It seems that many of us are under various misconceptions regarding the declarant - the IDI Cortese limited partnership. That became very apparent to me from audience comments at the last Leisure World of Virginia (LWVA) Board of Directors meeting. I would like to try to dispel some of the misconceptions relating to the declarant and its role in our community. In the following paragraphs, "IDI" refers to the current declarant, as IDI is the managing partner of the declarant and is the entity we interact with at LWVA.

 

Misconception: IDI owns part of our community.

Fact: IDI, as representative of the declarant, does not own a single square foot of the gated community composed of the five associations. All the buildings you see around you, all these beautiful grounds and streets, as well as the clubhouse are owned by us - the unit owners of LWVA. The declarant does own the undeveloped land to the east of us that was recently sold at auction for $7.6 million. It should be noted that an entity belonging to the IDI group of companies and NOT IDI as representative of the declarant bought that land.

 

By comparison, the property owned by the five associations - of which Riverbend is one - is probably worth more than $200 million. Riverbend alone is probably worth more than $40 million in a depressed real estate market.

 

Misconception: IDI pays for the upkeep of our grounds, streets and security.

Fact: If you look at the LWVA 2010 budget, you will notice that none of the income line items are attributable to IDI, as representative of the declarant. The upkeep of this community and its security is fully paid for by us. The recent paving project, the landscaping contract, the snow removal, the security, the heat for the pool, etc., are all paid for from the assessments charged against unit owners and not by the declarant. (The two ex-partners making up the declarant own the remaining thirty-some units in Riverview, via a separate legal entity. These units are for sale and the separate legal entity will continue paying monthly assessments on these units until they are sold.)

 

Misconception: IDI makes all the decisions for the community, and if they leave, we will have problems trying to self-manage.

Fact: IDI, as representative of the declarant, rarely makes any of the decisions at our LWVA board meetings. Those of you who attend these meetings have watched IDI defer to the presidents of the five associations on most decisions. The only time IDI is actively involved in a decision is when they use their super majority power to overturn a vote passed by the majority of the associations. Additionally, LWVA is NOT self-managed currently. LWVA has a contract with a professional management company: Legum & Norman. This has been the case for years. IDI, as representative of the declarant, stepping down from our board, only means they will not have the power to block the wishes of the majority of the associations.

 

Misconception: IDI is looking out for our interests.

Fact: The declarant is a "for profit" entity. They are not a charity, nor are they here to socialize and make friends. They are here to make money. That's how all "for profit" businesses operate. If such profit comes at our expense, so be it.

 

A case in point is the 11-story "Stonebridge" building that IDI, as representative of the declarant, tried to build on the land to our east (the land that was just auctioned off). For those of you who weren't here at the time, IDI had promised the original owners of Riverbend who bought units with a river view that their view would never be obstructed. Many of our original residents paid thousands of dollars more for that view. IDI specifically promised that any building that would be built in front of Riverbend would be a low-rise. They also made that promise to Loudoun County officials at the time. (Voice recordings of the IDI representative making these promises were uncovered in county records.) Then circa 2004 or 2005, IDI filed for a much higher 11-story building. Many of our residents organized and took their grievances to the Board of Supervisors of Loudoun County. I was in the audience at the hearing when the IDI attorney stood up and, for some 10 minutes, informed the Board of Supervisors that they had it all wrong. He stated that the Board had no jurisdiction and that the plaintiffs were wrong on the facts. The Supervisors, who have their own set of attorneys to help them, disagreed and ruled against IDI in favor of our residents. When all was said and done, IDI had to back off and accept the Board's ruling. Had IDI gotten away with building the 11-story high building, market value of units here at Riverbend would most probably have taken a hit. The market value of all other units at Leisure World could have been affected since any unit offered for sale has to compete with all other units for sale in the same community.

 

Misconception: If IDI leaves, La Pergola, (the restaurant at the club house), will be shut down and we will lose that nice convenience.

Fact: Those of us who have a problem with the restaurant subsidy which we are paying are not eager to close the restaurant. I personally have had many happy meals at La Pergola and realize that the restaurant does help sell units, just like having a bank branch or a hair salon on premises helps sells units. Our problem is with the ownership structure of La Pergola.

 

Misconception: La Pergola is owned by LWVA.

Fact: We do not own La Pergola. La Pergola is owned by ASC, Inc., whose principal officers are Elio Domestici and Giuseppe DiBenigno - the owners of Dante Ristorante of Great Falls.

 

Misconception: La Pergola is an amenity just like the shuttle bus or the gym.

