# Maui Resort Property Tax increase significantly?



## keepgoing (Sep 9, 2009)

It would make the Maui resort the most expensive resort in terms of maintenance fee within Starwood. 

Dear Owner: 

Your Board of Directors and the Starwood Management Team would like to update you on two important issues. As many of you may remember, your Board included a short note with the 2009 maintenance fee statements explaining the effect of increased utility expenses and Hawaii taxes on our maintenance fees. 

Despite our efforts and arguments to the contrary, Maui County has determined it will begin to assess the vacation units at the resort separately using residential condominium valuations. As a result of this change, the 2009/2010 real property taxes for our resort will increase by approximately $4,124,162 (from 2008/2009 real property taxes of $2,261,819 to 2009/2010 real property taxes of $6,385,981). Your Board has authorized the expenditure of funds necessary for the Starwood Management Team to appeal both the valuation methodology and millage rate of this proposed assessment increase. Your Board and Management Team are fully engaged in the effort to mitigate the effect of this proposed increase and have submitted tax protests to Maui County. In addition, the Starwood Management Team is working with the American Resort Development Association, Resort Owners Coalition (ARDA-ROC) toward a coordinated Owner response, as Maui County's actions will impac! t other resorts. We plan to communicate with you in the near future on specific actions you can take to ensure Maui County representatives understand the negative consequences their decisions will have on individual Owners, such as yourself. During the course of the tax appeal, the tax assessments we remit to Maui County will remain in a claims litigation account which neither the association nor Maui County may access until the conflict is resolved. Unfortunately, this will require the Board to consider securing a loan, levying a special assessment and/or increasing the 2010 assessments to cover these tax payments. 

To illustrate the impact of the unanticipated tax changes, the below chart details estimated increases in your Vacation Owners Association's 2010 assessments to cover the higher tax amounts. These amounts are broken down by unit type and whether ownership is on an annual or bi-annual basis. The first group of figures represents the funds necessary to cover the unanticipated increase in the real property taxes due in 2009. In addition to covering the 2009 shortfall, the second group of figures represents the funds necessary to cover that portion of the 2010 taxes which exceeds what was budgeted for in 2009. As you can see, the unanticipated increase for 2009 is less than the increase for 2010. This is because the tax year for Maui County commences on July 1, and thus the increase only impacts half of 2009.

Ocean Resort Villas Vacation Owners Association - Real Property Tax 

Estimated Amount to Recover in 2010 for 2009 Real Property Tax Shortfall: 
  Annual Bi-Annual 
2-Bedroom Lockoff  $125.28 $62.64  
2-Bedroom Lockoff Deluxe $172.63 $86.31 
1-Bedroom $105.70 $52.85 

Estimated 2010 Real Property Tax Increase Over 2009 Budget: 
  Annual  Bi-Annual 
2-Bedroom Lockoff $263.57 $131.78 
2-Bedroom Lockoff Deluxe $363.18  $181.59 
1-Bedroom $222.38 $111.19


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## LisaRex (Sep 9, 2009)

Letter to North owners:

 Dear Owner: 

Your Board of Directors and the Starwood Management Team would like to update you on two important issues. As many of you may remember, your Board included a short note with the 2009 maintenance fee statements explaining the effect of increased utility expenses and Hawaii taxes on our maintenance fees. 

Despite our efforts and arguments to the contrary, Maui County has determined it will begin to assess the vacation units at the resort separately using residential condominium valuations. As a result of this change, the 2009/2010 real property taxes for our resort will increase by approximately $5,170,204 (from 2008/2009 real property taxes of $1,218,266 to 2009/2010 real property taxes of $6,388,470). Your Board has authorized the expenditure of funds necessary for the Starwood Management Team to appeal both the valuation methodology and millage rate of this proposed assessment increase. Your Board and Management Team are fully engaged in the effort to mitigate the effect of this proposed increase and have submitted tax protests to Maui County. In addition, the Starwood Management Team is working with the American Resort Development Association, Resort Owners Coalition (ARDA-ROC) toward a coordinated Owner response, as Maui County's actions will impac! t other resorts. We plan to communicate with you in the near future on specific actions you can take to ensure Maui County representatives understand the negative consequences their decisions will have on individual Owners, such as yourself. During the course of the tax appeal, the tax assessments we remit to Maui County will remain in a claims litigation account which neither the association nor Maui County may access until the conflict is resolved. Unfortunately, this will require the Board to consider securing a loan, levying a special assessment and/or increasing the 2010 assessments to cover these tax payments. 

To illustrate the impact of the unanticipated tax changes, the below chart details estimated increases in your Vacation Owners Association's 2010 assessments to cover the higher tax amounts. These amounts are broken down by unit type and whether ownership is on an annual or bi-annual basis. The first group of figures represents the funds necessary to cover the unanticipated increase in the real property taxes due in 2009. In addition to covering the 2009 shortfall, the second group of figures represents the funds necessary to cover that portion of the 2010 taxes which exceeds what was budgeted for in 2009. As you can see, the unanticipated increase for 2009 is less than the increase for 2010. This is because the tax year for Maui County commences on July 1, and thus the increase only impacts half of 2009. 

Ocean Resort Villas North Vacation Owners Association - Real Property Tax 

Estimated Amount to Recover in 2010 for 2009 Real Property Tax Shortfall: 
  Annual Bi-Annual 
2-Bedroom Lockoff  $112.37  $56.19 

Estimated 2010 Real Property Tax Increase Over 2009 Budget: 
  Annual  Bi-Annual 
2-Bedroom Lockoff $307.63  $153.81 

On a more positive note, we are happy to report that we have been successful in implementing several strategies for effecting energy utilization reductions. This, coupled with your efforts to conserve energy usage while vacationing at our resort and a 2009 reduction in energy rates, has resulted in a significant cost savings to the Association of approximately $1,347,055. 

We thank you for the opportunity to serve and will update you as these events continue to unfold. Should you have any questions, our Association Management team is available to assist you at 800-729-8246.

Sincerely, 

Ocean Resort Master Association Board of Directors

Johnathan Ho, President Gerald Bodzy, Vice President    

Craig McFarland, Treasurer Bruce McNish, Secretary Teri Castleberry, Director


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## rickandcindy23 (Sep 9, 2009)

How much are your property taxes, with this increase, Lisa?


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## LisaRex (Sep 9, 2009)

I'm interpreting this as meaning that I'll be assessed another $450 during the next round of MFs to cover 2009/2010, and the $300 increase will be permanent unless they can convince Maui county to have mercy on the TS owners who bolster Maui's economy. 

$2300 MFs per year would mean they are charging $328 per night or $119,720 per year per apartment. Taking out the taxes, the MFs still seem staggeringly high. So much for the notion of "pre-paying for fabulous vacations."  We've pre-paid (dearly in some cases) AND we're paying darn close to what current rental prices are for equivalent condos in the area.  We Owners simply cannot continue to absorb these kind of MF increases and Starwood is going to have to step up to the plate and work out a more equitable management contract.  They/we won't be able to give away these units because of the financial burden of owning.  

I realize that this is a Maui county decision and not a Starwood decision. However, $2k was already too high to begin with for what they do, so this is merely salt on the wound.  Starwood going to have to cut costs and/or kick back money to the HOA for rentals if they want the resort to remain solvent.  This, of course, doesn't even begin to address the issue of delinquent MFs that are plaguing other resorts.  

My only consolation is that I own OF and will have a leg up on trying to recoup the MFs should I rent my unit out.  I feel for the IV owners who may not be able to recoup just their annual MFs with rentals.   I can see the resale prices dropping as I type.

This news certainly couldn't have come at a worse time.  Mauians seem to loathe TS owners even as they enjoy the benefits of the tourism dollars we consistently bring to their area.


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## rickandcindy23 (Sep 9, 2009)

It's the high sales price that is killing you on taxes, if it works anything like regular real estate.  

If Maui officials are multiplying the sales price of a unit X 52 weeks, and then determine the value of a unit to be $2.5 Million or something like that, then the high tax would be logical to them.


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## tborr123 (Sep 9, 2009)

If it is anything like real estate, the values and resulting taxes should be going down, not up.


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## KECH (Sep 9, 2009)

*Snail mail letter or email?*

This is definitely disturbing.  

WKORV owner here and TUG newbie.  Been lurking for a few months now and have learned a lot - thanks to all, esp. the moderators.  Can't help but feel a bit disenchanted tho with all the negative news re:  Starwood mgmt , ever-rising MFs, and decreasing TS resale values but I find solace that knowledge is power so will make the best of my ownership thanks to TUG.   And the fact that I'm happy with my ownership at WKORV and am planning to take my family to Maui regularly for many many years.

Was this letter received in the mail or was this an email?  I did not receive either yet so just curious what to expect.  If paper letter - props to the original poster for typing all that in!


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## LisaRex (Sep 9, 2009)

KECH said:


> Was this letter received in the mail or was this an email?  I did not receive either yet so just curious what to expect.  If paper letter - props to the original poster for typing all that in!



Welcome aboard! Glad to have you here.  

FYI, the communication came via email.


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## WalnutBaron (Sep 9, 2009)

If Maui County gets away with this, it's only a matter of time before the other islands attempt the same thing.  The federal government is practically insolvent and the states are dealing with massive budget deficits, so the easy answer for the bureaucrats and politicians is to squeeze more water out of the rock by raising taxes--especially on non-residents.

It's fair to say that all of us who are owners of Hawaii TS's have zero political leverage in Hawaii.  

But we DO have--collectively--leverage with Starwood.  I agree with LisaRex: if MF's continue to climb at rates similar to the rates of increase of college tuition and healthcare costs (both of which seem to defy gravity) then we need to organize a large, vocal, and organized group of Starwood owners to air our grievances and pressure Starwood to become a much more cost-efficient organization.  Starwood views us as their cash cow while their hotel division suffers.  That view most decidedly must be changed.


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## nycmaui (Sep 9, 2009)

Not good news.  Fighting MF increases on so many fronts.


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## zeke013 (Sep 9, 2009)

I am disappointed - to say the least - to have gotten this e-mail.  Raising property taxes so significiantly (almost 200%) in a recession is bad policy.  Not to mention the impact this will have on re-sale for current owners.

And they aren't raising the taxes on their constitutents - so not much we can do to protest or enact lagislative changes.


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## SDKath (Sep 9, 2009)

Any WPORV owners get a similar letter?


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## Fredm (Sep 9, 2009)

Something is very wrong with how these taxes fall out.

In every situation I can think of, timeshares have always been a tax boon to the County they are located in. 
Taxes are computed at the assessed value, (or average thereof) determined at time of sale, or approval of the final public report.

Tax rate notwithstanding, timeshares pay taxes that in aggregate are much higher than the taxes paid on a wholly owned condo of the same type and location. Reason being that the price of 52 intervals is higher than the price of a wholly owned condo in the same real estate market. If this were not so, developers would be crazy to go through the hoops to sell a condo in 52 slices. They would just sell the condo.

 52 intervals sold at say an average of 45k each results in a  valuation of $2,340,000 per 1400 sf condo. Probably closer to 55k each, or $2,860,000.
Is Maui County saying that this understates the value of a KOR condo? 
OR, are they saying that the assessed value was grossly understated when filed by Starwood (thereby minimizing the obligation when Starwood was paying a large portion of the tax themselves)?

Hard to tell based on the information thus far provided.


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## badpelican (Sep 9, 2009)

*Property Tax Rates in Maui County*

This link shows the tax rates for Maui county property types.  I'm not suprised timeshares are taxed so much more than some property types, but I do find it suprising the difference between hotel/resorts and timeshare properties.

http://www.co.maui.hi.us/index.aspx?NID=755


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## LisaRex (Sep 9, 2009)

I don't understand the animosity towards TS owners.  I have x amount of disposable dollars to commit toward vacation.  What I don't spend on lodging, I spend doing activities, shopping, and going to restaurants.  A study that the Maui zoning board conducted showed very little difference in spending patterns between a hotel tourist and a TS tourist.  And when hotel occupancy is down, we TS owners come back to spur on the local economy because we have to pay to maintain the place whether we show up or not.


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## Fredm (Sep 9, 2009)

badpelican said:


> This link shows the tax rates for Maui county property types.  I'm not suprised timeshares are taxed so much more than some property types, but I do find it suprising the difference between hotel/resorts and timeshare properties.
> 
> http://www.co.maui.hi.us/index.aspx?NID=755



Thanks for the link. Very helpful.

OK, Maui County just juiced the tax rate on timeshares. 
What they did not do was adjust the second component of tax calculation, i.e.,  "Fair Market Value". 

*Fair Market Value
Per MCC 3.48.290 the fair
market value of your property is
determined. Fair market value is
the most probable price (in terms
of money) a property should bring in a competitive
and open market under all conditions requisite to a
fair sale, with the buyer and seller each acting
prudently and knowledgeably. Locating, identifying,
and appraising your property at fair market value is
the responsibility of the Real Property Tax Division of
the Department of Finance.
Over the years, great strides have been made to
improve the methods used to assess property in a
uniform and fair manner. Visit our website at
www.mauipropertytax.com to view our records or
call our office regarding your assessment.
*

It appears that pains were taken to stick it to timeshare owners big time. Not satisfied with disproportionate assessed value, they actually increased the tax rate on the disproportionate value.

Given  fair market value being defined as it is,  I will bet that the valuation used does not reflect "the most probable price (in terms
of money) a property should bring in a competitive
and open market under all conditions requisite to a
fair sale, with the buyer and seller each acting
prudently and knowledgeably."

I will also assume (perhaps incorrectly) that neither Starwood nor ARDA ROC will challenge the taxes based on that measure. They will challenge it based on the unfairness of the tax rate alone.

This bears watching, and perhaps filing a separate owner appeal.
This is government exercising its taxing authority at its very worst.


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## Troopers (Sep 9, 2009)

Got the same email.  Ugh...


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## Westin5Star (Sep 9, 2009)

SDKath said:


> Any WPORV owners get a similar letter?



I got the WKORV but not one for WPORV.  This is just a Maui county issue so the island of Kauai should not be affected.  I would agree with a previous post that suggested other counties / states might follow suite.


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## DeniseM (Sep 9, 2009)

Troopers said:


> Got the same email.  Ugh...



