Villas on the Square History

HOW DID WE GET HERE?

November 20, 2019
Updated August 2023

To paraphrase the Talking Heads, how did we get here in this beautiful and improving condominium, with assessments that are quite high?

The rest of this blog outlines some history of Villas on the Square.  Frankly, we are often asked why condominium assessments are so much.

A detailed look tells us why previous boards decided to borrow money for repairs.  We are simply making the best of a dire situation that was exposed in 2004-2005.

Doing maintenance on time and when needed is always much less expensive than waiting and watching while roofs leak, parking lots turn to dust, and older stairs rot and turn to mush!

Thanks to the hard work of many owner volunteers over the last 20 years, Villas on the Square has finally made the transition from a reactive maintenance stance to one that is proactive.  In the long run, proactive maintenance is much less expensive than fixing things after a severe malfunction appears and then doing repairs in an inexpensive, low quality, short sighted manner.

Spending a little extra on repairs upfront results in lower costs in the long run!

Hurricanes

Villas on the Square was constructed in 1983-1985.  In the first two decades of its existence, reserves were funded to the tune of about $15,000-$20,000 per year.  For a condominium this size, that was simply not enough.  Monthly assessments were artificially low, at about $85-$125 per month during the 1990s and early 2000s.

By 2004, most buildings leaked during the heavy rains common in Pensacola.  There was ancient cedar siding that desperately needed painting.  Frankly, the painting and other repairs were not done for years when needed.  This was a disaster waiting to happen.  Hurricanes Ivan, Dennis and Katrina in 2004-2005 provided the proof.

Interior damage caused by leaks was severe and widespread.  The board passed two special assessments in excess of $2,000.  The Association paid about $450,000 for repairs.  This was primarily for interior damage.  A relatively small amount was spent to repair roofs.

Villas experienced very little physical damage from the storms.  Due to that and our insurance deductibles, the insurance proceeds for all three storms only totaled about $60,000.

This did not have to happen.  If the buildings had been maintained proactively, interior damage would have been a small fraction of that.  Unit owners at the time of the hurricanes were stuck with a bill for years and years of nonexistent maintenance and neglect.

Finally, the 2008 board of directors took a courageous step.  A special assessment in the amount of $4,000 per unit was passed.  The Association also borrowed $1.60 million from Coastal Bank & Trust (now Synovus Bank).  Monthly assessments were increased from $195 to $307 per month in one step.

Conditions were so bad no one complained about this!  Owners were eager for repairs to be made.

The Association invested $2 million to install the concrete fiber siding on each building, replace 12 of 19 roofs, and completely replace about a third of the balconies.  Major repairs were undertaken to the remaining balconies.

The concrete fiber siding is a 50 year product with a 20 year pigmentation warranty.

Floods & Heavy Rain

On April 29, 2014, the Pensacola area experienced 27 inches of rain in a 24 hour period from a monster spring storm.  At Villas on the Square, the water entered the downstairs units in Buildings 1, 5 and 6.  Forty-two (42) garages in Buildings 1, 2, 3, 5, 6, 11 and 12 had three inches of water on the floor.

The rain we received compares to 16 inches of rain in a 48 hour period from Hurricane Ivan.

On a per hour basis, that is THREE TIMES as much rain from the April 2014 flood event compared to Hurricane Ivan about 10 years before.

What was the result at Villas on the Square?  The Association repaired garages and the interior of several units.  The total cost was a little over $55,000.

This is a fraction of the damage cost compared to Ivan as a result of much more rain in a shorter period!  We reaped the benefits from the actions taken by the 2008 and 2009 boards of directors.

The board of directors did not even find it necessary to pass a special assessment at the time.  All of these repair costs were paid from the Association’s existing operating account balance.

However, the rain exposed some drainage factors at Villas that were previously unknown.  This amount of rain was unprecedented for the Pensacola area.

Proactive Measures

Even with relatively light damage, the floods and heavy rains put the 2014 board of directors on course to serious consideration of a major repair project.  A preliminary civil engineering report was obtained in November 2014.  The board also sought quotes for an engineering inspection of the building envelopes.  As we found out in 2004-2005, water entering any building is a major source of damage and expensive repairs!

The annual meeting was held on November 18, 2014.  Owners were overwhelmingly in support of major repairs, and of repaving our parking lots.

The building envelope inspection report was received in April 2015.  At that time, serious efforts to obtain financing for the project commenced.  Two banking institutions demonstrated a sincere desire to do business with Villas on the Square.

The board ultimately decided to refinance the loan with ServisFirst Bank.  This lowered the interest rate the Association is paying, and provided new funding for the building envelope project.

The building envelopes at Villas on the Square are now in the best shape in decades!

In the fall of 2018, half of the exterior stairs replaced.  The paving project repaired crumbling parking lots in the summer of 2019

The swimming pool project represents the completion of our change from reactive to proactive maintenance.

Benefits

Villas on the Square is bigger than meets the eye.  If Villas were a business, the estimated rental value of our units indicates annual gross revenues of about $1.2 million.  This is on an asset base that is worth about $14.5 million for insurance purposes.  For anyone who owns a unit, it is a significant investment.

However, Villas is more than just a business or investment.  It is a community.  About half of our owners make their homes here or have a relative who does.  Tenants enjoy our swimming pool and location.  We have one of the best locations in Pensacola.

Values at Villas are up recently.  The majority of sales in the last two or three years have been to those making Villas their primary or secondary home.  The quality of the neighborhood is maintained.  This makes life a little safer for everyone.

This also benefits those who purchased their unit at Villas as an investment.  Frankly, those buying a primary residence are sometimes willing to pay a little more for a home.  This gives investors a better return when they choose to exit their investment.

Villas on the Square is in a prime location for shopping, dining, medical treatment, and simply reaching other parts of Pensacola.  Our location is very convenient.  Villas is zoned for Cordova Park Elementary School.  This is one of the top five public schools in Escambia County.  We are very close to several top notch private schools as well.

It makes sense from several standpoints to continue maintaining our investment.  Taking care of Villas benefits those who live here.  People are the most important thing in any community.

Maintaining the neighborhood improves safety and quality of life for everyone.  Criminals frequently move on when seeing a well kept place where rules are enforced.  A messy neighborhood is perceived as an easier target!

Safety is enhanced by attracting quality residents who care about their homes.

As you can see, proactive maintenance reduces costs for everyone in the long term.  In addition, the quality of life for everyone is improved when property values in a community are strengthened.  Safety and quality of life of the people who live here is what really matters.  Preserving the quality of our community benefits everyone!

Let’s work together and make Villas on the Square an even better place to live and own a home!