Last Updated April 18, 2022
A: On March 31, 2022, the Developer unilaterally announced radical and significant changes that affect all homeowners related to houseguests, unaccompanied guests, and independent rentals. The sudden announcement of the unreasonable houseguest policy communicated that all members must charge visitors to their homes and restrict them from the community during holidays, among other issues.
In parallel, SSP announced to certain owners of homes currently offered for rent within the Designated Rental Areas that access to Club amenities would cease. This change is likely to significantly curtail or virtually eliminate these owners’ vested right to private rentals – a right which was marketed and sold to them with their property. Going forward, this change could effectively prevent their homes from independent rental use.
Neither the Developer nor the Club provided the opportunity for any homeowners to comment on or discuss the changes, despite the Community Charter’s original intent. In fact, SSP held a community-wide meeting in February and could have discussed the changes that were coming and solicited feedback. Immediate action is required to stop implementation of the changes and prevent potential long-term negative impacts to Palmetto Bluff as a viable community.
We care deeply about Palmetto Bluff and could not simply allow these private-equity-focused changes to occur without fighting for a transparent and fair process in full accordance with the law.
A: The Development Agreement allowed for, and the original Palmetto Bluff Community Charter (recorded as a deed in 2003) designated, certain Rental Areas (DRAs) where homeowners could have short-term rentals (STR) for periods of less than six months (e.g., Wilson Village). Presumably, as part of the effort to sell more lots, the Developer added DRA units over time, most recently in Moreland.
Subsequent to your neighbors’ purchases of property in these areas, and after 17 years with no substantial changes, in 2020 the previous Developer contemplated major and unreasonable changes that would affect short-term rentals. Since there are few if any Developer-owned lots left to sell in DRAs, providing the ability for guests to use amenities apparently is no longer a necessary part of the DRA property sales strategy. However, that guest amenity access and the anticipated rental income was part of the property purchase decision for most of the DRA homeowners.
A: No. The group now includes both homeowners inside and outside the DRAs. The most concerning issues are not the short-term rental issues and appear to be very alarming and could affect every homeowner at Palmetto Bluff.
A: Unfortunately, there appear to be many illogical and easily refutable narratives that have been manufactured and conveyed within the community.
In reality, short-term rentals from both independent renters and Montage are actively and currently promoted on VRBO, a home rental exchange, as well as other social media sites.
It is important to understand that the footprint of rental guests is generally not additive to usage. When the homeowners are not in town, renters stay instead of the owner just as if someone lent their home to a family member for a week or a weekend.
Also, homes in the DRAs represent less than 6% of the 4,000 lots, and not all are developed or rented. The estimated annual average number of nights a home in the DRA is rented is 100 (and is mostly vacant for the rest of the year). This relatively insignificant number—contemplated in the development plan—does not and should not overburden Club facilities.
The recent changes won’t eliminate or reduce the number of short-term rentals; likely they will simply move rentals to the Montage-managed homes.
A: Since independently managed short-term rental homes had restrictions on restaurant use and reservation limitations, it is estimated that these rental guests used less than 5% of the available restaurant capacity they had access to. This suggests that 92% of the non-member use of Canoe Club and 100% of the non-member use of Coles was from hotel guests and others who did not rent independently managed homes.
A: There are restrictions on unaccompanied guests’ use of the golf course. For example, unaccompanied guests have blackout dates, day-of-play tee time restrictions, and can make a tee time only 4 days in advance. Thus, it is estimated that unaccompanied guests of independently managed homes use about 4% of the available golf tee times.
The access agreement that provides Hotel guests access to the golf course is illuminating: hotel guests can make tee times 180 days in advance (compared to 60 days for actual golf club members), can play an unlimited number of rounds, are guaranteed 30% of the daily tee times, and can reserve almost 70% of the daily tee times if reserved 10 days in advance. It appears that hotel guests’ use of the golf course is substantially more than unaccompanied guests.
A: We believe the community-wide problem exists because the Developer did not build nor properly plan to build more amenities to meet the premium experience that the Developer marketed to us.
The huge number of lot sales and surging home transactions have been driving the obvious and increasing need for more amenities, restaurants, and events. This was true even prior to the pandemic. The most recent real estate boom has exacerbated this.
