Homeowner/Duane Scholten Meeting

Homestead Homeowners Meeting – April 19, 2022
Mt. Baker Rotary Building, Front St., Lynden
5:30 – 7:00 pm & 7:30 – 9:00 pm

*These minutes are a combination of both meetings.
ADDENDUM: Due to the one-hour time limit for each meeting, Duane had to keep his answers short but some of you asked for more details about specific questions. Therefore, I met with Duane several days later and have added the additional information to the corresponding paragraph as an “Addendum”.

Welcome & Rules of Order: Bob Weeks welcomed 250 homeowners to the meeting, outlined the rules of order:

1. Respectful meeting, mask mandate is lifted
2. No recording or videos of the meeting
3. Turn off all cell phones
4. Questions will be submitted in writing only
5. This meeting is for prospective property owner
6. History of the PRD: multi-family, single family, condo/apartment built around
7. a golf course, it is an integral part of Homestead.
8. City approved Homestead’s development for the water mitigation ponds
9. throughout its course (19 ponds, 2 pump houses, an outflow on east side and one on west side).

Origins:
DUANE: Grew up in Iowa, met his future wife Arlene in college, she was from Sumas. They moved to Lynden and his equipment business soon grew to a Kubota dealership on Guide Meridian with 55 employees. Duane introduced his son Willy to talk about how he would manage Homestead.

WILLY: Discovered golf as a youth, when his friend’s mom dropped them off at a driving range. After slicing and hitting for hours, he was hooked. Throughout high school and college (Western), Willy found time to golf on Homestead’s course. When he graduated with a degree in Business Management, he accepted a job at Homestead as their golf professional and was soon teaching large groups of students. Despite the Canadian border being closed in 2020, business began to grow.

After a successful year, Willy resigned to consider future plans. Soon after, when the golf course came on the market, he asked his dad if he would be interested in purchasing it – Duane said yes.

Management Goals:
Willy’s vision for managing Homestead is to keep it an 18-hole course, have an efficient accounting system where homeowners can access their personal account any time, and the conversation around the course will not be about a lawsuit. He will continue teaching students the game he discovered when he was young, to keep future generations coming to Homestead, as well as being an accessible manager with a competent staff.

Purchase:
In August, 2021, Duane made an offer to purchase Homestead from Mr. Chen, the current owner. It would be turned down twice before Mr. Chen accepted.
Addendum: There is a claim that Homestead is only worth $600,000 and that Duane paid too much. A home in Homestead recently sold for $900,000 so it does not make sense that 153 acres of beautiful real estate with mountain views is worth less than a house. For comparison, the city of Lynden paid $1.2 million for 8 acres in Dec. 2018 and prices are even higher now.

Once his offer was accepted, Duane was surprised “nothing much happened.” When the plaintiff’s attorneys deposed Mr. Chen’s realtor, demanding to know the name of the prospective buyer, the realtor identified Duane. He expected a phone call from the attorneys but again, “nothing happened which told me volumes. They were not interested in settling this lawsuit.”

A number of times, Duane referred to the plaintiff’s lawyers as “your lawyers” because “90% of you are class members in the class action lawsuit and some of you don’t even know it.” He explained that if we had not opted-out using a form sent by the lawyers, we were automatically included.

Addendum: From listening to people for several months about this topic, Duane heard people who are still upset about how it was handled. In early 2021, Andersson sent an update that explained if you did not opt-out, you would be automatically included in the lawsuit. In Oct. 2021, the lawyers sent an opt-in letter, and then the week before Christmas, Dec. 2021, they sent opt-out letters. Most people did not connect Andersson’s explanation with a letter from “Davis & Leary.”

And many did not trust a letter from a stranger, asking them to sign a form and return it. When Duane brought the topic up, it was to inform, not judge, what the lawyer’s/HOAG website claims: “over 90% of parcel owners support the class-action lawsuit against the golf course.” Many residents still don’t believe they’re included without choosing to be, as demonstrated at the lawyer’s meeting on April 21. Duane is a senior along with many of us, and understands the importance of being informed.

To gain knowledge about Homestead’s lawsuit, Duane had been reading court documents and HOAG updates, as well as following court proceedings. He informed us the lawyers had just lost their lawsuit against the city and were now left with one lawsuit: the class action.

In Feb. 2022, to move the sale along, Duane reached out to attorneys David Andersson and Matt Davis. They agreed to a meeting and brought plaintiff Tom Staehr with them. Duane felt the meeting went “very well” and was optimistic a solution was possible.

In March, 2022, Duane sent a fee proposal to the attorneys and waited to hear back. Two weeks passed without a response.

Duane called Tom Staehr, asked if he had seen the proposal, he had not. Tom called his lawyers who called Duane’s lawyer, Lesa Starkenburg. The lawyers had rejected the fee proposal. At this point, Duane looked around the audience and asked any plaintiffs present if they had received a copy of the proposal – several shook their heads. Duane suggested their lawyers should have run the proposal past them before rejecting it.

