THE DEVELOPMENT AND HISTORY OF SINCUIDADOS

Early in 1985, 560 acres of land in northeast  Scottsdale, Arizona, was determined to be an ideal spot to develop an upscale,  serene, non-golf community of custom homes on 1 plus acre lots. It was situated  in the Southwest quadrant of the intersection of Pima and Lone Mountain  Roads.

EDITOR'S NOTE

This page contains an interesting record of  Sincuidados from conception up until today. All is well now, and Sincuidados has  become one of the most desirable communites in all of Scottsdale.

Now that Sincuidados has come into its own, it is  fun to look back and read about how Sincuidados had growing pains in the  beginning. However, "the past is the past."

During Sincuidados's history the community has had  many challenges and has also undergone many improvements. To sum up before  discussing the past, the following are some of the more noteworthy  improvements:

The private roads have been re-surfaced

The mailboxes have been completely redone to double each  owner's mailbox size.

All three gates have been replaced.

There are now video cameras at each gate for security  purposes. Homeowners no longer need to have clickers to open the gates now that  transponders have been installed at each gate. When homeowners drive up the  gates, the gates automatically open.

The Sincuidados Club House has been remodeled and now looks  new.

The two tennis courts have been resurfaced.

The association now has a direct route to the trails on Lone  Mountain to make hiking from Sincuidados more safe and enjoyable.

It is noteworthy that all these improvements were completed  without any homeowner being assessed any money.

The association received a line of credit with a local bank  for the improvements. The loan has been paid back in full.

There continues to be over $850,000 in reserves. In other  words Sincuidados continues to be unique in quality of living, and in solid  financial condition. Ths past is long gone.

IN THE BEGINNING

The developer, Dick Johnes, was a friend of a banker whose  family owned an Ohio based lending institution with offices in Scottsdale. With  funding from his friend, Dick Johnes designed and built the infrastructure for  the community, to be called Sincuidados ("without care" or "carefree"). At that  time, Pima Road was a two lane road with little traffic, essentially no lights,  and no service facilities north of Shea Boulevard.

AWARD WINNER

The design of Sincuidados won an award for the way it blended  with the desert. The adobe perimeter wall was, per San Tan Adobe, designed at  Dick Johnes’ request, to flow with the land so that it appeared to be, in fact,  part of the landscape. The only amenity was a small clubhouse and two tennis  courts along with the peace, quiet, and beauty of the desert. The master plan  called for 1-plus acre lots with single story, low profile, custom-built homes.  One of the first homes constructed was designed by the prominent artist-builder,  Bill Tull, a design show house in 1988.

BAD TIMING

The idea and execution were great, but the timing was wrong.  Housing construction was down, the area was considered by many to be too far  from downtown Scottsdale; lot sales stagnated, and Dick Johnes was forced to let  the lending institution take back the property. Now the lending institution  found itself in the land ownership and development business and formed an entity  called the Sincuidados Development Company (SDC), in order to administer this  generally unwanted responsibility.

ALL THE HATS

SDC now wore all of the hats. It was the Declarant, the Board  of Directors, the Design Review Committee, and often, the lender for homes built  in the community. The governing documents allowed that the Declarant had voting  control over all aspects of Sincuidados until the very last lot was sold.

The community was divided into four sections, or phases.  Generally, the description was that phase I flowed from the Pima gate north and  west to the Lone Mountain gate; phase II, from the Pima gate south and west to  the Dixileta entrance; phase III, from the Dixileta gate west to Hayden Road and  north to the base of Long Mountain; and phase IV was the Eastern face of Lone  Mountain down to the desert and east to the boundary of phase I.

THE WALLACE GIFT

Phase IV was ultimately purchased by H.B. and Jocelyn Wallace,  who completed one of the earliest residences in 1987. The Wallace home, cacti  shelter, and gardens are situated on a substantial section of land, and the  property is held under the protection of a conservation easement, which will  maintain it as it is in perpetuity. Phase IV and its walking trails were made  available by the generosity of the Wallaces for all homeowners to enjoy.

