Hanalei Bay Resort - On the Road to Recovery
LARGE "Special Assessments" are the result of an "incompetent" Board of Directors and a Management Company that doesn't watch costs.
First let me say that I am NOT an owner at HBR. I have watched this resort for the last 15 years thinking that at some time I may want to become an owner.
Yes, the BOD had been incompetent for a long time. They chose to enter into a series of contracts with multiple management companies that were not just incompetent but also financially unstable, greedy, and self-serving.
The new BOD is doing a much better job and the current management company is experienced and doing a much better job in turning this resort around. The VOA (timeshare association) now controls the rentals and sales of foreclosed intervals and receives the benefits of same.
The financial mess that has accumulated for more than a decade has left a deep hole for owners leaving the replacement reserves well below acceptable levels. MF's for 2 BR units have escalated rapidly over the last few years and are currently $300 per interval higher than comparable independently run resorts on the island. The BOD had no choice but to levy a series of Special Assessments ($800/pop) and dramatically increase MF's to help dig out of the financial hole.
The BOD also entered the association into a 10 year, $2.5 million loan to fund resort maintenance and refurbishing. That loan will be repaid by owners over the next decade when it should have been funded by MF's paid by owners over the previous decade.
The current BOD is making excellent progress in returning this resort to a premium property. They will finish a complete refurbishment of all units by the end of 2014. I have seen photos and the completed units are very well done with high quality furnishings and materials. In addition, they are addressing issues with deferred maintenance throughout the resort. New roofs are being installed and a new resort wide solar system will come online in the near future. The lobby, restaurant, and cocktail lounge are being rebuilt after a 2012 fire that destroyed all three. The construction should be completed by Q3 2014.
This is a story of a beautiful resort in an absolutely gorgeous location that was nearly destroyed by poor management combined with the worst recession the US has experienced since the Great Depression. They now appear to be back on track to financial stability and I wish them the best.