Troopers:  If you aren't happy with your ownership, just remember that, "You have options!"   

Do you STILL wonder why Starwood owners aren't happy these days???  It's just one piece of bad news after the other!   :annoyed:


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## vacationtime1 (Sep 9, 2009)

Fredm said:


> OK, Maui County just juiced the tax rate on timeshares.  What they did not do was adjust the second component of tax calculation, i.e.,  "Fair Market Value".
> 
> *Fair Market Value
> Per MCC 3.48.290 the fair
> ...



FredM's point is especially significant because  Starwood has a conflict of interest.

It is in the interest of the owners to have a low assessed value because that will result in lower property taxes.  *Starwood, in its capacity as the controlling interest on the HOA Board, should represent the owners' collective interest in seeking a lower assessed value before the county or the courts.*

However, Starwood has a contrary interest -- maintaining the perception of the value of its product, both for any remaining developer sales and for any resales it may do.  It is not in Starwood's interest to make a big point of the fact that the units have lost over half of their value since Starwood sold them; Starwood is better served by the (mis)perception that timeshares increase in value.  Further, property taxes are a cost for the HOA and to the extent the HOA budget increases as a result of the increase in property taxes, Starwood may profit if its fee is a percentage of the budget.

How are we to insure Starwood will represent our interests in fighting this tax assessment rather than its own interest in acquiescing to it?


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## zeke013 (Sep 9, 2009)

vacationtime1 said:


> FredM's point is especially significant because  Starwood has a conflict of interest.
> 
> It is in the interest of the owners to have a low assessed value because that will result in lower property taxes.  *Starwood, in its capacity as the controlling interest on the HOA Board, should represent the owners' collective interest in seeking a lower assessed value before the county or the courts.*
> 
> ...




To some extent, that's true.  But the more Maui sticks it to TS owners, the lower the resale amounts get and the less new TS interests Starwood can sell.  Additionally, the higher the taxes, the higher the annual MFs are - and that was a big factor in our sales' presentation.  

They should be interested in having the units assessed at as low a rate as possible.


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## DeniseM (Sep 9, 2009)

zeke013 said:


> To some extent, that's true.  But the more Maui sticks it to TS owners, the lower the resale amounts get and the less new TS interests Starwood can sell.  Additionally, the higher the taxes, the higher the annual MFs are - and that was a big factor in our sales' presentation.
> 
> They should be interested in having the units assessed at as low a rate as possible.



I'm afraid Starwood is a lot more interested in impressing their investors, and the stock market, than they are in TS owners.


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## Troopers (Sep 10, 2009)

DeniseM said:


> Troopers:  If you aren't happy with your ownership, just remember that, "You have options!"
> 
> Do you STILL wonder why Starwood owners aren't happy these days???  It's just one piece of bad news after the other!   :annoyed:



Denise, yup you're right, I do have options.

Just so you know...I do deeply understand why some owners aren't happy these days.  Do you think I enjoy paying increasing MF?  Of course, you don't, right?  Every dollar increase you pay, I pay.  I just don't assume that Starwood is the evil empire.


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## Captron (Sep 10, 2009)

This is another one of those "easy" tax hikes for local politicians to make. Like huge taxes on hotels and rental cars it effects NON-RESIDENTS and thus does not impact their reelection chances. They can also claim that they FOUGHT to keep LOCAL taxes down so they often see it as a WIN WIN - more money in the budget and no increase to the people who elect me!

Unfortunately, I don't see this having a negative impact on taxes revenue in the long run - although I agree with Lisa's comments (re: fixed amount to spend) I don't think this will drop occupancy rates etc. so most people will just end up absorbing it into their budget for travel to "paradise". Some might eat cheaper while there, but most won't. I hope this doesn't stick but I have a bad feeling that it will.


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## paluamalia (Sep 10, 2009)

*Tax Increase*

I'm reading these posts and thinking it's just like home....I live in a seasonal resort area (Cape Cod) and our newspaper editorials are filled with comments like these by second home and seasonal condo owners.  Yes, you do add to the economy, but...it is also expensive to have guests every week!! The summer visitors (here on the cape) use lots of services while they are here and we have a lot to do when you are not here, the same as Maui County.  One of the largest expenses is road maintenance, there are lots of cars on our little roads that were never designed for the volume traveling over them.  I won't detail all of the expenses, they are numerous.  Another complaint is that our second home owners don't get to vote at town meeting because they are not residents, but no one gets 2 votes, one at home and one at vacation!!  And the seasonal residents always think they pay more for less, after all they don't send their kids to OUR schools.

I don't like to pay more, but lets get real...these are tough times for everyone, if you aren't feeling it, then you are lucky.....if it costs a bit more for paradise, so be it.  I don't live or work in the tourist economy here, but I am responsible to help make a Cape Cod vacation enjoyable for our visitors and I know the Hawaiian residents feel the same way.  I sit in traffic for 12 weeks out of the year, I drive carefully so that the visitor in front of me or trying to enter the road,  who is confused about what direction he's driving in doesn't have a head on collision with the bike riders or the walkers, or the kids going to the beach. People who live in vacation and resort areas do hundreds of kind and thoughtful gestures for the visitors that generally are not appreciated or noticed and that's the way it should be, you are here for vacation.  I know my taxes will go up to fix the roads, maintain the bridges, keep the ponds clean, educate the children, care for the elderly and make this a wonderful place to visit or live.  I'm willing to do it for my second home as well, and so far I am able to.   

Maui is the best!!  Aloha


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## Fredm (Sep 10, 2009)

paluamalia said:


> I'm reading these posts and thinking it's just like home....I live in a seasonal resort area (Cape Cod) and our newspaper editorials are filled with comments like these by second home and seasonal condo owners.  Yes, you do add to the economy, but...it is also expensive to have guests every week!! The summer visitors (here on the cape) use lots of services while they are here and we have a lot to do when you are not here, the same as Maui County.  One of the largest expenses is road maintenance, there are lots of cars on our little roads that were never designed for the volume traveling over them.  I won't detail all of the expenses, they are numerous.  Another complaint is that our second home owners don't get to vote at town meeting because they are not residents, but no one gets 2 votes, one at home and one at vacation!!  And the seasonal residents always think they pay more for less, after all they don't send their kids to OUR schools.
> 
> I don't like to pay more, but lets get real...these are tough times for everyone, if you aren't feeling it, then you are lucky.....if it costs a bit more for paradise, so be it.  I don't live or work in the tourist economy here, but I am responsible to help make a Cape Cod vacation enjoyable for our visitors and I know the Hawaiian residents feel the same way.  I sit in traffic for 12 weeks out of the year, I drive carefully so that the visitor in front of me or trying to enter the road,  who is confused about what direction he's driving in doesn't have a head on collision with the bike riders or the walkers, or the kids going to the beach. People who live in vacation and resort areas do hundreds of kind and thoughtful gestures for the visitors that generally are not appreciated or noticed and that's the way it should be, you are here for vacation.  I know my taxes will go up to fix the roads, maintain the bridges, keep the ponds clean, educate the children, care for the elderly and make this a wonderful place to visit or live.  I'm willing to do it for my second home as well, and so far I am able to.
> 
> Maui is the best!!  Aloha



This is not about who places more wear and tear on the infrastructure. By that measure it could be argued that vacation transients impact it the least.
Indeed, Maui County does not use that measure. It establishes  the tax rate based on its definition of  "highest and best use".

Unlike Cape Cod, Hawaii does not have a "seasonal" transient population. Although one does wonder what the shop keepers would do if the season burden of tourists were to disappear.
The literal economic underpinning of Maui County is tourism. 
Also, unlike other tourists, timeshare owners not only pay property taxes, they already pay disproportionately high taxes when compared to other any other tax payers. 

Maui is killing the goose that lays the golden eggs.
They do it because it is the most elastic source of tax revenue. Not because it fairly places the tax burden proportionately on those that consume services.

What this myopic action does do is weaken demand for timeshares in the real marketplace. In turn, it lowers resale values. Which, in turn will lower the "fair market value" of the underlying real estate being taxed. Of course, THAT shoe has yet to drop.


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## Maui_ed (Sep 10, 2009)

SDKath said:


> Any WPORV owners get a similar letter?


 
I own at both WKORV-N and WPORV.  So far, I have only received the letter for WKORV-N, not for WPORV.


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## keepgoing (Sep 10, 2009)

*It's just because someone need to continue to feed the ever hungry government.*

I agreed with Fredm that whether tourism placed the most tear and wear into the infrastructure is debatable.  Every town needs money to survive, whether it is industry, businesses or tourism. If none of those existed, property taxes of resident will be sky high and intrastructure would be worned down also by daily commute of people going out of town to work and back.  Tourism is by far the best money generating machine.  Would you rather to have factories w/ 18 wheelers, industrial pollutions etc...  Nowaday with this economy, every town wants to get people to visit.

I lean towards Starwood would fight to keep the tax down by all means.  1) without the higher tax, Starwood have more room to increase the MF so they can pocket more. 2) Higher tax hurting resales because no one willing to pay $3K MF every year, same principle would apply to retail sale too. 

This is just another example of government's greet and creativity on making more money.  Just like other pointed out, TS is the best goose to kill to get the golden egg because this goose can't affect their electibility by the next election.  They can get the credit of solving the town deficit without raising tax on local, isn't it great? Wait until they reach the threshold of this goose.  True, it is a paradise, but there are always others alternatives.  With the airfare added in, Maui may no longer offer the best package.


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## DeniseM (Sep 10, 2009)

Maui_ed said:


> I own at both WKORV-N and WPORV.  So far, I have only received the letter for WKORV-N, not for WPORV.



WPORV is not in Maui County.


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## LisaRex (Sep 10, 2009)

Okay, I'm confused.

"As a result of this change, the 2009/2010 real property taxes for our resort will increase by approximately $5,170,204 (from 2008/2009 real property taxes of $1,218,266 to 2009/2010 real property taxes of $6,388,470). 

http://www.mauirealestate.com/blog/2008/05/16/maui-property-tax-rates-fy-2009/

Given that timeshares are assessed at $14 per $1,000 of assessed value, and the property tax is 2010 is $6,388,470....then Maui is assessing WKORV-N at 45 BILLION dollars?  Could that be right?

45,631,928,000 divided by 1,000 = 45,631,928.
45,631,928 x 14% = $6,388,470.

EDITED TO ADD:  I just redid the math.  I have now come to the figure of $456,429,285.  I'm wondering if they are using the developer sales price to come up with this figure.  If so, they need to include resales in their figures to make the dollar amount truly representative of what the condos are worth on the open market!

Holy mother of gawd.  We're sitting on a goldmine!


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## LisaRex (Sep 10, 2009)

Fredm said:


> OK, Maui County just juiced the tax rate on timeshares. What they did not do was adjust the second component of tax calculation, i.e.,  "Fair Market Value".



According to this article, the TS rate of $14 per $1,000 of assessed value  was set back in '08.

http://www.mauirealestate.com/blog/2008/05/16/maui-property-tax-rates-fy-2009/


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## Fredm (Sep 10, 2009)

LisaRex said:


> According to this article, the TS rate of $14 per $1,000 of assessed value  was set back in '08.
> 
> http://www.mauirealestate.com/blog/2008/05/16/maui-property-tax-rates-fy-2009/



Yep. It was decided in 08. for the 2009 tax year, which begins July1, 2009. 

So, the reality just hit.


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## thomasro3 (Sep 10, 2009)

KECH said:


> This is definitely disturbing.
> 
> Was this letter received in the mail or was this an email?  I did not receive either yet so just curious what to expect.  If paper letter - props to the original poster for typing all that in!



I got this by email. x4... Man this is going to hurt the budget in the years to come. Seriously at these prices and without the Starwood Headache... with hotel prices/deals right now, I could stay in a hotel room for a comparable price. Hopefully all the markets straighten out.  Housing, Stocks and pertaining to this thread HOA Timeshare Maintenance fees.


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## KECH (Sep 11, 2009)

*re:  fair market value*

after I read the initial posting, the thought of fair market value did cross my mind and sure enough, more than one of you good people have mentioned it in this thread since.  So, what about it?  Seems to me that would be a very strong case for lowering the property taxes based on fair market value via ebay resales, etc. rather than developer purchase price.  It would be ironic for Starwood to raise that point, being that they would be admitting a very steep depreciation of their TS properties.  I'm wondering how strongly Starwood objected to this change and esp. whether or not they made this point (I doubt it).  Another argument could be made that part of the developer purchase price builds in the ownership 'perks' and does not represent the value of the property itself ie. SPG membership, ability to exchange via StarOptions, ability to convert to StarPoints.  

So what do you think?  And if this has merit, what are the next steps and by who?


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## DavidnRobin (Sep 11, 2009)

USVI is doing the same thing - Kauai will follow suit.  We will be spending less money while out in these places - and eating in more.


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## Darwin (Sep 13, 2009)

As a local township tax assessor (mainly land), your best avenue is to argue the Fair Market Value of the condo. Ask what comparision sales the tax department has used to arrive at this valuation (date of sale, unit size, week, etc). If the comparison sales are high or just from the developer to a new owner, point the tax department to sales that have closed on units with lower prices (ebay, etc.). You may have to challenge the assessment in court. I would think each owner could challenge their assessment to the Maui Real Property Tax Department. Not sure.

Darwin


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## KECH (Sep 13, 2009)

Darwin said:


> As a local township tax assessor (mainly land), your best avenue is to argue the Fair Market Value of the condo. Ask what comparision sales the tax department has used to arrive at this valuation (date of sale, unit size, week, etc). If the comparison sales are high or just from the developer to a new owner, point the tax department to sales that have closed on units with lower prices (ebay, etc.). You may have to challenge the assessment in court. I would think each owner could challenge their assessment to the Maui Real Property Tax Department. Not sure.
> 
> Darwin



thanks for your thoughts, which is consistent with my earlier posting re:  fair market value vs. tax based on developer prices.  Not hearing too much from others here... is everyone feeling resigned to the fact that we'll have to pay more property taxes or just waiting it out to get more details and/or doing more research?  I'm just feeling that we may be really getting bilked here but don't have the hard numbers to know for sure what they are basing the new taxes on (and frankly have not had too much time lately to dig on this).  I've read some philosophical thoughts on re-investment of this money into roads, etc. and I don't disagree or am concerned with the USE of funds, but this is a more basic question on the valuation of property.. 

