The Golf Course & V's Taproom Purchase Summary by BlueStar Resort & Golf

THE GOLF COURSE AND V’S TAPROOM PURCHASE SUMMARY PREPARED BY STRATEGIC CLUB SOLUTIONS ON BEHALF OF THE TRILOGY AT VISTANCIA COMMUNITY ASSOCIATION ®

MARCH 23, 2022

TABLE OF CONTENTS Executive Summary.......................................................................................................................................... 2 Participants in the Process................................................................................................................................ 3 Asset Description............................................................................................................................................... 4 The Offer............................................................................................................................................................ 4 The Timeline...................................................................................................................................................... 5 The Ballot........................................................................................................................................................... 5 Due Diligence..................................................................................................................................................... 6 Reserves............................................................................................................................................................. 6 Pros and Cons to Consider.................................................................................................................................7 Frequently Asked Questions............................................................................................................................. 9 Learn More........................................................................................................................................................13

EXECUTIVE SUMMARY Trilogy Golf Club at Vistancia (the “Course”) includes the golf course, the practice facility, the clubhouse, the cart storage facility, the restaurant, the golf maintenance facility, and the land. The Course was recently appraised on behalf of the HOA and its value is estimated to be $5,350,000. This includes a $250K reduction for the updates to the golf course pump station, which are likely needed in the next 1-3 years. Shea is offering to sell the Course to the HOA for $4,050,000. 10% ($405,000) will be required upon closing and the remaining balance of $3,635,000 can be paid over 36 months at 6% interest. There are no loan costs, no prepayment penalties, and no pre-closing deposit required. The HOA can choose to pay the loan as quickly as it would like to reduce the interest expense. This equates to a temporary assessment increase totaling $39 per month per homesite, which includes a $5 reserve funds allocation. The temporary assessment would be in place for 36 months. The HOA can choose to offer residents a lump-sum pre-pay option if it so chooses and our expectation is that they will. The 10% down payment will come from currently available HOA operating funds. As of the end of January 2022, the operating account was in excess of $3.6 million dollars which is $1.1 - 1.3 million in excess of the industry standard for operating cash-on-hand. This is inclusive of an undistributed operating surplus of roughly $760K from 2021. No reserve funds are used to purchase the golf course. The vote, which opens on March 25th and will continue for approximately 30 days (response rate dependent), has two main components: 1. Conditions: The ballot defines the conditions under which the transaction can move forward, which include: the selection of independent, qualified transactional counsel; the sharing of substantive Due Diligence materials with the community at large; and the affirmation of the Transition Committee. 2. Consent to Borrow: If the Conditions above are met, the ballot provides consent to the Board to enter into a loan to facilitate the purchase. The loan is at the terms described above. If and only if the Conditions are met would the obligation for the Consent to Borrow be binding. Further detail regarding the ballot and the written consent process has been prepared by the HOA’s general counsel. You may review the ballot draft here. You may review a summary of the voting process prepared by the HOA’s counsel here. Concurrent with the close of escrow, the HOA Board will transition to full homeowner control. The new HOA Board will include six homeowners and one Shea representative. (The Shea representative will leave once the last home closes and be replaced by a seventh homeowner.) The new HOA Board members would include the two existing homeowner members as well as four new Board members from the Transition Committee. The new Board would serve a mix of 1-, 2-, and 3-year terms. It is expected that from the time of the completion of the vote to the closing date would be approximately six months. During that time, the Purchase & Sale Agreement (PSA) would be negotiated, homeowner-led Due Diligence would take place, and final contract terms would be decided and executed. An expected close would be on or around September 30, 2022. To assist homeowners in making the evaluation, the following overview provides additional details on the pertinent subjects. At the request of many homeowners, sections are included at the end to help evaluate the various pros and cons of this decision. We encourage you to review these, understanding that opinions are expressed and should be considered as such.

