# And the Poipu Pointe story goes on



## lv_maui (Oct 15, 2009)

http://www.kauaiworld.com/articles/2009/10/11/business/kauai_business/doc4ad1602860e47284383930.txt


This is almost comical.


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## Kauaigrl00 (Oct 17, 2009)

So what will the answer be???  Those fees really did jump very fast!


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## dougp26364 (Oct 17, 2009)

Kauaigrl00 said:


> So what will the answer be???  Those fees really did jump very fast!



From 2001 to 2009 they went from $695 to $1,400. That's a little more than 8.75% per year. Considering that this is a Hawaiian timeshare and, what seems to me Sunterra's habit for underfunding MF's to make things easier on their sales teams, I'm not so sure this is unreasonable. Yes it hurts but, how far out of line is this resort with other Hawaiian properties?


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## Kauai Kid (Oct 17, 2009)

I believe what really got people riled up was a total of a 50% MF increase in the last two years.

Sterling


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## dude-luv (Oct 17, 2009)

*High MF Makes Resales that much harder*

I have exchanged into Poipu Point and have visited many times with the idea of purchasing a unit there resale at some point in time.  However, the MF are now at a point where I wouldn't consider it.  The jump in MF over the last two years is alarming for owners.  Try getting rid of the units with such a high MF.  There comes a point when the albatross of high maintenance fees scares serious buyers away and devalues what was once an outstanding resort. 

I purchased Kaanapali Beach Club (another DRI managed resort) at a very cheap price recently an am concerned about the escalation in maintenance fees there.  

The ability of owners to mount an organized effort to re-capture control of their resort is hindered by false information, misinformation and apparent faith in DRI.  The model for control by an HOA is down the road at Lawaii Beach Club.  Unfortunately, organizing the owners and getting the necessary legal support to challenge DRI to re-take control is simply too difficult a task.


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## Darlene (Oct 17, 2009)

Ouch!  We have stayed there before when it used to be the Sheraton (I think).  I'm glad we own at Kona Coast.  Shell is a much better management company.


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## dougp26364 (Oct 17, 2009)

Kauai Kid said:


> I believe what really got people riled up was a total of a 50% MF increase in the last two years.
> 
> Sterling



Like I said, Sunterra was horribly underfunding their resorts. IMHO it's part of the reason there were a lot of dissatisfied Sunterra owners and why Sunterra is no longer in business.


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## DeniseM (Oct 17, 2009)

> From 2001 to 2009 they went from $695 to $1,400. That's a little more than 8.75% per year.



The fees at the Marriott and Westin Resorts are Avg. about 10% a year too!


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## dougp26364 (Oct 18, 2009)

DeniseM said:


> The fees at the Marriott and Westin Resorts are Avg. about 10% a year too!



That's sort of what I was getting at. I understand the Point's owners being upset because MF's went up drastically the last couple of years but, I'm not sure their anger should be directed at DRI. I think the problem was more or less with Sunterra and the el' cheapo way of trying to run resorts. 

A few years ago I recall reading how great it was to own Sunterra resort because the MF's were so low and you could trade those weeks and get into Marriott's, which had much more expensive MF's, relatively easily. In fact I recall catching some flack for owning Marriott's with their high MF's while Sunterra owners were paying 1/2 what I was but staying in resorts I owned. They had a point......for a while.

Now those historically low MF's have caught up with them. The management company went bankrupt and left at least some of their resorts in need of repair. I believe one of the Sedona resorts pools was constructed so poorly that it couldn't be repaired and needed replacement. Sunterra kept MF's low as a selling point for it's sales staff. Why by Marriott and pay $1,000/year when you can own here and pay $500/year plus, you can trade into those expensive resorts any time you want. I know I've heard that line several times before from lessor resorts sales staff. 

MF's appear to be where they belong considering the S. Cloobeck wants a certain standard for the resorts managed by DRI. That's just the way it's going to be. I'd love to see gasoline back at 50 cents a gallon but, that isn't going to happen either. 