Anyone else have other thoughts on this?


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## Darwin (Sep 14, 2009)

*A few answers on web site*

Web site = http://www.co.maui.hi.us/FAQ.aspx?TID=27 FAQs

6. Can I view my property’s information on the web? 
Yes, you can view your property information at the Real Property website. Real Property Tax Website
13. How does the County determine my assessment? Using cost and market approaches to value, properties are assessed at 100% of fee simple market value using comparable fee simple sales during a specific period preceding the assessment year. The assessed value will reflect what your property is worth based on the sales at that specific time period. 
14. Why a big increase in value from the previous year? The County determines value by using actual sales of comparable properties from specified time periods. If there is a big jump in the real estate market during that period, you may see a corresponding jump in the assessed value
19. You say the properties are assessed at market value. Why doesn’t the assessed value reflect today’s market? Why are current sales not used? The current assessment reflects the real estate market for a specified time period. As an example, for the 2008 assessment year, the sale period used is from July 1, 2006 to June 30, 2007. Any sales occurring after this time frame will be reflected in the following year’s assessment. 

There is a lot of info. on their web site. I will check more in a few days. 

Darwin


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## LisaRex (Sep 14, 2009)

Trust me, I'm concerned.  Certainly we should fight Maui county on this as it is unfair to tax us based on an unrealistically high figure.  I know I bought my TS at 40% less than what Starwood was asking.  To appraise the property based on developer rates is unfair because it doesn't represent reality, namely resales. 

I am waiting to see if Marriott Maui owners get a similar letter.  Because if Marriott can manage to absorb the increase in its normal MFs, which are slightly less than Starwoods, then I think we owners are going to have to make some hard decisions about what course of action to take.  $300+ a night in MFs was too high already.  $300 a night + a special assessment to cover property taxes that the HOA knew were going to skyrocket this year is a double slap in the face.  

Many of us were sold on the notion that buying a TS meant that we paid a large amount of money upfront and that the remaining years we'd simply have to pay a nominal MF.  "Pre-pay for fabulous vacations!"  Starwood is trying to make money on BOTH ends. And it's unfair.  A HOA should act part and parcel like a non-profit organization -- the fees should cover the necessary expenditures along with a modest reserve for emergencies.  MFs should not be collected in order to pad exorbitant salaries and usurious management agreements with the developer.  

In the case of taxes, Starwood is trying to talk out of both sides of its mouth.  It was asking $90k for OF 2 bdrms, but then is acting surprised when Maui county taxed them on 90k x 52.  

Once again, the fact that the HOA is comprised of Starwood-selected individuals and not homeowners who are looking out for our interests, is the major problem.  And once that is solved, the rest will follow.


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## Troopers (Sep 14, 2009)

LisaRex,

A.  Marriott's Maui MF are slightly less that Starwood's Maui MF (I expect this to be the case as I think Westin's are nicer than Marriott's)

B.  Marriott's HOA BOD are not developer controlled (not sure about this but I believe this to be case based on the other resorts)

Since A & B are true, I don't think there's much to gain with respect to MF savings if our HOA was independently controlled.


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## LisaRex (Sep 14, 2009)

Troopers said:


> LisaRex,
> 
> A.  Marriott's Maui MF are slightly less that Starwood's Maui MF (I expect this to be the case as I think Westin's are nicer than Marriott's)
> 
> ...



It remains to be seen whether Marriott Maui's MFs will increase based on the new property tax schedule.  It they manage to absorb the increase within their MFs, then that does say something.


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## Troopers (Sep 14, 2009)

LisaRex said:


> It remains to be seen whether Marriott Maui's MFs will increase based on the new property tax schedule.  It they manage to absorb the increase within their MFs, then that does say something.



Agreed.

Ignore the new tax increases and look at the 2009 MFs...Starwood MF are NOT out of line but I keep reading about it here starting from this thread.  I believe the issue is overstated.


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## LisaRex (Sep 14, 2009)

Troopers said:


> Ignore the new tax increases and look at the 2009 MFs...Starwood MF are NOT out of line but I keep reading about it here starting from this thread.  I believe the issue is overstated.



It's hard to know when the only thing you're given is a topline summary.  It's hard to know when you're not even given a name to contact.  When you veil yourself in secrecy, it's hard for me to not believe that there's a reason for the secrecy. 

Operate openly; communicate freely; manage honestly -- it's not that hard. 

BTW, part of the reason I am so skeptical of the SVO representation on the boards is due to the sky high refurbishment cost that folks at Sheraton Vistana were asked to pay for.  This is in addition to their usual MFs.  See below for a breakdown on the costs to refurbish a 1200 square foot villa.  That is 60 x 20 feet or about 1/2 the size of the first floor of my home:  

What is the breakdown of the cost per villa?
The refurbishment cost for each villa will be approximately $67,170.

Kitchen $289*
Cabinets/countertops - $13,575 
Master bedroom/bathroom* – $8,004
Guest bedroom/bathroom* – $4,155 
Dining room – $4,134
Living room – $12,040 
Patio/balcony – $784
Tile flooring – $5,245
Paint – $4,018 
Demolition/renovation - $7,859
Stairwell improvements – $2,500 
Other/contingency – $9,023

* This estimate is for furniture, fixtures and equipment only. Reserves will be used to offset the refurbishment cost by $4,456 per villa.

***

Now, I ask you, who pays $4,000 to paint a 60 x 20 room?  Or $8,000 to demolish the same?  And how can they get away with putting 1/7 of the budget in an "other" category?  I ask this in total seriousness. What kind of furniture are they putting in the dining room that costs $4,000, or the living room for $12,000 (because, of course, the paint, flooring, and demo are itemized separately!) For $12k, I'd better see "Henredon" stamped on it!  And, for the love of all that is holy, has ANYONE heard of getting a contractor's discount? 

My point, Trooper, is that someone made a huge amount of money off the Courts remodel.  The Starwood controlled HOA allowed it to happen, which makes me believe that there was some sort of kickback.  Even if there wasn't they were clearly not acting as responsible financial stewards.  And that is not how an HOA is supposed to act.   

When you accept stewardship of someone's money, you should spend their money as if it were your own.  My HOA should spend MY money as if it were theirs.  I don't trust them, and frankly, I have good reason not to trust them.


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## Troopers (Sep 14, 2009)

LisaRex said:


> It's hard to know when the only thing you're given is a topline summary.  It's hard to know when you're not even given a name to contact.  When you veil yourself in secrecy, it's hard for me to not believe that there's a reason for the secrecy.
> 
> Operate openly; communicate freely; manage honestly -- it's not that hard



I completely agree.




> BTW, part of the reason I am so skeptical of the SVO representation on the boards is due to the sky high refurbishment cost that folks at Sheraton Vistana were asked to pay for.  This is in addition to their usual MFs.  See below for a breakdown on the costs to refurbish a 1200 square foot villa.  That is 60 x 20 feet or about 1/2 the size of the first floor of my home:
> 
> What is the breakdown of the cost per villa?
> The refurbishment cost for each villa will be approximately $67,170.
> ...




I can understand your skepticism.  But, $56 per square feet ($67k for 1200 sf) doesn’t seem high at all.  I’m never stayed there nor do I know Orlando costs so maybe $56 per foot is high…I’m not sure.  Maybe the refurb cost per villa is higher than you might expect due to construction constraints, such as hours of work, or insurance requirements.  As for the specific line items, perhaps SVO awarded the entire refurb job to the single low contractor where the overall costs were the lowest, rather than award multiple contracts to not have to manage the job.  Btw and not that it matters, is the flooring in the dining room and living room included under Tile Flooring? 




> My point, Trooper, is that someone made a huge amount of money off the Courts remodel.  The Starwood controlled HOA allowed it to happen, which makes me believe that there was some sort of kickback.  Even if there wasn't they were clearly not acting as responsible financial stewards.  And that is not how an HOA is supposed to act.



I’m suspicious that someone made a boatload of money, but I’m not certain.  The SVV refurb seems reasonable but I’ll have to think about it more.


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## gregb (Sep 14, 2009)

I believe the property tax is on tangible property.  But isn't part of the purchase price for the services *wood provides when we stay there?  If that is the case, than that part of the sales price should not be subject to property tax.  Maybe *wood could approach the problem from that perspective?


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## clsmit (Sep 15, 2009)

*WKORV HOA is Has More Owners that SVO Employees*

When I was at WKORV this June I went to a Board meeting. (go to note #8)http://www.tugbbs.com/forums/showthread.php?t=99809 . The board members at WKORV are owners who seem to have a clue and ask good questions (I think Starwood has 1 board member out of I think 5). But since, like all Boards, they have to go by what the management says, I don't know how much profit the companies who bid for the refurbishments made, but the bids were not all for the same amounts. The bid companies had to bid to certain specs for the furniture, drapes, etc., though.

They talked briefly about the status of the tax issue at this meeting even though it wasn't the primary topic. My take on it is that the timeshare lobbyists were doing what they could with the Maui government. Given the sometimes acrimonius relationship between the mainlanders and the longtimers/natives (and I don't know the makeup of the Maui government on this issue), however, it could be a lost cause. I don't recall if going to court over the issue was discussed, but it could potentially be an option. Or the timeshare owners could just be stuck with this tax if it looks like the litigation won't be worth it.

It would be nice if the HOA members were on this forum, even if the SVO people weren't. Something to think about if you happen to run into one at your local Starwood property or golf outing.


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## Lawlar (Sep 15, 2009)

*Salt*

I hate to pour salt on your wounds, but I suspect Starwood will also add to your MF its costs for attorneys, accountants and lobbyists to fight the tax increase.  Will your HOA require Starwood to pay those fees? I doubt it.

I take no pleasure in reading this thread.  I'm sure Marriott will be passing on this same tax and related fees to those of us who bought at MOC.  

I wonder if Marriott would give me a discount on the MF if I painted my unit the next time I stay there.  I love to paint and it wouldn't take me long to paint the unit.  I'll even buy the paint.


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## Fredm (Sep 15, 2009)

gregb said:


> I believe the property tax is on tangible property.  But isn't part of the purchase price for the services *wood provides when we stay there?  If that is the case, than that part of the sales price should not be subject to property tax.  Maybe *wood could approach the problem from that perspective?



This is true in California. Assessed value is computed at 65% of the price. The other 35% is a standard for furnishings and services which are non-taxable.


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## gregb (Sep 16, 2009)

I wonder how Maui County justifies the difference of $8.50 per $1000 for hotels, and $14 per $1000 for Time Shares, but only $4.55 per $1000 for apartments and $2.00 per $1000 for homeowners.  I have heard justifications that transient visitors use more services than locals and so should pay more.  But thinking about it, I cannot identify any county services that a TS visitor would use more than an apartment dweller.  In fact, TS users don't use some services that apartment dwellers do, such as schools and social services.  So how does the county justify the more than three times higher rate for TS over apartments?  

And compare TS to hotel rates.  Both service transient visitors.  If one could find a justification that transient visitors cost the county more than locals residents, I would expect Hotels to have a higher tax rate than TS.  I expect that hotels have a shorter average length of stay than a TS, so a hotel room would contribute more cost to the county than a TS unit.  Does any of this make sense??

Greg


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## LisaRex (Sep 16, 2009)

Here's what I've gathered as to why TSs have a bad reputation.  They believe that the presence of TSs escalate the prices of local housing because of the inflated developer prices.  They believe that because we have a fully equipped house (including kitchen & laundry) that we won't contribute to the local economy in the same way that hotel tourists do.   And, of course, the relationship with tourism is always a love/hate relationship, in large part because developers don't know when to stop.


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## spuppy (Sep 16, 2009)

I think the expression is biting the hand that feeds you.



gregb said:


> I wonder how Maui County justifies the difference of $8.50 per $1000 for hotels, and $14 per $1000 for Time Shares, but only $4.55 per $1000 for apartments and $2.00 per $1000 for homeowners.  I have heard justifications that transient visitors use more services than locals and so should pay more.  But thinking about it, I cannot identify any county services that a TS visitor would use more than an apartment dweller.  In fact, TS users don't use some services that apartment dwellers do, such as schools and social services.  So how does the county justify the more than three times higher rate for TS over apartments?
> 
> And compare TS to hotel rates.  Both service transient visitors.  If one could find a justification that transient visitors cost the county more than locals residents, I would expect Hotels to have a higher tax rate than TS.  I expect that hotels have a shorter average length of stay than a TS, so a hotel room would contribute more cost to the county than a TS unit.  Does any of this make sense??
> 
> Greg


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## rickandcindy23 (Sep 16, 2009)

A *Million Dollar *house would only cost $2,000 in taxes.  That's way too low for real estate.  So Oprah's huge mansion and acreage, I guess she is just charged $2.00 per 1,000, too.  

We all ought to just move to Maui!  My property taxes are $2,400 on my measly house.


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## rickandcindy23 (Sep 16, 2009)

Hotels charge sales tax, so they add to the economy that way.


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## thinze3 (Sep 16, 2009)

rickandcindy23 said:


> It's the high sales price that is killing you on taxes, if it works anything like regular real estate.
> 
> If Maui officials are multiplying the sales price of a unit X 52 weeks, and then determine the value of a unit to be $2.5 Million or something like that, then the high tax would be logical to them.



The oceanfront units were selling for over $100K when we were there in July. That's over $5M each.


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## LisaRex (Sep 16, 2009)

thinze3 said:


> The oceanfront units were selling for over $100K when we were there in July. That's over $5M each.



I paid $50k for my OF, so if the county uses only developer purchases to assess it, they are way overstating their worth.

And by that reasoning, the IV folks should be paying quite a bit less in property taxes than OV or OF owners.


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## Troopers (Sep 16, 2009)

FWIW, the timeshare tax rate did not increase.  The $14 per $1k was in place back in FY 2005-2006.


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## Darwin (Sep 21, 2009)

*So true*



Lawlar said:


> I hate to pour salt on your wounds, but I suspect Starwood will also add to your MF its costs for attorneys, accountants and lobbyists to fight the tax increase. Will your HOA require Starwood to pay those fees? I doubt it.
> 
> I take no pleasure in reading this thread. I'm sure Marriott will be passing on this same tax and related fees to those of us who bought at MOC.
> 
> I wonder if Marriott would give me a discount on the MF if I painted my unit the next time I stay there. I love to paint and it wouldn't take me long to paint the unit. I'll even buy the paint.


