SC Court of Appeals Hearing

June 5, 2024

On June 4, 2024, there was an appeal hearing before the South Carolina Court of Appeals on this case. The appeal hearing can be viewed on the SC Court of Appeals site here. To see the same video but in YouTube with familiar navigation and a chapter index, please use this link.

We appreciate that you continue to contact us with questions, voice your support, and share your

concerns with us at pbcommunityadvocates@gmail.com. We plan future updates for you as well.

 Sincerely, 

PB Community Advocates

pbcommunityadvocates@gmail.com 

Letter To Our Neighbors (Letter #4)

July 23, 2023

Dear Neighbors,

We hope you are all enjoying your summer!

This email provides a short update to our stakeholders on the recent events related to the major change to the structure of the Palmetto Bluff community. The PB Community Advocates (PBCA) continue to hear from many of you about your interest in and concerns about the PB community.

Dispute Resolution Process Initiated on July 10 – As you know, South Street Partners (SSP) sent out an email on May 31 announcing a major change to the structure of the Palmetto Bluff Club (“Club”) that purports to make “membership” in the Club voluntary, rather than mandatory.

• On July 20, 2023, a group of members delivered a notice of claims and a request for mediation to SSP. This group intended to initiate the negotiation and mediation process required by Chapter 18 of the Community Charter for Palmetto Bluff

• This new group of homeowners believes that a fundamental change to the community’s intended structure (like transforming the Club into a voluntary arrangement) may only be made by amendment in accordance with the Recreational Covenant’s clear terms and South Carolina law —and not by unilateral “waiver” of reciprocal covenants

• The Recreational Covenant, a recorded governing document for the community, has very specific requirements for how it can be amended. Among other things, owners of residential property must consent to material changes to the document

• Put simply, homeowners were not allowed to vote on this topic which could have long-term, far-reaching consequences for the community we know and love

• The next step in the dispute resolution process is a formal mediation between SSP and the group of homeowners who have filed the claim

Secret Listening Sessions – During the week of July 10, SSP held two listening sessions/focus groups

where they presented information on the future of our development to a small group of invited

homeowners. It is unclear how SSP chose which homeowners it wanted to participate. Let us know if

you attended a session and we would be happy to share this information with the broader community!

Current Status of Litigation – The current litigation related to the governance issues in our community continues. The case had a hearing this week and continues before the South Carolina Court of Appeals.

We welcome interactive dialog with community members. If you have information to share or questions for us, please don’t hesitate to drop us an email at pbcommunityadvocates@gmail.com. Tell us what you think of these topics or anything on your mind.

Please feel free to share this update with your neighbors!

Sincerely, 

PB Community Advocates

pbcommunityadvocates@gmail.com 

Response to SSP Club Membership Change (Letter #3)

June 11, 2023

Dear Neighbors,

The Palmetto Bluff (PB) Community Advocates care deeply about the future of our amazing low country community. Proper governance, stability, and positive relationships with all stakeholders are crucial to the long-term viability of our community. The Advocates were just as surprised as our neighbors by the random May 31st email from South Street Partners (SSP). Unfortunately, the direction they’ve laid out poses significant problems for the vital foundation that Palmetto Bluff was originally built upon. 

PB Community Advocates have never advocated for the Palmetto Bluff Club to be non-mandatory. We have always pressed for it to be non-profit. Our other topline reactions to the email on May 31 are:

• To make the change SSP is trying to implement, they need to obtain agreement from at least 50% of the membership per the governing documents (but they have chosen to avoid this requirement)

• The for-profit nature of the Club is what makes it unlawful

• A member-owned mutual benefit corporation that is not for profit is important to the long-term viability of the community and the value of our ‘home’ and our property values

• All PB homeowners and landowners should be very wary of a “non-mandatory club.” When one thinks of the new items that SSP could put in place (tract homes being sold at mid-market prices, bulk lot sales, to mass memberships for non-residents, to homeowners being permanently removed from the Club – unilaterally – for breaking arbitrary rules set by SSP, etc.), it is easy to see how many more potential problems will result

• This can all change next week. And then change again the week after that. Healthy communities thrive on stability and transparency – why can’t we have that here at Palmetto Bluff?

• This email makes their business intentions very clear and their goal to make money at the cost of our homes and community

With the stroke of its keyboard, SSP has apparently made Club membership “optional”—a fundamental pivot from the mandatory membership that has served this community well since its inception. This sudden decision appears to be driven by SSP, having finally understood that the structure of its for-profit Club is unlawful at the same time as they want to build a springboard to their business plan. However, SSP’s sweeping-change-by-email is the wrong answer to the right question. It is an answer that could change the character of this community forever, negatively impact all property values and accelerate the use of Palmetto Bluff as quick-flip financial tool for SSP and its majority backer, led by Nick Weber of Henderson Park in London. 