PARTICIPANTS IN THE PROCESS Strategic Club Solutions (SCS) is the consulting firm selected by the resident members of the HOA Board to help the community evaluate the golf course purchase. At the request of the resident HOA Board members, the cost of SCS was funded by Shea Homes. SCS is held to a professional standard to deliver information and perspective on behalf of its client, the HOA. SCS is responsible for generating and sharing an analysis of the assets so that both the seller and the HOA have complete information in order to make the best decision regarding a potential acquisition. More information on SCS can be found at strategicclubsolutions.com. Shea Homes, which is the current owner of Trilogy Golf Club at Vistancia, including the golf course, V’s Taproom, and the golf maintenance facilities. The Transition Committee, which is made up exclusively of homeowners and will be responsible for leading the Due Diligence process on behalf of the HOA. The Transition Committee includes Pat Adler, Scott Carty, Bill Downey, Linda Simpson, Kevin Strege, Lance Tucker, and John Turner. Their biographies are all available in the Committees section of MyTrilogyLife.com. BlueStar Resort & Golf, which is the operator of Trilogy Golf Club at Vistancia and V’s Taproom. BlueStar is the group that is assisting SCS in gathering all of the information about the tangible components of the asset as well as providing all of the financial information for SCS’s review. More information on BlueStar Resort & Golf can be found at: bluestargolf.com. Jennifer Thomasson, Community Manager for Trilogy at Vistancia on behalf of Associated Asset Management (AAM). Jennifer is coordinating communication between SCS and the residents and is also handling all procedural elements of the voting process. Jennifer is also the direct contact for the Transition Committee. Ben Keilholtz, BlueStar Resort & Golf. Ben has been with BlueStar since construction began on Trilogy at Vistancia, and his role is to support Strategic Club Solutions, the Transition Committee, and Jennifer Thomasson in collecting the information they need.

ASSET DESCRIPTION The most detailed version of the assets being offered for sale is in the appraisal prepared in March 2022. It describes the parcels of real property in addition to the equipment, fixtures, and systems in the operation. In summary, Trilogy Golf Club at Vistancia (the “Course”) includes the golf course, the practice facility, the clubhouse, the cart storage facility, the restaurant, the golf maintenance facility, and the land. To review the appraisal, you can visit the Information Hub available on MyTrilogyLife.com, or click here.

THE OFFER Shea has agreed to provide payment terms to the HOA. The terms offered are as follows: 1. Price. The golf course, V’s Taproom, and all related assets are offered for $4,050,000. 2. Term. The HOA would purchase the Course for a 10% down payment and a 36-month payment plan. The down payment would be funded from the community’s operating account. The ongoing payments would be funded via a temporary increase in the monthly HOA assessments. 3. Purchase Price Assessment. On a per homesite basis, the temporary monthly assessment increase is $34. The interim increase would be put in place for the 36 months immediately following the close of escrow on the transaction. The total payment per homesite over the 36 months is $1,224. 4. Reserve Funding Assessment. To allow for reserve funding beyond the potential facility profits, an additional $5 per month per homeowner will be collected. Shea Homes will make $575,000 available to the golf course reserve funds for use, if needed, by the operation. This amount will be replenished by the $5 monthly payment. Any profits from the Course will be shifted into the HOA’s reserves. 5. Total Temporary Assessment Per Homesite. In sum, each homesite would be responsible for an additional $39 per month in assessments for 36 months, meaning each homesite will pay in total approximately $1,404 for the Course and the associated reserve funding. There are no loan costs. Funds not paid at closing are subject to an annual interest rate of 6% with no prepayment penalty. The HOA would have the ability to complete any or all of its payment to Shea without penalty at any point if it so chooses. Methods of expediting payment could include: 1. Allowing for a lump sum, pre-payment option from homeowners; 2. Choosing to allocate funds from its existing funds and/or profits generated by the Course; 3. Refinancing the course with an independent institution; 4. Combining any or all of the three options. Any of these choices would have the likely effect of either reducing the monthly assessment or reducing the number of months over which it is paid. Decisions in this regard will be up to the homeowner-controlled Board in place upon the close of the transaction.

THE TIMELINE The timeline is as follows: • Voting opens on Friday, March 25th and is expected to continue for approximately one month. • Note: If the vote is no, the process ends. Shea will sell to a third-party. • If there is a yes vote, from about May 1st through June 30th, the Purchase & Sale Agreement (PSA) will be negotiated between Shea and the Transition Committee and its independent transactional counsel. • The expectation would be that the PSA is executed on or around July 1st, and the 60-day Due Diligence period will commence then. This period will run approximately through the end of August. • Just prior to the end of the Due Diligence period, the Transition Committee will present its findings to the community along with the response from Shea. Only if the Transition Committee feels that the Conditions of the vote have been met and interests of the HOA have been protected would the transaction process continue. • If upon completion of the Due Diligence period all parties are satisfied, the PSA terms move forward and the 10% down payment requirement is placed into escrow. • Note: If upon completion of the due diligence period all parties are not satisfied, the process ends. • At closing, roughly October 1st based on the above timing, the newly constituted Board (currently the Transition Committee) would execute the PSA, the down payment funds would be transferred from escrow, the temporary assessment increase would begin, and the HOA would own the Course. The above is a broad summary of the process and milestones. There are additional smaller steps that would occur in the process, and the community can expect to be informed of progress along the way.

