March Residents’ Meeting — Analysis of Rents/Value

I’ve always bragged about having the best residents in the world. We truly appreciate the respect you folks have given me and my staff. Our team has worked tirelessly in an effort to assist you in making this the best place we can make it.

In that spirit of mutual respect, I want to be completely transparent with you about where we stand in our annual adjustment in costs and rents. There will be an adjustment this year. I know that it is a disappointment to many of you — and I want everyone to understand why and how we came to our conclusion.

First, let’s start at the beginning…

The Market & Competition:
We know that there are plenty of other parks in the area and we do regular assessments of them to see where we stand. We have the enclosed handouts for comparisons of the value you receive for the money you spend.

The first thing I want you to notice is that we are a great value for the money – we aren’t the cheapest park in the market, but we believe we are by far the best value.
We have spent literally millions of dollars in upgrades over the past 5 years. By doing so, we have surpassed many neighboring communities in overall quality of the property, and in our amenities and facilities.
One of the reasons our park has a different “feel” than our competitors is that we have more space and less density – which is to say, we have wider streets and larger lots than most other parks. In comparing parks, the measure used is Density per Acre, and ours is at 9 units per acre compared to the 12-16 units that are common elsewhere. That gives us that open “feel” that so many visitors comment on.

Costs of Operations:
Next, I want to talk about the cost of operating a first-rate facility like ours. Just looking at standard costs of operations, those hard costs increased about $700,000 over the past five years. Our real estate taxes alone have increased from about $90,000 per year to $175,000 per year -that’s a 195% increase. We’ve also seen substantial increases in water, sewer and utility costs. During this time, we’ve had extensive maintenance on road surfaces, as well as amenity improvements.

Some other factors to consider:

Largest Facilities per unit:
If you visit other parks, I think you will agree that our facilities are much like those in parks “two and three times” our size. I have heard from many of you that our relatively small size (685 & 791 units versus 1200-2000 units) adds to our appeal. However, offering big amenities in a small park does have cost implications.

Historical Values of Your Homes:
In my 40+ years in the real estate industry, I’ve come to understand the importance of value. The value of anything has to do with “supply and demand” of the product being offered. Thanks to upgrades, our product (that is, our park) has been in high demand. We have enjoyed close to 100% occupancy during our past seasons.

Since we took over operations in 2008 and 2009, we have invested millions of dollars in upgrades to our faculties and that has been good for everyone. While property values in many competitors’ parks are still below pre-recession levels, many of you have increasing home values. Together we are enjoying the greater value of being a top-quality park.

IN CONCLUSION…

So, here’s the bottom line: As I mentioned, we will have an increase in rents again this year. Despite rising costs, the amount of increase will stay the same as in previous years, a $250 increase. This means that as a percentage increase to updated values, it is falling, but it is still an increase and I hope you will understand why it’s necessary.

We are grateful to have you as residents. We are committed to you. We are having this meeting now to simply give you time to check out other facilities if you do not trust our accompanying charts on values. 1 also realize that there are some residents who’d like to stay but are on fixed incomes and simply cannot afford the quality of park that we have become. For those of you in that category, I apologize. However, you can sell your home at a very nice market price and probably buy elsewhere for less money. You won’t receive the same quality of property, staff or amenity, but you can go elsewhere for less
money. We acknowledge we are not the least expensive. It is just impossible to create the quality of our parks without a cost.

We never promised we would be the “cheapest” in the market, just the best value for a high quality property.

We genuinely do our best to make this community your special home. Hope to see you next year! I will take comments and questions privately after this meeting.

Thank you for your participation and we wish you well this summer,

Al LaCanne
Interstate Investments, Inc.
General Managing Partner

Rhonda Ciacco
General Manager
Silveridge and The Resort

View Cost Comparisons vs. Other Parks (pdf)

Survey Results Are In — We Hear You!

“Aw, people can come up with statistics to prove anything.
Forty percent of all people know that.”
Homer Simpson

You surprised me. Having worked in market research for many years and having owned a research consulting firm, I confidently predicted that the Silveridge survey would yield somewhere between 100 and 200 responses. We got 326!

Many thanks to all of you who participated, and especially to those of you who took the time to offer ideas. For a single question, asking for suggestions/comments about the facilities, over 200 of you wrote out answers. The General Manager for Silveridge, Rhonda Ciacco, and the owner, Al LaCanne, have been studying those comments and already have the first changes in the works. Let’s do a quick review of those changes, then I’ll do a summary of all
the survey results.

RESPONSES TO SOME OF YOUR SUGGESTIONS

Of the many ideas that you offered, these are the first ones that we’ll be working on.

