In this month’s letter, we’ll conclude with
Part 3 of the Cypress Forest PUD and Raveneaux
deal. Click here For
Parts 1 and 2 March 2014 and April 2014. Due
to space limitations in the newsletter more
information appears on the website.
Recall on September 2nd, 2008 an agreement
between Cypress Forest Public Utility District
and Raveneaux was signed and on November 4th the
community votes in support of the deal, despite
the costliest hurricane in Texas history.
Hurricane Ike struck on September 13th and our
area was without power for 2 weeks. What
was going to happen the building? How will
the storm affect the club? Would it close
permanently? What about the deal!
Not even Ike could stop the deal. But
why did it take, nearly 2 years, until November
2nd 2010 for an order adding land, and finally
another three months for the Park Property to
close? Answer is fear. The Standard &
Poor's 500 would collapse 37% in 2008. U.S
real estate market values dropped dramatically,
financing dried up and bankruptcies soared.
The Kleinwood MUD files lawsuits against Cypress
Forest PUD and against Raveneaux's owners.
Your PUD would prevail in both Federal and State
Courts against Kleinwood, who eventually would
settles with Raveneaux.
Additionally, each month Raveneaux would try
to alter the deal and rumors flew.
Each month the PUD would deny any changes except
extend the existing agreement. The Board
was split over the continuous negotiations.
The minority voiced, "a deal is a deal" by
threatening to walk would force Raveneaux's
hand. Whereas the majority feared wasting
our $5,600,000, plus issuing debt, then possibly
have Raveneaux file for bankruptcy protection.
We might lose not just our cash but the
restrictions on the property, not knowing how a
Federal Judge could rule on the matter.
Besides each month liquidity was increasing in
the financial market and interest rates were
dropping, which meant our risks were dropping
and our borrowing costs were falling. The
majority voiced, "Each day our risk is less, and
the deal is cheaper, why close."
Eventually, the PUD would finance at 40%+ lower
for a 50% shorter loan period.
However, another lawsuit is filed coupled
with an election, motivates the Board to close
the deal. Many sleepless nights occur as
part of Raveneaux is foreclosed by its lender
but all turns out well as one partner buys out
Finally, on February 8th 2011 the
Park Property closed.
Did the result justify the time, money and
lawsuits? Speaking for myself, I respond
the acquisition is better and more valuable than
I had anticipated. It wasn’t supposed to
be easy. Our goal was achieved. We
saved our open green space - got the land and
deed, paid an amount less than appraisal value,
kept the country club open throughout the
ordeal, leased back the golf course to keep the
golfers and the owners happy, restricted the
developer's plans to our community's vision, and
increased our community's amenities by adding a
park and trail.
I appreciate all the neighbors and
consultants who made this happen.