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Subsidized Maintenance Fees List in Vegas

Discussion in 'Hilton Grand Vacations Club / HGVC' started by CalGalTraveler, Sep 13, 2017.

  1. CalGalTraveler

    CalGalTraveler TUG Member

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    Do we have a listing of which resorts are still subsidizing maintenance fees especially in Vegas? I was told by a reliable source that the Blvd/Strip is still subsidized and will increase at some point, but Paradise and Flamingo are not so the maintenance fees are true to cost.

    What about Elara? Is that still subsidized because they are expanding and selling new units in the building?

    I also would be interested in other HGVC properties as well. Is a rule of thumb that it is after they have "sold out" the building?
     
  2. Cyberc

    Cyberc TUG Member

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    I skimmed the last annual report and it says that our resort on the strip was subsidized. Don't remember by how much.

    What I don't understand is why subsidies it when you have completed the active sale?
     
  3. Cyberc

    Cyberc TUG Member

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    Just looked it up and the subsidies was 377.255$ For 2016.

    As of 2013 there is no mentioning of subsidies, can't say for 2014 as the budget for 2014 is not online. In 2015 $ 2016 the subsidies was put on the budget.

    Can't find the budget for 2017 either.
     
  4. 1Kflyerguy

    1Kflyerguy TUG Review Crew: Rookie TUG Member

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    I think the developers subsidize the MF during the active sales process as way to make the purchase look more affordable..

    Many home builders do the same thing when selling houses and condos in the US, they set the HOA fee artificially low to make it easier for buyers to qualify for the loan.
     
  5. Cyberc

    Cyberc TUG Member

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    Yes but why continue after the active sales has ended?

    Also it seems that there was no subsidy in 2013, but there was in 2015&2016 maybe also in 2017
     
  6. 1Kflyerguy

    1Kflyerguy TUG Review Crew: Rookie TUG Member

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    Not really sure on that, there are quite a few resorts where they still have "planned unit" that are not yet built. Parc Soleil has lots of unbuilt towers, think LV strip was supposed to have two more towers planned. Kings Land has a few more phases to go, but they are building out at HWV next..

    Perhaps they maintain the subsidy in case they decide to build.
     
  7. Cyberc

    Cyberc TUG Member

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    I found this from the audit 2015, no files available online for 2016 or 2017 in that regards. In 2015 122k was given in subsidies. Maybe someone can explain why hgvc paid them?

    As of 31st of December 2015 hgvc was the owner of 746 units, seems like a lot.

    Revenue Recognition
    Maintenance fees revenue is recognized annually in the amount of the membership assessment allocation specified for current period operations based on the annual budget adopted by the Board. An equal portion of the maintenance fees is assessed for each ownership interest, based on unit type. In lieu of maintenance fees, the Developer has elected to subsidize any revenue shortfall, as further described in Note 9.

    NOTE 9 - RELATED PARTY TRANSACTIONS
    Pursuant to Nevada law, the Developer has agreed to subsidize through December 31, 2015, the difference between the actual costs incurred in operating the Project, taking into account all income and revenue received by the Association, and all amounts paid and payable by owners other than the Developer with respect to such operating costs, in order to keep amounts payable by owners other than the Developer at an amount comparable to the amount payable by owners if all 714 units were in operation. The Developer reserves the right, but not the obligation, to extend and increase the amount of this guarantee for one or more periods of one-year each, after the expiration of the guarantee period, as permitted by Nevada law.

    NOTE 9 - RELATED PARTY TRANSACTIONS (Continued)
    The Developer’s obligation under this subsidy agreement for the year ended December 31, 2015, was $122,037 for replacement. As of December 31, 2015, $4,065 was due to the Developer for overpayment of assessments. As of December 31, 2015, the Developer owned 746 ownership interests based on year 2015 occupancy.
    The Developer utilizes 1,447 square feet of space in the first floor lobby of Las Vegas Boulevard Vacation Suites, for the purpose of operating a lobby and pool bar. The Association receives reimbursement for the maintenance of the sales and management office space and the first floor lobby space. Total reimbursement for the year ended December 31, 2015 was $371,928 and is included in other revenue.
    Certain Board members are employees or representatives of HGVC or its affiliates. The following expenses were reimbursed by HGVC and its affiliates during the year ended December 31, 2015.