LIGHTING. In addition to ongoing improvements in the lighting at the entrance, we’ll be taking your suggestions and reviewing all the lighting on walkways and will be adding more.

FIRST IMPRESSIONS. We are reviewing the dress code for those who work at the front gates and other employees. We are planning new attire. Watch for new standards by the fall.

SUMMER LANDSCAPING. Some of you suggested that you’d like weed control and other maintenance services over the summer. While there are individuals who currently offer such services on an informal basis, we are arranging for our park landscape vendor to also offer this service to you. We will look into options and what the cost to you would be and will let you know.

STREET CLEANING. We are investigating new ways to keep the streets clean, investigating other providers and techniques. We’ll make this better.

OTHERS WE COULD USE YOUR HELP WITH

CLUB HOURS. Some of you requested longer hours for specific craft rooms, like art and ceramics. These are not set by our policies, but by the clubs involved. Please see them to make changes.

NEW ARRIVALS WELCOME. We had a suggestion that we pair up longtime residents with new arrivals to make them feel welcome and help them get into The Resort lifestyle. GREAT IDEA! We’d love to see this happen and if you’re willing to help, please let us know.

There were plenty of other excellent suggestions and we will be using the off-season to get to more of them. Again, our thanks. And please keep the ideas coming – we have Problem/Solution forms in the office and are eager to hear of anything that isn’t up to standard or that could be improved.

CONCERNS/ISSUES

One issue that came up in a number of responses was increased rents. These were discussed in a letter put together by Al and Rhonda, as well as in a community meeting. We’ll put the letter and accompanying chart in this issue of The Silveridge Sun for any of you who might have missed it.

Finally, there were those who noted specific problems with the facilities, such as peeling paint. We work at having the highest standards for our facilities and we really, really want you help in spotting such problems. Please use the Problem/Solution forms in the office so we can put them into our schedule.

THE SURVEY RESULTS

“If you surveyed a hundred typical middle-aged Americans I bet you’d find
that only two of them could tell you their blood types, but every last
one of them would know the theme song from ‘Beverly Hillbillies.'”
Dave Barry

Let’s review all the questions and answers, in the order asked.

Overall satisfaction and the NPS

The standard measure of how well any product or service performs comes from asking if you’d recommend that product/service to friends or relatives. This yields what is known in research circles as the Net Promoter Score, and it is the gold standard of performance measures. You determine the NPS (that’s the Net Promoter Score – it’s so popular that it goes by its initials) by taking the highest two ratings (“9” or “10”) and then subtracting out all the low scores (a “6” or below).

The benchmark NPS for the service providing the survey software, based on over 70,000 surveys, is 23. You gave Silveridge a 36, well above the average score. Congratulations to the staff and owners and all the volunteers who make Silveridge special.

Time in the park

The most common answer for how long residents had been at Silveridge was 4-8 years, at 39%. If you’ve been at Silveridge for over 15 years, you’re one of just 12%.

Why Silveridge?

Over two-thirds of you (70%) said you chose Silveridge because of friends/relatives. No wonder it’s such a friendly place.

Appearance of the park

Asked to rate the appearance of Silveridge, 40% said Excellent and 49% chose Good, for a total favorable rating of 89%.

Rating the staff

When you rated the overall performance of Silveridge staff, you gave them a weighted average of 7.9 out of 10.

For the other questions about the staff, there were five possible responses, from Never to Always. Looking at what in research is known as the “top two boxes,” that is, the two best ratings, the numbers came it at…

For enforcing rules & requirements, 55%.

For being quick to respond to problems/concerns, 46%

For warm and friendly, 77%

And, finally,

asked specifically about the maintenance staff, the “top two” came in at 75%.

The newsletter

As someone who works on our Silveridge Sun newsletter, I was eager to see how you felt about our efforts.

The printed version scored 8.2 out of 10 and the online version 7.7. And nearly everyone agreed that the current schedule of once a month was just right. Asked what topics you’d like to see more of, you suggested items on changes to the park itself, and profiles of clubs and activities.

Feeling safe

A large majority (94%) of you felt either Safe or Very Safe during the daylight hours, with the percentage dropping a bit (to 88%) during the nighttime.

Value

When asked to rate the value received for the cost of rent, 51% chose Good or Excellent, with 38% at Fair.

(Al LaCanne has done extensive research on rents in the areas, along with analysis of comparable values. This was presented at a meeting in mid-March but is also included in this issue of Silveridge Sun.)

Profile of those who responded

Of those who took the survey, we saw that..

92% are seasonal residents

55% were American citizens versus 42% Canadians, and

Were evenly split between male and female.

So, those are the statistics. Thank you again for your help with the survey.

Should you have any questions about specific responses, I’d be happy to talk with you. You can contact me at dale@dauten.com.