Minutes of Master Management Special Board Meeting October 02, 2014 President Donna Capobianco called the meeting to order at 9:32 a.m. Roll Call: Present - Donna Capobianco, Danielle LoBono Remotely - Fred Rosenzveig, Gene Goldman Absent Charles Lusthaus, Dan Glickman, Bill Morse, Pierre Laliberté President s Report - Donna Capobianco After acknowledging the large turnout, Donna explained why the Special Meeting had been called now, that it had a very specific agenda and noted that the meeting is recorded and can be viewed at CVEDB.com and Channel 99. Donna encouraged everyone to attend the Town Hall meeting held in December where the year will be reviewed and open mic is available for comments, questions, and concerns. Golf Course Property Purchase Status (9:37:18 a.m.) Donna spoke from the following Presidents Report: Some things we all need to keep in mind - Whoever owns the land must deal with the land issues. For forty years land in middle of village was used as golf course. After at least 4 different owners, that ended last year when the golf course was shut down. CVE unit owners never owned it and never had control over it. CVEMM is the only buying entity in the village that can make a large purchase on behalf of all unit owners so it only made sense for the community to ask CVEMM to try to purchase the land. What and how decisions are made by CVEMM Board is crucial to us all. CVEMM BOD's 1st obligation is to protect the company and operate in best interest of majority of members. Land price was very high. CVEMM never disagreed. But majority wanted it if we could get it and were willing to spend up to the $5.5 Mil or $10 per month per owner (Principle & Interest) to own and protect it. Wells Fargo negotiations yielded an excellent financing agreement at less than 5% ensuring P&I of less than $10 per month - about $8, which we accepted. 1
The process: 1. Tests conducted by our engineer with sellers engineer alongside them. 2. Then our engineers, environmental attorneys as well as sellers, sat with Broward County Environmental Agency to discuss options. 3. Lastly our engineer & all our attorneys met with CVEMM BOD late last week in a lengthy meeting to discuss results. WHAT WE LEARNED: TESTS: Contamination as expected -Seller is aware as he had his own experts alongside ours. No better or worse than most golf courses operating for 40 years in SE Florida. Arsenic found generally over the property, some areas better or worse than others. naturally occurring in the soil was used as pesticide on all golf courses doesn't deteriorate or dissolve over time golf courses stopped using approximately 5 years ago no reported arsenic poisoning we are aware of by workers, golfers or residents our understanding is arsenic has to be ingested for it to be poisonous GREAT NEWS: No contamination found in the lakes. There is contamination in the ground water but not into aquifer. It appears there has been settlement migration of arsenic on to association property how much there is unknown how much of it is naturally occurring is unknown how much was used by CMM as a pesticide on all land years ago is unknown how long settlement migration has been there is unknown RESULTS of meeting with Broward ENVIRONMENTAL AGENCY: Broward gave very positive signals of willingness to be helpful. If we only have to contend with the golf course land and agree to keep the land passive use, (green space with walking paths) the most reasonable and cost effective approach for the community would be to apply for Brownfield Designation and Acceptance. This would be accomplished between Broward County Regulators and the City of Deerfield Beach only. No state involvement needed or required. 2
If granted, for $1 million or less, CVEMM would be protected and the land would remain green space owned and protected by the village. Requirements include a signed release by 29 associations abutting the land not to sue CVEMM. No involvement by the state. If only one person complained to the state, the state would have to investigate and because their requirements are different than local agencies, the requirements would change, and we lose Brownfield option and costs of remediation (cleaning the land) jump to between an estimated $6.5 up to $10 million or more. COST Risk Assessment: COST to remediate or clean up the property would be $1 mil or less if we could obtain a Brownfield designation and approval from Broward County environmental agency and City of DFB to keep passive land use, not build. Cost changes to $6.5-10 million if State environmental agency gets involved as their remediation requirements are different from local authorities. No way to know if we would obtain Brownfield designation and obtain signed acceptance from Broward County and Deerfield Beach until after sale takes place, given mandatory closing date too close. We would not buy unless Seller discounted price by expected remediation cost. We would not know estimated costs until too late. Seller offering under contract only $250k discount so no guarantee he would discount more. A complaint goes to the State environmental agency prior to obtaining Brownfield Designation and Acceptance drives remediation cost up to between $6.5-10 million or more as State must investigate and has more stringent remediation requirements. Cost is too high over and above sales price if other agencies get involved. Person who complained to City regarding trees, and we all have a right to complain to any public agency, contacts State and Local environmental agencies constantly. Same person has history of multiple complaints lodged against