Another important vote is coming at our 2022 Annual NTRA Members Meeting. There are two ballot resolutions to be approved – 1) the annual resolution allowing the Association to apply any year end surplus funds to our reserve funds to avoid paying income tax, and 2) a proposed amendment to the “Shared Amenities” agreement. Owners are asked to approve both resolutions.
In particular, in Resolution 2 owners are asked to approve an amendment to the Amenities Use Easement and Agreement
between the New Town Residential Association (NTRA), the New Town Commercial Association (NTCA), and New Town Associates (NTA), the New Town Developer. This vote is an important action to reflect how both Associations are managed and now operate.
What is the Amenities Use Easement and Agreement?
The Amenities Use Easement and Agreement (referred to commonly as “Shared Amenities Agreement”) is an agreement between the NTRA, NTCA, and NTA concluded in 2015, when the Developer controlled all three entities. This document outlines the rights of owners in each Association to enjoy the common areas throughout New Town, and the obligation of each party to share in the cost of their upkeep. This agreement covers items like shared electrical lighting, maintenance of dog stations, security, landscaping at community entrances, seasonal banners and decorations, etc.- items located throughout both New Town’s commercial and residential neighborhoods. Oversight is provided by a Managing Committee with Board Members from both Associations which meets annually to review the cost sharing budgets for the upcoming year.
The 2015 agreement places the NTRA at a disadvantage. The agreement’s representation is 1 vote for NTA, 3 votes for NTCA and 3 votes for NTRA. The agreement favors the Developer through at least 2026 because as Declarant for the NTCA and President of NTA, the Developer controls four Committee votes. The agreement also permits the Declarant to unilaterally subject future real estate to the provisions of the agreement (paragraph 1b) “without the consent of either Association or the Committee.” This is a critical challenge for the NTRA given the possibility of development of neighboring Eastern State Hospital property.
Why is this amendment needed now?
The Amendment would remove language prohibiting us from having a management company that is different from the NTCA. There are two parts of the agreement that must be changed.
Currently paragraph R5 in the Recitals states:
“The Associations have determined it to be in their best interests to provide for management of both Associations and the Amenities by a single management company or manager. This determination is based upon the benefits inuring to each Association from consistent and unified management and maintenance of Amenities and properties within New Town, economies of scale, the fact that Amenities and utilities serving each Association may be located on property owned by the other, obligations of the Associations established zoning proffers, and the complex interworkings of two associations operating within a single master planned mixed use community.”
This paragraph needs to be removed. For many years both the NTRA and the NTCA used the same management company, Town Management LLC. However, in December 2021, NTRA and Town Management mutually terminated their contractual relationship. At that time the NTRA asked the Managing Committee for a waiver to this single management company requirement and proposed an amendment, but the Chair (NTCA President and NTA President) declined asking the NTCA’s legal counsel to review the situation. NTCA’s legal counsel advised against a waiver, saying “any amendment must be approved in accordance with the Amenities Easement and Agreement.” The Amendment we are voting on follows this process.
The assumed benefits of a single manager no longer apply to our community. Our two management companies work together on maintenance items, services are provided, and bills are paid accordingly. Over the past year it has been demonstrated that this cooperation works, so we need to legally reflect the separation.
Similarly, paragraph 7 “Single Management Company” is no longer relevant and needs to be deleted in its entirety from the Agreement. Paragraph 7 currently reads:
“NTCA and NTRA currently contract with a single management company to provide services in connection with the duties of each Association and are under, therefore, central management as of the date hereof. NTCA and NTRA shall continue to contract with a single management company to provide services to the Associations. The Committee shall work with both Associations to facilitate the selections of a single management company by the Boards of Directors from each Association. Once selected, a representative or representatives of such management company may attend and participate in (but shall not be entitled to vote at) meetings of the Committee.”
Why does such a change require a Member vote?
Section 18 of the agreement requires that “any amendment to Paragraph 7 of this agreement (requiring a single management company) ...must be approved by not less than 2/3rds of the votes cast in person or by proxy at a duly called meeting of the members of each Association at which a quorum is present.”
While the Boards of each Association and the Declarant can amend other sections of the document, a change to Section 7 requires both Boards approval and a member vote by both Associations. The NTRA Board has approved this amended language and we are starting the NTRA voting process by asking for your approval on December 14th. Then the decision process will move to the NTCA.
How will this change affect the NTRA and NTCA relationship?
NTRA and NTCA continue to cooperate routinely. The proposed amendment includes adding a new sentence 6g to recognize the involvement of both management companies at the annual Managing Committee meeting.
“NTRA and NTCA may appoint a representative or representatives of their respective management companies to attend and participate, but not vote, in Committee meetings.”
Recently a Charlotte Park owner publicly criticized the Board for “tarnishing the relationship with the NTCA.” That is not the case. The NTRA Board has been working hard to be treated fairly on cost sharing, and as an equal partner in this agreement. In fact, this December 14th planned amendment vote was suggested by the President of NTCA and NTA as a way forward on this one topic only, so that the NTRA is not kept in continued violation of the agreement.
Certainly, more changes to the Shared Amenities Agreement are needed going forward. The NTRA recently asked that the Managing Committee work on a larger revision of the entire agreement but that motion did not pass.
Support this necessary first step to equal partnership by approving Resolution 2.