Paragon Mill Owners,

About a year ago, Building 7 at Paragon Mill was seriously damaged by a fire. Even though the Council of Co-Owners had insurance, as required by the governing documents, the insurance company did not provide enough funds to rebuild the building. Unfortunately, the Council doesn’t have enough in the reserve account or budgeted funds to cover the cost. THE COUNCIL IS HOWEVER LEGALLY REQUIRED TO REBUILD THE DAMAGED BUILDING. To do this, we need to secure funds, and the Board proposes obtaining a loan, in the amount of $325,000.

The By-Laws (Article V, Section 5.1(f)) require 67% of the owners (128 of 190) to approve the Board's request to obtain a loan. We are asking you to vote to APPROVE the loan, so the Board can secure the loan to continue the rebuild of Building 7 and to pay the contractor in full. The loan repayment will start 30 days after the loan is obtained, but after reviewing the 2024 budget, we are confident that repayment can be managed for the remainder of 2024 without increasing owner assessments this year.

With the help of the Association Attorney, the Board has considered all options, and we believe that getting a loan is the best choice. This approach is more economical than using all our reserve funds, which would leave the reserve account empty, or imposing a one-time special assessment, which would cost each unit owner an average of $1,710 (depending on unit type).

Please carefully review the following to understand how your vote will impact you and your community:

1. If you approve the loan: The Association will have 7 years to repay it, and you won’t need to pay anything extra beyond your regular monthly assessments this year. From 2025 onward, loan payments will be included in the budget. Additionally, the reserve account will remain intact, allowing us to continue scheduled projects such as painting, landscaping updates, or even emergency repairs.
   
   
2. If you do not approve the loan: The Board will have to use up all the reserve funds, depleting the account, and about $15,000 or more from the operating account, which wasn’t planned for. This will leave no funds in the reserve account for other scheduled projects, such as painting (which 4 buildings are currently scheduled to be completed this year), landscaping updates, or even emergency repairs. Additionally, if the loan is not approved, the Board can and will implement a special assessment of $50,000 per year (which does not require homeowner approval) to replenish the reserve account. This amount would be divided among the 190 units based on unit type and would be billed yearly for about 7 years, in addition to your regular monthly assessment.
    

While our immediate focus is on securing funds for the rebuilding, the Board is also consulting with the Association’s Attorney regarding the shortage of funds to see if further action can be taken to regain financial compensation.

YOU ARE ALLOWED ONE VOTE PER PROPERTY. ALL VOTES MUST BE RECEIVED BY SEPTEMBER 23RD.

If you have any questions, we are asking that you please direct them via EMAIL ONLY to paragonmill@vertexpg.com.

 

To Recap:

• Approval of the Loan
  • Keeps the Reserve Account intact
  • Allows the community to absorb the loan repayment costs into the Operating Budget for gradual repayment without any excessive burden
    
    
• NOT Approving the Loan
  • Depletes the entire Reserve Account
  • Causes a Special Assessment over the next 7 years

 

Thank you for your attention to this important matter.

Best Regards,

Board of Directors
Paragon Mill Council of Co-Owners