Club Properties, LLC
Offering Summary
Summary
This is an income producing investment in 90+ acres of property located in the center of Southeast Decatur, AL. The investment units are transferable by sale (within covenants of the operating agreement) and by gifting and inheritance. Investment units are secured by the value of the property.
PURPOSE
To fund Club Properties, LLC in the amount of $3,000,000 for the purpose of purchasing the real estate (90+ acres and Clubhouse) currently owned by Decatur Country Club, mortgage currently held by Club Financing, LLC (10 DCC members). Offering amount will be used to purchase the mortgage of $2,500,000 from Club Financing, LLC, plus $500,000 to pay legal fees and to establish a capital sinking fund for the property, facilities, and clubhouse.
After the property is purchased, Club Properties, LLC will lease the property (triple net lease) to Decatur Country Club on a 50 year lease at terms initially favorable to Decatur Country Club with gradually increasing rent payments over 5 years.
Financial
Club Properties, LLC will be funded by selling 300 $10,000 units to interested individuals. Total units in Club Properties will be 333, including the 33 Decatur Country Club members who paid $10,000 assessments to become Class A One members of DCC.
Rent will be paid by Decatur Country Club at the rate of $30,000 in year 1, $60,000 in year 2, $90,000 in Year 3, $120,000 in year 4, and $150,000 in year 5. Thereafter rent will increase every year in accordance with the consumer price index (CPI). There are also additional rents that can be realized if DCC meets certain membership goals based on total members that could increase the rent payments to as high as $270,000 per year if the club grows to 600 members as it had in the past.
Rents will be paid to Club Properties, LLC members in accordance with their percentage of ownership in Club Properties, LLC. Depreciation expense for the property and clubhouse (approximately $220,000 in 2011) will be allocated to Club Properties, LLC members in accordance with their percentage of ownership in Club Properties, LLC.
Operations – Club Properties, LLC
Voting rights in Club Properties, LLC will be one vote for each $10,000 unit a member owns. Club Financing, LLC will be governed by a four member board of directors (currently John Eyster, Jr., John Cook, Jr., Clint Shelton, and Em Barron) elected from the membership of Club Properties, LLC to serve 5 year staggered terms. In general, the board of directors should have few decisions to make, since as long as Decatur Country Club meets the terms of the 50 year property lease no changes can be made to the lease or operating agreement. The only major topics the board of directors should normally have to consider would be regarding the approval of disbursement of funds from the sinking fund for capital improvements of the property and/or club facilities. Except for matters related to the use of the sinking fund for capital expenditures, Club Properties, LLC will have no input into the normal, continuing operation of Decatur Country Club.
All Members of Club Properties, LLC are eligible to be Class A One members of Decatur Country Club, however they do not have to be members of DCC if they chose not to be.
Operations – Decatur Country Club
The governing structure of Decatur Country Club will not change from its current format. A five member board of directors will be elected to serve staggered four year terms. The board members must be Class A One members of Decatur Country Club to serve on the board, and will be elected by a vote of all Class A One members of the club. Each Class A One member of Decatur Country Club will have one vote in deciding matters of importance to the club, regardless of the number of shares they may own in Club Properties, LLC.
The board of directors will work closely with the General Manager and Chief Operating Officer of Decatur Country Club to manage the normal operations of the club on a continuing daily basis. This will include all issues regarding operations, management, finances, staff, membership, dues, etc. Any requests for capital expenditures needed for the clubhouse or club facilities must be submitted to the board of directors of Club Properties, LLC for approval. Any capital funds spent from the sinking fund must be repaid to Club Financing, LLC as detailed in the operating agreement.
By definition, all Class A One members of Decatur Country Club must be members of Club properties, LLC. This insures that every Class A One member and every director has a vested financial interest in Decatur Country Club.
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