 

Costs get passed on to the lowest denominator.
Darwin


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## Darwin (Sep 21, 2009)

*Maui Timeshare Analysis*

Here is a link to a study of the conversion of hotels to timeshares in Maui County. http://www.co.maui.hi.us/documents/Finance/timesharestudy.pdf.

Darwin



Thanks Dewnay for the correction.


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## LisaRex (Sep 22, 2009)

Your link didn't work for me, Darwin.


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## Dewnay (Sep 22, 2009)

This link works: http://www.co.maui.hi.us/documents/Finance/Timesharestudy.pdf

D.


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## Fredm (Sep 22, 2009)

Troopers said:


> FWIW, the timeshare tax rate did not increase.  The $14 per $1k was in place back in FY 2005-2006.



Troopers, two points to be made here.

First, The BOD advised owners of the dramatic tax increases in August of this year. In doing so, the Boards stated :
*"Despite our efforts and arguments to the contrary, Maui County has determined it will begin to assess the vacation units at the resort separately using residential condominium valuations. As a result of this change, the 2009/2010 real property taxes for our resort will increase by approximately $4,124,162 (from 2008/2009 real property taxes of $2,261,819 to 2009/2010 real property taxes of $6,385,981).* Your Board has authorized the expenditure of funds necessary for the Starwood Management Team to appeal both the valuation methodology and millage rate of this proposed assessment increase. Your Board and Management Team are fully engaged in the effort to mitigate the effect of this proposed increase and have submitted tax protests to Maui County....."

Nowhere has a change in "tax rate" been attributed to the increase.
The culprit is "assessed valuation".
This discussion has, for the most part, been focused on the tax rate. My comments included.

While $14 per $1k can be argued to be excessive and unjustifiable, the real issue is valuing the units far higher than "fair market value".

What is currently unknown is the unit valuation prior to, and after the increase. Without these figures it is not possible to know what is being contested.

Second, the tax rate is a separate, though relevant conversation. 
Maui County has determined that the rate is elastic enough to impose it disproportionately on timeshare owners, however unjustified.

Both components to the tax calculation are not specific to Starwood resorts. Relief will not be granted in appeal to KOR & KORN only. 
Maui property tax policy can only be effectively appealed by property type. All timeshare resorts are effected, and should file a joint appeal. 
Perhaps this is what is intended by the BOD approval of funds to address the matter. But, it is not clear.


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## Troopers (Sep 22, 2009)

Fredm said:


> Troopers, two points to be made here.
> 
> First, The BOD advised owners of the dramatic tax increases in August of this year. In doing so, the Boards stated :
> *"Despite our efforts and arguments to the contrary, Maui County has determined it will begin to assess the vacation units at the resort separately using residential condominium valuations. As a result of this change, the 2009/2010 real property taxes for our resort will increase by approximately $4,124,162 (from 2008/2009 real property taxes of $2,261,819 to 2009/2010 real property taxes of $6,385,981).* Your Board has authorized the expenditure of funds necessary for the Starwood Management Team to appeal both the valuation methodology and millage rate of this proposed assessment increase. Your Board and Management Team are fully engaged in the effort to mitigate the effect of this proposed increase and have submitted tax protests to Maui County....."
> ...



I concur.  Thus, my posting.



> While $14 per $1k can be argued to be excessive and unjustifiable, the real issue is valuing the units far higher than "fair market value".
> 
> What is currently unknown is the unit valuation prior to, and after the increase. Without these figures it is not possible to know what is being contested.



Follow my math here for WKORV and I hope my numbers are right…

There are 26,832 total unit weeks (86 units/floor per map here on TUG x 6 floors x 52 weeks = 26,832 unit weeks).

Proposed 2009/2010 taxes is $6,385,981.  At $14 tax rate per $1000 valuation, total resort valuation is $456,141,500 ($6,385,981 x $1,000 / $14)

Thus, a single unit week is valued at $17,000 ($456,141,500 / 26,832 total unit weeks).  For 2008/2009 tax, valuation for a single week is $6,021.

If my calcs are correct, a 2 bdrm unit (which consists of two units) is valued at $34,000 for a week.  Certainly not the developer sales price nor the price I paid for my resale weeks but fair. 


Also, If the tax office recognizes resale pricing (which I doubt), it’s worth noting that a resale of a single unit week unit barely reduces the overall valuation as there is 26,832 unit weeks.  Thousands of resale weeks are needed to significantly impact the overall valuation.



> Second, the tax rate is a separate, though relevant conversation.
> Maui County has determined that the rate is elastic enough to impose it disproportionately on timeshare owners, however unjustified.
> 
> Both components to the tax calculation are not specific to Starwood resorts. Relief will not be granted in appeal to KOR & KORN only.
> ...



Agreed.


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## Fredm (Sep 22, 2009)

Troopers said:


> Follow my math here for WKORV and I hope my numbers are right…
> 
> There are 26,832 total unit weeks (86 units/floor per map here on TUG x 6 floors x 52 weeks = 26,832 unit weeks).
> 
> ...




Troopers.

I understand your view of the tax as a timeshare owner. A couple of hundred bucks in not enough to upset the applecart. It is what it is. Vacations are important, and not about to be spoiled over this.

I like to keep it simple. Assessed valuation can only be computed on the value of the real estate. Not the furnishings or services presumed in the price paid (whatever price). Industry standard is 65% real estate, 35% furnishings & services.

There are 516 condo units, total. 
Total tax burden for 09/10 is ~$6,386,000.
$6,386,000/516 = $12,376 tax per condo unit., or* $24,772 per two bedroom condo. That is annual property tax per condo.
*, or $476 per deeded week. Just about what the new bill will be.

Yes, about $200 per deeded week more than previous tax assessment.  That is quite a tax bite.
It puts the dis-proportionality in some context. $24,772 tax per condo.

The property valuation per 2 bedroom condo is then $2,444,000.
For every unit; ocean front, ocean view, and Island view.

"Fair market value" is not some average of original sale prices and some relatively small number of resales. It is current market price, averaged across a corresponding tax year.  A tax rate of $14 per 1k is stiff.  But, on a valuation of 2.44 million it is government gone wild.


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## Ken555 (Sep 22, 2009)

Fredm said:


> A tax rate of $14 per 1k is stiff.  But, on a valuation of 2.44 million it is government gone wild.



Well said. I'm very glad I don't own in Maui, and those who do have my sympathy.


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## vacationtime1 (Sep 23, 2009)

Dewnay said:


> This link works: http://www.co.maui.hi.us/documents/Finance/Timesharestudy.pdf





Fredm said:


> The property valuation per 2 bedroom condo is then $2,444,000.
> For every unit; ocean front, ocean view, and Island view.
> 
> "Fair market value" is not some average of original sale prices and some relatively small number of resales. It is current market price, averaged across a corresponding tax year.  A tax rate of $14 per 1k is stiff.  But, on a valuation of 2.44 million it is government gone wild.



Go to the above link Dewnay provided; check page 12 of Appendix E.  The assessor tells us exactly how they get to these numbers:"According to the Maui County Real Property Tax Division, the
resort condominiums are assessed based on its per unit market
value. Resort condominiums tend to have more current sales
activities, therefore, it is easier to assess the market value of
resort condominium properties.

Hotel properties do not have as frequent of sales activities as
individual condominium units, therefore the cost of replacement
less depreciation for the hotel properties are taken into
consideration when assessing hotel properties for tax purposes.

*Timeshare properties are assessed using the same methodology
as the hotel properties (cost of replacement less depreciation).
Interval sales are not considered in determining the market value 
for the timeshare properties*."​The county assessor proposes to use developer prices ("cost of replacement"), which explains how they get to the values FredM quotes above. This creates at least two questions:  

First, why is "cost of replacement" an appropriate appraisal methodology when it includes the developer's 100% mark-up which is paid only once (when the unit was originally sold) and is no longer reflected in the "market value" of the property being appraised?

Second, how can the assessor legitimately claim there are insufficient comparable sales for timeshares, but there are comparable sales for resort condos, when there are undoubtedly many times more resale timeshares than resale condos?  Hotels may not sell frequently, but timeshares certainly do.


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## Fredm (Sep 23, 2009)

Fredm said:


> Troopers.
> 
> 
> There are 516 condo units, total.
> ...


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## Troopers (Sep 23, 2009)

Fredm said:


> Troopers.
> 
> I understand your view of the tax as a timeshare owner. A couple of hundred bucks in not enough to upset the applecart. It is what it is. Vacations are important, and not about to be spoiled over this.
> 
> ...



Thanks Fred, and you are right that a couple of hundred is what it is.

Phew, I'm glad our numbers jive.

FWIW, the property valuation per 2 bedroom condo is $1,768,000, not $2,444,000.


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## Fredm (Sep 23, 2009)

Troopers said:


> Thanks Fred, and you are right that a couple of hundred is what it is.
> 
> Phew, I'm glad our numbers jive.
> 
> FWIW, the property valuation per 2 bedroom condo is $1,768,000, not $2,444,000.



Actually, its higher. Your 1,768,000 value is the taxable base excluding the non-taxable portion for furnishings and services. If the standard 35% is applied to 2.444 mil, the assessed value would be $1,588,600.  To arrive at your 1,768,000 the appraised value would have to be 2,720,000, not 2,444,000. I just rounded in my head.

Irrespective of the 'real' amount, the tax remains almost 25k per condo, plus another few thousand in TOT. 

Fortunately, this is not one of those "Starwood is the evil empire" discussions.
Hawaii and Maui County should be ashamed of themselves.


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## DavidnRobin (Sep 23, 2009)

...and we will be spending less money eating out and such - this only hurts the business owners who can vote in Maui (unlike us).  Typical - taxation w/o representation.  I can only assume that Kauai will soon follow suit.

Is there a way for Owners to challenge their appraised amount - and not base it on the 'paper' amount that WKORV claims which is much more than the actual value.


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## rickandcindy23 (Sep 23, 2009)

So Fred, your numbers make sense, and it is almost $500 per owned week in property taxes, not even taking into account the TAT, an additional tax they get from anyone staying there, including the owners who already paid $500.   

Westin ought to think of some new ways to save money, or they should consider ways to get more cash out of exchangers.  :ignore: Did I just say that?  Heavens!  I must be crazy to say it, but consider that an exchanger into Kahana Falls has to pay a huge energy fee of $150 on a 2 bedroom unit, and the Kaanpali Beach Resort charges high parking fees.  

Of course, Westin mgmt. would probably just keep wahtever fees they collect, anyway, and it won't even help owners. :annoyed:


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## wannagotoo (Sep 23, 2009)

I am at WKORV-N right now. I called the General Manager to see about an appointment and was referred to a fellow in Florida. Notes:
1.There is an increase of $15.4 MILLION (7%) in tax revenue from hotel/timeshare reevaluations/assessments. The elected officials realize timeshare owners do not vote so their jobs are not on the line when increases are directed to timeshare owners. Economy is flat and timeshare owners are easy pickin's.
2. 75% of the economy comes from visitors
3. Starwood has paid an additional $7mil for taxes that is now in an escrow account and cannot be used until the litigation is resolved. The hearing is scheduled for next summer, and if not resolved a law suit will follow
4. Marriot, ARDA, etc., are all considering litigation but don't seem to be united at this time.
5. Two Board members for WKORVN are owners, Steve Ward and Craig McFarland
6. http://www.co.maui.hi.us/index.aspx?NID=66  this will get you to the list of councilmen who we can write to express our concern.


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## SDKath (Sep 23, 2009)

wannagotoo said:


> I am at WKORV-N right now. I called the General Manager to see about an appointment and was referred to a fellow in Florida. Notes:
> 1.There is an increase of $15.4 MILLION (7%) in tax revenue from hotel/timeshare reevaluations/assessments. The elected officials realize timeshare owners do not vote so their jobs are not on the line when increases are directed to timeshare owners. Economy is flat and timeshare owners are easy pickin's.
> 2. 75% of the economy comes from visitors.



You know the expression "biting the hand that feeds you."  That is what the Hawaiian government is doing to non-residents right now.  BAD idea in the long run, even if it is an easy solution for today's troubled times....

Katherine


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## Fredm (Sep 23, 2009)

SDKath said:


> You know the expression "biting the hand that feeds you."  That is what the Hawaiian government is doing to non-residents right now.  BAD idea in the long run, even if it is an easy solution for today's troubled times....
> 
> Katherine



VERY BAD idea, indeed.

Those who think this increased tax is the real additional cost are sadly mistaken.

It is straw that is breaking the back of many owners. 
If you have not looked lately, resale prices are down at least 10% in the past month alone. The cherry on top of an already hammered market.


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## Darwin (Sep 25, 2009)

Good discussion. Writting to the council members can help. By disappropriately taxing us I will be spending less on eating out, attractions, shopping, etc. I will be pointing this out to them. In this case where units are sold on a regular bases, replacement cost should not be used.

*The sales comparison analysis should be used.*

There are three approaches to value. Sales comparison, Cost, & Income.

Cost of replacement = The primary use of the cost approach is to obtain a value estimate that may be compared with value estimates determined by the sales comparison and income approaches to value. For example, government buildings, schools, hospitals, and churches are considered special-purpose property that rarely sell or produce income. The cost approach usually provides a more accurate estimate of market value when the improvement is new and available for use at its highest and best use.

*The cost approach is based on the principle of substitution which states that "a prudent or wise person would not pay more to buy a property that it would cost to construct new an equally desirable substitute property assuming no costly delay is encountered in making the substitution."*

Cost does not necessarily equal value.

*Sales Comparison* = approach is a method by which the market value of a property is based upon the prices paid for similar properties in the market. It involves comparing properties similar to the subject property for which market data such as sales prices, asking prices and offers to purchase are available.