The question for these owners is their level of comfort. Do they want a premier or gold crown resort or, will they be willing to accept a lower rating as time goes by. Are they willing to do without upgrades to keep up with the newer amenities put in by newer resorts? Will they be willing to accept a gradual decline in exchange power as their resort lags behind in creature comforts that become standard at other resorts? Most importantly, are they willing to face the spector of a large SA to refurbish their resort when the time comes?

As anyone knows that reads these forums, I am not always a DRI supporter. I am, however, willing to give a fair opinion and not jump on DRI every chance I get or when it's unwarranted. I believe the MF's were probably to low at this resort but, if you're going to have Marriott or Westing like MF's, you'd also better be tossing in Marriott or Westin like amenities. If I were an owner at this resort those are the things I'd be looking for, asking questions about (what is DRI doing with this money), and demanding. If the majority of owners at the Point don't expect a certain standard to be maintained, then they're correct to persue the option of replacing the management company. The only other options are to go along for the ride (DRI will do what DRI wants to do without a lot of owner input) or sell out and move on.


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## Kauai Kid (Oct 18, 2009)

I've owned since the Point at Poipu was an Embassy resort.

In my less than humble opinion, the resort was in better condition when managed by Sunterra than by DRI.


Sterling


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## dougp26364 (Oct 18, 2009)

Kauai Kid said:


> I've owned since the Point at Poipu was an Embassy resort.
> 
> In my less than humble opinion, the resort was in better condition when managed by Sunterra than by DRI.
> 
> ...



Since I don't own there, I have no arguement. All I can say is that when DRI bought out Sunterra, I took one look at some of the Sunterra MF's and realized there was going to be some pain. The MF's I saw at Sunterra resorts and the quality we experienced at Greensprings probably wasn't going to cut it with DRI. Quality was going to have to go up and DRI wasn't going to foot the bill out of their own pocket. IMHO, it was either going to be SA's with a more gradual increase in MF's (around 10% per year) or a steep increase in MF's. To be honest, if figured it would be a mixture of the two with more SA's where possible. Looks like I was wrong about that.


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## AKE (Oct 18, 2009)

I would think that maintenance fees in general, regardless of the resort, have got out of control.  If we look at it from a different perspective, a maintenance fee of $1500/week/unit translates to $78,000/year.   At a resort with 200 units this is $15,600,000 a year! I know of no luxurious condo which comes even close by comparison.  I can name a number of $500,000 - $1,000,000 + condos which have maintenanace fees in the $600 - $1200 PER MONTH (or $7,2000 - $14,4000/unit/year) and they have all the same facilities as a timeshare with the exception of the weekly cleaning and checkin facilities BUT these 2 items in no way can account for the difference. From my perspective, it would appear that there is either significant profit taking or poor purchasing / maintenance / management.  When we bought our timeshare in 1990 the maintenance was around $325 - now it is around $900/week.  I just looked on the internet and I can rent,  at name brand timeshare resorts for LESS than that for X-mas / New Year's week.  Based on that, why bother buying a timeshare anymore?


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## dougp26364 (Oct 18, 2009)

AKE said:


> I would think that maintenance fees in general, regardless of the resort, have got out of control.  If we look at it from a different perspective, a maintenance fee of $1500/week/unit translates to $78,000/year.   At a resort with 200 units this is $15,600,000 a year! I know of no luxurious condo which comes even close by comparison.  I can name a number of $500,000 - $1,000,000 + condos which have maintenanace fees in the $600 - $1200 PER MONTH (or $7,2000 - $14,4000/unit/year) and they have all the same facilities as a timeshare with the exception of the weekly cleaning and checkin facilities BUT these 2 items in no way can account for the difference. From my perspective, it would appear that there is either significant profit taking or poor purchasing / maintenance / management.  When we bought our timeshare in 1990 the maintenance was around $325 - now it is around $900/week.  I just looked on the internet and I can rent,  at name brand timeshare resorts for LESS than that for X-mas / New Year's week.  Based on that, why bother buying a timeshare anymore?



