The Pagosa Lakes Property Owners Association (PLPOA) volleyed questions from its membership for nearly three hours during an informational meeting held Jan. 8 about a proposed new gymnasium project set to go before a vote of the association’s property owners later this month.
Addressing an audience that was by turns challenging, sympathetic, and questioning, the PLPOA leadership sought to dispel concerns over a range of issues about the $2.1 million project, which, if passed, would levy a onetime $255 special assessment fee across the association’s more than 6,400 members.
“The [phrase] ‘special assessment’ is always a nasty one,” PLPOA board president Lars Schneider said near the top of the meeting. “It typically is associated with poor decisions, poor financial responsibility, lack of planning, lack of reserves, lack of capital — everything. PLPOA doesn’t have that issue.”
According to Schneider, the proposed special assessment is the first in the association’s history dating back to the early 1970s.
In the case of the gymnasium, with a price tag exceeding 15 percent of the association’s equity, it’s a requirement.
“Because of that, it has to go to majority vote,” Schneider said. “This is not something the board can push through.”
Voting for PLPOA owners is scheduled to begin Jan. 27 and extend through March 1.
Speaking to a crowded meeting room with 100 more watching online, Schneider traced the project’s evolution and made a case for the gym’s place within a growing PLPOA community.
“So, every project we do is always kind of specific to one area, and helping one demographic, one neighborhood, one subdivision,” said Schneider, who pointed to mailbox locations and subdivision trails as examples.
The gymnasium, he continued, is “actually going to help a bigger majority of the community.
“Now, whether that’s a majority of the community as a whole, not sure, but it helps a heck of a lot more than just 80 mailbox locations, a fence, a trail … It’s for the greater good of the community and a healthy overall community, and that’s what the PLPOA is all about.”
The vision
If approved, plans shared at the Jan. 8 meeting call for a multiuse, 9,600 square-foot structure with an enclosed breezeway connecting it to the existing recreation center on Eagle’s Loft Circle.
According to the PLPOA, cost considerations prompted designers to forego exterior windows and opt for prepainted Sport Court flooring rather than traditional hardwood.
Other specs outlined call for additional restroom facilities, a scoreboard, and enough floor space for basketball, volleyball and pickleball courts, as well as room for indoor soccer play.
Flexible partitions would allow staff to divide the space into smaller areas to accommodate multiple activities and programs all at once, and access would continue to flow through the main entrance in the recreation center.
In a mock schedule, organizers allowed time and space for pickleball play, adult recreation leagues, youth open gym time, prep sport practices and more.
“The idea is to meet everybody’s needs,” said Ryan Graham, manager of the association’s Recreation and Amenities Department. “The idea is to program for everybody within the community of the PLPOA.”
Dollars and cents
The PLPOA estimates its proposed $255 assessment would raise roughly $1.64 million to help construct the gymnasium.
That total, in addition to $520,000 already earmarked for the project, would be enough to fund the project, board members report, with a 20 percent cushion allowed for construction overages.
“We wanted to make sure that if we were coming to the association with this that we had our numbers straight,” PLPOA finance advisory committee chair Adam Blocki said.
According to the committee’s research, if approved, the project would also add about $2,500 in property value for a typical $500,000 home in the association — a figure later attributed to a national, rather than local, model.
The decision to move forward with a vote comes in response to community feedback and with an eye cast toward rising construction costs in the area, Blocki reported.
“The community expressed a level of interest in this,” he said.
Summarizing a question board members faced when determining whether or not to bring the vote to its members, he asked, “Will the potential costs of taking on a project like this grow faster than we’re able to save for it?”
Blocki further emphasized the assessment fees, if approved, would go “strictly” toward the gym’s construction — not ongoing maintenance or repairs at the existing recreation center.
“The goal for both [the recreation center and gym] would be for them to be self-sustaining through after-school programs or membership fees,” he said. “We don’t want, necessarily, increases in gym membership fees to pay for any of this.”
If the gym is to be financially self-sustaining, as the PLPOA hopes, attracting new members will be part of the equation, according to the financial projections released by the association, as will new afterschool programs and adult recreation leagues.
