July 15, 2008

Sea Pines Residents Vote Down Transfer Fee on Real Estate Sales

By Tim Donnelly, The Island Packet, Hilton Head Island, S.C.

Jul. 15--Sea Pines property owners voted down a proposal that would have added a charge to the sales price of property to help pay for improvements to aging infrastructure, the community announced last week.

Fees similar to the one proposed in Sea Pines -- .25 percent on every commercial or private property sale or transfer -- have been enacted in several other communities in recent years. Community managers increasingly see it as a way to pay for needed improvements and repairs in older gated communities.

Sea Pines fell about 117 votes short of meeting the 75 percent required to pass the referendum. Of the 5,025 ballots sent out, about 2,618 were returned. About 1,858, or 71 percent, of those were in favor of the referendum.

Sea Pines officials said they were disappointed, especially as they came so close to the needed number of votes. The weak economy and fears about the local housing market probably caused some property owners to oppose the fee, officials said.

"From our perspective, we were very close," said Cary Kelley, executive vice president of Community Services Associates, which oversees common properties, security and maintenance. "It was overwhelmingly supported."

Sea Pines' goal was to use the fee to raise $8 million for its reserve fund, which would have been spent on improving roads, fixing drainage systems or recovering from a disaster.

In addition to the .25 percent transfer fee, the referendum asked property owners to consider a temporary 10 percent surcharge on their annual assessments that would expire in seven years, or when the $8 million goal was reached.

Officials thought this would help spread the burden, so higher fees wouldn't affect just new property buyers.

Some feared the fees would make selling their homes more difficult, said Don Carlson, president of the Association of Sea Pines Plantation Property Owners board. The board supported the proposal.

"The timing was probably not great in terms of the overall economy and getting people to support additional funding for the community," he said. "I think there's a concern on everyone's part to conserve cash and not take on any additional expenditures."

The Hilton Head Island Area Association of Realtors also had opposed the fees for similar reasons.

"I think economics have a large role to play in this," said Patricia Jinkins, president of Sea Pines' CSA board.

Shortly before the referendum ballots were sent out, county voters approved another school board bond issue, and the added tax burden from that might have worried some owners, she said.

Sea Pines officials said they will have enough money on hand to pay for infrastructure upgrades and will put any excess revenues into a reserve fund.

Owners may eventually be asked to consider another referendum. Kelley said officials will review the results to see which groups opposed the measure, and might try appealing to them directly next time.

"It's in the community's best interest," he said.

Residents in Indigo Run, Shipyard Plantation and Hilton Head Plantation have adopted transfer fees in recent years, partially as a way to stay up-to-date and competitive with newer neighborhoods. Sea Pines is the oldest of those communities, and a large majority of its residents recognize the importance of preparing for long-term needs, Carlson said.

"I think we'll just have to deal with the best way to do that in the future," he said. "Any funding in a community like this has to be done with property owner support. That would come through a referendum at some point."


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Copyright (c) 2008, The Island Packet, Hilton Head Island, S.C.

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