The sales comparison approach relies on the economic principles of substitution, change and contribution. The principle of substitution is the underlying principle that applies to this approach. *This provides that if two similar properties are available for sale, a wise person will purchase the property that could be purchased at a lower asking price.* The principle of change provides that "market value is never constant because of environmental, economic, social and governmental forces are at work to change the property and its environment." Property values need to change to reflect this. The third basic principle (contribution) provides that the "value of a component of property depends upon its contribution to the whole property." Example, a property owner spends $10,000 to erect a garage; however, a typical buyer is willing to pay only $8,500 for the garage. The contributory value of the garage is $8,500 instead of the $10,000 cost.

Enough


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## Ken555 (Sep 26, 2009)

On a related note, I just recalled that Riverside County lowered assessment values on WMH in the last year. Quite a difference between their actions and those on Maui.


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## Fredm (Sep 26, 2009)

Ken555 said:


> On a related note, I just recalled that Riverside County lowered assessment values on WMH in the last year. Quite a difference between their actions and those on Maui.



Right you are!

"Market Value" is not an abstract term. It has a precise meaning that can be quantified (within reasonable bounds).
The difference between Riverside and Maui Counties is that Riverside is in California, where a taxpayer revolt resulted in Proposition 13. That's why property taxes a billed separately in California. The assessed valuation is based on the amount paid at sale. In the interest of economy it is handled somewhat differently for timeshares, but nonetheless addressed.

Maui is exhibiting the very worst in taxing authority abuse.They want the money, and manufacture a rationale based on nothing honestly arguable to get it. All on the backs of those who do not vote in the jurisdiction.  Although not as dramatic as taxing one out of their home, its the very same thing. There are those who cannot afford it simply because they are being taxed beyond their limit to pay an unjust tax. So, HOA fees become delinquent, and use is lost. Further, the delinquency is bad for every owner, compounding the matter.

Meanwhile, full time residents have their property tax heavily subsidized. Something is very twisted with approach to local governance. 

Having traveled to Hawaii for the past 45 years I understand the issues of Polynesian cultural preservation, native economic sustainability, and grandfathered land rights. But this reaches far beyond what was originally intended. This is pure politics which is damaging the underpinning of the entire economy. Everyone loses in the long run. 

Shame on them!


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## Fredm (Sep 26, 2009)

DavidnRobin said:


> ...
> 
> Is there a way for Owners to challenge their appraised amount - and not base it on the 'paper' amount that WKORV claims which is much more than the actual value.



The premise of the tax can formally be appealed.
However, the only way for it to be effective is for all timeshare resorts to file a joint appeal. It effects all resorts.

What is troubling is that the KOR and KORN boards have allocated HOA funds to address the matter independently for the moment. That is a waste of time and money. Every resort must kick in and file an appeal that challenges the staff "findings" made to justify it.


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## Icarus (Sep 27, 2009)

LisaRex said:


> Mauians seem to loathe TS owners even as they enjoy the benefits of the tourism dollars we consistently bring to their area.



Nah .. it's just you and Denise. lol. I've seen the secret documents. You should not have taken that lava rock home with you.

ok, I'll go back to the lounge now.

-David


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## DeniseM (Sep 27, 2009)

Icarus said:


> Nah .. it's just you and Denise. lol. I've seen the secret documents. You should not have taken that lava rock home with you.
> 
> ok, I'll go back to the lounge now.
> 
> -David



Icky - I'm crushed!  But I do have that little tiny lava chip!  :rofl:

Oh yeah, and then there's the beach glass, and the granite from the Hindu Temple, and the beach towel I took from the HHV in 1977...oh dear...


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## LisaRex (Sep 27, 2009)

Icarus said:


> Nah .. it's just you and Denise. lol. I've seen the secret documents. You should not have taken that lava rock home with you.



That wasn't lava; it was charcoal.  I swear!


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## Troopers (Oct 12, 2009)

Update:

I was browsing through the Tax Board site and stumble on this.  This is the most recent agenda archive...it appears Marriott is appealing their *2008* assessment.  I was unable to find any appeals by Starwood.


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## Fredm (Oct 12, 2009)

Troopers said:


> Update:
> 
> I was browsing through the Tax Board site and stumble on this.  This is the most recent agenda archive...it appears Marriott is appealing their *2008* assessment.  I was unable to find any appeals by Starwood.



I don't get it. Why are the Maui resorts not banding together on this? It affects all of them.


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## LisaRex (Oct 13, 2009)

Fredm said:


> I don't get it. Why are the Maui resorts not banding together on this? It affects all of them.



All Maui TSs are affected by the 14% tax rate, but the "highest and best use" component only really affects the Marriott and Westin, because only they were selling tons of units at those crazy 2007 sales prices.  It's hard for them to argue with a straight face that the units aren't REALLY worth $5m apiece when they were listing them, and presumably selling them, for $90m per week.

As time goes by and more units change hands at resale prices, an appeal SHOULD work.  If Starwood would drop their purchase price, as Marriott has done, then it would certainly help our cause.


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## Fredm (Oct 13, 2009)

LisaRex said:


> All Maui TSs are affected by the 14% tax rate, but the "highest and best use" component only really affects the Marriott and Westin, because only they were selling tons of units at those crazy 2007 sales prices.  It's hard for them to argue with a straight face that the units aren't REALLY worth $5m apiece when they were listing them, and presumably selling them, for $90m per week.
> 
> As time goes by and more units change hands at resale prices, an appeal SHOULD work.  If Starwood would drop their purchase price, as Marriott has done, then it would certainly help our cause.



Lisa.

Its the entire tax calc formula. It's easy to get wrapped up in the details. But, no way, no how, should a 1400 sf condo carry a $25,000/yr. property tax, plus an additional  3-4k TOT.

The sale price only matters if it were a level playing field. Then, Maui would still be receiving a disproportionate tax over a residential payer. 

For example, California is ecstatic because timeshare property tax is  calculated on the interval sale price x 52 weeks. It results in a far higher valuation than the same condo that is single owner based. But, all are computed from the same tax rate. 1%, plus a few special districts that add up to another 0.25%. 

Maui has chosen to apply a tax rate at 700% above a residential unit, THEN compute it at a property valuation that has no rational relationship to its unit value. 
Your view of it is how it was. This change doubled an already outrageous tax.

This is not a Starwood manufactured problem. It is a mistake to frame it as such, IMO. Marriott is discounting prices to move inventory. Not to mitigate taxes. Starwood has no inventory to move. Marriott has lots of it, worldwide.

This tax is not simply unjust, its criminal. The only way to reverse it is to challenge it. First, by appeal, which probably won't work. Then in the courts, which might. 
This is why all Maui resorts have to challenge it together. It affects all of them on the same basis.


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## LisaRex (Oct 13, 2009)

Fredm said:


> This is not a Starwood manufactured problem. It is a mistake to frame it as such, IMO. Marriott is discounting prices to move inventory. Not to mitigate taxes. Starwood has no inventory to move. Marriott has lots of it, worldwide.



I've never believed, or said, that the high property taxes were a Starwood manufactured problem. In this instance, Starwood is blameless. 

If the "highest and best" use isn't based on the "highest and best" sales price of the units, then what is it based on? Because if it is somehow based on actual sales price, then discounting the price (as Marriott has done) would ultimately lead to lower property taxes.   

And, no, I don't believe Marriott discounted the prices in order to mitigate taxes. They discounted the price in order to move more product.  But by lowering the prices, it will mitigate taxes, unless I don't understand what "highest and best" means.


----------



## Fredm (Oct 13, 2009)

LisaRex said:


> I've never believed, or said, that the high property taxes were a Starwood manufactured problem. In this instance, Starwood is blameless.
> 
> If the "highest and best" use isn't based on the "highest and best" sales price of the units, then what is it based on? Because if it is somehow based on actual sales price, then discounting the price (as Marriott has done) would ultimately lead to lower property taxes.
> 
> And, no, I don't believe Marriott discounted the prices in order to mitigate taxes. They discounted the price in order to move more product.  But by lowering the prices, it will mitigate taxes, unless I don't understand what "highest and best" means.



Lisa:

From the Maui tax assessor:

"Timeshare properties are assessed using the same methodology
as the hotel properties (cost of replacement less depreciation).
*Interval sales are not considered in determining the market value
for the timeshare properties."*


The tax assessor goes on to say (although it makes no sense whatsoever)

"resort condominiums are assessed based on its per unit market
value. Resort condominiums tend to have more current sales
activities, therefore, it is easier to assess the market value of
resort condominium properties.

Hotel properties do not have as frequent of sales activities as
individual condominium units, therefore the cost of replacement
less depreciation for the hotel properties are taken into
consideration when assessing hotel properties for tax purposes."

So, they are using current developer sale prices, to establish replacement cost.  But, hotel replacement costs only include land acquisition and construction. If that was the basis for real replacement costs applied to timeshares, the real number would be about 1/3 of the basis being used.

So, a real contradiction. Replacement cost is inflated by ~200%.
Then, the $14 per 1k is the multiplier. Which is nothing less than what is needed for the tax coffers.

They must either use real market price to determine "fair market value", or, real replacement cost. Not the contrived application of 1 from column A and 1 from column B, and a multiplier that relates to neither.

Bottom line is that the tax method is bogus. I am not a property tax attorney, but I do not believe it could be defended it in a court of law. There is no legitimate basis for it that is consistent with other property valuation or tax rate methodology.

This is one of those situations where the elected officials need to find money, and give marching orders to staff to develop a "finding" that supports a defined end result. So the salaried staff pastes a rationale together to give credence to the action.
Unfortunately, it happens way too often.

Of course, it is very convenient that they apply the tax to those who do not vote in the jurisdiction.


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## thinze3 (Oct 13, 2009)

Look WHO is most delinquent on their taxes (by dollar amount). It's not Starwood.


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## Troopers (Oct 13, 2009)

thinze3 said:


> Look WHO is most delinquent on their taxes (by dollar amount). It's not Starwood.



I saw that too when I was looking around.  Of course, one has to google them to find out which property it is.


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## taffy19 (Oct 13, 2009)

I didn't see Marriott either but Diamond Resorts has the highest delinquency but is this all by one owner?     Our other resort went through this process some time ago but I wonder how much our taxes will go up at the Marriott?  

If the Marriott owners, at the two new towers, have to pay the suggested percentage, we will be hit very hard.  Unbelievable.  

Marriott needs to fight this hard but they cannot do it alone.  Some of these developers will have to ban together or they can kiss their development goodbye for additional sales.  ARDA should help them too because they are more for the developers' benefit than ours.  They should have some cloud.  JMHO.


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## Troopers (Oct 22, 2009)

Update:

No Starwood (or Marriott) appeals heard in yesterday's hearing, Oct 21, 2009.  Hearing agenda is here.  All appeals are FY 2008, not FY 2009 appeals.

Next hearing is Nov 4, 2009.  I'll keep everyone posted.


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## LisaRex (Oct 25, 2009)

http://www.tugbbs.com/forums/showthread.php?t=108943

Kauai Kid reports that there are no increases in maintenance fees for 2010 at the Maui Schooner.  And they're offering a 3% cash discount if paid by Jan 1.

2 BR every year AOAO 544.77 or 528.43 with disc 
2 br every year ROA 504.54 or 489.40 with disc
Total AOAO+ROA=1049.31 OR 1017.83

If energy costs are up so much, how can other properties on Maui manage to stabilize their MFs?


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## Fredm (Oct 25, 2009)

LisaRex said:


> http://www.tugbbs.com/forums/showthread.php?t=108943
> 
> Kauai Kid reports that there are no increases in maintenance fees for 2010 at the Maui Schooner.  And they're offering a 3% cash discount if paid by Jan 1.
> 
> ...



Owners control the resort. 
Trading Places (TPI) is the OM.

Owner newsletters  are very revealing.

Money is treated as it should. It belongs to the owners.
Examples:

 - Balances are swept daily into an interest bearing money market account. 

 - Occasional foreclosures are offered to owners at deep discount.
    The discounted sale proceeds are then deposited into the HOA general funds account. So despite non-performing shares, the HOA fund actually realizes a net benefit from foreclosures.

 - Rentals of vacant inventory is managed by the OM for a commission. The balance belongs to to the HOA.

 - A concerted effort is made to operate within budget. So, to offset what they say have been 20-40% *annual *electric rate increases, services and in-room amenities are cut in a timely way. So, occupants pay for them. Kind of a small use tax, which makes sense to me when navigating tight budgets.

 Maui Schooner owners just want affordable value. They get it by having complete control.  

The price of branding is lack of control. I suspect that most Starwood owners would find the trade off unappealing. Unfortunately, it is not possible to have the best of both.


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## DanCali (Oct 25, 2009)

LisaRex said:


> http://www.tugbbs.com/forums/showthread.php?t=108943
> 
> Kauai Kid reports that there are no increases in maintenance fees for 2010 at the Maui Schooner.  And they're offering a 3% cash discount if paid by Jan 1.
> 
> ...



So even with the tax increase they were able to holds MFs constant? That's what I call looking after the owners!


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## Fredm (Oct 26, 2009)

DannyM said:


> So even with the tax increase they were able to holds MFs constant? That's what I call looking after the owners!



One of the owner newsletters mentions that they were successful in having 2008 taxes reduced via lower assessed valuation.


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## LisaRex (Oct 30, 2009)

Acc to the Hawaii boards, the Kaanapali Beach Club MFs increased $100 this year.

Waiting to see what Marriott does.  I'm sure Starwood is waiting, too.


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## LisaRex (Nov 3, 2009)

Marriott has come out with their Maui MFs.  Even the new towers are roughly what Starwood charged in 2009.  Starwood, are you watching?  

Molokai, Lanai & Maui Towers
1Bdrm $1538.81
2Bdrm $1692.70

Lahaina & Napili Towers 
2Bdrm $1896.49
3Bdrm $2275.79


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## Fredm (Nov 3, 2009)

LisaRex said:


> Marriott has come out with their Maui MFs.  Even the new towers are roughly what Starwood charged in 2009.  Starwood, are you watching?
> 
> Molokai, Lanai & Maui Towers
> 1Bdrm $1538.81
> ...



That's about a $78 increase over 2009.
Considering the tax bite is over $200, looks like a reduction in base fees.


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## gregb (Nov 3, 2009)

At MSC my WKORVN currently shows an estimated MF of slightly less than the 2009 MF.  (Don't have the exact figure here right now, but checked yesterday.) But that is estimated.  Not sure how often they come in at the estimate.


