreement for Purchase of Condominium Unit under Improved Lot Exemption from ILSFDA 119. Sample Opinion Letter to OILSR Regarding Judgments and Violations 1327 1333 1347 1353 1357 1361 1385 PART S EVENTEEN ETHICAL AND PROFESSIONALISM ISSUES IN ADVISING THE RESORT DEVELOPER, OPERATOR, CLUB, OR RESORT ASSOCIATION 120. Ethics and Professionalism 121. Engagement Letter Resort Condominium Project By James L. Cunningham 122. Opinions (Handouts) 123. Anchoring the Resort The Flagship Hotel (Handout) 124. Condominium Hotels and Other Investor-Oriented Real Estate (Handout) 125. Interval and Fractional Ownership and Private Residence Clubs (Handout) 126. Small Hotel Concept (Handout) 127. Lender Concerns (Handout) 128. Winter Resorts (Handout) 1389 1393 1399 1525 1537 1543 1553 1559 1565
129. Establishing the Resort Governance Structure (Handout) 130. Developing and Implementing an Amenity Strategy Presentation Slides (Handout) 131. Relationships Among Resort Components Presentation Slides (Handout) 132. Federal Land Sales Compliance in the Context of Resort Development (Handout) 1571 1583 1597 1603