I asked that we start a discussion about long term planning for Osuna Ranch at the upcoming June Board meeting. I hope it’ll be the start of an information gathering process from the membership about Osuna’s future.
The Three Faces of Osuna
Osuna Ranch is a 25 acre Association owned property that has three main uses.
First, it is a working commercial horse stables with a hunter/jumper ring, housing 50 horses.
Second, it is the site of a restored mid-1800’s historic adobe house beloved by the historians in our community.
Third, it is the site of various events including a well attended yearly Celebrate Osuna event that most recently had over 200 people attend on June 3rd.
Maintenance
This all sounds good, and it is, but the facilities for all three uses requires more money to be spent – money that cannot fully be recovered through user fees.
I’ve already written about how much deferred maintenance the horse stabling portion of Osuna has. It hasn’t gotten much better in the last two years. Significant capital upgrades on the order of $500K or more need to be spent on the Osuna horse stabling operations or else it will continue to degrade into a bottom of the barrel facility.
And this cannot be recouped through stabling fees. The economics of commercial real estate, and horse stables in particular, dictate that capital expenses are recouped and/or profited from when the property is sold. And if the Association never sells Osuna, then there will be a continual money drain in property upkeep.
Likewise, the adobe requires constant upkeep and there are zero dollars coming back from any sort of user fees for its upkeep.
Finally, Celebrate Osuna events are wonderful and everyone who attends them enjoys them, but they strain Osuna’s poor facilities. For safety reasons alone, we should upgrade the facilities to accommodate such large events.
Options
There is nothing wrong about Association facilities that cost money – our extensive trails network, our sports fields, the Arroyo, Ewing Preserve and even the Patrol are all cost centers that don’t generate any revenue. They are amenities that the Association has deemed worthy enough to subsidize or provide for “free” (paid for, of course, through our Association dues).
The Association has tried to treat Osuna like it does the Golf and Tennis Clubs and force it to run at break even via horse stabling monthly rents. This has been shown to be unsustainable (the deferred maintenance) and is resulting in the facilities degrading over time.
The horse stabling facilities don’t service a lot of Association members. Only 14 members currently stable their horses at Osuna (out of 50 total). So it begs the question of whether it is worth properly upkeeping the facilities on the back of Association assessments? In addition, the Osuna stables doesn’t offer anything unique. There are dozens of other horse stables, most much nicer, in Rancho.
So the perennial question has always been whether or not the Association should sell the entire property. Twice in recent memory, the Association Board considered such a question, once in 2014, and once in 2016.
My personal view is that equestrian properties, especially ones permitted for 50 horses, are disappearing. As an equestrian community (our horse trails are a unique asset), it would be a shame if the equestrian portion of Osuna Ranch were to be lost.
In my thinking there are two avenues going forward. Either we spend the right amount of money to upgrade and maintain Osuna at a decent level, and continue and maybe even expand our offerings. Or we sell it with a deed restriction such that it must continue to be maintained as an equestrian property.
If we keep Osuna, my guesstimate says it would cost each of us about 6% extra in Association dues each year for a couple of years to get Osuna back to a half decent maintenance level, and then cost a continual 1% to 2% per year going forward to continue to maintain it properly. That would mean bumping up Association dues from $0.15/$100 to $0.16/$100 for a couple of years to get the facilities maintained properly, or do the equivalent in a one-time assessment.
Option two, selling Osuna with a deed restriction, could net $8M to $10M, but then we’d lose the ability to host large scale events like Celebrate Osuna, and access to the historic adobe would have to be negotiated with the new owner, if even possible.
In general, I’m a proponent of spending money to maintain and upgrade our facilities. But being on the finance committee during this budget cycle, I saw first hand how some people reacted to the latest budget increase from $0.14 to $0.15/$100 of property value. On the other hand, once we explained why the increase was needed, I think people went away mollified.
So, I am genuinely curious what you think. I’ve created a discussion thread about this topic here (I think I fixed the bug which prevented people from registering as a new user if you’ve had trouble in the past). And, of course, you can send your comments directly to the entire Board via memberinput@rsfassociation.org.