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## DeniseM (Nov 3, 2009)

gregb said:


> At MSC my WKORVN currently shows an estimated MF of slightly less than the 2009 MF.  (Don't have the exact figure here right now, but checked yesterday.) But that is estimated.  Not sure how often they come in at the estimate.



Greg - In the past, the estimate has been completely different than the actual MF - I wouldn't put any faith in it at all.


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## YYJMSP (Nov 4, 2009)

*WKORV MF online at MSC*

Our account on MSC is showing 2010 MF for WKORV now -- a 25% increase from last year.

Our entry for WKORVN is still showing a projected MF (i.e. the same as last year)


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## DeniseM (Nov 4, 2009)

ManbirPrihar said:


> Our account on MSC is showing 2010 MF for WKORV now -- a 25% increase from last year.
> 
> Our entry for WKORVN is still showing a projected MF (i.e. the same as last year)



That is just the estimate - in the past the estimates have been unreliable.

Once it has a "due date" listed, we'll know it's the real deal.


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## YYJMSP (Nov 4, 2009)

*WKORV not quite 25% increase*

I forgot to account for the previously announced tax increase that is probably included in the MF showing on MSC.

Given that, it appears the base increase is around 9% if we ignore the 2009 tax shortfall and the 2010 tax increase, or 20% if we assume that 2010 tax increase is always going to be there from now on...


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## DanCali (Nov 4, 2009)

ManbirPrihar said:


> I forgot to account for the previously announced tax increase that is probably included in the MF showing on MSC.
> 
> Given that, it appears the base increase is around 9% if we ignore the 2009 tax shortfall and the 2010 tax increase, or 20% if we assume that 2010 tax increase is always going to be there from now on...



Unless you have a credible threat to vote officals out of office in Hawaii, I would assume taxes can only go up...


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## LisaRex (Nov 4, 2009)

DannyM said:


> Unless you have a credible threat to vote officals out of office in Hawaii, I would assume taxes can only go up...



Or unless we can successfully appeal.


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## DavidnRobin (Nov 4, 2009)

ManbirPrihar said:


> I forgot to account for the previously announced tax increase that is probably included in the MF showing on MSC.
> 
> Given that, it appears the base increase is around 9% if we ignore the 2009 tax shortfall and the 2010 tax increase, or 20% if we assume that 2010 tax increase is always going to be there from now on...



9% ??? - LOL

It is a 25.1% increase NO MATTER how it is justified...
and a 90% increase since 2005

2Bd LO Dlx at WKORV
2005 $1,623.77
2006 $1,813.16 (11.7%)
2007 $1,954.27 (7.8%)
2008 $2,203.79 (12.8%)
2009 $2,459.73 (11.6%)
2010 $3,076.69 (25.1%)

since they all go up proportionally - this will be the same % increase for all other WKORV VOIs


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## DanCali (Nov 4, 2009)

LisaRex said:


> Or unless we can successfully appeal.



"we" i.e. Starwood or the HOA? Are they appealing on owners' behalf? Do we know what "our" main argument would be?

Personally, I'm not sure where Starwood's interests lie here and if they are aligned with owners' interests. They can't set the tax rate - governments have the legal right to tax... The only thing they can do is argue that these units are worth $10K-$15K on the resale market (they have the ROFR data) so taxes should be much lower. That would be a good argument and may even help our cause, but I doubt Starwood wants to go down that road.


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## YYJMSP (Nov 4, 2009)

We've owned at both WKORV and WKORVN since 2005, and we just assume that the MFs will go up 10% each year on average, so they double every 7 years I think is how that works out...

Being Canadian, and the MFs being billed in USD, we get to play the "what's the exchange rate going to be right after New Year's" game every year as well.  That can make the MF fluctuate by as a much as another 10% in either direction from our point-of-view.


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## DanCali (Nov 4, 2009)

ManbirPrihar said:


> We've owned at both WKORV and WKORVN since 2005, and we just assume that the MFs will go up 10% each year on average, so they double every 7 years I think is how that works out...



One cannot make that assumption and hang on to their timeshare. If this is what you really assume you should sell it... Doubling every 7 years (10% annual increase) means that MFs of $2500 today will be $5000 in 7 years, $10,000 in 14 years, and $20,000 in 21 years, and 40,000 in 28 years. Timesharing is supposed to be good value after the initial upfront cost, not drive you (or your children) into bankuptcy. Needless to say that resale values will go to zero much before the next 7 years are up if we continue raising MFs at 10% a year.

In a normal world where the HOA is looking after owners' interests MF increases should reflect some reasonable cost of living index. This is even what Starwood salespeople say....That is also why Worldmark can gurantee, in writing, that MFs will not go up by more than 5% each year, and their actual increases have been lower than 5% (I'm not sure what they will do if we go into an inflationary economy, but so far their model is working and owners seem happy).


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## Weez (Nov 6, 2009)

Well got my invoice in todays mail. 

New MF for WKORV is $2,351.36 for 2BR lockoff Annual

Master Association Assessment        160.36
Apartment Ownership Assessment   410.93
Vacation Ownership Assessment    1661.54
SVN Fee                                        113.53
ARDA-ROC-Pac Contribution               5.00

Ugghhhhhh


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## Fredm (Nov 6, 2009)

Weez said:


> Well got my invoice in todays mail.
> 
> New MF for WKORV is $2,351.36 for 2BR lockoff Annual
> 
> ...



Quick calculation.
Starwood's management fee is 10% off the top.
Average increase of $500 per 2 bedroom interval x 20,800 intervals for KOR and KORN x .10 = $1,040,000 in additional management fees from the 2010 increase alone.


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## Weez (Nov 6, 2009)

I've read thru most of the posts and while I've seen it suggested several times about the timeshare managements teaming up to fight this, has anything actually been planned? Are there any petitions or complaints filed to voice our displeasure? Just seems like we need to push a little harder on this maybe for e their hand.


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## vacationtime1 (Nov 6, 2009)

I spoke with the friendly reps at Starwood yesterday about some unrelated items (my own reservations for 2010 and 2011).  The Maui property tax increase just happened to come up in conversation.

I was told that ARDA was going to file a lawsuit against the County of Maui about the recent assessment/tax rate.  That would be consistent with ARDA's role as a lobbyist.

Of course, I could have been told this simply to encourage the $5 donation to ARDA when I paid my MF's.


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## Weez (Nov 6, 2009)

Thanks for the info Robert!


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## jjlovecub (Nov 6, 2009)

I will be there in 2 weeks for Thanksgiving so I am just going to have a great time and not dwell on the increase. Not going to let it spoil my trip!


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## Henry M. (Nov 6, 2009)

The annual summary that came with the latest WKORV bill says:

The Association has begun the appeal process to protest the valuation methodology of this proposed assessment increase and has submitted tax protests to Maui County. The required tax payments have been paid under protest and the payments have been placed in a litigation funds account pending the outcome of the valuation protest. Neither the Association nor Maui County will have access to these funds until the dispute is resolved.

The Management Company will use tax consultants and attorneys to fight on behalf of the Association. Additionlally, ARDA-Hawai'i has been actively involved and will continue to pursue the issue on behalf of all timeshare owners in Maui.

While the exact date has not yet been set, this matter will be scheduled for a hearing in 2010, and the Management Company will provide addtional updates in the future if the situation is resolved wither through the formal protest process or through negotiations with Maui County.


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## DavidnRobin (Nov 6, 2009)

Weez said:


> I've read thru most of the posts and while I've seen it suggested several times about the timeshare managements teaming up to fight this, has anything actually been planned? Are there any petitions or complaints filed to voice our displeasure? Just seems like we need to push a little harder on this maybe for e their hand.



I have strongly recommended to all Tuggers that they write/call the specfic resort HOAs - I have and will respond to their response - and so on and so forth - until I get a reasonable answer and importantly a PLAN.  However, since I am fortunate to have an excellent job (or a job at all... keep repeating...) - I cannot do this for others - nor even quickly for myself.  My position is to pay my MFs - get as much vacation value from the resorts that we own - and continue to battle.

*Again - do not sit back and expect others to do this, unless you do not care - (money tree is in constant bloom) - do this - a noisy minority can work. If you choose not to then you are contributing to the problem*

Lack of tranparency of HOAs because of the suppression of communication from owner to owner community is the root of the issue (ESPECIALLY in today's web-based days).  I would be very happy to be on the WSJ or WKORV BOD - and I would put to an Owner vote to override the SVO policy about communication between owners - but no way that is going to happen (for a variety of reasons) - but mainly because SVO controls who is on the BOD - again by CCRs that Owners signed


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## DavidnRobin (Nov 6, 2009)

emuyshondt said:


> The annual summary that came with the latest WKORV bill says:
> 
> The Association has begun the appeal process to protest the valuation methodology of this proposed assessment increase and has submitted tax protests to Maui County. The required tax payments have been paid under protest and the payments have been placed in a litigation funds account pending the outcome of the valuation protest. Neither the Association nor Maui County will have access to these funds until the dispute is resolved.
> 
> ...




I am very glad to hear that they have set aside the funds - and are challenging . PTS? ... 10%?


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## dss (Nov 7, 2009)

David - Great post - Since you clearly have a rich understanding of the players and what fights we should be picking here, is three any chance we could impose on you to create a simple FAQ document with talking points and contacts for contacting the HOAs? I'm happy to put in the time for my part but want to make sure it's focused in the proper areas. 

Thanks so much for any guidance you could offer.


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## DeniseM (Nov 7, 2009)

DavidnRobin said:


> I have strongly recommended to all Tuggers that they write/call the specfic resort HOAs - I have and will respond to their response - and so on and so forth - until I get a reasonable answer and importantly a PLAN.



David - I used the email function at MSC to request the contact info. for all the WKORV BOD members on Oct. 19th and still have not received the info. (as promised.)  I will post that info. on TUG as soon as I get it...


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## DeniseM (Nov 7, 2009)

*LisaRex's post about maintenance fees and the info. in her SW Docs, and 2 responses, have been moved to the maintenance fee thread, as her request - *http://www.tugbbs.com/forums/showthread.php?t=108663&page=5


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## DeniseM (Nov 7, 2009)

dss said:


> David - Great post - Since you clearly have a rich understanding of the players and what fights we should be picking here, is three any chance we could impose on you to create a simple FAQ document with talking points and contacts for contacting the HOAs? I'm happy to put in the time for my part but want to make sure it's focused in the proper areas.
> 
> Thanks so much for any guidance you could offer.



*Great idea!  *


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## LisaRex (Nov 7, 2009)

WKOVR-N 2 bdrm LO MFs:

2010 Master Association Assessment $165.83
2010 Apartment Ownership Assessment $581.77
2010 Vacation Ownership Assessment $1732.00
Total: $2479.60 + 2010 SVN Membership Fee $113.53 (if applicable)

We're paying $350 per night.  That is more than what I paid to rent a 2 bdrm privately owned 2 bdrm OF condo at Kaanapali Shores a few doors up in 2006. 

Interesting notes: 

"developer contribution:

Over the past years, the developer has voluntarily contributed to the budget to help offset a portion of your annual costs. In 2009 this voluntary contribution is forecasted to be approximately $192k versus the approved budget of $1.1M due primarily to savings in expenses such as utilities.  In 2010, the developer is projected to voluntarily contribute $440k to help offset a portion of your costs.  Due to expense savings, the amount amount contributed by the developer is lower than the 2009 budget amount, resulting in an increase in the Owners fee of $24.62 per average ownership week."

We pay a MF of $545.90, a management fee of $52.89, $5.29 to the Kaanapali North Beach Master Association, Inc.  and $113.53 to SVN. That's $717 right off the top. 

Oy vey.


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## DanCali (Nov 7, 2009)

Interesting in comparing posts 1 and 2 in this thread... WKORVN letter talked a lot about energy savings to offset the tax. Yet (i) the MFs went up just as much as WKORV, which didn't have the "energy clause" and (ii) MFs went up even net of the tax increase impact. Makes you wonder where those savings went...


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## gregb (Nov 7, 2009)

Got my WKORV-N MF bill today as well.  Numbers are the same as LisaRex.

What I did find interesting was the glossy "annual summary and 2010 forecast" included with the bill..  It identifies the (decreases) and increases in the various categories of the expenses.  I found this to be enlightening.  While one might not like the numbers, this enclosure goes a long way to shed light on where the increases come from.  I applaud Starwood for including it as a good start towards transparency.

In particular, according to the sheets, almost all of the expenses associated with labor costs have gone down for 2010.  Also, the energy costs have gone down.  There are several areas with increases, the two biggest being the increased property taxes ($307.63), and delinquent owners ($215.77 increased budget for 2010).  Another big increase comes is to cover cover shortfalls from 2009 ($119.35).  I believe part of this is to cover delinquent owners in 2009.

When I add up the increases and decreases from the sheet, it comes to a total increase of $555.99.  This is a little less than the $614.98 the fees actually increased.  So I assume that some of the other expenses were not called out in the sheet.

But again, I think this is a good start at explaining why the costs have gone up so much this year (33.0%).

Greg


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## pharmgirl (Nov 8, 2009)

Here are the MFs for the new marriott Maui TS, don't know how much they increased
Lahaina & Napili Towers
2Bdrm $1896.49
3Bdrm $2275.79
I requested that somene let me know what was the increase and what is the tax component

I suggest we all write to Maui County authorities to protest the increase on timeshares

Since the WKORV increase is so high, I will notify the Maui County authorities that we will NOT use restaurants, activities, etc that cost the amount of the increase

Does anyone know address or names, boards, etc in Maui to direct letter?
this of course is in addition to writing to HOA


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## DeniseM (Nov 8, 2009)

pharmgirl said:


> I suggest we all write to Maui County authorities to protest the increase on timeshares
> 
> Since the WKORV increase is so high, I will notify the Maui County authorities that we will NOT use restaurants, activities, etc that cost the amount of the increase
> 
> ...



See post #115 and #119.