ROCKING THE BOAT

When the Cherens moved to Sincuidados in June 1989, there were  eight homes and only six occupied. Three or four of these were winter only  residents. There were no gate hosts; the gates remained open; little maintenance  was done; and annual meetings were held, but the homeowners had no voice in the  management of the community. David took exception with SDC wearing all hats, but  his suggestion that a sever conflict of interests existed met with only a smile  from the SDC representatives.

Time passed without success in selling lots, and SDC became  more impatient to relieve itself of the responsibility of managing Sincuidados.  As well, they had a great deal of money tied up in the community and, for  understandable business reasons, wanted out. SDC began looking for developers,  even tract home builders, who would purchase the property and relieve them of  their obligation. The original intent of custom homes on large lots became  unimportant in the new quest by SDC to "unload" this property.

TROUBLE FROM THE SKIES

To further complicate matters, at this time, residents began  to see (and hear) a substantial number of small private airplanes performing  acrobatics over the area occupied by Sincuidados. David Cheren inquired and was  informed by the local FAA authorities that this airspace had long ago been  designated as available for this type of conduct. David’s objections and  suggestion that a mishap in the air could result in not only death or injury to  the pilot, but death or injury to innocent residents living below the airspace –  was essentially ignored. This "designation" years prior might have made sense  because no one lived in the area at the time, but the situation had changed and  the rules, therefore, needed to be changed.

After about 6 months of arguing back and forth, David finally  threatened to complain to the authorities in Washington, D.C.. The local FAA  personnel capitulated and took the necessary steps to move the airborne  playground to a deserted area of the desert.

THE WAR WITH SDC

During the late 80's to mid 90's the SDC allowed various  builders to ignore essential principles of Sincuidados’ Design Guidelines,  hoping that these homes would sell fast or that one of the builders would be  successful enough in Sincuidados so that it would develop the community.

On two occasions, SDC entered into negotiations with home  builders who intended to divide the property into small lots and build  inexpensive tract homes. David became privy to the identities of each of these  builders and on each of these occasions communicated to them that any change in the original intent or design for this  community would result in litigation being filed to force the builder to comply  with the CC&R’s and Design Guide-lines, as originally written and as  originally represented to the then current homeowners. On each of these  occasions, the prospective developers backed away from the project. One wrote a  letter telling David that, because of his "interference," he was backing out of  the deal – didn't’t want the threat of a lawsuit hanging over his head.

A THORN IN THEIR SIDE

Further, David began receiving letters from a law firm  representing SDC, accusing him of interfering with their business, causing them  to lose money, etc. and threatening him with a lawsuit if he continued his  course of conduct. David’s response, essentially, was that SDC was, because it  held all the votes, trying for entirely selfish reasons, to unload the property  without any consideration for the written, contractual promises made to existing  home and lot owners. David Cheren and the SDC attorneys went back and forth,  each threatening, for years.

Then the third tract builder came on the scene. This time,  before the residents knew they existed, SDC had entered into an agreement, was  selling lots to the builder at greatly reduced rates, and was funding the  construction of houses. David mailed letters to all home and lot owners,  received pledges and money for expected legal fees from both residents and other  lot owners. They were understandably concerned because they intended to build in  Sincuidados and expected the general plan, the CC&R’s and the Design  Guidelines to remain as had been represented to them when they purchased their  lots.

STRENGTH IN NUMBERS

By this time there were enough homeowners within the community  to constitute a force to be concerned about. David organized a meeting at the  clubhouse, during which he explained the history and problems, and obtained  additional funds and pledges. He and a few other homeowners met with attorney  Fred Davidson, explained the problem, and arranged what ultimately amounted to a  number of meetings. During the course of these meetings they were able to  convince this last builder to divert from his custom of building "cookie cutter"  homes and instead to build large, individually designed homes which would better  fit into the community. Only a minimal compromise was reached, but fortunately  this builder was not successful in selling his homes – he built six – and, he  was forced out of Sincuidados and out of the building business. SDC again, not  only had the property to sell, but the six homes they had financed to help sell,  as well.