THE BALLOT Procedurally, the process being undertaken is one of “written consent” versus “voting,” although in practical terms the distinction is negligible. To move forward, two-thirds of all homesites must provide their consent. The HOA’s general counsel has provided a summary of the voting process and why it is proceeding in this fashion. This summary is posted in the Information Hub on MyTrilogyLife.com. The homeowner consent process (“voting”) will be handled securely by an independent, accredited thirdparty company hired by the HOA. That company is Election Buddy. Text message, in-person, by mail, and online options will all be provided. The components to the written consent will be detailed on and reflective of the processes defined in the community’s governing documents. The draft ballot is available for review in the Information Hub on MyTrilogyLife.com.

DUE DILIGENCE The Transition Committee will lead the Due Diligence process. This Transition Committee is made up exclusively of homeowners — homeowners who have their community and neighbor’s best interests in mind. The Committee will select transactional counsel. This counsel will advocate for the HOA in the development of the final terms of the Purchase & Sale Agreement and will help administer the Due Diligence process provided for in the Purchase & Sale Agreement. The transactional counsel will report directly to the Transition Committee. Please note, this will not be current HOA counsel. During Due Diligence, the following will be reviewed by the Transition Committee, amongst other things: • Financials* • Asset Information* • Environmental • Leases & Obligations • Contracts & Permits • Water*

• Employment* • Memberships* • Departmental Performance, Golf* • Departmental Performance, F&B* • Leadership Team*

*Indicates SCS has already reviewed as part of their evaluation on behalf of the homeowners. Two samples of Due Diligence (one from BlueStar, one from SCS) are available in the Information Hub on MyTrilogyLife.com. Just before the end of the Due Diligence period, the Transition Committee will release its findings to the members of the HOA along with its recommendation. The release of this information is a condition of the consent provided in the vote. If and only if the Transition Committee releases its findings and finds the transaction to be in the best interest of the HOA would the purchase move forward.

RESERVES The HOA will have approximately $9M in reserve funds available at the end of 2022. This reserve balance grows at a rate of roughly $100K monthly, after accounting for the ongoing investments the community makes. The golf course could add $50K or more monthly to this total. This is in addition to the $5 per month per homesite temporary assessment. Shea is making $575,000 available at close, if needed by the operation. This $575,000 would be replenished by the $5 per month per homesite. In a scenario where the golf course purchase happens, the net impact on overall reserve funds available will be positive from a dollars available standpoint. Conversely, the percentage of reserve funds available as compared to “fully funded” will go down, just by nature of adding additional assets to the coverage. Our estimates show that, based on reserves needs equal to the purchase price ($4.05M), the replenishment of funds will surpass the new requirements within 4-6 years. That means that the nearterm percentages will go down but the long-term availability of funds will be greater. To reach our conclusion, conservative numbers were used. Because a complete reserve study couldn’t be completed before the vote, we had to make estimates. That said, our belief is that $4.05M over ten years is a conservative baseline to use. At the suggestion of residents, Shea has agreed they will make $575,000 available to the golf course reserve funds for use, if needed, by the operation. This amount will be replenished by the $5 monthly payment from homeowners. As a general statement, the community is incredibly healthy financially and there is no reason to think that will change based on the choice to acquire the golf course.

