[The following article was first published in February 2008. The question of Southsider Alan Shaw's dues was raised during the Monday, March 14 Seven Lakes Landowners Association Work Session, in a statement that Treasurer Denny Galford made announcing his resignation from the Board. We are republishing the article here to help clarify the situation.]
Twice in as many weeks, the question of whether Southsider Alan Shaw is a dues-paying member of the Seven Lakes Landowners Association has come up during Board of Directors meetings.
Shaw, along with six other Seven Lakes residents, is currently suing the Association and Seven Lakes Country Club [SLCC] in an attempt to derail an agreement involving the residential development of the Club’s five-acre driving range that lies near the entrance to Seven Lakes South.
Though Shaw’s home lies within in the boundaries of Seven Lakes — on a five-plus acre lot at the end of Sandham Court — Shaw is not an SLLA member, does not pay Association dues, and does not have access to the community’s recreational amenities.
President Don Truesdell made the point that Shaw, a frequent critic of SLLA policies and management, “is not a dues-paying member” of the SLLA during the January 16 Board Work Session, prompting Director Donna Stephan to ask for a fuller explanation of the point. Evidently unsatisfied with the response, Stephan again asked for an explanation during the January 30 General Meeting.
Shaw’s relationship to the SLLA is laid out in two agreements signed by two SLLA officers, one dating to 1992, the other, to 2006. Taken together, they tell the story.
Shaw owns not only the outsized lot on which his home sits, but several other Southside lots, as well as an undivided 6.2 acre parcel that lies to the southeast of Devonshire Avenue, due south of Sherwood Drive. He acquired these properties in 1992, when then lead developer Don Billings’ Seven Lakes Development Company [SLDC] persuaded Shaw to take property in the townhouse area of Seven Lakes South to satisfy a $140,000 debt to Shaw, who had also been involved in the development of Seven Lakes.
Billings created SLDC as a vehicle to pull the Seven Lakes development out of bankruptcy. But SLDC had difficulty selling lots quickly enough to pay its creditors and eventually found itself facing the possibility of an involuntary bankruptcy.
Billings persuaded creditors — including Shaw, First Bank, and Seven Lakes Investment Group — to take lots in lieu of payment. But that solution created a problem: Once the developer transferred the lots to the creditors, those creditors would have to begin paying dues on the undeveloped lots — not an attractive prospect for the creditors.
The solution was for SLDC to ask the SLLA Board to extend developer rights — including an exemption from paying dues — to the creditors. The SLLA Board, perhaps feeling another developer bankruptcy was the last thing the community needed, agreed and approved SLDC’s request on May 12, 1992.
An agreement dated July 9, 1992 and signed by the SLLA Vice President provides that “Shaw shall not be required to pay landowners dues on the lots listed on Exhibit A.” The attached “Exhibit A” lists nine numbered lots and other “unsold property” on the South Side and references a map which includes both the current site of Shaw’s home — since designated Lot 2999 — and the undivided six acre parcel south of Sherwood.
And so the matter stood until 2002, when Shaw began building his home on the five-acre Southside tract. As that project developed, Shaw gave the Association a ten foot buffer strip around the outside of the Sandham property and installed perimeter fencing on the association’s behalf.
A dispute with a painting contractor led to Shaw’s arrest on felony charges by Seven Lakes Company Police Chief Dennis Lombard. The charges were ultimately thrown out in a District Court probable cause hearing.
Shaw owned, lived in, and paid landowners dues on, a home on the North Side when the 1992 agreement was struck on the Southside lots. The Northside home was not part of that deal, so Shaw continued to pay dues on the property.
After his arrest, Shaw refused to pay dues on his Northside property, which led to a complicated back-and-forth involving dues liability and the value of the fencing Shaw had installed. The dispute came to a head in the latter half of 2005, ultimately leading to a meeting that included Shaw and SLLA Directors Loren Swearingen and Don Truesdell.
That meeting resulted in a second agreement between Shaw and the Association, signed by SLLA President Jack Fathauer on March 13, 2006.
Acknowledging the dispute regarding dues on Shaw’s Northside and Southside properties and the desire of the parties to compromise, the 2005 agreement provided that:
• Shaw would paid the back dues on the Northside property, which was later sold.
• The SLLA would not consider Southside lot 2999 — the lot on which Shaw’s home sits — “a membership lot and will make no further assessment on Southside Lot 2999 for annual membership dues from Shaw, for as long as Shaw continues to own such property. No membership rights will vest in Shaw due to his ownership of Southside Lot 2999.”
In other words, the Association collects no dues on Shaw’s residence and Shaw is not, based on his ownership of that lot, a member of the Association.
Although SLLA President Truesdell, along with Swearingen, negotiated the deal that led to the 2006 agreement, in both the January 16 Work Session and January 30 General Session, he said that he has asked the SLLA attorney to review the 1992 agreement between Shaw and the Association.
It is not clear that Lot 2999 is covered by that agreement, Truesdell said during the January 30 General Meeting.