At this time, SDC decided that it might be a better idea to  solicit David Cheren as an ally rather than an adversary. David, along with one  other homeowner, was invited to attend the Board and Design Review meetings. The  homeowners still had no vote and little influence, but SDC wanted to demonstrate  the difficulty of managing Sincuidados and per-haps be convinced to be more  compassionate to its plight.

A NEW THREAT

A better relationship was established, but it was soon learned  that SDC was about to consummate a contract with a developer called DTB (the  same company which ultimately developed the commercial enterprise at the  northeast corner of Pima and Pinnacle Peak Roads, "La Mirada".)

By this time, much of the property in phases I and II had been  sold; H.B. and Jocelyn Wallace had purchased phase IV; and essentially all of  phase III and some lots in phases I and II were available for purchase. It  should be noted that during all of this time SDC did not pay homeowners dues for  any of the lots it owned, nor did it put money into a "reserve" account for  future repairs and maintenance, as required by the law in Arizona. As well, a  new Declarant, pursuant to the governing documents, was also free from any  responsibility to pay homeowners fees on the lots it owned.

The residents were now faced with a situation where they were  going to inherit a new Declarant, owning a substantial number of lots, and the  old Declarant SDC, still owning a number of lots. Neither of these entities was  responsible to pay dues and each could essentially do as it pleased.

PHASE III

It was discovered that DTB intended to convert phase III into  320-plus lots; had purchased 2 lots at the Pima entrance to build model homes;  and intended to blade phase III to create a tract for development. DTB chose the  Edmunds Company as its builder of choice, allowing that one could simply  purchase a lot and use his own builder – but Edmunds was available to build, as  well. During this general time period, the Edmunds Company was purchased by the  Toll Brothers Corporation.

While all of this was going on, SDC tried to conciliate the  homeowners by allowing homeowners to become members of the Board of Directors.  For 2 years homeowners did serve on the Board, with two of them, Floyd Russell  and Fred Mapp serving as President for one year each. Homeowner representatives  were, however, a minority, so the community was still effectively run by  SDC.

PITCHING IN

David Cheren continued to actively oppose SDC and upon  learning of the pendency of their contract with DTB, again sent letters out to  all home and lot owners, explaining the situation and soliciting funds to retain  an attorney if necessary – to file a lawsuit to ask the Court to intervene and  determine the homeowner’s rights.

The money was successfully raised and group of five or six  reviewed the reputations of various local attorneys specializing in associations  such as ours and determined to employ the law firm of Ekmark & Ekmark, in  Scottsdale.

Curtis Ekmark met with David Cheren on a number of occasions  and with the group of "homeowner representatives," as they called themselves  (David Cheren, Alex Kaminer, Allen Huebner, and Joel Pierson) on a number of  occasions during which time Curtis reviewed David’s files and consulted with the  group regarding their rights vis a vis this pending transfer of Declarant’s  rights.

RESIZING

In late 1997, David began to meet with the attorney and the  managing agent for DTB. His position, on behalf of the group, was that they were  not going to allow 320-plus homes in phase III, nor were they going to allow  models at the Pima gate, and, especially, they were not going to allow tract  houses to be built. On many occasions David, and some-times with the homeowner  group (not the Board or their members) met with DTB and engaged in heated  arguments for about 6 months before they were able to finally reach a tentative  agreement to settle the controversy as opposed to pursuing litigation.

RESERVES

At this time the community was in disrepair and the totality  of the critically under funded homeowner reserve held by the Declarant was only  $26,000. It should be noted that, to this time, no lot owned by a Declarant paid  any homeowner dues. A firm was hired, called Reserve Data Analysis, whose job it  was to determine the condition of the common assets of Sincuidados and to  determine a reasonable amount of money which should have been saved in the  Reserve Account to that date, to be available for maintenance and repairs.

