August 18, 2005

Dear Homeowner,

On behalf of GH Capital and Borrego Investors, LLC, owner and developer of Rams Hill, let me welcome you to the first in a continuing series of updates on the progress and evolution of our spectacular community.

For those of you who haven’t met me, my name is Gregory Perlman and I am the Principal of GH Capital and Borrego Investors LLC. Many of you have had the chance to meet David Itzikman, who is GH Capital’s project manager for Rams Hill and is onsite during the week. Based in Sherman Oaks, CA, GH Capital and its principals have been developing real estate projects since 1987 and its real estate holdings throughout the United States are worth over $500 million.

We have received several questions and concerns about the change to the development team at Rams Hill and first of all I wanted to personally let you know that GH Capital remains committed to turning Rams Hill into one of the finest golf communities in the west.  This is more than a project for GH Capital.  From the time we first saw this property, we recognized its beauty and since completing the acquisition in September 2004, our infatuation has grown deeper every day as we get to better know the property and the people.

GH Capital is very well capitalized and will ultimately be spending close to $100 million to build not only a spectacular Tom Fazio golf course but to turn Rams Hill into one of the finest country club facilities in the country.  For that vision, GH Capital brought in some of the top planning, architectural, and marketing experts to develop all components of the plan including the golf courses, club houses, view corridors, housing plans, landscaping and future amenities.  The Wiles Group was brought in as a project manager to help with our development plan. However, some of their ideas did not jell with the vision of development team and we decided to change project management and have experienced members of the GH Capital team take over the project management. Most of the onsite development team remains in place including our Vice President of Development, Mike Cusick, our Marketing Manager, Isabel Lozano, and our Golf Course Superintendent, Steve Gregory. 

Several of you have asked about delays in construction of the golf course.  The delays are due to a combination of final permitting from the County of San Diego as well as the fact that the golf course had grown too large and was coming in over its initial budget. Tom Fazio and his team walked the course with us last week and they are working hard to revise the golf routing into a more manageable course size.  As Tom mentioned during the meeting on April 13, he only works on a limited number of new courses each year and is dedicated to making Rams Hill one of the most spectacular courses in the desert. He was happy with his initial plan but, as his team got to know the land and community better, they had inspiring new ideas about changes in the routing, enhanced water features, landscaping, better view corridors and subtle aspects of course design. While we want these ideas to be part of the new course they must be done within a reasonable cost and timeframe.  We anticipate having the next iteration of the Fazio plan by September 15 to 30 and hope to have construction in full swing shortly thereafter.

When will the new 18 be ready for play?  To be quite candid, creating the best can’t be rushed and the course may not be open this season.  We will know more in the next 30 days and will let you know immediately.  We are looking at different options for play, including having reciprocal privileges at De Anza Country Club and are still hoping to have some of the new golf course ready for play this season.  

I know everyone is anxious to hit that first shot on the Tom Fazio course but GH Capital has succeeded over the years through both a commitment to quality and a philosophy of investing for the long term.  We have that same commitment to making Rams Hill one of the west’s most spectacular golf communities and creating long-term value for all homeowners, particularly for those visionaries who invested early in Borrego Springs.

We value your commitment to this community.  As the project proceeds, your ongoing input is welcomed and most appreciated.  Please call, write or email us with any other questions or thoughts.  I look forward to updating you regularly on progress on the course and other developments in the exciting evolution of Rams Hill.