Regarding his proposal, Duane explained his reasoning for multi-tiered fees:

1. It is more fair and reasonable for condos/apartments, already paying a high HOA fee, to have a lower maintenance fee.
2. Only homeowners paying a higher fee are single homes on golf course.
3. Off-course & on-course duplex/multiplex, VI, Meadow Greens, & off-course single homes will pay less.

Addendum: The fee scale was based on Duane believing it was unfair for people in condos/apartments to already be paying high HOA fees and then have an additional high fee so he chose a “multi-tiered” fee proposal. It allows for those who are struggling to make ends meet and who arenoton the golf course vs residents on the golf course who are ok with higher fees to get a more fair and reasonable solution. The previous one-fee-for-all was not seen as fair.

In projecting which repairs would be priority, Duane said streets, street-lights and sidewalks will be first for safety purposes. Street-lights will be brought up to code in anticipation the city will resume maintenance. He also wants to prioritize the airport due to the outlet drain not being maintained, which has created a hazard.

Duane asked several of his friends who love to golf, where they enjoy playing. When they did not list Homestead, they said it was due to losing balls in the many ponds throughout the course.

Addendum:The many water hazards for golfers vs pond mitigation for Lynden has been a challenge for 30 years. At least with a local owner, we could have someone who wants to fix the problem instead of deferring it.

Q&A:

Q: Would you consider conveying the COS to homeowners?
A: No, and here’s why. If homeowners don’t maintain the COS, we’ll get complaints and now we have to manage you for not managing COS.

Q: Would homeowners know where or how their money is being spent?
A: It will be obvious, you will see repairs being done as we restore Homestead to what it once was.

Q: What is our guarantee you won’t misuse funds?
A: There is a trust factor needed from both sides and you have my word. Plus my door is always open, and you don’t need an appointment.

Q: If you have no intention of turning over open spaces or creating an HOA, what are the checks and balances?
A: If after two years, you can’t see where your money is being spent, then we have failed you. We can’t predict what’s going to happen but we will be transparent and we are here, local, and open to hearing and discussing your ideas.

Addendum: Duane explained he believes actions prove intentions, which is why he said if we can’t tell where the money is being spent, they have failed us. He wanted people to know he stands behind his word with visible evidence for follow-through, repairs, and restoration.

Q: When you said “they” never showed us proposed fee schedule, who are “they”?
A: The plaintiff’s attorneys.

Q: Is there any kind of first right of refusal that you are up against in this sale?
A: No.

Q: Would the fees be going to maintain open space only or will some go towards the golf course?
A: The golf course cannot survive without the fees, so a portion will go towards it. But there will be separate accounts for each portion of the fees, no co-mingling.

Q: Can you limit reserve fund to maintaining stormwater ponds only?
A: There probably won’t be anything in the reserve fund for 5 years; that’s how long it will take to repair and restore all of the deferred maintenance projects.

Q: Do you plan to form an HOA?
A: We’re open to that discussion. You had a very good, hard-working advisory board but their preamble didn’t see the light of day. HOA’s have the potential to work but many do not. Look at Heartland’s HOA (in Lynden). It’s against their HOA rules to park on the street but cars are parked all along the street and no one can do anything about it.

Addendum: Duane repeated he is open to discussing having an HOA but in his experience, HOA’s tend to fizzle out or frustrate the members due to not having or using enforcement power. But again, he believes in listening to the other side.

Q: Are there any clauses to allow building or different uses for the land?
A: Can’t be done, the City won’t allow it. It’s a big stormwater issue and the golf course provides for that. It can only be a golf course.

Q: Will you be going to the lawyer’s meeting on Thursday?
A: It would be inappropriate because I’m not involved in the lawsuit.

Addendum: After the homeowners meeting, Duane and Willy were personally invited by the plaintiffs to attend the lawyers’ meeting. Willy attended in person, Duane was out of town but able to observe meeting via zoom.

Q: Would you work with investors?
A: No, I’ve worked with them in the past, prefer being on my own.

Addendum: Duane explained he has had investors throughout his career, and found he could make decisions more quickly without waiting for a committee to decide. The meeting was adjourned in order to prepare for the second meeting at 7:30.

Responses from the crowd were very positive as people commented on Duane’s candor and willingness to work with Homestead homeowners. The most frequent comments were relief we could finallymove forward and have a local owner for our community. The audience of 250 applauded several times throughout the presentation.

At the end, one attendee’s summary: “This is an incredible opportunity for us to have a beneficial relationship with Homestead’s owner, something we have not had for several years.”

Duane’s contact information:
Cell: 360-961-5147
Email: duane@scheq.com
Office Address: 8223 Guide Meridian