The Diamondhead Covenant Renewal Effort – Part 1

The Beginning – 2008

Understanding how we got to the covenants renewal mess of today first takes traveling back to see Diamondhead as it was in 2008. When that year began, city incorporation was still just on the horizon. Begun primarily as an effort by POA President Lloyd Ramirez during his 2004 – 2006 term, its supporters were close but had not yet reached the required number of signatures, and its opponents were hard at work against it.

Aside from the county, the POA was still the sole source of governance and funding for the community. Just three years on from Katrina, it was coping with devastated neighborhoods including a wiped-out south side, repairing or rebuilding hard hit facilities and amenities, and dealing with the blow to its finances.

A proposed plan had been drawn up by Ramirez for a gradual transfer of all amenities to the city if covenant-1successfully incorporated, and it included a tentative turnover schedule meant to end in 2020 with the
POA’s going out of existence. Though the written plan wasn’t publicized, apparently enough talk about it made the rounds that many residents came to believe incorporation meant the eventual end of the POA. The plan, however, fell through when representatives of the POA, Purcell, and the Incorporation Committee [1] met and failed to agree about any transfer other than streets and drainage. [2]

The summer of 2008 proved eventful. Sometime before June 30, Jacobs Entertainment, Inc., acquired part of its Diamondhead properties according to filings with the SEC. Meanwhile, Ramirez was asked by the board to look into the covenants as he was leaving his past-president term on the POA board. “We had this vague notion that the covenants in 2020 were maybe going to go away,” he recently told the current board, and “we had to save [them].” [3]

In early July he was deputized an “agent of the corporation” to investigate and report on options regarding problems of expiration. In their investigation, he and board attorney Paul Newton “to their surprise” found 27 separate sets for different parts of Diamondhead with different expiration dates from 2020 to 2029, or with no expiration date though most expire in 2020. [4]

By July 28, with enough signatures attained, the petition for incorporation as a city was filed in court. [5] Meanwhile in July and August, Jacobs completed its acquisition of Diamondhead property in preparation for proposing a casino on the south side near property where the Harbor House Condos were before Katrina. News of their plans went public on September 19. [6]

Though it was 12 years before expiration, it’s easy to see why the board back then grew alarmed enough to start investigating renewal. Under those unsettled 2008 circumstances, with change coming at them from all sides, the safe harbor of renewed covenants with their guaranteed income source and zoning-like architectural controls must have looked like the only chance for maintaining Diamondhead’s quality of life.

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[1] The only information I’ve found on that committee is an article stating that John Yarbrough chaired it and Chuck Ingraham worked alongside him. http://www.hancockchamber.org/…/john-yarbrough-city-of-dia…/
[2] State of the City Address, Chuck Ingraham, 2013
[3] POA Board Minutes: July 28, 2016 Special Meeting
[4] Recommendations to Prepare for the Long Term Issues Associated with Possible Expiry of the Covenants, August 2009. There are actually more than 30 sets according to the list attached to the Declaratory Judgment Petition as Exhibit E.
[5] Diamondhead’s Comprehensive Plan
[6] http://www.crainscleveland.com/…/jacobs-entertainment-pursu…