Board of Directors narrowly approves letting realtors use the Clubhouse for a $5 fee

What a difference a week makes.

During a divisive and confrontational workshop meeting on Feb. 7, the King City Civic Association Board of Directors took a straw ballot and voted 5 to 1 to charge Elaine Simms the commercial rate ($125 per half day) for reserving the King City Clubhouse living room for First Sunday open houses.

Simms, a King City resident and real estate broker with Ken Miller & Associates, started the program in King City five months ago, and as a resident, she reserved the Clubhouse living room for free and found resident volunteers to offer tours and information packets about all the participating properties for sale during the First Sundays.

Residents can reserve KCCA facilities for free, and Simms was not being charged to use the Clubhouse, although a 2012 addendum to the Covenants Codes & Restrictions states that residents must pay a fee if they are using a facility for commercial or political purposes.

After another lengthy but less divisive discussion at the Feb. 14 board meeting, the directors voted 3 to 2 on a motion to charge Simms $5 per event, which board member Joe Wilson said he would pay.

Discussions at both meetings revolved around the benefits of exposing prospective buyers to the KCCA's many amenities versus following the CC&Rs to the letter, and each side had its proponents.

Board workshop discussion

At the workshop, board President Denny Gelfand, who abstained from the straw ballot, said, "We've been keeping a blind eye toward this situation. It has a mixed value because it exposes the community to our facility, but it's in violation of the CC&Rs, so I think there should be a change."

Wilson said that the brokers "are not doing it for sheer enjoyment, and secondarily, there will be sales resulting, and that is how we pay our bills," referring to the transfer fee of 1.5 percent of the sale price of properties that buyers pay to the KCCA.

According to board member Blair Wyatt, whose husband is broker Brad Wyatt, there are five real estate brokers living in King City.

"If one realtor stands in the doorway of the Clubhouse with a sign outside that is the same color as the realty's and hands out business cards – you're dealing with seniors," Wyatt said. "They will think that is the only realtor – that leaves out the other four."

Wyatt added that her husband does not participate in the First Sunday events "because he works every Sunday."

Board member Katherine Griffith said that the CC&Rs should be followed, but Vice President Paul Downing reminded the board of the income the KCCA receives through transfer fees when properties sell.

With a major remodeling of the Crown Center and swimming pool starting, Downing said, "We'll pay for our pool in no time. The real estate (sales) projections are beyond belief, and we will be the beneficiary. Anything that benefits our community, we should pave the way.

"Any real estate promotion promotes King City and has a high dollar value. We should make an amendment to the CC&Rs. The community is benefitting here – not the realty companies."

After Wyatt raised the issue again of only one broker handing out business cards, she and Wilson got into a shouting match, each telling the other to "back off."

Downing suggested, "If cards are handed out, have the cards from all the realtors in the city. If the CC&Rs impede selling our product, then change the rules."

Treasurer Roger Burke said, "I don't want someone standing in the door hustling people, handing out their business cards, stuffing them in people's pockets. Realtors can rent a room and put up their display there. I don't want Girl Scout cookies, Boy Scout cookies, the opera or anyone selling here for profit.

"This (First Sunday program) is a commercial enterprise. The real estate people involved should pay the commercial rate."

Downing suggested removing the word "commercial" from the CC&Rs amendment, adding, "They (the brokers) are acting on our behalf in a sense and are promoting this community."

But Griffith asked, "Should we put 'in a sense' into the rules? I want them to rent a room and pay the commercial rate."

When Downing learned that the commercial rate is $250 per day for the Clubhouse or $125 for a half day, he said, "As a person in business, $125 is not too much. That's cheap – that's nothing," and Wyatt added, "If Ken Miller does not want to pay, he can run the First Sunday out of his office right down the street."

Gelfand pointed out that while having the Clubhouse open during First Sundays "has redeeming value for the community, it is in violation of the CC&Rs. We need a way to make it fair for everybody. If someone doesn't make a motion, the existing CC&Rs will stand."

Griffith said that "it comes down to whether to charge the commercial rate or the resident rate (which is $180 per day). This should be the commercial rate."

Taking a straw ballot, Wyatt, Griffith, Downing, Secretary Terry Pittsley and Burke voted in favor of charging Simms the commercial rate per the CC&Rs, while Wilson voted in opposition.

At the workshop, several board members admitted that they had not attended a First Sunday event at the Clubhouse, and in addition, they did not have all the facts as they discussed the issue, according to Simms.

Simms' perspective

"I have never hand out cards or any branded information at the Clubhouse or in the information packets given to prospective buyers," she said. "I go out of my way to keep myself and our company out of it.

"There are a great group of volunteers that man the Clubhouse and conduct the tours. Everyone is in the groove now, so I don't even go into the Clubhouse, although Ken and I do put out the signs." 