#2 – THERE ARE UNKNOWNS Con: Despite the tremendous volume of information provided thus far, there will absolutely be unknowns. For example, we do not know the exact details of reserve funding, but we do know that there are $0 allocated to golf course reserves now, so it’s safe to assume the HOA will be underfunded in that regard. Furthermore, there is a lot of equipment at the facility that is in good working order today but is technically past its useful life and will that Please note this section and the next explicitly include create an issue? These are all valid concerns. That said, the opinions of Strategic Club Solutions. SCS was the community is incredibly healthy financially, and there engaged to perform three functions: is no reason to think that will change with the acquisition of the course. • Lead the communications process with

PROS & CONS TO CONSIDER

homeowners

• Evaluate the business performance and share information of value to homeowners • Provide our perspective on the pros and cons of a potential acquisition

#1 – BALANCING RISKS

Pro: The community is incredibly healthy financially and well equipped to handle the unknowns. In the strictest terms the HOA is slightly underfunded as a percentage of the community’s Reserve Study estimates, but it is still at over 50% funded and that equates to $8M as of the end of January 2022, with reserves consistently growing at more than $100K monthly. The HOA also generates considerable new Reserve funds each year via resales, and the operating surplus has been significant in recent years and should continue as the community nears build out. It is almost a certainty there will be the dollars to deal with the business’s ebbs and flows, without ever seeking a further golf-related assessment from members.

Con: The HOA already owns significant assets, and this would increase the scope of that infrastructure. The golf course results are good as of late, but both golf and F&B can be inconsistent businesses. Adding more to oversee could be a concern. With Shea gone, it would put considerably more pressure on #3 – I PLAN ON SELLING SOON the homeowner Board to effectively oversee HOA management (with support from AAM) and the Con: This is a fair consideration for some. It’s unfortunate in this case, but doing what’s in your amenities (with support from BlueStar). own best interest may mean that you have less of Pro: We encourage you to reframe the risk a stake in the “existential” nature of some of the perspective. In every decision, there are risks, and questions posed. Even if you believe in the negative choosing not to do something is as much of a choice effects of third-party ownership, they may take a as choosing to do something. The Course makes up while to reveal themselves, and, if you’re planning on a majority of the curb appeal for the community, selling soon, that could be “the next guy’s problem.” whether you live on or off the golf course or in the Ultimately you have to make the best decision for Kiva or Mita section. The way it looks affects the you, and it’s understandable that you might want to values of all homes in at least some way, as does the minimize your costs as you prepare to sell. way the restaurant operates. If a third-party owner decides to run operations as profitably as possible, Pro: There is not a strong pragmatic argument it may choose to eliminate funds that affect the curb against this. The only argument to be made would appeal since they are not directly tied to the golf be around the meaning of community, and the and dining experience. Also, the HOA will be using commitment every homeowner makes to weigh the qualified, business-minded people to take care of the good of all with your own personal situation. assets and oversee them using industry best practices and mitigating risk as any professional would with their responsibilities.

Why Someone Might Vote Yes The main reasons to vote yes are around Control, Protection, and Diversification.

fund growing at more than $100K monthly. This issue is exacerbated by adding more assets which will need to be covered. Our perspective is that, in this case, the dollars mean more than the percentages. By the time this deal would close, the HOA’s reserves are likely to exceed $9M, and the annualized investments are less than a million dollars. Reserves should always be a consideration, but the community is, by any measure, very solid financially.

From a Control standpoint, owning the golf course will provide the HOA complete control of everything within its borders. In times of good and bad, homeowners are always making the choices that affect them most. No longer would you rely on the competence or intentions of another group to From a distrust standpoint, if you aren’t comfortable determine your experience. believing Shea or BlueStar and you aren’t comfortable From a Protection standpoint, some part of the value believing us or the appraiser, the information we of all homes in the community is tied to the quality share is all effectively the fruit of a poisonous tree. We of the golf course and restaurant experience. The don’t really have a response to this argument, other magnitude of that impact can be argued, but there than to encourage you to trust your own eyes. You can is no cogent argument that it doesn’t matter. So, see that the golf course and the restaurant are busy. with the average home in the community selling You likely know that the way the course looks matters for $600,000, is it worth investing $1,500 or so to to people considering buying in the community. If that’s the only evidence you use, use that to decide protect that? whether the investment is worthwhile. From a Diversification standpoint, the HOA has three revenue streams right now: dues; resale fees; Why Some No’s Should Strongly and amenity profits from spa, cafe and weddings. By Consider Yes owning the golf course and V’s, a new way to raise funds is introduced. If the course performs as it has, We have heard a lot of feedback from people who hundreds of thousands of new dollars will come to fundamentally support the reasons for Yes, but are the HOA, allowing your community to spend more or intending to vote No, primarily because of a view that “there is a better deal that could be negotiated”. for your dues to be less (or maybe both). Without passing judgment on the quality of the deal (we do believe it is quite fair), ultimately the offer Why Someone Might Vote No made is the offer, for better or worse. We would The reasons for no are mostly around the risks of the encourage people to consider whether the potential unknown. Those are in three basic categories: asset benefits of a differently negotiated set of purchase condition, reserve needs, and distrust of the process. terms outweigh the risks of letting the golf course leave the control of the HOA. At $34 monthly for From an asset condition standpoint, the facilities are the purchase of the course (or even less in total if expansive and the equipment is, for the most part, the prepay option is offered, which it likely will be), past its defined useful life. These are risks. Having how much better would a better deal be? And how reviewed the facilities and equipment ourselves, does that compare to the potential value that could we see no pending signs of disaster (neither did the be gained or lost of your home? We understand appraiser), but it’s not inaccurate to point out that in and acknowledge that some view this process as the next few years, at least some of what’s in use right imperfect. But ultimately, the choice being made is now will need to be replaced. And, of course, none of for the future, and we would encourage people to us has a crystal ball. keep that in mind. From a reserve needs standpoint, there is a view among some that the current $8M in reserves is inadequate for the community’s needs, even in the context of the