It could be easy to shrug and think – “I want to stay in the Club, so this doesn’t affect me.” However, as the attached Palmetto Bluff Neighborhood Association (PBNA) email outlines, this is a radical change with serious potential implications for all property owners. Converting to a non-mandatory structure – particularly with the associated stipulations in SSP’s FAQs – provides little, if any, actual benefit for the members. In reality, if you resign from membership, a future buyer of your property will be saddled by significant fees to reinstate that membership, no doubt affecting listing prices, contract terms and overall desirability of PB property. We salute PBNA for their astute criticism of SSP’s decision and align with their point-of-view. Please spend time to read their assessment. [please email us for a copy of the PBNA letter]

Importantly, this change delivers extensive advantages to the Developer in running Palmetto Bluff as a business and to the Palmetto Bluff Club as a for-profit entity. The existing Club is SSP’s business venture and is not “our” Club. As members, we have zero say in how the Developer operates the Club and our community – as this unilateral email change by SSP makes clear. Even though the Declaration of Recreational Covenant states the Club exists “to operate and maintain social and recreational facilities within Palmetto Bluff for the benefit of the owners of the Residential Property,” SSP appears to be improperly forcing this structural change so SSP can operate the Club to its own economic benefit.

Ideal Club Structure – The ideal method to correct the unlawful structure of the Club is to convert the Club to a member-owned non-profit Club, in accordance with South Carolina’s Nonprofit Corporation Act. This alternative is common in most communities like ours in South Carolina – because it is in the best interest of Club members, balances the financial interests of the Developer with the long-term needs of the community, and aligns with the Declaration’s stated intent for the Club. To be clear, we don’t have an issue with SSP making money – if they do it legally.

Since many of us will be living here long after the Developer exits their transaction and given that this change will have significant and lasting impact, it is now time for even more of us to stand up to make our voice clearly heard. Home and property owners should demand that SSP either reverse this radical change or use the required process in the Declaration to obtain consent from the majority of property owners to effectuate it.

Thank you for listening to and considering our perspective. We ask that you please share this update with our neighbors, share your thoughts and ideas with us, and contact us if you would like to help!

Sincerely, 

PB Community Advocates

pbcommunityadvocates@gmail.com 

A Vision for Palmetto Bluff's Future (Letter #2)

March 1, 2023

The enthusiastic conversation among community members about Palmetto Bluff (PB) in recent weeks reflects increasing concerns and a growing desire to learn more about and preserve the place we love.

The PB Community Advocates (PBCA) appreciate the outreach and support from many homeowners, some of whom were unknown to us prior to our first note. The number of neighbors who share our concerns about the future of Palmetto Bluff is very encouraging and reinforces our core view:

Responsible and strategic community governance is of paramount importance to our community.

PBCA feels strongly that specific adjustments to the Preservation Trust, Palmetto Bluff Club, Community Charter, and Palmetto Bluff Foundation are essential to ensure that Palmetto Bluff remains a special place that thrives in the future. From the outset, Palmetto Bluff was intended to be a unique community that cherishes the Low Country – not a transaction vehicle for private equity and international investment firms. For those who live here now and those who join us later, we are advocating for the following:

• The Preservation Trust (the community’s non-profit HOA) should administer the community in accordance with the Governing Documents and have a Board of Stewards who act as fiduciaries. The Developer should commit to adequately funding the Trust’s reserve, include property owner representation on the Board of Stewards, and provide complete financial transparency. These actions, in accordance with the laws governing South Carolina non-profits, will strengthen community durability.

• The structure of the Palmetto Bluff Club (the Developer’s for-profit venture), future amenity plan, and accessibility should be adjusted and reflect members’ priorities. The Developer should convert the Club to a non-profit mutual benefit corporation, commit to a reasonable timeline for planning and providing adequate amenities in correlation to the community’s size, and restore guest access for homes in Designated Rental Areas (DRA). These actions will better balance the financial interests of the Developer with the long-term needs of the community.

• The Community Charter should be amended to restrict the Designated Rental Areas to those that are currently in existence. The Developer should commit to limiting the number of homes in Designated Rental Areas to 5% of the total homes in the community. Thus, no more than 200 of Palmetto Bluff’s 4,000 potential homes could be within a DRA. This action will allow the existing DRA homes to contribute to the healthy growth of the community and, at the same time, eliminate the potential for an unfettered number of short-term visitors in the future – be it from private homes or those built under the hotel owner’s program (currently Montage Residences).

• The non-profit Palmetto Bluff Foundation (also known as the Conservancy) should be a prominent community component. The Developer should commit to prioritizing conservation. This action can restore the Conservancy to its originally intended priority now and in the future, maintaining the unique allure of Palmetto Bluff’s natural setting – a primary reason that many of us chose this special place.

In closing, we are inspired by the many offers to help and the creative ideas that we have received. PBCA has been very pleased to welcome new supporters to the litigation effort over the last few weeks, along with countless other actions of positive outreach. Please feel free to respond with your thoughts and ideas. We are committed to continuing to share knowledge and ideas with our community. Since we are also interested in hearing all points of view, you are welcome to share this note with your neighbors. 

 Sincerely, 

PB Community Advocates

pbcommunityadvocates@gmail.com 

Open Letter to Our Palmetto Bluff Neighbors (Letter #1)

The Palmetto Bluff (PB) community is at a critical inflection point. With a dramatic 37% increase in annual Club dues, 450 homes or more in development, and no significant new Club amenities on the horizon, many homeowners are questioning the future of our community.

As a strong and growing group of neighbors with shared concerns, the PB Community Advocates (PBCA) knows that good governance, stewardship, and transparency are of paramount importance to the long-term success of our community. It is clear from the January 17th Town Hall Q&A and community conversations afterwards that many community members have serious concerns about those important aspects. This is disheartening to see in a place we all cherish. Read More here...