A complex, comprehensive report was produced detailing each  element to be considered for the future of Sincuidados and, with that  information and documentation, the homeowner group met with SDC and DTB and  Edmunds to prepare a settlement agree-met which would serve to resolve the  differences. In about May of 1998, the agreement was signed. In pertinent part,  it provides that:

The homeowners could elect two persons to serve on the Board, with two  votes;

1. The Declarant would select two persons to serve on the Board and they had  two votes;
2. A tie breaking vote remained with the Declarant;
3. But, the wishes of the homeowner Board members would be controlling as long  as they didn't’t act to impede the ability of the Declarant to market their  property;
4. The Declarant paid the Homeowners Association $210,000 – to help fund the  Reserve Account;
5. Although the governing documents allowed that the Declarant had the  controlling vote on all matters until the very last lot was sold, it was  required that the property be turned over to the homeowners along with all  rights to manage by April 2001, or when the Declarant owned less than 10 lots,  whichever first occurred.;
6. The Declarant was required to pay for building the Dixileta gate house and  for extending the perimeter adobe wall from the Dixileta gate west to Hayden  Road;
7. The Declarant was prohibited from building its intended "model" homes at the  Pima entrance;
8. SDC was required to pay homeowner dues for each of the lots it owned; and
9. The Declarant’s right to further assign its interests was limited, thereby  insuring that the homeowners would not have to deal with yet another Declarant.

THE REAL HOMEOWNERS ASSOCIATION

Until this time, the Declarant determined which homeowners  would be on the Board and certainly David Cheren was not one of the persons  selected by them. But, after the settlement agreement was fully executed, a  general election was held by Sincuidados homeowners and Bill Berman and David  Cheren were selected to represent the homeowners during that first year when the  homeowners truly had a meaningful influence on the future of the community.  David Cheren was selected to be President and Bill Berman Vice-President of this  Board. An open forum meeting was quickly arranged to obtain homeowner input  regarding maintenance and remodeling, sorely required with the community. The  suggestions of the Reserve Analysis Company were taken into consideration.

Fortunately, the relationship among the four members of the  Board proved successful. Agreement was not only obtained for all of the  remodeling, repairing, and changes which had been suggested, but the Declarant’s  people provided advice and guidance, producing a pleasant and positive  result.

Toward the end of their first term as Board members, an  increase in the number of homeowner Board members to five, was requested. This  was thought to be reasonable so as to allow more homeowners to become familiar  with the job of managing the community, in order to establish a strong,  competent, and knowledgeable group on the Board.

At the time of the 1999 general election (Homeowners Annual  Meeting) the home-owners selected five persons to serve on the Board – but they  were still limited to two votes with two votes held by the representatives of  the Declarant. The home-owner’s representatives were David Cheren, Allen  Huebner, Ray Sullivan, Dick Horne, and Lowell Lueptow. The Declarant’s  representatives were Charlie Bowie and Rich Schoonmaker.

In late 1999, the Declarant’s representatives resigned from  the Board, since they then had only a few homes left under construction. The  Declarant, however, has not yet assigned its rights as Declarant to the  Homeowners Association, but is expected to do so some-time during the year  2000.