Maui County Real Property Website - http://www.co.maui.hi.us/index.aspx?NID=576


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## pharmgirl (Nov 8, 2009)

Thanks, I will be writing to Maui County!!  That will be $270 we will not spend in Maui restaurants, activities, etc

Here are the fees for the new Maui Marriott, also a substantial tax increase
 but about the same as a 2 BR WKORV increase of 227 for Marriott and about $272 average for westin according to brochure

MOC -- Lahaina Towers
Here's the MFs for my unit (a 3BR):

Fiscal Year Description Due Date Amount Dues
2010 Reserve Fee 2010-01-08 197.13
2010 Property Tax Fee 2010-01-08 388.25
2010 Operating Fee 2010-01-08 1690.42
Total Charges $2275.80


Reserve fee was $181 in 2009, so 10% increase
Property taxes were $161 in 2009, so almost 250% increase
Operating fee was $1,838 in 2009, so 8% decrease


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## Troopers (Nov 10, 2009)

*WoodMFs2Hi said:


> Interesting in comparing posts 1 and 2 in this thread... WKORVN letter talked a lot about energy savings to offset the tax. Yet (i) the MFs went up just as much as WKORV, which didn't have the "energy clause" and (ii) MFs went up even net of the tax increase impact. Makes you wonder where those savings went...



WKORV did have the energy savings...it just wasn't posted in post 1.  See here.


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## Troopers (Nov 10, 2009)

Troopers said:


> Update:
> 
> No Starwood (or Marriott) appeals heard in yesterday's hearing, Oct 21, 2009.  Hearing agenda is here.  All appeals are FY 2008, not FY 2009 appeals.
> 
> Next hearing is Nov 4, 2009.  I'll keep everyone posted.



Update:

No Starwood (or Marriott) appeals heard on Nov 4, 2009 hearing.

Next hearing is possibly Dec 2, 2009.


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## DeniseM (Nov 10, 2009)

Troopers said:


> Update:
> 
> No Starwood (or Marriott) appeals heard on Nov 4, 2009 hearing.
> 
> Next hearing is possibly Dec 2, 2009.



See post #115:



> The annual summary that came with the latest WKORV bill says:
> 
> The Association has begun the appeal process to protest the valuation methodology of this proposed assessment increase and has submitted tax protests to Maui County. The required tax payments have been paid under protest and the payments have been placed in a litigation funds account pending the outcome of the valuation protest. Neither the Association nor Maui County will have access to these funds until the dispute is resolved.
> 
> ...


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## Troopers (Nov 10, 2009)

DeniseM said:


> See post #115:



Thanks Denise.  I received the same info.

I'm interested in Marriott as well.


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## mwoody5569 (Nov 23, 2009)

The protest of this seems pretty easy to me- just boycott Maui- I guess to be effective all of the Hawaiin islands.  Even if we are stuck paying the property tax, do we realize what type of impact we would have if all of the sales revenues/taxes left that (island)state from vacation owners alone?  Convert your stay to points and stay somewhere else until the taxes become more reasonable.  Let's call the media while we're at it- THEN write letters.  Let the residents vote their officials out of office when they all start losing their jobs.


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## DeniseM (Nov 23, 2009)

Welcome to TUG, mwoody5569!  



> Convert your stay to points and stay somewhere else until the taxes become more reasonable.



Unfortunately, converting to Starpoints is a really bad value.  For a 2 bdm. you only get 80K Starpoints and that is pitiful when you consider that the maintenance fee ranges from $2,346 - $3,076.  It's actually cheaper to BUY Starpoints from Starwood than to convert!

Plus, converting to Starpoints isn't even an option for resale owners.

Also - this tax is only in Maui County - not all of the islands.


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## mwoody5569 (Nov 23, 2009)

*boycott maui*

and let the reps know you are if you are a timeshare owner like myself.  I will be converting my ownership to points every year and taking my money elsewhere.

their email addresses including the mayor:

mayors.office@mauicounty.gov, danny.mateo@mauicounty.us, bill.medeiros@mauicounty.us, wayne.nishiki@mauicounty.us, joseph.pontanilla@mauicounty.us, michael.victorino@mauicounty.us, michael.molina@mauicounty.us, gladys.baisa@mauicounty.us, jo_anne.johnson@mauicounty.us, Sol.Kahoohalahala@mauicounty.us 

http://www.co.maui.hi.us/documents/Mayor's%20Office/Budget/FY2010%20Budget/FY%202010%20Proposed%20Budget_Mayor's%20Remarks.PDF

from the revenues section of the mayor’s budget press statement:

The proposed budget for Fiscal Year 2010 requires county revenues totaling $572 million, a 2% increase over Fiscal Year 2009. Net real property tax revenues of $235.7 million are anticipated, representing 40% of all County revenues. Property values have leveled off, and even declined in most categories. However, we have seen increased valuations in Hotel and Timeshare categories, leading to an overall increase of real property tax revenue of $15.4 million, or 7%. Again, no proposed increases to property tax rates are proposed for Fiscal Year 2010.


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## mwoody5569 (Nov 23, 2009)

I understand about the maui only tax- but I think that the hawaii governor and businesses wouldn't be all too happy with the reduced revenues across all islands and couldn't we use all the strong arming we can get?


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## DeniseM (Nov 23, 2009)

mwoody5569 - Be sure you read the other posts in this thread to see what info. has already been discussed/shared here.

Converting to Starpoints is a poor value.  I personally am not willing to convert to Starpoints and get a measly 80K points for my $2,400 maintenance fee.  80K Starpoints will only get you 7 nights in a standard room at nicer Starwood hotels - not worth $2,400 to me!


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## mwoody5569 (Nov 23, 2009)

I know- but the principal is worth it to me- I can use cash and points and spread it out and with the money I save on excursions and food I will still come out ahead.  At what point will you shut them down in their tracks?  when your fees go to 3K, 4K, 5K?  This isn't what I signed up for- I'm ready to just walk away from this at this point.


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## DeniseM (Nov 23, 2009)

This is the thing, just because you convert to Starpoints doesn't mean your unit will sit empty.  Starwood will just rent it to someone else, who will spend money on Maui, and you will continue paying the maintenance fee and the taxes....  I am glad to have you on our team, but I think it will take a more direct approach.


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## zeke013 (Nov 25, 2009)

pharmgirl said:


> Thanks, I will be writing to Maui County!!  That will be $270 we will not spend in Maui restaurants, activities, etc



I doubt that will have any impact.   They'd rather have your $270 directly from you rather than have you spend the $270 in local businesses where they may get 8 or 9% of that amount. 

Sure, the local economy may slow down - but they're more than making up for it.


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## DanCali (Nov 25, 2009)

zeke013 said:


> Sure, the local economy may slow down - but they're more than making up for it.



Very true - but locals can vote elected officials out of office... If they start hurting because we spend less they will turn to their elected officials who caused this mess (at least that's the hope).


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## Troopers (Dec 14, 2009)

Troopers said:


> Update:
> 
> No Starwood (or Marriott) appeals heard on Nov 4, 2009 hearing.
> 
> Next hearing is possibly Dec 2, 2009.



Update:

No Starwood (or Marriott) appeals heard on Dec 2, 2009 hearing.

Next hearing is early January 2010.


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## Fredm (Dec 15, 2009)

DanCali said:


> Very true - but locals can vote elected officials out of office... If they start hurting because we spend less they will turn to their elected officials who caused this mess (at least that's the hope).



I don't think that will happen.
The simple and pleasing message to the voting constituency
is this.Read carefully what it says:

*from the revenues section of the mayor’s budget press statement. 

"The proposed budget for Fiscal Year 2010 requires county revenues totaling $572 million, a 2% increase over Fiscal Year 2009. Net real property tax revenues of $235.7 million are anticipated, representing 40% of all County revenues. Property values have leveled off, and even declined in most categories. However, we have seen increased valuations in Hotel and Timeshare categories, leading to an overall increase of real property tax revenue of $15.4 million, or 7%. Again, no proposed increases to property tax rates are proposed for Fiscal Year 2010."
*

Yes, the tax is being appealed. Want to bet they won't give it back?

This is the timeshare owners fight.
IMO the only way it will be successfully resolved is through a legal challenge to the basis and computation of the tax assessment.  

Then, a legal challenge to the excise tax levied on HOA dues.

Then, a legal challenge to the TOT on an owner's occupancy.

If there was ever a justification for the optional $5 payment of ARDA dues, this is it. ARDA should aggressively step up to these matters with a legal challenge. It is an industry-wide issue, properly spearheaded by an advocacy organization.


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## Ken555 (Dec 15, 2009)

Fredm said:


> If there was ever a justification for the optional $5 payment of ARDA dues, this is it. ARDA should aggressively step up to these matters with a legal challenge. It is an industry-wide issue, properly spearheaded by an advocacy organization.



If ARDA setup a legal fund for this purpose, I (and I assume others - especially those who own in Maui) might be more inclined to contribute. As it is, I have no influence over where ARDA spends the contribution. They could use it to fight in some other location for purely developer benefit. This is the fundamental problem as I see it with ARDA - again, read the name of their organization... On the other hand, if we had an "American Timeshare Owners Association" (ATOA) I would be much more comfortable becoming a member or a contributor (hmm... has that been tried before? is there one under a different name?).


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## Fredm (Dec 15, 2009)

Ken555 said:


> If ARDA setup a legal fund for this purpose, I (and I assume others - especially those who own in Maui) might be more inclined to contribute. As it is, I have no influence over where ARDA spends the contribution. They could use it to fight in some other location for purely developer benefit. This is the fundamental problem as I see it with ARDA - again, read the name of their organization... On the other hand, if we had an "American Timeshare Owners Association" (ATOA) I would be much more comfortable becoming a member or a contributor (hmm... has that been tried before? is there one under a different name?).



I agree with you.

ARDA is a DEVELOPER advocacy group. 
But, many do pay the five bucks. ARDA should do something for money it solicits.


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## Ken555 (Dec 15, 2009)

Fredm said:


> I agree with you.
> 
> ARDA is a DEVELOPER advocacy group.
> But, many do pay the five bucks. ARDA should do something for money it solicits.



ARDA does. They support the developer.


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## nodge (Jan 24, 2010)

Here's an article on this subject that ran in last Friday's Pacific Business News in Honolulu.

FredM is that you being quoted in the article?  If so, did the reporter find you through TUG?  Do tell.

-nodge


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## Fredm (Jan 25, 2010)

nodge said:


> Here's an article on this subject that ran in last Friday's Pacific Business News in Honolulu.
> 
> FredM is that you being quoted in the article?  If so, did the reporter find you through TUG?  Do tell.
> 
> -nodge



Yep, it's me.

The reporter, Janis Magin, contacted me last week.
She may have found me on TUG. Would not be surprised. 
TUG was mentioned in the article. Yeah!
I also consult to the investment community on the timeshare industry. Someone may have pointed her in my direction.
I didn't ask.  

I am glad this issue is getting some visibility. It is the most outrageous abuse of taxing authority I have ever witnessed. It may even be illegal. Shame on them.


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## Hole19 (Jan 26, 2010)

Hello....brand new to TUGS here.
Very helpful to see that we're not alone when it comes to frustration with our Maui time-share!!
My wife and I bought @ WKORV in Sept. 2008.  It seems to me that there is an issue of "full disclosure" on the part of  Starwood and the sales staff.  CLEARLY they knew this tax increase was imminent.  The recent Pac. Bus. News article shows that this valuation system was put into law in 2005!!
I wrote the President of Starwood about this and one of his assistants got back to me and they denied knowing anything about the eventual increase.  However, I also spoke to a Maui County rep and he said Starwood "absolutely" knew the higher rates would go into affect once construction was completed on the North building.  Somebody is not being honest and I'm starting to think Starwood has more to hide than Maui County.
Do we have any "full disclosure" recourse??  We would not have agreed to the deal had we been given all the facts I feel we were entitled to.


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## Fredm (Jan 26, 2010)

Hole19 said:


> Hello....brand new to TUGS here.
> Very helpful to see that we're not alone when it comes to frustration with our Maui time-share!!
> My wife and I bought @ WKORV in Sept. 2008.  It seems to me that there is an issue of "full disclosure" on the part of  Starwood and the sales staff.  CLEARLY they knew this tax increase was imminent.  The recent Pac. Bus. News article shows that this valuation system was put into law in 2005!!
> I wrote the President of Starwood about this and one of his assistants got back to me and they denied knowing anything about the eventual increase.  However, I also spoke to a Maui County rep and he said Starwood "absolutely" knew the higher rates would go into affect once construction was completed on the North building.  Somebody is not being honest and I'm starting to think Starwood has more to hide than Maui County.
> Do we have any "full disclosure" recourse??  We would not have agreed to the deal had we been given all the facts I feel we were entitled to.



Hole19, there are two components to the tax calculation. 
The tax rate, which was increased to $14 per 1000 several years ago.

The 2010 increase was due to the increase in assessed valuation. 

Starwood had no prior knowledge of this increase, which accounts for the doubling of taxes in 2010.


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## Hole19 (Jan 26, 2010)

Thanks Fred,  Are we SURE Starwood had no idea??  My contact at Maui County confirmed nothing was in writing but the understanding was clear that eventually the Ocean Resort Villas properties would be re-classified from "hotel" to "condo" valuations.  I'm learning as I go here and still trying to make sense of it all.  Just feeling a bit duped!!


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## jerseygirl (Jan 26, 2010)

Would be stunned if Starwood had no idea it was coming.  Certainly they should have someone on staff who stays on top of things like this.  But, then again ....


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## Fredm (Jan 26, 2010)

jerseygirl said:


> Would be stunned if Starwood had no idea it was coming.  Certainly they should have someone on staff who stays on top of things like this.  But, then again ....



Oh, perhaps they knew "something" was coming. But, not in the time frame mentioned, when Hole19 bought in 2008.

Besides, the assessed valuations are so off the charts as to leave anyone breathless. 

My point being that this is not Starwood's doing. The villain is Maui County.


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## jerseygirl (Jan 26, 2010)

I agree that Maui County is the villain.  Perhaps a different animal ... but, didn't the article in which you were quoted talk about a "known increase" when the resort was sold out?  Somehow, I'm not thinking that Starwood was very upfront about that when they were selling units.

Of course, I'm also completely cynical at this point.  I think Starwood has, by a huge margin, the poorest excuse for a management team of any of the comparable hotel-based timeshare systems (Hilton, Hyatt, Disney, Marriott).  So, I guess I just see evil everywhere I look.


