TRANSPARENCY SERIES: “Better Together: The LPOA and LHC”

The Mission of the LPOA is as follows: “To maintain and enhance the property values of its members and promote the development of a desirable residential community through projects, programs and services.”

The most important way we continually achieve this mission is through nurturing and maintaining our two signature amenities: our Lake and our Golf Course.  As part of our Communications Plan of 2023, we have committed to providing detailed reports on a wide variety of important, and sometimes highly misunderstood, information about the acquisition of the Golf Course.

This series of reports is called the Transparency Series: “Better Together: the LPOA and LHC.”

Featured Topics

History of our Interest Rates Paid by the LHC on the LPOA loan: The LHC has been making interest payments on the LPOA loan since its inception in 2008, with the Federal Fund Rate as the backdrop for the basis of repayment. The LHC paid an interest rate of 5% from 2008-2011, and then 1.5% from 2012-2024. For most of these years, the federal fund rate was at record lows of .25%.  Federal rates have seen record increases in the last 24 months, as they have increased 11 times up to 5.5%. In order to stay on pace with federal rates,  our boards are free to adjust the repayment rates at whatever pace they deem appropriate going forward. This interest payment remains just one of the many, more significant, forms of ROI that the LPOA benefits from as the controller of the LHC.

Bulletin: 2025 Proposed Lease Structure Update: Recently in Feb 2024, the Board asked Staff to create a triple net (NNN) lease format that could be used to make the 2025 lease renewal more understandable to the average stakeholder, with increased detail for line items. The staff provided a new lease format to the Board in March 2024, which will leave the overall cost of the lease the same, but will add itemized details that had previously been listed as a lump sum.  This format, without numbers, is still being discussed internally as the Board tries to agree and approve the final version. Once approved, it can be confirmed during the November 2024 budget process, with final figures inserted, to be approved for the 2025 fiscal year lease.

History of our Leases between the LHC and LPOA: The LPOA acquired the LHC in 2007 and has been a lease-paying tenant of the Lakewood Oaks Golf Course for 13 out of those 18 years (2011-2024). Initially, in 2007, the LPOA invested in the purchase of the LHC. Then, the LHC shouldered the food and beverage and low lease costs of the LPOA for six years (2010-2016). Finally, in 2017 the lease and food and beverage costs became equitable for both parties, and both entities are thriving today.

History of our Promissory Notes between the LHC and LPOA: The LPOA invested $586,747.24 in the equity payment for the purchase of the LHC in 2007, then another $363,368.16 in unplanned cash infusions during the first two years. The LHC has been making interest payments on the total loan balance of $963,115.60 back to LPOA, since 2008. In the meantime, the priority of the Golf Course has been to repay its Bank Loan balance first ($850k is remaining), which will balloon in 2025.  After that, the repayment of the LPOA loan could/should be prioritized, while still carefully maintaining the LPOA equity interest in the LHC.

Chronological History of the Golf Course 

Part 1: Introduction & Timeline (1977-2024): This timeline helps orient old and new residents to the history of Lakewood clubhouses, food and beverage, and Golf Course transitions.

Part 2: Discovery Process (2005-2007): This details the two-year process of seeking professional reports on financials, operations, and planned efficiencies from the LPOA acquiring the LHC, the 10 informational sessions offered to the community, and the membership vote to acquire.

Part 3: Acquisition Process (2005-2007):  This is a detailed account of the financial, legal and tax structure of the course acquisition, and all documents are provided.

Part 4: The Recession Years (2007-2009): The Golf Course struggled immensely during the first 2 years of acquisition, which was unfortunately timed right at the start of the Great Recession. In retrospect, we can see now that had the LPOA not acquired the course, or if the Golf Course failed during those difficult and important years, the landscape of our community would be vastly different.

Part 5: The Recession Recovery (2010-2017): This outlines great strides during 6 years when deferred maintenance was finally addressed, membership evolved, and food and beverage costs shifted between entities.

Part 6: Strategy – The Way Forward (2017-2018): Drafted in 2017, this provided the positive outlook and changes on the horizon that were anticipated with membership, following a website overhaul and new partnerships.

Part 7: The Pandemic Effect (2019-2024): Although tragic and disorienting for our community, the unexpected years of the Covid-19 shutdown led to remarkable gains at the Lakewood Oaks Country Club. As one of the only clubs that stayed operational during the shutdown, our course thrived, and continues at a record high level of membership.

Thanks for reviewing these important documents at your leisure.  These are currently posted in the Residents Only section of the website. Additionally, we will be creating a web page with this information, and other FAQs, in the next couple weeks.