I think I can agree with you on this. The only thing is the advances in MF costs have pretty much been across the board with top rated resorts. Even our HGVC ownership, which I've considered a bargain looking at the amenities they provide, is approaching $1,000/year. 

I hold two resorts that have what I'd consider low MF's. Both of them have questionable maintenance and one I fear is looking at either a SA or some big jumps in MF's over the next few years. The other is showing signs of wear without enough cash in reserves to refurbish the units. In another 5 or 6 years there's going to be an issue IMHO. 

So the question is why are timeshare MF's so heavy? Is it an overall charges by management companies for their fee's? Is it that owners don't treat their resorts or resorts they've exchanged into as their own, doing more damage thinking it's not coming out of their pockets? Or is the big expense the amenities and services provided?

I feel like it's difficult to compare timeshare's to full ownership condo's since timeshares are often more like resorts where full ownership condo's are more like neighborhoods. I don't know of a lot of full ownership condo's that provide 4 adult pools, two bars (one is a bar and grill), onsite convenience store, conceirge, housekeeping services et....... Most timeshares provide so much more than full ownership condo's and thus are going to have more expenses. Then there's the extra's that the management company must do not the least of which providing reservations services. Full ownership condo's have no such expense.

Of course there's the maintenance issues involved with timeshares. In 11 years of timesharing, either some of these people don't value their homes as much as I do or, they feel they can trash a timeshare complex and it won't come out of their pocket. Looking around my neighborhood I realize some people don't have a sense of pride in ownership. There's several houses in my neighborhood that have needed repainting for 3 or 4 years now with no signs the owners have an interest in doing it. I suspect my neighbor, which just put his house up for sale, is moving primarly because his home is now 12 years old and is showing signs of needing work done. It's easier to sell and buy a newer home than put the money into an existing home in some people's minds. I myself have put a few thousand back into my home in the last couple of years and know that I'm looking at a new privacy fence in the next two years, a new roof in the next 10 years and probably should be replacing my hot water heater this year. I could move and let the next guy worry about it but, in the long run, that's really counter productive. 

Timesharing is just flat out expensive. Maybe management companies need to look at ways to contain expenses better. IMHO, they need to involve owners considerably more than they do now. Likewise owners need to be more involved. If owners see a way to save money, they should speak up until they at least get a responce from management that's not an auto reply message. I've made a few suggestions over the years. Sometimes management is receptive, sometimes they ignore me all together. I hate it when I feel ignored and I think that may be the problem with owners at the Point righ now. DRI and the management team at the Point may not be doing enough to keep owners in the loop and ask owners what THEY want to do and the direction THEY want their resort to go. I've said it before and I'll say it again. With DRI, owners are along for the ride so you'd better like where they're going.


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## Poobah (Oct 19, 2009)

*Another Volley in the DRI Saga*

This was in the Kauai Garden Island News today. The lines are being drawn.

Cheers,

Paul

*Consultant lashes back at attempt to ‘silence criticism’*



By Coco Zickos - The Garden Island
Published: Monday, October 19, 2009 2:09 AM HST
• Editor’s note: This is the third article in a series about an ongoing dispute between timeshare owners and management company Diamond Resorts International at the Point at Po‘ipu.

PO‘IPU — Since the economy turned sour last year, consumers have been more diligent with the ways in which they spend their money and timeshare owners at The Point at Po‘ipu say they are displeased with fees rising more than 50 percent in two years.

“The idea of paying an annual maintenance fee equal to what we currently pay at Marriott’s Kaua‘i Beach Villas in Lihu‘e doesn’t go down very well,” said John Palshaw, who has owned a timeshare for 11 years at The Point at Po‘ipu. “The differences in services available, in pool quality and in beach availability represent a huge disparity ... making it very hard to justify a $1,400 annual fee at The Point.”

