The Club has continued through the years to maintain an excellent and strong financial position. Prior investments in 2012 and 2015 have resulted in increased member satisfaction, world-class golf courses, and the Marina that not only produces the net revenue to reduce member dues each year but generates capital producing home sales. This season six home sales were generated as boaters purchased homes converting from non-equity Marina residents to homeowners and equity members. We have also had to consecutive years of no increase in member dues.Admirals Cove has maintained its competitive marketplace advantage as the place to live in South Florida. We continuously exceed a budget of 26 annual membership sales to fund our annual capital budget.
To preserve this trend, the Board of Governors initiated a study over a year ago to evaluate the amenities and services that will be in demand by our agent diverse community to establish a plan to ensure the club will have the required infrastructure for the foreseeable future. We knew our study would need to be thorough and encompass a wide range of amenities and member interests. The Process with the membership started at the Annual Meeting, continued through our Focus Group Sessions held this past season and concluded with applying the comments and concerns from the membership in our final analysis.
The study has now been finished and a number of improvements are being recommended that is completed with secure the viability of the Club for the foreseeable future. The impact to member Capital Dues would be an increase of $82 per month for social member and $83 per month for all other members over the term of the project loan.
A central objective in financing the project was to take a very conservative approach. The project budget has therefore been based on only 19 membership sales per year while the Clubs Capital Budget is based on 26 membership sales per year and over the past 13 years, the Club has average 34 membership sales per year. The 19 membership sales occurred during the past recession and represent the lowest over the last 13 years. Greater details are covered in the Cost and Finance section of this brochure. If approved on the schedule defined herein, the project is estimated to be completed by November 2018.
The Club has worked with a number of architects and contractors over the last year to arrive at these recommendations and projected associated costs. Two architectural firms, Garcia Stromberg and Glidden Spina, and deliver the quality plans and specifications required by the Club and were selected to design the proposed improvements as presented herein.
The following will help explain all of the recommended improvements to our Club. We hope you will take the time to review it and attend the Information Sessions with the Board, Standing Committee and Club management representatives that will be held to assist you with any and all questions and/or concerns you may have regarding this project. If approved we will provide you with a much-needed project of which you will be very proud and one that is delivered on time and on budget. Your Board of Governors is unanimous in urging you to vote for this proposed project.
The total construction costs for the project are estimated to equal $21,400,000. The project costs are proposed to be finance as follows:
By Capital Borrowing if approved by the members, as follows: 1) refinance the Clubs existing loan balance of approximately $9,262,400 and 2) obtaining additional financing in the original principal amount of $21,400,000. We have projected that the loan term will be 20 years and that the initial interest rate will be 4.25%. A final loan commitment and terms from the Bank will be forthcoming pending the membership approval of the project.
The balance of the project costs, together with the Club's annual capital expenditures, will continue to be funded through our Capital Budget which has worked successfully since 2008. This Capital Budget includes the proceeds from Capital Dues and Membership sales and includes the following increases approved by the board:
Golf - $173 $256
Sports - $116 $199
Tennis - $70 $153
Social - $49 $131
Golf - $150,000 $175,000
Sports -$110,000 $128,500
Tennis -$100,000 $117,000
Social - $86,250 $101,000
Currently, the Clubs Capital Budget assumes 26 membership sales per year. Over the past 13 years, the Club has averaged 34 membership sales per year. However, the Board of Governors wanted to take a very conservative approach for this project, so the board has assumed only 19 membership sales per year for its financing projections. This level of membership sales represents the lowest number in the last 13 years, which occurred during the last recession. If membership sales exceed 19 in a year, the Board of Governors intends to reevaluate the then current year's Capital Budget for the purpose of possibly reducing the term of the loan.
Peter Stromberg and Jorge Garcia are the project architects and contractors. "We have retained the international award-winning architecture and interior design firm Garcia Stromberg, located in West Palm Beach, for our new state-of-the-art spa and salon facility, the main arrival court, Blu 19th Hole and Restaurant and lounge. The redesign of the women's locker room and lounge area, and the rebranding of the Golf Village Bar and Restaurant and Lounge. They have designed many notable projects in the area and abroad including the Boca Raton Beach Club, One Thousand Ocean, Floridian National Golf Club and Resort and Spa, St. Andrews Country Club Spa, Frenchman's Reserve Spa and Fitness, Westin Diplomat Hotel Spa and Lobby, Adagio on the Beach, the Westin Grand Cayman Hotel, the Conrad Hotel Fort Lauderdale, Akoya, and 3550 S. Ocean.