The Tellico Village Property Owners Association reached an agreement with the Tellico Reservoir Development Agency late last week to modify the existing 99-year lease of common properties, including the Toqua and Tanasi golf courses, Yacht Club, Chota Recreation Center and the private roads serving Tellico Village.

The original lease, executed in 1984 by Cooper Communities Inc., in the name of TVPOA with TRDA, required the POA to make escalating annual lease payments to TRDA over a period of 99 years, with total payments of $56,799,765 over the lease term.

For example, the lease payment due from the POA under the original lease in 2016 was $415,750, and considering the annual payment escalations of $8,315 per year, the final lease payment due to TRDA in 2084 would have been $971,170. In addition, under the existing lease arrangement, at the end of the 99-year term the leased common properties would still be owned by TRDA.


The lease amendment will shorten the term of the lease, cap annual lease payments and convey the common properties to the POA at the conclusion of the lease term, according to a press release from the POA.

The lease amendment now runs through 2044 and calls for the POA to make equal annual installment payments to TRDA of $400,000 for 27 years with one final payment of $178,225 due in 2044. The amendment will result in a savings to TVPOA of $36,799,765 over the original lease. The POA plans to save more than $4 million during the life of the lease amendment by removing the annual payment escalator.

The POA and TRDA signed the final documents for the lease Friday.

The amendment resulted from the negotiation of a buyout clause under the original lease. The parties incorporated the original lease buyout term of $20 million. TRDA, however, allowed the POA to offset from the buyout the total amount of lease payments the POA made between 1985-2016.

The lease ensures that all Tellico Village common properties will be owned by POA in the future, according to the POA.

“This is an historic agreement for our association,” Alan Hart, POA board president, said. “(POA General Manager) Winston (Blazer) did a great job pulling this together over the last 18 months. We weren’t sure it could happen, but it did.”

Blazer worked with POA board member Bob Coates, POA attorney Kevin Stevens and representatives with The Ingram Group, a Nashville-based strategic communications firm, to come up with the amended lease.

“We put in a lot of work and pulled a rabbit or two out of a hat,” Blazer said, noting that he was appreciative of Stevens, Coates and the Ingram Group for their efforts in securing a new agreement.

The POA invested about $200,000 in the process of landing the agreement.

“I think it’s a very good return on our investment,” Coates said. “Two hundred thousand dollars spent for a return of nearly $37 million, and we will own the assets at the end of the agreement.”

Coates said the POA will incur no debt as a result of the agreement.

“Sometimes it’s a challenge as a board member to know about an important initiative like this and not talk about it,” Hart said. “This is a great example of why we sometimes need to stay mum on certain topics. We could have failed on this one if we didn’t let the process work itself out quietly, but now we can celebrate.”