    Regards
     
  8. 1Kflyerguy

    1Kflyerguy TUG Review Crew: Rookie TUG Member

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    This looks like it gives HGVC an opportunity to control their expenses associated with the resorts. Basically by opting to subsidize the revenue shortfall, they allow the resort to spend and maintain the appearance they desire, but not raise the MF per unit which would probably impact sales.

    At many resorts HGVC controls the board and thus the HOA. My guess is they still control the board and HOA at the strip, so this simplifies things for them. I assume HGVC and any developer is a similar situation would stop the subsidy prior to relinquishing control of the board.
     
  9. CalGalTraveler

    CalGalTraveler TUG Member

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    If we divide $377,255 by 52 weeks = $7254/week. Divide that by 482 owned units (1228 total units - 746 HGVC owned) = < $10/unit annual subsidy. Seems hardly worth the effort and not much additional discount to sway buyers. Perhaps this subsidy helps with developer taxes.
     
  10. Cyberc

    Cyberc TUG Member

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    Shouldn’t the math include all units and not just those not owned by hgvc. Hgvc pays mf of the units they own as well.

    Why would hgvc own 746 units? I would say they should sell them and generate some revenue. They can ofc rent them but I would assume they can’t rent that many units weekly.
     
  11. CalGalTraveler

    CalGalTraveler TUG Member

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    You could include but this would make the annual subsidy per unit annually even lower. I was running a "back of the envelope" calculation.
     
  12. 1Kflyerguy

    1Kflyerguy TUG Review Crew: Rookie TUG Member

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    The resort fact sheet on HGVC.com shows a total of 714 units as the LV Strip location, so i think the number above is the total units, not the number HGVC still owns.

    As for paying the MF on the units they own, "In lieu of maintenance fees, the Developer has elected to subsidize any revenue shortfall, as further described in Note 9" I think this means they pay enough to keep the HOA solvent and cover all of the expense. I don't believe they pay this in addition to the MF for their units. The $122K you mentioned might be more or less than than the MF would be for the units they own.
     
  13. Cyberc

    Cyberc TUG Member

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    I just re-read the audit and you are correct there are a total of 714 units. That gives a total of 37.128 ownership interests of those the developer owns 824 interests.


    What is the difference in the two budgets attached? I can see the subsidy is different when compared. They are from the same fiscal year.
     

    Attached Files:

  14. CalGalTraveler

    CalGalTraveler TUG Member

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    So if my math is correct that's only a subsidy of $10.16 per unit ($377,255 in 2016 divided by 714 units). The 1228 units that I was quoted from the front desk probably included studio lock-off units that would be included the 714 "owned" units.

    Not much subsidy so there must be a tax or other developer incentive for doing so.
     
  15. hurnik

    hurnik TUG Member

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    I'm surprised there's still a developer subsidy at all. I bought direct (mistake) at the strip/blvd 15 years ago. I would've thought the developer subsidy would've ended by now. Although I think they only had the one tower (or two) then. Not sure if they've built the other towers since, so perhaps it's from the additional towers?
     
  16. Cyberc

    Cyberc TUG Member

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    Yeah it’s not much of a subsidy pr unit, so if it ever stopped the mf wouldn’t be that much higher.
     
  17. 1Kflyerguy

    1Kflyerguy TUG Review Crew: Rookie TUG Member

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    The Kings Land billing statement breaks out the subsidy by unit type / week so you can see exactly what the subsidy is for unit type you own. No math or division required. Theirs goes from a low $85 for a 1BR to high of $245 for a 3BR in Phase 3.

    I am surprised all the HOA don't use the same format, unless there are different state regulations they each need to follow.
     

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