Fact: La Pergola is a convenience and not an amenity. For it to be an amenity, LWVA will have to be the full owner of La Pergola. LWVA/all of us collectively own the bus, the gym, the pool, and all the other amenities. On the other hand, we do "NOT" own the bank branch, the hair salon, or the restaurant. These are fully owned by outside interests. Having Inova Hospital and Lansdowne Resort close by are also conveniences. But we don't own these businesses either. And just as we do not subsidize the bank or the hair salon, we shouldn't subsidize any other outside business. We actually charge PNC Bank and the hair salon very nice rents which help defray some of our assessments. By contrast, not only are the owners of La Pergola operating here "rent free", but they take home a nice amount of dollars each and every month from the "gross" sales, irrespective of any losses suffered by the restaurant!

Initially, La Pergola's owners were taking home $48,000 per year right off the top. That money came out of the restaurant subsidy. After numerous complaints from the associations, IDI, as representative of the declarant, agreed to cut that amount by half - to $24,000 per year.

(By the way: Lansdowne Resort next door boasts a great selection of restaurants. They are only a short walk away, and we don't pay them any subsidy!)

 

A Suggested Remedy: Either LWVA takes over the ownership of La Pergola and turns it into a real amenity; or eliminate all profit guarantees to La Pergola's owners. The current manager, staff, and menu at La Pergola can remain the same. Attila, the current manager is more than capable of managing the restaurant without any outside help from La Pergola's owners.

 

Some comments on the recent letter from Mr. Norman Dreyfuss: According to Virginia statutes, a partnership in dissolution (the current state of the declarant,)  cannot operate "business as usual." They can only pay off creditors and sell and distribute partnership assets. Retaining full control over the LWVA Board and overruling the associations’ decisions, does not fall under either of these two categories!

 

Additionally, the LWVA declaration, specifically referred to in Mr. Dreyfuss' letter, does not provide for a unilateral transfer of declarant rights, as stated in the letter. That was the opinion of the independent attorney retained by the five associations to study the various documents. Moreover, Mr. Dreyfuss himself declared in public session at the July LWVA Board meeting that if the IDI group of companies buy the land to the east at the July 21 auction, they will have to develop it under a different name since the "Leisure World" name is trademarked by their ex-partner, the Cortese family. The five associations will not be affected by that outcome and can continue using the "Leisure World" name.

 

Also: IDI kept us in the dark for several months  after the court dissolved the declarant partnership. When specifically asked about the partnership status, Mr. Dreyfuss would simply state,  month after month at LWVA Board meetings, that "the lawyers are talking to each other"!

 

At the last LWVA Board meeting, Riverbend agreed to table a motion until the September board meeting asking for IDI, as representative of the declarant, to step down from the board. The IDI group of companies have until early September to close on the land they bought at the July 21 auction. We at Riverbend will take a "wait and see" attitude, while continuing to follow developments between the two ex-partners.

 

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TWO INCUMBENTS FILE PETITIONS FOR BOARD OF DIRECTORS POSITIONS

 

Two outgoing members of the Riverbend Association Board of Directors, Harry Carter and George Green, have submitted their nominating petitions in accordance with Section 3.4 of our Bylaws to run for the Board in the upcoming election.  

 

 

Harry and George were appointed to the Board last year to fill vacancies of directors who left before their terms expired. If elected in the Annual Meeting on October 7, Harry and George will each serve a three-year term.

  

Summaries of each candidate's background and experience have been posted in the lobby for those interested in knowing more about each one of them.

 

Candidates will make themselves available to Riverbend residents at the "Meet the Candidates Night" to be held on Thursday, September 2 at 7:00 p.m. At this time you will have a chance to find out more about each candidate and ask questions about issues that concern you.

 

The Election Committee will be handing out election materials with ballots/proxies to unit owners in the lobby on Monday, September 13 and Tuesday, September 14.

 

The League of Women Voters have consented to participate in the counting of ballots/proxies. The Election Committee held meetings with their representatives on Monday, August 23 to discuss the process.

 

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2010 CALENDAR FOR ELECTIONS

§  Sept. 2 - Meet the Candidates Night in the party room at 7:00 p.m.

§  Sept. 7 - Election Committee meets to assemble voting materials.

§  Sept. 13-14 - Election Committee hands out materials to unit owners.

§  Oct. 7, 6:00 p.m. Deadline for ballots/proxies.

§  Oct. 7, 3:00 to 6:00  p.m. League of Women Voters count ballots/proxies.

§  October 7 - Annual Meeting in Riverbend party room at 7:00 p.m.