HOLIDAY ISLAND -- In a surprising settlement offer Monday by Table Rock Landing Time-Shares Association in its lawsuit against the Holiday Island district government, the time-share board asked for five terms, which HISID's lawyer, Matt Bishop, advised commissioners not to accept at this stage.
The board held a special meeting Tuesday to discuss the terms, agreeing to four but rejecting the fifth.
The new offer by TRL is significantly changed from that discussed and rejected by the board at its evening meeting Jan. 28. In the first offer, TRL prepared a draft declaratory judgment for the court that states the time-shares would pay a single R-1 assessment rate per each of its 28 units from 2012 on, in exchange for dropping its requested award of $1.9 million for alleged past excessive assessments of 10 times the R-1 assessment rate prior to 2011 and 2.5 times the R-1 in 2011. It also asked for free golf and recreation center amenities for time-share owners for three years, the ability to purchase activity cards starting in 2016, time-share owner status as full property owners, voting rights on 56 ballots by the TRL board and payment of attorney fees, which at that point were $55,000.
The new terms concede TRL would pay for its golf and drop the voting rights issue, but that HISID would allow time-share owners to purchase activity cards at the property owner rate, would pay $30,000 in legal fees and would assess TRL units at the R-1 rate.
It was this last that was the sticking point for Bishop and the commissioners.
Bishop advised the board to table the offer until a related lawsuit, Bischoff v. HISID, is decided.
"... Given that the Bischoff lawsuit contains an attack on the 2011 assessment which is similar to that of TRL, I cannot advise settlement on these terms," he wrote. "This is not due to any opinion on the reasonableness of these terms or lack thereof. It is primarily due to the potential impact on the Bischoff litigation...."
Commissioners discussed whether the district designating TRL's assessment rate the same as an R-1 is the same thing as setting zoning. Bruce Larson contended it is not.
"I think the judge can say it should be the same as an R-1, not that it is an R-1, just the same number as an R-1."
Commissioner Linda Graves also brought up TRL's unpaid assessment bills for 2011 and 2012, that they should be part of the negotiations.
Ken Brown moved, seconded by Graves, to accept the first four terms of the new settlement offer, have TRL pay its 2011 and 2012 assessments and continue to negotiate the fifth point.
"If we don't accept number five, the deal is off the table," said Commissioner Greg Davis.
"Are you speaking for Table Rock Landing?" Brown asked.
"It's what I feel will happen," Davis said.
Several people from the audience offered public comment.
"What was the original zoning on the time-shares?" asked Fred Nelson. "If we never had the authority (to zone), do we even have the right to assess the time-shares? Also, at what point will we be able to decide to incorporate and give us a legal entity to operate Holiday Island properly?"
District Manager Gerald Hartley said neither the district nor the developer has the legal right to zone, by state statute.
"It is a police power reserved to counties and cities," he said. "Only two counties in Arkansas have adopted zoning, and we're not one of them."
"But everything out here is zoned," Davis pointed out.
"No," Hartley said. "There is no statutory authority out here to zone."
The board voted to deny the motion 4-1, Davis voting nay.
Then Graves made a new motion to say the board agrees "in principle" with the first four points but wants to negotiate on the fifth point, "to come to something legally acceptable to our attorneys and that we also resolve assessments, interest and penalties for 2011 and 2012."
The board approved that motion 4-1, Davis voting nay.
The board also held a lengthy executive session, but returned to take no action.