At the same time, Montage weddings and corporate events are overwhelming the infrastructure because those Hotel guests add to usage. Given the scale of recent weddings, conventions, and other private events, the impact from those guests’ additional use is noticeable across the community. In addition, the sudden ‘split’ from Montage seems to have happened without proper planning to support adequate amenities and events in 2022; this may have further exacerbated the problem.
The original vision for Palmetto Bluff in the original Community Charter called for a very small number of total homes to be rentable. This was always part of the plan since day one. On the other hand, the original charter did not contemplate the impact of a very large hotel.
Last Updated April 21, 2022
A: The Developer should answer this question. Solving for these types of problems requires a long-term commitment and stewardship to Palmetto Bluff’s land, community, and promoted lifestyle. One would assume that any developer at any luxury property, and the financiers backing the investment venture, would carefully weigh how much new capital they’re willing to inject when a near-term exit may be on their horizon.
A: This is a fair question. We share your desire to get an answer. SSP held a town meeting on February 17, 2022, but, as an example, did not notify homeowners of the upcoming houseguest policy, including expensive fees for unaccompanied guests. They also did not surface the prohibited use of Club facilities during peak holiday times for these guests (even though this use happens in lieu of owners being at the residence), nor the rules that would seem to effectively eliminate VRBO and third-party managed short-term rentals.
A: These changes may be news to you because the Developer apparently did not provide notice to all property owners. A key issue is the potential immediate decline of your property’s value compared to where it would have otherwise been. Properties in DRAs sell for premium price because they can be rented. The area’s sales data shows this.
DRA homes that are not Montage-managed have now been deliberately cut off from almost all key amenities. Unlike other large communities in the region, such as Kiawah Island, Palmetto Bluff does not have a public beach or public golf courses for guests to use. Thus, rentals here have relied on reasonable access to restaurants, a pool, and basic amenities – especially given that the typical profile of DRA renters is a young family with small children. At stake is both the expected loss of rental income and the possible sudden loss in property value.
A: All of us are curious as to why the Developer would not be interested in DRA rentals continuing. DRA rentals are a vital pipeline of prospects for the Developer’s goal of selling as much real estate as the Developer can before it sells all or parts of Palmetto Bluff.
Most current homeowners rented at some point before buying. This is how most of us fell in love with Palmetto Bluff. These changes are perplexing. According to the area’s real estate sales metrics, properties in communities with transient guests transact at a premium compared to other truly private club communities. Minimizing transient guest visits seems counterproductive to monetizing the value of the remaining undeveloped real estate and to supporting premium property values.
A: The group has been in touch with elected officials and civic leaders about all these troubling issues that are changing Palmetto Bluff. We are also very concerned about how the Developer’s sudden, unilateral decisions for the DRAs will affect the small business ecosystem of Bluffton. The DRA rentals drive significant and meaningful revenue to the local businesses – and this revenue might soon evaporate.
The DRA homes support numerous property managers, housekeepers, maintenance operators, transport services, and other residential service providers. In turn, the DRA rental guests buttress many other businesses in the local community and throughout Beaufort County. These small businesses could face deep financial harm and, in many cases, closure with the possibility that many employed citizens will lose jobs that they love and rely on.
The opportunity for gainful employment for local citizens was always part of the arrangement between Palmetto Bluff and the Town of Bluffton. Yet, these new DRA policies may have the adverse effect.
A: The Palmetto Bluff Neighborhood Association (PBNA) is a neighborhood association that also looks out for the best interest of our community. The mission of the PBNA is to “work together to ensure that Palmetto Bluff remains the very special place that we call ‘home’ for generations to come by promoting transparency, communication, and education.” Our group strongly supports this cause, and we encourage all homeowners to join in their important mission.
PB Community Advocates is separate from the PBNA. Yet, we greatly appreciate our healthy and open relationship with PBNA’s leadership.
A: The Member Advisory Committee provides input to the Developer but has no authority or vote in the direction of the Club or Community. We encourage all homeowners to reach out to the Member Advisory Committee with their concerns now and in the future. (updated 4/21/2022)