Simms could not attend the Feb. 14 board meeting, but Gelfand said she sent him a "nice" letter, which Marty Williams, another broker at Ken Miller & Associates, read after saying, "I'm disappointed this has become a personal issue instead of a community issue."

In her letter, Simms, who attended the Feb. 7 workshop, said she felt it was important to "clarify glaring misconceptions" that had come up at that meeting, stressing that there is no advertising at the First Sunday event in the Clubhouse or any broker standing at the door handing out business cards or branded information.

"The event is of great benefit to the community," Simms wrote. "The First Sunday open house provides buyers with inside information they are looking for about the community. Many of these potential buyers now know about the event and know they can tour the facilities and ask questions about the community and get answers to their questions.

"Agents with listings in King City who do not live here do not have the inside information many buyers are looking for about the community. These agents now also know about the event and are letting their clients know. Any exposure our community can get is a benefit."

Board meeting discussion

Gelfand responded, "I think she could afford to pay $125, but Elaine thinks she provides enough of a service that she should not pay. I think Elaine truly loves this community, but she definitely makes money."

He explained, "Due to the feud (between Wyatt and the Ken Miller agency) going on, Blair is recusing herself from this."

Both Wilson and Downing stressed that houses are selling quickly, and each sale brings in money to the KCCA. Downing, who has a long career in real estate and construction, said that with an average sale price of $280,000, each buyer pays about $4,000 to the KCCA through the 1.5 percent transfer fee.

"Promotion brings more value, and more value brings more money," said Downing, who added that the final amount of transfer fees in February was $43,997.

Griffith said, "There is not one real estate person associated with this who does not make money. This event brings in money for them. Houses sell in a few days, and we get 1.5 percent, and they make 6 percent. All I think they should do is pay the fee."

To counter Simms' assertion that there is no branding at the event, both Gelfand and Griffith said that the list of properties for sale includes the real estate agents' names and companies.

Public comment

During the public comment period, Judy Holmes said, "We've really worked hard to make this event neutral with no advertising and no cards passed out. No one realtor should pay the fee – all the real estate agents benefit. All we volunteers do is take people on tours. I especially like showing off the library.

"The non-branding is important. If you call it a commercial venture and charge for it, people will start advertising. It should remain neutral."

She added that all brokers with listings in King City have been asked to participate in First Sunday. "We have participation from all the realty companies but not all the realtors with listings – that's their choice," Holmes said.

Gelfand asked her if prospective buyers who come to First Sunday in King City are told about homes for sale in Summerfield and the Highlands, and Holmes replied in the affirmative.

"Why would we do that?" Gelfand asked, and Holmes replied, "Because for eight years they've done it for us."

Final arguments and votes

After more discussion, Downing said, "I don't see how we could do ourselves any harm by letting this little thing go on at no charge… Do we want $45,000 or $125? We as a board have the authority to waive the fee and we should."

Griffith disagreed, saying the board couldn't waive the fee and added, "I don't care if she pays the (lower non-commercial) resident fee – she shouldn't get it for free."

After more discussion about whether the board could waive the fee or not, Downing made a motion to allow First Sunday to operate without the host realtor paying a fee.

Downing, Wilson and Pittsley voted yes, while Griffith, Gelfand, who originally said he wouldn't vote, and Wyatt voted no, Audience members protested that Wyatt said she was recused, but Griffith said she was recused from the discussion, not the vote.

Downing made a second motion to charge $5 for use of the Clubhouse living room, and he, Wilson and Pittsley voted in favor while Wyatt and Griffith voted in opposition, and Gelfand abstained. Burke was absent.

"Paul's motion passes," Gelfand said.

Summerfield First Sunday

Meanwhile, in Summerfield, the open clubhouse concept was quickly endorsed by its Board of Directors as a way to promote the community.

"In April 2009, Mel Nielsen, one of the residents, recommended to the board that we 'Sell Summerfield' to prospective buyers with a large weekend open house with heavy newspaper advertising," said Ken Miller, who is Summerfield Civic Association Board of Directors president. "At the next board meeting, the board approved the idea to be presented at the annual Summerfield board meeting with residents invited.

"The idea was discussed at the annual board meeting, and after overwhelming support, $10,000 was budgeted for advertising, signage, refreshments and information packets. The weekend event was scheduled for Sept. 12 and 13 in 2009. It was a smashing success. Shortly after this successful event, the Summerfield board supported monthly open houses at the Summerfield Clubhouse."

That year, Robyn Dezendorf, a Summerfield resident who is a broker with Keller Williams Realty Portland Premiere, started the First Sunday open house program, coordinating all the participating realtors and creating maps and information packets for the open houses. Beginning in September 2016, Summerfield resident Elizabeth Young, who is a broker with Ken Miller & Associates, took over the Summerfield First Sundays.

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