FREQUENTLY ASKED QUESTIONS If I don’t live on the golf course or play golf, How was the price developed? why would I vote yes? Shea expressed to us that there is a minimum amount In an important and very real way, all homes in the they would be willing to accept. That minimum was community are tied to the quality of the golf course less an exact number and more a ratio to the appraised and restaurant. When people choose to purchase a value. They acknowledged that they are willing to home in Trilogy at Vistancia, they first fall in love take less in a transaction with the homeowners, but with the community, then seek a home that suits that amount shouldn’t be less than 20-25% of the their needs. Part of falling in love with the community market value. is the beauty of the place, and much of the beauty of the place is the 200 acres of the golf course. So, With that in mind, SCS advised Shea to develop a whether it’s direct or not, all homeowners already formula to calculate the offer price, and to determine “own” a bit of the course as a portion of the value of that formula pre-appraisal. SCS suggested - and Shea your home. Is that value enough to justify the $39/ accepted - the following formula to arrive at its offer month investment? You will need to make that to the community: • Appraisal price adjusted by a 10% appraisal judgment. But all values in the community are tied to margin of error, minus one another. So whether you live right on the fairway or you are nestled for away from the course, the way • 3% for non-incurred broker costs, minus people feel about the community overall affects your • 3% of three years of estimated revenue for value. This is why you would strongly consider a vote initial reserves of yes even if you don’t play golf or live on the golf course. In real terms, that worked out as follows: Why this timeline? The order of operation is standard operating procedure in a transaction of this kind. First is an initial evaluation to determine interest. If there is interest, the buyer and seller negotiate a Purchase & Sale Agreement (PSA). Immediately following the signing of the PSA, Due Diligence begins. At the end of Due Diligence, the transaction either continues or is stopped. If it continues, the two parties progress towards a close.

• Appraisal Price = $5,600,000 (less $250K for a 1-3 yr replacement of the irrigation pump house) net appraised value $5,350,000 • 10% Appraisal Margin Adjustment = $535,000 • Price After Appraisal Margin Adjustment = $4,815,000 • Avoided 3% Broker Costs = $160,500 • Price After Broker Costs Adjustment = $4,654,500

All of this will take approximately 12 months from start to finish, roughly split between six months • 3% Three Years Estimated Revenue for of initial discovery and six months of post-vote Initial Reserves = $600,000 evaluation, negotiation, and administration. We • Price After Estimated Revenue for Initial are just now completing the first 6 months of this Reserves Adjustment = $4,054,500 process. This is longer than what would normally take place for a golf course transaction, but is not This number was rounded to the nearest whole unusual considering the elements in play at Vistancia. amount, so $4,050,000. This is a $1.3M discount to the independently appraised market value. It is a 24% discount to the independently appraised market value.

Why this deal structure?

What if I don’t trust Shea?

