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HOA NEWS | THE COLONY NEWS | APRIL 2022 | 3 From the Golf Course Committee The past few months have been busy for the Colony Golf Course Committee (GCC) with support from the Board of Directors and input from professional consultants. • Last November, we held 10 Town Hall meetings to communicate the status of the golf course litigation and potential options for our future. • We developed a video that can be viewed at www. thecolonyatcaloakshoa.com. • The Board retained Paradigm Golf Group to perform a Due Diligence inspection and assessment of the California Oaks Golf Course, which included an inspection of the golf course, and to provide costs associated with the repair, restoration, and operation and maintenance. (A summary table was provided in March's The Colony News.) The Paradigm report projected that with proper management, the course would be profitable after renovation. • The GCC sent out News Updates via the Colony "eblasts" and Newsletter. • Four open forum Q&A sessions were held in March. • Three Town Hall Meetings were held on March 24. • People have asked, "Why are we moving so quickly with the golf course?" The answer is because the foreclosure could happen quickly, and the membership may not have this opportunity again. The Board believes it is important to give the members the opportunity to decide if they want the Association to acquire the course if the opportunity becomes available. In order to do that, we must bring this issue to a vote. If a judge moves to foreclosure (which could happen in April), we need to be prepared to move forward with a bid to acquire the course, or we wait and see who the next owners are going to be. If there are no bids on the property, it goes back to Majestic and, more than likely, the course will be shut down. A key question has come up as to why we need to amend the Colony Covenants, Conditions and Restrictions (CC&Rs) and Articles of Incorporation (Articles). The Association's CC&Rs and Articles must be amended in order to grant the Association the power to (1) acquire the golf course, and restore, manage, operate and maintain the golf course property and facilities; and (2) establish a separate legal entity for this purpose as recommended by the Association's Certified Public Accountant (CPA). In addition, the amendments to the CC&Rs are needed to update provisions that address any third-party ownership of the golf course and property (if the golf course is not acquired by the Colony membership). Another key question presented to us is, "If we acquire the golf course, do we need to keep it a golf course?" The answer to this question is simply, yes, at this time. The golf course includes land use restrictions associated with the recorded Deed of Trust that requires the property to be operated and maintained as a golf course. In the future, it may be possible to change the use of the golf course property. But that would take a considerable effort, planning, and coordination with not only the members of the Colony, but the city of Murrieta and various regulatory agencies. At this time, the GCC believes the best course of action is to use best management practices to restore the golf course into a viable business, including the renovation of a restaurant that could be a valued amenity to the Colony residents. Two important court hearings are scheduled in March and April that will have an impact on the status of the golf course. The upcoming vote of the members will determine if the Association will be able to acquire the course in the event the court orders the foreclosure of the golf course; if we allow the course to go into foreclosure to possibly be acquired by a third party; or if control of the golf course reverts back to the current owner and closes. As of the writing of this update, the court trial on the fraudulent conveyance case will begin March 18, 2022, and the court hearing to determine if the receivership continues or the course goes into foreclosure is scheduled for April 13, 2022. The GCC has received input from professional golf consultants that the course can be a viable business as the golf industry continues to grow. Over the past couple years, golf was one of the few activities people could enjoy. Even now as additional activities reopen, the interest in golf has continued. The California Oaks Golf Course today has not been profitable because of the deterioration of the course (e.g., broken equipment, years of deferred course maintenance and the closure of the restaurant). Once the property has been restored, the GCC believes the course will be an attractive activity to golfers and an attractive amenity to the residents of The Colony.

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