1. Developing and Implementing an Amenity Strategy

2. Development / Ownership Options CONSTRUCTED BY: OWNED/OPERATED BY: Special District POA Community Developer Separate Nonprofit Entity Commercial Operator Amenity Developer Commercial Operator

3. Development/Ownership Options Advantages: Ability to issue bonds Bonds repaid through special assessments Property owners taxed for operating costs Disadvantages: Cost of bond issue Lack of long-term control “Public” access Special District

4. Development/Ownership Options Advantages: Shifts development cost, headaches Enhances real estate values Shifts operating risk Disadvantages: Lack of control over construction, quality Lack of control over operations, access for property owners Uncertainty as to future ownership / operations Amenity Developer Commercial Operator

5. Development/Ownership Options Advantages: Maximizes flexibility Maximizes control Enhances real estate values Disadvantages: Cost Risk Headaches Community Developer ???

6. Development/Ownership Options Community Developer ??? Considerations:  Developer’s business and long-term goals  Competition in market area  Capital outlay required; profit potential  Operating cost  # of units to be sold; internal demand  Price/product mix  Depth of the outside market

7. Development/Ownership Options Community Developer POA Factors:  Capital outlay easily recouped through lot prices  Operating cost affordable for target market  Little or no outside market  Capacity matched to community size

8. Development/Ownership Options Community Commercial Developer Operator Factors:  Capital investment substantial  Strong demand within and/or outside community  Amenities do not appeal to all buyers  Good potential to operate at a profit

9. Development/Ownership Options Community Nonprofit Developer Club Factors:  Capital investment substantial  Strong demand within and/or outside community  Amenities do not appeal to all buyers  Little potential to operate at a profit

10. Bundling Amenities with the Real Estate  All amenities in separate club  Some level of membership mandatory  All memberships optional  All amenities in POA  Non-golf amenities in POA; separate golf club with memberships optional

11. Development and Market Considerations  Capacity vs. demand  Exclusivity  Marketing impact  Timing Bundling Amenities with the Real Estate

12.  Creation, administration and enforcement  Avoiding antitrust challenges  Avoiding unreasonable restraints on alienation  Fair housing laws  Controlling use  Establishing financial obligations Legal and Drafting Considerations

13.  POA owned and operated  Community CCRs  Separate club  Community CCRs  Covenant to share costs with POA  Separate recreational covenant on each lot Bundling Amenities with the Real Estate Documenting the Arrangement

14. Bundling Amenities with the Real Estate Controlling Use Occupants vs. owners  Co-owners who share use of second home  Vacation rental guests  Age-restricted communities

15. Bundling Amenities with the Real Estate Controlling Use  Number of authorized users  Entire household entitled to all privileges  Entire household entitled to social privileges; limited # entitled to golf  Limited # of persons entitled to all privileges

16. Bundling Amenities with the Real Estate Establishing the Financial Obligations Initiation Fee  Included in lot price vs. separate  Nonrefundable vs. refundable  Initial sale only vs. initial sale and resales/transfers  Limitations on unreasonable increases

17. Bundling Amenities with the Real Estate Establishing the Financial Obligations Periodic Dues - Method  HOA includes in assessment for common expenses  HOA shares costs or makes contribution to separate club  Each owner pays dues directly to club

18. Bundling Amenities with the Real Estate Establishing the Financial Obligations Periodic Dues - Calculation  Based on actual share of designated expenses  May not be desirable if commercial operator  Requires access to budget, books and records  Fixed, subject to limitations on increases  Risk of impairing value of club on future sale  Provides level of certainty to real estate buyers OR

19. Bundling Amenities with the Real Estate Establishing the Financial Obligations Collecting Membership Fees  Timing of obligation to pay  Lien rights  Remedies

20. Keys to Developing an Effective Amenity Strategy  Carefully consider development/ownership options in light of Developer’s goals Economic considerations Target market  Draft to Maximize compliance and enforceability Minimize risk of legal challenge Balance interests of the parties

21. Marketing Construction Phasing Expansion Timing of Amenities

22. Timing Post-transfer rights of developer Transfer of Amenities