The choice to pursue a payment plan structure versus a one-time assessment was due to the generally accepted view that one-time assessments are an imperfect method for community fundraising. They have the propensity to unduly burden owners, and they also do not account for the balance of use between a current homeowner and a potential future homeowner. By phasing the payments over time, a home that is sold during the payment period effectively shares the cost with the future buyer. Plus, once the homeowners control the Board, they can choose to offer prepayment options, thereby reducing the interest expense for the HOA. We expect they will offer this choice.

This is an unfortunate truth for some. If you are able to put the emotion to the side, perhaps look at the facts so you can form a new truth. There has been no evidence that the financial information provided is not accurate. The business performance is real. You can see for yourself the golf course and the restaurant are busy and supported by the community and the public. If removing Shea from the community is important to you, the best path is by taking control of your Board, your amenities, and your community as soon as possible.

Why no partnership plan? The partnership idea - or, more accurately, the many partnership ideas that have been presented both publicly and directly to SCS - is not being pursued at this time. There’s no real story here, other than they all seemed to end up being more complex than is necessary. After a lot of review, both internally and with HOA counsel, every version of the partnership seemed to end up as a solution in search of a problem. The HOA has the opportunity to purchase the Course or allow it to be sold to someone else, and the goal is to keep that choice as clean as possible. If the HOA purchases the golf course and V’s, the homeowner controlled Board will have the option to explore potential partnerships, management companies, or other scenarios if the HOA seems that is a desired path.

Furthermore, the Due Diligence process is being stewarded by the Transition Committee, which is exclusively homeowners. Their agenda is to do what is best for the community which includes their neighbors and their personal property. This group will research in great detail the assets, the financials, and anything else they feel is relevant. They will ask smart questions and seek objective information. They will be assisted by independent transactional counsel, whom they will select. If you don’t trust Shea and you think not purchasing the golf course assets will punish or “hurt Shea,” please know Shea is leaving the community as planned when the last home is closed. This means they are going to sell the assets no matter what. We encourage people to not let their evaluation of Shea cloud their view of what’s in their own best interest.

What if Shea has no other offers to purchase All this said, the lack of the partnership should not be the course? viewed as a lack of commitment from BlueStar. BlueStar very much wants to be a part of Vistancia, and they have The golf course sales market is strong right now with offered reduced fees and a downside protection clause many buyers pursuing courses like Trilogy Golf Club at in an effort to be a part of this community moving Vistancia. We would discourage anyone from thinking forward. The 50/50 partnership didn’t ultimately that a better deal is waiting if you hold out. We believe it make sense for a few reasons, but they are nonetheless is more likely that a third-party buyer will pay $5.35M or more for the course, if it were to be put on the open committed to the community. market. The appraiser has confirmed this belief.

How is the Course performing now? The start of 2022 has been good. Revenue is well ahead of 2021 and ahead of the 2022 budget as well. Profit is to plan, at roughly $350K through the first two months of the year. The projections for 2022 are roughly $575K, and the head start through two months is a positive sign. What is also a positive sign is the blend of growth between golf and F&B performance.

We do not believe a second bite at the apple will be offered to the HOA. If you feel owning the golf course is an important part of the HOA meeting its obligation to maintain and enhance home values, you will need to evaluate whether $4.05M is a fair enough price to meet that objective. The process may be imperfect in your view, but this decision will only be able to be made once.

Are we sure the appraisal is right? The full YTD financials are available on MyTrilogyLife.com along with a Performance Yes. The appraiser, Ralph Brekan, has been the Summary Report from General Manager Jon preeminent golf appraiser in Arizona for decades, and his work as both an appraiser and a broker provide Morgan. him unique insight into the real value of courses. If Is there new information about reserves you have questions about the appraisal, please listen available for golf? to the interview we conducted with Ralph here, or read the transcript here. As an additional safety net for the community, Shea Homes has agreed to make $575,000 available to How will the Board transition work? the golf course reserve funds for use, if needed, by the operation. This would be available immediately In the event of a Yes vote by the community, Shea upon close, and replenished by the $5 monthly has agreed to relinquish four Board of Directors payment from homeowners. This was suggested by a seats to homeowners, effectively transitioning the homeowner after the Town Halls and SCS and Shea community to homeowner control prior to the final home close. The new Board would be made up of six agreed it was a good idea. homeowner Board seats and one Shea representative. What if I think we could negotiate a better This transition would occur concurrent with the deal? closing of the transaction, and will allow for clear and complete independence between seller and buyer. The offer is for roughly 75% of the appraised price. We’ve come to think the number isn’t as much of an The four new Board members will be selected from issue as the homeowners would have liked to have the Transition Committee in a method determined negotiated. It’s understandable. But the Transition by the Transition Committee and the two existing Committee will be conducting real Due Diligence, homeowner representatives on the Board. The final and they can ask for adjustments that could be Board seat held by Shea would still transition in advantageous for the HOA. conjunction with the close of the final home in the community. There is no question that on the open market a third-party buyer will pay more than $4.05M for To learn more about the Transition Committee, these assets (and potentially more than the $5.35M you can visit their committee page on appraised value). MyTrilogyLife.com.

