by Nelson Orth on Wed Jan 27, 2010 12:53 am
HOW MUCH DOES TIRZO OWE SUN CITY ANTHEM?
by Nelson Orth on Wed Jan 27, 2010 12:53 am
I do not know the exact number, but I can provide some insight and a calculated estimate of that number. But before I do that, let me review, as best my memory serves me, on the events that have led us to the position that Sun City Anthem (SCA) now faces.
After secret negotiations were held in the March to May 2009 time frame, a presentation was given to the residents at the May 27, 2009 board meeting. The primary negotiators were Roz Berman, Dan Forgeron, and one of the associations attorneys Ed (let me repeat myself four times so you uninformed residents of SCA can understand) Song. Remember, no resident input, no resident review before approval by the Board of Directors (BOD). The contract was then signed on May 28, 2009 by Roz Berman, then president of the SCA BOD. I requested a copy of the contract almost immediately after the signing, but was denied a copy for about 28 days. As a result of this delay, I submitted a complaint to the Nevada Real Estate Division against the SCA Community Association Manager (CAM). As provided for in the lease, Tirzo took immediate occupancy of the space that was once occupied by the Trumpets owners, S&D Café.
My interest in this situation peaked in the September 2009 time frame when the Restaurant Advisory Committee (RAC) began to hold its meetings in secret. To this day I have been unable to discover the time, date, or place of any RAC meeting. Hence no resident questions, no resident input, no resident information. So who is in charge of the RAC? Roz Berman is the board liaison and Dan Forgeron is the Technical Advisor. Now where have I heard those two names before?
Tirzo’s Bistro opened for business on or about September 9, 2009. About that time I began to ask questions and find any information I could about how the operations were going. During the September, October, and November 2009 time frame, I was unable to discover much. The Chair of the RAC, Lorraine Kennett, the CAM, the SCA BOD didn’t want to say much. But sometimes you just have to ask the right question and hope that the laws of Nevada support your inquiry. I hit the jackpot when I asked for the November 2009 financial report. In this 346 page document were three pages devoted the restaurant.
This report showed the following: (a negative variance is defined as money owed)
A negative variance of $462 for the month of June (the month Tirzo assumed responsibility for the space).
A negative variance of $1,862 for the month of July.
A negative variance of $8,131 for the month of August.
A negative variance of $6,689 for the month of September.
A negative variance of $3,013 for the month of October.
A positive variance of $4,373 for the month of November.
The total is a negative variance of $15,784 for this period of time.
Even with this information I was reluctant to publish my suspicions. But then the December Board Book was made available, and the enclosed RAC report where RMI stated, “Tenant has paid gas and trash bills in July only. As of December 2, no other utilities bills have been paid. Disputes related to utility invoices were raised and are being researched by RMI and legal counsel.”
Then the Holiday season was upon us, and I became busy with parties and having fun. On December 28, 2009 I requested from the CAM a copy of Tirzo’s November revenue sharing report which, as required by the lease is due on the 25th of each month,reports the gross monthly revenue of the restaurant. Since the CAM had provided me with the September and October report, I did not believe there would be a problem. The CAM advised me that I would have to wait until the January board book was released before I could obtain a copy. I have since filed another complaint against the CAM since she has, by law, 14 days to provide me with that documentation. As an aside, today being the 25th of January, I have requested a copy of the December 2009 revenue sharing report from the CAM. For those of you that are interested, Tirzo’s revenue sharing report totals are as follows:
September: $71,615.75
October: $82,027.60
November: $77,894.17
The revenues for all three months fall below the $100,000 benchmark needed before any additional revenue is generated for the Association.
So how about the rent? Has Tirzo paid his $7,000 a month rent on time? The answer for October (the first month due) and November is yes. For December I believe the answer is yes, but I asked today for verification. For January the answer is no. In the January board book, released today, the RAC report states, “The January minimum rent payment was not received by the date the RAC had its meeting but was not past due. Per Section 4 of the lease, additional rent ‘shall be due and payable by the twenty fifth (25th) day of each month’ for the previous month.” I’m not talking about “additional rent”. I’m talking about the monthly rent and Section 4.05 states that the rent is due on the first of each month, and if not paid by the 5th, then a 5% penalty is invoked. This RAC report goes on to say that utility payment for September and October has been paid, but November has not been paid. Of course no numbers were provided.
So what is the bottom line? I believe Tirzo owes SCA about $20,000. I could be wrong in some of my calculations, but there is no doubt Tirzo has not fulfilled his financial responsibilities to SCA. It was interesting to note that at today’s board book review, Roz Berman asked if she should elaborate on the RAC report. Board president, Jack Troia, said no, just make the motion to accept the financial report.
Where has the process failed us? The most obvious failure is the failure of the residents to demand an open and transparent RAC. If that had occurred, perhaps RMI would have exercised their responsibilities under Section 1.02 of their contract – to oversee and enforce the terms and conditions of all SCA contracts. Where was the Finance Committee? Aren’t they supposed to look out for the best interests of the residents? How about out trustworthy association attorneys? Were they consulted the first time Tirzo was late in a payment? Who knows? But then again, who cares? They only look out for the board and themselves.
And what does the board do? As I see it, the board only has two choices. The first is to evict Tirzo for breaking the lease. The second is to commit SCA dollars with the hope that Tirzo can succeed in the future. But if they do commit those dollars, how will Tirzo spend them to expand his business base?
Are we or are we not on the same slippery slope as the S&D Café?