Sell Osuna? Not a New Idea
At a recent board meeting (and in a recent string of emails), Director Trubey makes the argument that the Association should sell off 20 acres of the Osuna property. The idea of selling off all – or part – of the Osuna property isn’t new; in fact, it was hotly debated in 2016 with the Board considering three potential options. In the end, the Board decided not to proceed.
This time around, selling Osuna is a means to an end: the Board has a number of capital projects (chief of which is the Ranch Clubhouse remodel) that require funding. If the Association can sell off an asset to raise the cash, then a loan would not be required. Signing up for a $8MM loan, however, would require a vote of the full Membership.
Setting all of this aside, and whether you are for or against the idea, let’s assume that selling off a large portion of Osuna comes to pass. The next question on the table would be: what should the Association do with the proceeds of the sale of 20 acres of Association property – whether that’s $10MM, or $20MM, or more? Let’s follow the money. From the beginning.
As Director Trubey reminds us, the 25-acre Osuna property was purchased in 2006. However, what he doesn’t remind us of is that the funds for the purchase came from the Association’s Open Space Fund.
What is the Open Space Fund, you ask? The Open Space Fund was created in 1984, with the purpose of preserving and enhancing the rural character of the Covenant by acquiring undeveloped open space parcels. A portion of annual assessments – 2 cents per $100 of assessed value – were funneled directly into the OSF. That amount was later increased to 2.5 cents.
It took about 11 years before there were sufficient funds in the OSF for the Association to start looking for parcels to acquire. In 2006, the Association used $12MM of the funds to acquire the Osuna Ranch property; by 2012, the Association had acquired seven properties with a purchase value of $16.2MM.
The OSF (renamed the Covenant Enhancement Fund in 2012) continued to build in value until the fiber optic project came along in 2017. The CEF was then renamed – this time to the Fiber Optic Fund (FOF), and a few weeks later the Board allocated the $8MM in the FOF to the fiber project.
Poof. All the money gone. Well, almost. In 2024, the FOF was resurrected as the Capital Improvement Fund (CIF), with 2 cents of the assessment going into this fund. Now we come to 2025, with a new capital improvement project on the table: the remodeling of the Ranch Clubhouse. And – what a coincidence – selling off a chunk of Osuna is suddenly a hot topic again.
But the money from the proceeds of any Osuna carve-up belongs to those that paid for it: the Members. And the Members paid into the Open Space Fund for two plus decades with the money designated for the specific purpose of acquiring undeveloped open space parcels.
So, the money should go back into a fund with that same expressed purpose. Or perhaps it should go towards improving the remaining portion of Osuna. Either that, or here’s another idea for the money: pay a dividend to the Members as a return on their investment. By my math, $10MM in proceeds would just about cover our annual Association assessment fees.
How about that? Zero Association assessments in 2026. An Osuna Assessment Holiday. If selling Osuna is a means to an end, then let’s have a full-member vote to determine the outcome. – Adam Smith