Issue of Age Restriction Holds Up Savoy Club Purchase

Several issues came up when the Pulte Group came before the to seek changes to the Declaration of Covenants for the Savoy Club subdivision Monday night.

The Bloomfield Hills, Michigan-based developer has on 79th Street. The development originally was started by Callaghan Associates, a custom home builder in the West and Southwest suburbs, which now has its main office in Burr Ridge.

The Savoy Club was planned to be a 52-lot community for empty nesters. Only six homes were completed and sold, however, before a foreclosure lawsuit was filed against the developer in 2010.

Before Pulte can close on the deal, development covenant changes must be made, approved by the Homeowner's Association and then reviewed and approved by the Village Board.

Age-restricted vs. age-targeted

A main issue that came up at Monday night's meeting was whether the development was to be a development that was restricted to residents 55 and older or targeted for residents 55 and older.

"In your documentation, it says you want to change or confirm that this is going to be an age-targeted community. Well, that’s just a target … That, in my opinion as the chairman of the Planning Committee, is in conflict to what was presented to us … and consequently approved," said Trustee Bob Grela.

Homeowners were present at Monday night's meeting to voice their concerns as well.

"I'd like to point out to you that the covenant said that it will be age restricted. That’s the covenant we signed," said Marty Whehner, one of the Savoy Club's six homeowners. "As part of the sales presentation, we were encouraged to visit Forest Gate to see what was done there. Forest Gate is an age-restricted community."

According to Chuck Byrum, attorney for the Pulte Group, in order for the Savoy Club to be an age-restricted community, the covenant would have to state that at least 80 percent of the people who live there must be 55 or older, and the developer would have to file with the Department of Housing and Urban Development, which would be a much longer and more complicated process than what they had planned when they decided to make the purchase.

Trustee John Manieiri asked whether Pulte had a floorplan that would allow bedrooms to be added to a home, because that would bring up additional issues for the subdivision that would not be present in an age-restricted community.

"Both developers fought a lot of people about their park impact and school fees ... there was going to be no or little impact to schools, streets or the parks," said Manieri, "so parking wasn't going to be a problem."

Thomas Moffitt, an attorney for First Merit Bank, which currently owns the undeveloped lots at the Savoy Club, said that although there might have been discussions about the development being age-restricted, the original Planned Unit Development agreement was approved as an age-targeted development.

Phased Purchase

Homeowners also had concerns about the deal between the Pulte Group, and First Merit Bank.

Ken Oestermeyer, treasurer for the Homeowners Association at the Savoy Club said the documentation gives the Pulte group the opportunity to sell lots to a third-party contractor.

"[If that's the case,] we would much prefer for it to remain the way it is," said Oestermeyer.

Moffitt said a phased plan in which the Pulte Group purchased lots in installments was the best deal that could be made at this time.

"The bank would like to sell all the lots immediately, but that’s not an economic reality," said Moffitt. "Basically five [lots] per quarter … that’s their obligation. They can take more."

Byrum said the Pulte Group's intention is to complete the entire project and that there are penalities built into the contract for not doing so.

"It would be very, very painful financially not to go through with it," said Byrum.

Promises to homeowners

Village Administrator Steve Stricker said there were several outstanding projects that still needed to be addressed such as trees that were to be installed and an outside retaining wall.

"It is my understanding that this developer was going to [address the issues on that list] … not using homeowner fees, but on their own," said Stricker. Stricker said the homeowner's association had put together a list of items that needed to be addressed.

"That is entirely correct," said Mark Mastrorocco, a land acquisition manager for the Pulte Group. "After each item [on the list,] we put in writing Pulte’s action plan regarding that item."

Trustee Manieri said there also was an issue with the pond on the property.

"We’ve had broken promises from the previous developers with the maintenance of the pond," said Manieri.

"Pulte has committed to address the issues with the ponds this year, this summer," said Mastrorocco.

Byrum said the group also would take care of any road repairs that resulted from construction crews traveling on the subdivsion's roads without using homeowner's fees.

Plans to move forward

Mastrorocco said the Pulte Group plans to construct units moving south from the entrance on 79th Street, starting with two lots in the cul-de-sac on the left of the development. They then would move to two lots in the cul-de-sac on the right and finish with Lot 39, which contains the foundation for an unfinished unit. The plan would be to continue to take lots from north to south in the subdivision.

Mastrorocco said the Pulte Group projects average sale prices to be between $700,000 and $800,000. He said the base price of a unit with no options would be $590,000, but said no one has ever purchased a home from the group without any options.

"With the customization, we expect some homes to be over 800,000," he said.

Mastrorocco said the company would do what it could to work with the community as the project moves forward, but the agreement must state that the development will be an age-targeted community.

"We would not be able to proceed with the Savoy Club if it were age restricted," said Mastrorocco.

Mayor Gary Grasso said that Savoy Club homeowners should keep in mind both the Pulte Group and First Merit Bank's reputation while considering the amendment of the development covenant.

"We all understand what the world was like prior to 2008, but it is 2012. If the insistence is that it is age restricted, it sounds like they will walk," said Grasso. "Everyone needs to understand that."

Savoy Club homeowners said they were not comfortable making a decision Monday night, and Trustees Al Paveza and Jack Manieri said they were not either.

"The residents who elect us want more time," said Manieri. "I don't feel comfortable voting on it without having all their questions answered first."

The board voted to continue the discussion until its Jan. 23 meeting.