Sugar Top Resort is no stranger to controversy. Since it opened in 1983, it was the catalyst for the state of North Carolina to pass the “Ridge Law” that prohibits any structure like it to be built again. For almost 40 years, its mere existence has divided people. In the last nine months, a new controversy has taken center stage at Sugar Top Resort – the Board of Directors has been recalled.
According to attorney Michael Vetro, who represented the board at Sugar Top Resort, “A new board was elected in the spring of 2021. They came into the position and quickly realized that many issues around the physical plant needed to be addressed. They believed that the operating budget could not be cut anymore and that new revenue was needed to address a list of maintenance and operational needs.”
According to Scott Alexander, who helped spearhead the recall vote, “The recall was not about the cost of repairs and maintenance. It all started when several residents took issue with illegal votes being cast in the May election and they questioned how the board was elected in the first place. During the May 2021 election, our HOA Board of Directors was casting 15 votes from nonresidential units such as the lobby, meeting rooms, etc. and one vote from a vacant condo that is owned by the HOA. The board was casting votes in favor of the candidates they preferred.”
Alexander went on to say, “when the board was confronted with NC Gen Stat § 47C-3-108 (2012), which states, ‘No votes allocated to a unit owned by the association may be cast,’ – that means if the association owns the lobby, or a meeting room, they can’t vote in elections using votes from the lobby or the meeting room – they responded by saying we won by more than 15 votes, so it does not matter.”
Michael Vetro stated, “The board determined that they needed revenue for two very urgent needs. They needed funds for the additional work required because on site residency rates had increased during the pandemic. After the popularity of AirBnb and VRBO’s, they decided they could increase operating funds through a resort fee or an increase in monthly dues.”
He went on to say, “After putting out an RFP and consulting engineers, they determined that the building needed around $4,000,000 in repairs and maintenance. The $4,000,000 expense would result in a financial burden to each unit of approximately $12,500 above and beyond increased monthly expenses for the operating budget.”
According to Scott Alexander, “A group of residents was discussing a possible recall vote and how to force better communication from the board, and the board decided to add a $25.00 resort fee per night when anyone other than the person on the deed uses a unit. It would have worked like this – if a grandparent allowed a grandchild to use the unit to go skiing one weekend, they would be charged $25.00 to use their grandparent’s condo. We pushed back, and the board decided not to add a resort fee. Instead, they voted to increase the monthly HOA dues from $375 to $425.”
The conflict continued, later in 2021. Alexander said, “Then we are saddled with a $4,000,000 assessment for improvements and repairs on the building with very limited communication about how this number is justified. No communication about the process or the decision-making process to determine how to pay for the work. The HOA has a savings account that has fluctuated between 1.2 million and 1.6 million dollars. Why not use at least some of those funds for this project?”
According to Alexander, “A group of us started collecting signatures to force a recall vote. The state of North Carolina require 20% of the owners to agree for a recall. We have 320 units, and we needed 64 signatures to force a recall vote. Once we hit 120 signatures, we stopped asking, and on September 27, we submitted the signatures to the full board. This should have forced a vote within 30 days from that date. The board ignored us, and finally their lawyer, Michael Vetro, said we had to send it via certified mail to the board secretary. We did that, and they still ignored to have a recall vote. Only after we hired an attorney and threatened a lawsuit did they schedule a meeting for the vote.”
On January 8, 2022, the Sugar Top Resort board called a special meeting with one item on the agenda, a recall vote to remove four sitting board members (President Goose Guice, Vice President Paul Hermann, Treasurer Charles Helbling, and Director Paul Boutin). Secretary Lynne Troelstrup was not on the list to be recalled. The vote itself did not take place without conflict and controversy.
According to Michael Vetro, attorney that represented the board, “Prior to the vote, residents circulated a proxy appointment form that was not provided by the board and would have been invalid. the board provided an official proxy appointment form that was used on January 8.”
Prior to January 8, board members Paul Hermann and Paul Boutin resigned their positions from the board. Also prior to the January 8 meeting, the remaining members of the board appointed two new board members not named in the recall vote. The two newly appointed board members resigned shortly after the recall vote.
On January 8, 2022, the count was administered by Arrington Rankhorn, the General Manager of Sugar Top Resort, and Sam Hodges, the Maintenance Supervisor of Sugar Top Resort. As they counted votes, it was determined that 11 of the proxy votes could not be counted.
According to Michael Vetro, “some of the ballots had not been signed, some had not been filled out correctly, and some of the attendees at the meeting also had provided proxy ballots. Obviously, you cannot vote in person and by proxy.”
During the meeting, residents attempted to share additional grievances with the board and attendees, and the board did not grant this opportunity. When it was communicated that some of the proxy votes would not be counted, resident Bill Watkins attempted to address the board.
“When I attempted to question the board at the special meeting about these allegedly ‘invalid’ proxies by asking for a point of order, President Goose threatened to have me removed from the room by the extra security that had been hired that day,” Watkins said. “It was a very intimidating and inappropriate abuse of power.”
According to Michael Vetro, “All of the board meetings are attended by an on-site Sugar Top Resort security officer. Because of the verbal attacks toward the board, an off-duty police officer was hired to attend this meeting as well. The officer stayed in the back the entire meeting.”
Once the votes had been counted, Vetro addressed the crowd on behalf of the board, and according to resident Elmer Purkey, Vetro stated, “there were not sufficient votes for the recall.”
The attendees of the meeting disbanded without incident. Then on January 14, 2022, Michael Vetro sent an email to the residents of Sugar Top Resort. The letter is attached and states, “I reconsidered my prior conclusion and must now inform you that the recall election results in the recall of Goose Guice and Chuck Helbling.”
When asked about the change in opinion Vetro stated,” When you have a recall vote you have different standards in different situations. In some situations, it is a simple vote up or down, and a simple majority carries the decision. In other situations, a recall only occurs when the number of votes to recall is greater than the number of votes to elect someone during their election. The night of the vote, I believed that a recall of members of the board at Sugar Top Resort would require the latter. Over the next few days and after consulting other legal professionals and the governing documents for Sugar Top Resort, I changed my position.”
Today Sugar Top Resort has one board member, according to resident Scott Alexander.
“Lynne Troelstrup is the only remaining person on the Board of Directors,” he said. “Currently she is the President, Vice President, Director, Treasurer and Secretary!”
The residents at Sugar Top Resort have changed out 80% of their board and still have numerous challenges ahead.