How was the Transition Committee selected? everyone who lives in the desert. However, based upon

multiple presentations by the local and regional water Two members of the Transition Committee are the two authorities, there is no water concern for the golf course homeowners Board members already serving. for the foreseeable future. The golf course uses reclaimed In accordance with the HOA’s governing documents, water. There is an abundance of reclaimed water, and as the additional Transition Committee members the community grows, the amount of reclaimed water were selected following an open application process increases. available to all homeowners. From our understanding, approximately 60 applications were received, and the homeowner Board members began their evaluation there. After interviews with candidates and internal discussions, they selected the five new members of the committee.

Details on this can be found on MyTrilogyLife.com including a video from the STEM Club event with local and regional representatives. The course’s current water agreement - which was renewed in 2021 - is available on MyTrilogyLife.com as well.

understand

the

considerations

This new committee will become the community’s first the HOA would need to have regarding post-Shea Board, and they will serve a combination of insurance coverage? 1-, 2-, and 3-year terms, and be replaced via an open election process. In short, yes. The particulars of the various coverages required will depend on many factors, but to the basic What is the arrangement with BlueStar? question of, “Is there insurance available to protect the Reflective of the feedback from the community regarding HOA?” The answer is yes. The course currently has continuity, as part of the PSA a new management policies for general liability and workers compensation. agreement will be executed with BlueStar Resort & Golf The cost of insurance is included in the financial for management services of both the Course and the information provided. HOA resort operations. To reflect the efficiencies of a Do we have some control of the golf course consolidated agreement, BlueStar will adjust its overall fee downward by 10%. Furthermore, BlueStar will tie already thanks to the Golf CC&R’s? 20% of its Course management fee to achieving projected Your HOA’s general counsel provided this response to the Course profits. The magnitude of these adjustments is question of whether the Golf CC&R’s provide meaningful roughly $40,000 anually between the two entities. protection in the case of third-party ownership: As an additional note, it is expected that there may also be a reduction in overall costs to the community and the course due to the efficiencies of a single-client environment, though those benefits are more difficult to quantify, there will be operating savings that will flow through to the operating surplus for the HOA and it’s combined assets post-purchase. The Transition Committee will lead the development of the updated agreement with BlueStar, assisted by HOAhired independent counsel as necessary. The agreement will run no shorter than the 36-month payment plan period.

“The Golf Course Declaration provides some protection to the Association in the event the course is not maintained properly. It is certainly better than nothing. However, the best way for the Association to control the maintenance and the standard is to own the course. If a third party buys the course and the Association is unhappy about the way the course is being maintained, it would have to litigate the issue. Specifically, the Association would have to go to Court and prove a violation of the Declaration. Ultimately, a Judge or Jury would decide whether a violation exists. Of course, this could be very expensive.”

Importantly, the agreement described above would have no impact on the community’s relationship with BlueStar Landscape for community landscape services. The HOA does have protection against alternate uses That agreement will be evaluated in whatever manner of the course land. In summary, the course will remain the Board and community see fit moving forward. a course in all but the most extreme scenarios. The question is more around the quality of what the course Should I be concerned about water access? would be. The availability of potable water should be a concern for

LEARN MORE This decision is important, and its implications will outlive every homeowner in the community. We encourage everyone to take their responsibility seriously, and to vote with your current and future neighbors in mind. The best and most complete information is on the Information Hub on MyTrilogyLife.com. It houses a comprehensive library of documents and videos for you to review. If you do not have access to technology or are having issues finding the information, please contact a Trilogy representative at the Kiva Club Concierge Desk to help and/or to print out what you would like to know and review. If you have additional questions, you may also email feedback@bluestarresorts.com.