“[The gymnasium] is being built with some of those youth and afterschool programs in mind, having specific youth memberships available,” Blocki said. “That would offset some of the costs.”
“[We’re] counting on some amount of adult memberships that don’t already have memberships to the rec center. That would be one source of potential revenue,” he continued. “The youth programs, various recreational sports leagues — all are different sources of potential income that we would bank on offsetting some of those costs.”
Lingering questions
With voting set to begin Jan. 27, members arrived at the meeting with questions about far-reaching aspects of the proposed project, including insurance liability, conflicts of interest and the project’s financial solvency, among others.
For the PLPOA leadership, answers to some of those questions were easier than others.
While Schneider could assure one attendee that no member of the PLPOA board or their family members would stand to financially benefit from the project, he was more circumspect when asked about what additional risks property owners may be assuming by voting yes.
“I’m personally aware of a $20 million verdict for a personal injury case in Colorado this past year,” one questioner began. “Is there anything in place to limit our exposure as owners if there were some kind of a team sport accident that went above the limits of our insurance?”
Schneider cited a $10 million umbrella policy currently held by the PLPOA, but acknowledged that the association may need to increase that threshold to allow for any added risks presented by the new gym.
“We will gladly look into upgrading the umbrella policy. Nobody likes to be underinsured,” he said. “But, in the same sense, we can’t be fear-based.”
Other questions fielded by the board touched on the PLPOA’s larger financial health, including if purported surpluses can’t be used to help fund the gym’s construction.
“Yes,” Schneider replied, “all revenue streams and surpluses that were not accounted for will be put towards the project, and that’s why we’re able to keep the assessment so low, keeping things kind of tight but still safe.”
He assured audience members that any money raised from the special assessment is required to go directly to the project. In the unlikely event there was any left over, that amount would be refunded to members.
Throughout the meeting, the PLPOA board took pains to distinguish the gymnasium project from others it has considered in recent years — including those outlined in the PLPOA master plan — asking members to think of it as a unique, individual project that stands to profit the association for years to come.
Looking beyond its construction, some in attendance wondered how the gym’s long-range profits might compare against the costs to maintain and staff it.
“How are we going to sort of keep track of operating expenses and operating income … so the income we’re seeing matches what you guys have projected?” one attendee asked. “You can only guess what this projected income is going to be.”
“Our operating costs and our expected revenue comes from years of the rec center operating,” Schneider replied, adding that in 2024 the center counted an almost $80,000 surplus.
That surplus, in addition to anticipated increases in membership and revenue from rental fees, have the board feeling confident in the gym’s ability to remain afloat and reliably profitable.
“I’m suspecting that that first year or two, getting programs up and running, [revenue projections] might be off a touch,” Schneider said, but added that the recreation center’s profit margin was wide enough to make up for any early disparities.
“We have the ability to play with it and still cover and be OK with a hefty, healthy margin,” he said.
Larger-scale questions surrounding the gym’s use — by whom and for what purposes — prompted reflective answers from board members that spoke to how they see the project fitting into the greater community of not just the PLPOA, but Pagosa Springs.
“Being a kid who grew up here, it’s a moral thing,” Schneider said. “I do not have children … but I care so deeply about kids having a place to practice, outlets and a place to go after school.”
He added, “We’re not talking about it being overrun by hundreds of kids. It’s teams and some tournaments is what we’re talking about.”
Discounted youth memberships for gym and pool use, as well as potential assistance for lower-income households, are all up for discussion, Schneider reported.
“Even though the PLPOA wants to make this a positive financial asset for the community, we’re not here to gouge families,” he said. “It’s hard enough living in this town.”
He added of the benefits, “It helps us financially, pays for itself, helps the community — mentally, physically — and all it takes is a onetime special assessment,” he said.
He also discussed the vote.
“Keep in mind,” he added, “the board could be completely wrong, and that’s why the community gets to vote on it. So, we’re coming to you saying, do you want this? Reflect your opinions in the vote.”
For additional details about the gymnasium’s proposed design, features and financial disclosures, as well as a recording of the Jan. 8 meeting, visit www.plpoa.com/gymnasium.
garrett@pagosasun.com