Fees doubled from $695 in 2001 to more than $1,400 per week in 2009. Owners have been outspoken about their concerns regarding the elevated prices and feeling powerless when it comes to maintenance and management fees, as the majority of Vacation Owners Association and Association of Apartment Owners board members are employees of Diamond Resorts International.

Elizabeth Brennan, executive vice president and general counsel for the management company, DRI, sent a letter via e-mail on Oct. 6 to Janas Consulting Management Consultant Mike Givens threatening a lawsuit for making “defamatory, false and tortuously interfering” statements in an Oct. 4 article in The Garden Island.

Janas Consulting responded with a cease and desist letter sent via registered mail on Oct. 13 from Richard Pumilia of Pumilia Patel & Adamec LLP.

“I assume that you have found it profitable in the past to attempt to silence criticism of your organization by threats, harassment and intimidation,” the letter states. “With respect to Janas, these tactics may have the opposite effect from the one you seek.”

Janas Consulting “has not been retained with respect to The Point at Po‘ipu development,” even though the letter sent by Brennan claimed that they had, but would accept “an engagement ... should the opportunity arise,” the letter says.

Attempts to contact Brennan to clarify what statements or information was inaccurate in the Oct. 4 article were unanswered. In a phone interview on Oct. 9, she said the article was “completely false” but was “not in the position to provide” more information.

About 250 concerned deeded owners of some 10,000 at the South Shore resort have plunged forward in their efforts to take back control of their properties. Timeshare owner Rich Batchelder said the number would be higher if DRI would release the contact information of other owners.

“Since February we have been attempting to get a list of deeded owners,” he said Thursday, adding that he has been told by DRI employees that it is a “strict policy not to release the list.”

Hawai‘i Revised Statutes Chapter 514A states, “The resident manager or managing agent or board of directors shall keep an accurate and current list of members of the association of apartment owners and their current addresses ... The list shall be maintained at a place designated by the board of directors and a copy shall be available, at cost, to any member of the association as provided in the declaration or bylaws or rules and regulations ...”

“The questions is, ‘Is Diamond Resorts going to abide by Hawaiian statutes?’” Batchelder said.

Chapter 514A also states, “A director shall not cast any proxy vote at any board meeting, nor shall a director vote at any board meeting on any issue in which the director has a conflict of interest.”

In addition, “the number of persons constituting the board ... shall have an elected board of not less than nine members” and that no single apartment should have more than one representative.


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## meatsss (Oct 20, 2009)

It seems as if DRI is not abiding by HRS Chapter 514A in the matter of the size of the board, the availbilty of the owners list, and the conflicts the DRI employed board members may have. Tells you something when the general counsel tells a paper the story is wrong but can't tell them why. Sunlight is the best disinfectant. I'll have to check to see if Calif. has similar laws in re Lake Tahoe Resort.


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## lv_maui (Oct 20, 2009)

It really will not matter.  DRI controls enough votes that they can vote whomever they want on the board.  You can have 21 members, and DRI would still control the board.




meatsss said:


> It seems as if DRI is not abiding by HRS Chapter 514A in the matter of the size of the board, the availbilty of the owners list, and the conflicts the DRI employed board members may have. Tells you something when the general counsel tells a paper the story is wrong but can't tell them why. Sunlight is the best disinfectant. I'll have to check to see if Calif. has similar laws in re Lake Tahoe Resort.


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## lv_maui (Oct 20, 2009)

Poobah said:


> “The idea of paying an annual maintenance fee equal to what we currently pay at Marriott’s Kaua‘i Beach Villas in Lihu‘e doesn’t go down very well,” said John Palshaw, who has owned a timeshare for 11 years at The Point at Po‘ipu. “The differences in services available, in pool quality and in beach availability represent a huge disparity ... making it very hard to justify a $1,400 annual fee at The Point.”



OK, I can concede that the number and size of pools can cause some fee differences, but the availability of a beach?  No, not really.  This statement really makes no factual sense.

One of the reasons that the Pointe's fees may be higher is that the resort was designed as a condo project not a timeshare one.


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