Sun City crowd skeptical after Pulte takes majority control

A standing-room crowd of Sun City Hilton Head residents jeered and booed at a meeting Thursday when the community's developer, Pulte Homes, took majority control of its board of directors.

Pulte officials now hold a 4-3 majority on the board. The two resident board members who were replaced Thursday were elected last spring, when Pulte officials said they wanted to prepare for resident leadership of the association.

While Pulte officials said the takeover will help protect their investment in Sun City, residents shot back that the move was a "smokescreen" for problems that aren't being disclosed.

Pulte officials said the timing of their exit from the community has changed. When the two additional resident board members were elected, Pulte had expected that most homes would be sold by this year. But there are about 2,000 homes left, and Pulte officials now say all of those homes may not be sold for up to seven years.

The residents wanted to know how control of the board would translate into sales of homes. Pulte officials have not elaborated.

"I'm not usually a conspiracy theorist," said board vice president and resident Jo Stephey during the board's quarterly meeting Thursday, "but we do not know the complete situation here."

Some residents suspect that Pulte wants control of the board to dictate how various issues are handled in the community, including problems with at least one lagoon overflowing into yards, stormwater drainage and exterior stucco cracking.

Some residents and board members also question why Pulte needs control of the board when it already has veto power.

Jon Cherry, Pulte's general manager in Sun City, said veto power is not a proper way to manage. He would not elaborate when residents asked for more information on that point.

Resident and board president Bob Hooper said the board was recently presented with examples of other communities around the country where developers were put at a disadvantage because of poor decision-making by resident-controlled boards. But Hooper said he was insulted by the suggestion that residents would make decisions that would harm the community as well as their own investments.

Cherry said the board might make decisions that would interfere with Pulte's ability to sell homes, but again, he would not elaborate.

One resident, a retired builder, said Pulte needs to convince residents that taking majority control of the board without a vote is a good idea.

"It needs to pass the fairness test and the smell test," the man said during a question-and-answer portion of the meeting.

Ed Hughes, an attorney with Nexsen Pruet Adams Kleemeier law firm who has worked for area developers, said he would not recommend developers bring in homeowners on a community board until a project is substantially complete. Nexsen Pruet Adams Kleemeier does not represent Pulte Homes.

Hughes said that when residents are empowered by board membership, they might become too involved in the business-elements of the development. But he added that Pulte officials aren't doing themselves any favors by refusing to be as specific as possible in providing reasons for the board takeover.

"They think you're hiding something or covering something up," he said.