During these years, the Board of Directors, along with various  committee members, had accomplish the following:

Resurfaced the tennis courts;

1. Redecorated the clubhouse and installed a new kitchen;
2. Landscaped and lighted the area around the clubhouse;
3. Repaired and capped the perimeter adobe wall;
4. Cleaned the culverts and rebuilt some;
5. Repaired the streets, although additional work was in progress as of  February 2000;
6. Established a periodic newsletter;
7. Established bulletin boards to provide current information, at the mailbox  structures;
8. Established an Advisory Committee to convey homeowner opinions to the Board:
9. Collected more than $40,000 in arrears owed to the Association, largely  through the efforts of our volunteer Treasurer, Marlin Glatfelter;
10. Provided annual budgets to the homeowners;
11. Had certified audits conducted each year;
12. Had the Reserve Study updated and, because of repairs made during the  subject period, the Board was advised that only $70,000 as opposed to the  original $100,000 estimate, was required to adequately fund the Reserve account  each year;
13. Redesigned and rebuilt the Pima entry and gate house;
14. Installed Electric and water lines at the Pima entry to provide for future  lighting and landscaping in that area;
15. Installed New Sentex systems at the Pima and Dixileta gates to enable access  control from any home in Sincuidados;
16. Established a Hospitality committee to oversee community social activities;
17. Created a new Homeowners Booklet;
18. Employed a court reporter to record minutes of all Board meetings;
19. Hired an architect, Allan Christensen, with successful experience leading  the Design Review process at Desert Mountain, to lead the Sincuidados Design  Review committee, aided by veteran members, Howard Thomas and Rudy Gasten;
20. Accumulated more than $100,000 in the Reserve account;
21. Required no additional assessment to be imposed on homeowners, and;
22. Determined there was no need to increase the homeowner dues.

A NUMBER OF HEADACHES

It was found that the street light underground wiring was  defective and dangerous. The cost of repair, because streets had to be  excavated, was prohibitive. Popular vote was to keep the lights inoperative and  help preserve our beautiful night skies. Plumbing, sewers, and electric in  numerous areas within "old" Sincuidados, were defective. They had not’t been  maintained and required expensive repair and replacement. Adobe manufacturers  are now making adobe block which is different in appearance from the adobe  originally used on the perimeter wall. However, the original builder of the wall  was located. That company continues to made adobe block by the same formula and  rebuilt the wall and culverts and continues now to maintain the adobe  structures.

One other significant problem was that no plans for the  various infrastructure were available. Further, the management company employed  by SDC for the community had virtually no records and the files and records they  did have were incomplete and disorganized. These incomplete, inadequate records,  of course, included all financial records for Sincuidados from its  inception.

NOT WHAT IT'S CRACKED UP TO BE

The tennis court project became another problem. The original  courts were not play-able and an attempt to repair them was unsuccessful – thus,  the decision to replace them. A well respected contractor specializing in tennis  courts was employed, who set a foundation of 5 inches of concrete on each of the  court areas. Within a short time, the concrete began to crack. The contractor  gave assurance that filling the cracks would correct the problem and would  guarantee his final product for 1 year. A specialist in the engineering of  concrete advised that the repair "might" work and that we should wait through a  winter (1999-2000) to determine the fate of the courts.

Although 1/8-inch cracks were normally to be expected, David  Cheren negotiated a written agreement with the contractor whereby the guarantee  was extended to 3 years; it was insured by an insurance company with the premium  prepaid by the contractor; and the policy names the Sincuidados Association as  beneficiary. Further, the allowable width of any crack was reduced from 1/8 to  1/16 inch. The guarantee allows that the entirety of both courts will be rebuilt  per the original contract specifications if, within the 3-year period, the  courts fail to meet the guarantee standards. As a bonus, the contractor added a  cushioned surface (originally proposed at an extra cost of $11,000) at no cost  to the Association.

A NEW BEGINNING

New contracts were negotiated with a management company,  maintenance personnel, a landscape company, as well as companies to clean and  exterminate the club and gate houses.

The Board, in contemplation of the transition of rights from  the Declarant to the Home-owners Association, met with the attorney representing  Sincuidados, in order to obtain guidance and suggestions for professional  investigative help in determining whether there were deficiencies or defects  within the community which could have arguably be the Declarant’s responsibility  to repair prior to this transition.

The Board, armed with the results of its investigation, met  with the Declarant and reached an agreement regarding repair of defects or  correction of deficiencies.