[Seven Lakes Landowners Association [SLLA] President Randy Zielsdorf read the letter below during the March 14 Board Work Session, responding to reporting about and criticism of the covenants recently filed by Seven Lakes Country Club to protect its Golf Course property.]

March 14, 2011

I appreciate the Times article dated March 13, 2011, entitled “Zielsdorf: Country Club’s Covenants Are Consistent with 2007 Agreement “. This article was an addendum to their article on March 10, 2011 concerning the Country Club Covenants filed on February 15, 2011 in Moore County. Please consider this letter as my final thoughts and comments pertaining to this issue.

The agreement signed on July 13, 2007 between the Country Club (SLCC) and the Landowners Association (SLLA) was comprised of five bullet items (see attached). For the record, this agreement was not an attorney generated document, but was a good faith effort by some members of both boards to bring an end to a long and contentious dispute between the SLCC and the SLLA concerning the use of the old driving range. Because this document was not drafted by someone with legal expertise, it contains language that is nebulous at best and contradictory at its worst.

Bullet #1 states:

“The Seven Lakes Landowners Association will grant the authority to the Seven Lakes Country Club to establish its own covenants limiting the use of all Country Club property to the operations of the golf course and country club. Hunter Stovall will have the right to review the Seven Lakes Country Club covenants to insure compliance with this requirement.”

Bullet #4 states:?"Upon the sale of any Seven Lakes Country Club property for residential purposes such properties will be subject to the South Side Covenants."

While these are contradictory statements, bullet #4 clearly specifies “any properties”, not just the old driving range. (At the time of this agreement it was the existing driving range). While bullet #4 cannot trump bullet #1, neither can bullet #1 trump bullet #4.

Unfortunately bullet #4 has been ignored by everyone who has looked at the original agreement, myself included. The wording in the SLCC Covenants is consistent with the wording of the original July 2007 agreement. Attorney Stovall's value to the association was that he emphasized that "should" any SLCC property be developed, that it must fall under the South Side Covenants. This is emphasized in the SLCC Covenants document.  The July 2007 document has received judicial review and has been a matter of public record since the April 2008 decision. While the original agreement can be modified, as was recently done, it cannot be changed. 

The current board stands firm in our decision not to make the same mistake as the previous board. To that end, we relied on the expertise of legal counsel who reviewed and revised the covenants that were developed by the SLCC attorney. The end result was a document that complied not only with the July 2007 agreement but with the court decision of 2008 as well.

Some have argued that if the SLCC covenants had been released to the public for review, this error would have been found. It is NOT an error. The July 2007 agreement has been in the public record for 3 years and 8 months, and no one has mentioned the contradiction between the first and fourth bullet items. If anything, bullet #4 is perhaps the most clearly worded of any of the statements in the July 2007 document.

Bullet #2 of the July 2007 agreement provided that the SLCC grant a ten (10) foot easement to the SLLA to run along the entire old driving range and South Side mail house property. This easement was signed on February 14, 2011 by the presidents of both boards, and filed with Moore County on February 15, 2011. The easement assures that a future developer cannot cut an access into the South side from Seven Lakes Drive thereby bypassing the gates. That piece of property had never been protected by the 10 foot buffer which surrounds the rest of Seven Lakes North/South. The current President and Vice President of the SLCC worked very cooperatively with SLLA board member Melinda Scott and me to make a modification to bullet #5 in order to accomplish this task (i.e. to complete bullet #2).

We need to be realistic regarding the SLCC Covenants. That document is not an SLLA document. It was written by the SLCC attorney, reviewed by the SLLA attorney, and approved by both attorneys. The SLCC has worked very hard to keep their course within the top 100 golf courses in North Carolina for the last three years. I believe they will continue to work very hard to keep the golf course viable. But let’s assume the worst case scenario that the SLCC goes bankrupt. It is highly unlikely that the SLLA will ever be able to afford to purchase the entire golf course, let alone maintain it for green spaces. It is better for the SLLA to have the agreement of 2007 and the SLCC Covenants which clearly specify that any development on any of the SLCC properties must conform to the South Side Covenants.

The Agreement of July 2007, between the SLCC and the SLLA resulted in the SLCC and SLLA being sued, along with four SLLA board members. That suit was heard in court in April 2008. The judge ruled in favor of the SLCC and the SLLA. The suit firmly established that the SLLA cannot dictate to the SLCC what they can do with their property. The cost of that suit was $200,000, of which $100,000 was billed to each of the SLCC and the SLLA. Fortunately each side was only required to pay their $5000 deductible along with any time billed by their respective attorneys. When I first became a board member in March 2007, there was board debate and discussion as to whether the SLLA should sue the SLCC over the fate of the old driving range. Fortunately cooler heads prevailed which led to the July 2007 agreement. But had the SLLA sued, it would have lost and borne the entire cost of that suit. There would have been no insurance protection since the SLLA would have initiated the suit.

In conclusion, I would not be surprised if the next seated board, particularly the newest members receive pressure from some within the community to revisit this issue. My advice to the next board is to consider this ugly chapter in the history of Seven Lakes North/South closed, as did the overwhelming majority of our residents back in April of 2008 once the lawsuit was concluded.

Randall A. Zielsdorf, President, SLLA

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