CVEMM and emails frequently accusing CVEMM of all kinds of environmental wrongdoings. No complaints justified but any agencies, City or State, must investigate. Ross Gilson has already been trying to stop our moving forward. BOD believes risk is very high a complaint would be lodged with state. LEGAL Risk Assessment: The $1 million or less it might cost if we can obtain Brownfield Designation and Approval requires all bordering associations to sign a release stating they will not sue CVEMM. We believe risk is high they would not sign the release and might sue us. Person who complained about the trees and constantly complains to environmental agencies has often threatened CVEMM with things like sprinkler water squirting into his mouth and if he contracted any illness he would come after us. High probability Ross Gilson might pursue 29 associations to join in class action against CVEMM to clean association land and pay for any real or perceived damages to them and their owners. BOD believes risk of litigation is very high. 3
(9:58:55 a.m.) Donna announced with unanimous board approval, Master Management Board will not proceed with the purchase of the golf course property. Following announcement of the decision, an overwhelming applause was received from the majority of the large number of residents in attendance. Donna continued with the report: DECISION: Board decided against going forward with the contract at this time. Contamination is proven to exist. Very high potential remediation costs given risks of complaints to state are high and very high potential legal risks from many directions. We were unanimous in our decision. We know the naysayers who have been attacking us for following the desires of the majority of the community to try to buy the land will criticize this Board for spending great sums of our money just to end up not buying it. They will say we wasted unit owner money only to get the result they already predicted. We would say to them and anyone who believes them: CVEMM, as the only possible buying entity in the village, listened and acted on desire of the majority of owners to try to purchase the land. CVEMM does not have the luxury of just talking and blogging with no empirical, scientific data to support itself. CVEMM has responsibility to do its due diligence and Investigate thoroughly, bring in experts to assist us, weigh the pros and cons and risks and do our best to make informed rational decisions and act in the best interest of our Corporation and our members. This Board demonstrated its ability to do all these things regardless of how we felt personally about the issue. Everything was conducted professionally and properly and good argumentation and debate occurred often. And the cost to each unit owner for all this due diligence is less than $20 total. We did what was needed in a reasonable and responsible fashion and this allowed us to make a prudent decision. FUTURE: With everything we now know maybe there may be a better opportunity from the seller in the future. If there is, and we are in a position to pursue it, we will inform you immediately. As of right now, the golf course property is a contamination site. There evidently have not been many interested buyers and now given its proven condition and settlement migration issues and conditions, it seems even more unattractive. This Board will remain open to future opportunities that reduce COST and RISK to acceptable levels. There are three positions open on the Board for the next election. If you are comfortable with the way this Board conducts itself, we ask that you please consider candidates, whoever they are, that demonstrate they can communicate effectively, support and respect majority rule and be willing to perform due diligence, not just think they are the only experts. If you appreciate the effort and hard work it takes to protect this corporation and its members, and respect being 4
on a BOD which is a team effort, we hope you will take great care to elect people who will act accordingly. (10:07:26 a.m.) Having concluded her report, Donna outlined the open mic session to be held and recognized Danielle LoBono, who noted the Board had put in a lot of time and effort, had worked hard for the community and was watching the dollars. Open Mic (10:08:26 a.m.) Donna initiated the open mic session requesting residents line up and announce their names and addresses when approaching the microphone. Approximately 12 residents spoke and inquired as to issues such as breach of contract, real estate taxes, net leases, seller restrictions as to the sale, maintenance of the property, concerns for development, remediation of the property and agencies involved, developmental restrictions, arsenic levels on association properties, financials on money spent, what would happen in the case of abandoned property, access to the property, sale and use of property going before the City of Deerfield Beach, history of the golf course, and if the restaurant was owned by the golf course. Adjourn Meeting was adjourned at 10:30 a.m. (For greater detail, those wishing to hear all comments, discussions, and debates are encouraged to view the meeting video in its entirety or by using the time markers above on www.cvedb.com. Meetings may also be viewed on our Community TV Channel 98.) Respectfully submitted on behalf of, Gene Goldman Secretary & 2nd Vice-President Board of Directors By: Kelly Serkin Executive Administrator CVE Master Management Co., Inc. The signature above indicates only that these are the minutes adopted by the Board of Directors in open session on, 2014. 5