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## Hole19 (Jan 26, 2010)

I agree jerseygirl...something just doesn't seem right here and we are left footing the bill with seemingly no recourse!  It's such a frustrating and helpless feeling.
If MF's stayed where they are I could live with it.  My biggest concern is that they will go through the roof and take away ANY benefit of time-share ownership.  If fees go to 3 or 4 or 5 or $6,000 per year it will ruin the industry or atleast the desireability for Hawaii/Maui time-share.  Many owners can't and won't absorb that increase and I hope that the "powers that be" realize this!
Can any TUG member share some advice to ease our concerns?  Where does this money grab by Maui County end??


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## rocky (Jan 27, 2010)

This article from the NYT provides some context about the difficulties HI is facing -- I'm not arguing that the tax increases are valid -- rather, just providing a bit of background on the dramatic budget problems the state is struggling with.  So you know to pick your restaurants carefully.........

http://www.nytimes.com/2009/12/20/us/20hawaii.html


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## Ågent99 (Jan 27, 2010)

Well, it comes to a certain headway.

You may have to raise prices to offset increasing expenses but you'll reach a point of price increase that will cause your customer base to decrease such that you may be forced to LOWER prices to get them back.

One problem we have is that a lot of us are stuck but that is classical SHORT TERM thinking by the industry (meet the next quarter's bottom line).  In the long term, one cannot continually increase prices.  I'm sure a lot of us will simply walk away and never EVER come back.  That is bad for the TS industry as a whole or at least for Starwood managed properties....

I know I've been soured for TS.  I seriously doubt I will ever buy anything more.  I love the vacations but the cost is only increasing and at cataclysmic rates.


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## Fredm (Jan 27, 2010)

Hole19 said:


> Thanks Fred,  Are we SURE Starwood had no idea??  My contact at Maui County confirmed nothing was in writing but the understanding was clear that eventually the Ocean Resort Villas properties would be re-classified from "hotel" to "condo" valuations.  I'm learning as I go here and still trying to make sense of it all.  Just feeling a bit duped!!



No, I am not sure.

I do know that this entire mess is a contrivance by Maui County.

The re-classification was from taxing a single property ( the resort) to taxing the condos individually.

When the resort was taxed, the bill was distributed to the individual condos based on their size (just as HOA fees are).
What Maui County did was engage in alchemy. 
The very same property was deemed to have an assessed valuation 300% + higher, overnight, when the condos were "valued" separately. The lame rationale is that there is more property on the books.

Never mind that the tax rate is 700% higher than that of a resident's assessed valuation.

Never mind, again, that Maui County conveniently ignored its own definition of "fair market value" when it established the new assessed value.

It was an outright ugly and shameful money grab on those who do not vote in the jurisdiction.

Worse, IMO its devious justification places it in direct contradiction of other taxes imposed  by the State of Hawaii.
It is, therefore, arbitrary and discriminatory. No nexus exists as a basis for the tax. 

To answer a question you posed in another post, this should be a matter for the courts. Maui County was careful to not raise residential taxes, so no ballot initiative to control taxation will succeed. But, a test of the legal basis for its taxation may. This will require the resources of an advocacy group, such as ARDA. Its members have the most to lose in the long run. Timeshare developers cannot sell new product with this tax structure in place.

While it may be a short term expediency, Maui County has abdicated responsible governance, IMO. 

Think of what can happen. Timeshare owners do not vote in Maui County. But, they do vote in matters relating to their resort ownership.

What if......
 - owners voted to take over the resort.
 - owners decided to convert their intervals back to 
   individually owned condos, and sell them on the open 
   market. Take their share and run.

Under the taxation laws, the persons acquiring the condo will be taxed at resident rates. Also, there will no longer be a TAT on its occupancy. In fact, the entire resort is no longer a "resort". It is a private residential condo complex.
Under existing laws, the individual condo purchase price becomes the "fair market value".

So, what happens to the tax base in this scenario? Hawaii and Maui lose ~$32,000 per year, per 2 bedroom condo in taxes. While nothing else changes. 

Far fetched? Maybe. But, if the governing documents permitted it my guess is that it would happen. The new condo owner pays for their share of common facilities. All else is their responsibility. Just like any other condo association. Down the beach, The Whaler is operated exactly like this. The property is a mix of privately owned and timesharing units.

Assuming the governing docs permitted it, how hard do you think it will be to convince 26 shares in a condo that they should sell out to an individual owner? It is near the point that they will have nothing to lose.

The real loser will be Maui County and the State of Hawaii. All because they are killing the goose that lays the golden eggs. This tax structure cuts both ways. 

Of course, the ripple effect on the tourist economy will be huge.
Less weekly transient scum to support retailers, stimulate sales tax, and pay for services they do not use.

Yet, the mayor brags that tax revenues have actually increased without raising resident taxes by one cent.
Idiot!


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## gregb (Jan 27, 2010)

Reading the NYT article, it does not mention any attempt by the state or counties to raise income to cover the losses.  Well we know what Maui did.  Raise the rate on TS.  But what about the properties?  Shouldn't they be paying "their fair share"? 

Greg


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## DavidnRobin (Jan 27, 2010)

Perhaps... WKORV puts the valuation of an OFD at >$100K (for example) in part to show that they were correct when they told Owners on how their VOIs would appreciate - when the true valuation is half of that.  By doing this - WKORV has created a problem for taxes for the Owners upon conversion.

The true valuation for taxation should be what on average has been paid for these VOIs - not what WKORV claims as the value.

The question I have - is what Maui county is basing the valuation of WKORV VOIs - the average purchase price - or WKORV's inflated price?


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## Fredm (Jan 27, 2010)

DavidnRobin said:


> Perhaps... WKORV puts the valuation of an OFD at >$100K (for example) in part to show that they were correct when they told Owners on how their VOIs would appreciate - when the true valuation is half of that.  By doing this - WKORV has created a problem for taxes for the Owners upon conversion.
> 
> The true valuation for taxation should be what on average has been paid for these VOIs - not what WKORV claims as the value.
> 
> The question I have - is what Maui county is basing the valuation of WKORV VOIs - the average purchase price - or WKORV's inflated price?



The units sold for whatever price. 
The information is with the Country Clerk. It is what it is.
How Maui County arrived at the assessed value is the issue.

What Maui County is doing is arbitrarily selecting whatever it wishes to compute a tax.
For example, it chooses to tax the unit as a timeshare because 52 intervals are sold for a much larger aggregate price than a comparable residential condo. This is what most taxing authorities do. Timeshares always pay more tax than their residential equivalent.

However, all other taxing jurisdictions leave it at that.
What Maui County does is apply a tax rate 700% higher than  the residential equivalent, to the inflated value of the timeshare. No basis exists for it.

They explain it away by noting that timeshare owners somehow consume more services which must be paid for.
But, that is what the TAT is supposed to be for (which btw is being raised by 1% in June). So, at the very least it is double dipping the issue. Adding insult to injury.

THEN, MC completely ignores its own definition of "fair market value" when determining the assessed value. It CHOOSES to invent the value. The invented value may be rationalized by stating that the last highest price sold was "x".  But, that is not fair market, not even by their definition.

Further, it completely ignores the principal of taxable value. 
Furnishings and services are non taxable items everywhere else in the USA. In California, for example, 35% of a timeshare purchase is subtracted before arriving at the assessed valuation, as this is the standard non taxable portion.

The bottom line: Maui is desperate. They need money and instructed staff to produce the necessary findings to support the rape. 

Starwood has nothing to do with this. The actual details of sales are public record. What Maui has chosen to do with it is an abomination. And IMO illegal.


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## gregb (Jan 27, 2010)

Fredm said:


> For example, it chooses to tax the unit as a timeshare because 52 intervals are sold for a much larger aggregate price than a comparable residential condo. This is what most taxing authorities do. Timeshares always pay more tax than their residential equivalent.
> 
> However, all other taxing jurisdictions leave it at that.
> What Maui County does is apply a tax rate 700% higher than  the residential equivalent, to the inflated value of the timeshare. No basis exists for it.



This is double dipping.  First they tax at a higher rate, for whatever justification they can find.  And secondly they apprise at a much higher value.  Now I could see doing one or the other, but doing both is beyond the pale.



> They explain it away by noting that timeshare owners somehow consume more services which must be paid for.
> But, that is what the TAT is supposed to be for (which btw is being raised by 1% in June). So, at the very least it is double dipping the issue. Adding insult to injury.



I wonder exactly what services we consume more than other island visitors and even residents?  We certainly don't use the schools, the hospitals, the dog catcher.  Yes we drive rental cars on the roads, but the locals use the roads as well.  And I don't see how TS owners use any more services that other resort visitors, yet our taxes are much higher.

I had been thinking of purchasing some more weeks on Maui, resale.  But given the current uncertainty about the MF increases, I will not do that.  So in the end Maui will lose the extra business I was planning on bringing to the island.

And don't even get me started on the extra taxes they levy on rental cars.  My $228 car rental has over $100 added as taxes and fees.  That is a 44% markup on the rental.  Way more than I paid recently in Orlando.

Greg


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## LisaRex (Jan 28, 2010)

gregb said:


> I wonder exactly what services we consume more than other island visitors and even residents?



I believe this is how they justify themselves:
http://www.mauinews.com/page/content.detail/id/500583.html?nav=10


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## Fredm (Jan 28, 2010)

LisaRex said:


> I believe this is how they justify themselves:
> http://www.mauinews.com/page/content.detail/id/500583.html?nav=10



Wow! That article is not a justification. It's an indictment of their stupidity and incompetence.

With elected officials such as these Maui's economy is hopeless.

The arrogance is unbelievable. First prize goes to this discriminatory comment:
*Hokama told panelists that he does do not view time-share owners “as an equal to us” when it comes to residency and ownership. They do not vote here and do not live here full time, Hokama said.*

I have previously opined that the new taxes imposed on timeshare owners are arbitrary and discriminatory. To have an elected official actually voice the discrimination takes my breath away.

Hokama is Chairman of the Maui County Council.

Very discouraging. OTOH, he may have just hanged himself.


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## LisaRex (Jan 28, 2010)

Their conclusions also fly in the face of Maui County's own 2006 commissioned study on the impact of timeshare conversions.  Definitely a case of politicians reaching conclusions before the data is presented, and the ignoring data when it contradicts their conclusion:

www.co.maui.hi.us/documents/Finance/timesharestudy.pdf

"Nonetheless, data from the State of Hawaii Department of Business, Economic Development & Tourism suggests that the impact specifically from timeshare conversions is likely minimal. Separate data provided by the County, our real property tax model and data from those hotels that underwent conversion also supports this conclusion."  - page 7, Executive Summary

Also noted in the summary:

"We also note that Real property tax rates and methods vary among the Counties, with Maui’s timeshare rate the highest Statewide. As each County has a different method for categorizing and valuing timeshare properties, Maui may wish to consider further analysis into these alternative methods for any applicability for Maui." - page 7


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## LisaRex (Jan 28, 2010)

Here's another good article from 2006, which confirms my suspicions that Maui is trying to discourage development of TSs by taxing them to death: 

http://pacific.bizjournals.com/pacific/stories/2006/07/10/story1.html

"With nearly 2,300 new time-share units set to be built by 2010, Maui County officials are trying to discourage more development by imposing higher taxes, even though a new study they commissioned found that time-share owners weren't a drain in the economy."

"Despite the study's findings, some county officials say time-share development is out of control and threatening the direction of Maui's carefully tended upscale tourism industry."

And this is a gem of a quote: 

"I don't see it being a need in our county to have time share," said G. Riki Hokama, Maui County Council chairman. "That's not the visitor I want here." 

Aloha!


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## jerseygirl (Jan 28, 2010)

Wow -- I'm speechless!


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## Fredm (Jan 28, 2010)

gregb said:


> Reading the NYT article, it does not mention any attempt by the state or counties to raise income to cover the losses.  Well we know what Maui did.  Raise the rate on TS.  But what about the properties?  Shouldn't they be paying "their fair share"?
> 
> Greg



Of course they should be paying their fair share.
But, fair share is an oxymoron in Hawaii (Maui).
Resident property taxes are heavily subsidized by timeshare owners. 
Residents pay $2 per $1,000 of assessed value. And assessed value is understated. While timeshare owners pay $14 per $1,000 of artificially inflated assessed value.
Plus, pay a 9% transient occupancy tax for every night the unit is occupied. Plus, pay an excise tax of 4.8% on the entire HOA fees paid.


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## LisaRex (Jan 28, 2010)

Fredm said:


> (T)imeshare owners pay $14 per $1,000 of artificially inflated assessed value.
> Plus, pay a 9% transient occupancy tax for every night the unit is occupied. Plus, pay an excise tax of 4.8% on the entire HOA fees paid.



And when we rent cars (using a one-week midsize Alamo rental as an average), we pay:

Plus, $1/day facility fee to upkeep their airport $7.00 
Plus, 11.11% concession recovery fee to upkeep their airport $36.88
Plus, a $3/day "rental motor vehicle surcharge" $21.00 to presumably pay for their highways
Plus, 4.166% sales tax $15.47

For a total of $82.80 in taxes on rental cars per week.


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## jarta (Jan 28, 2010)

LisaRex,   ...   If WKORV-N on Maui is not where you want to own, you can sell a 2-br there on eBay and buy a platinum season 2-br at WKV (148,100 StarOptions) for about the same price.  Recently, they both have been selling for about $17K on eBay.  The lower MF at WKV in one year would let you recoup any difference in price or closing costs.  Why wouldn't you (or anyone else) consider that?

And, for the amount of StarOptions you get at WKV (a mandatory resort) you can trade into WKORV or WKORV-N any time you want - based on availability.  And, there should be plenty of availability given Maui's position on taxing visitors to support the lifestyle of the locals.

You are not without a key to your own jail.   ...   eom


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## LisaRex (Jan 28, 2010)

jarta said:


> LisaRex,   ...   If WKORV-N on Maui is not where you want to own, you can sell a 2-br there on eBay and buy a platinum season 2-br at WKV (148,100 StarOptions) for about the same price.  Recently, they both have been selling for about $17K on eBay.  The lower MF at WKV in one year would let you recoup any difference in price or closing costs.  Why wouldn't you (or anyone else) consider that?



Because, as a trader, I'd lose my OF view.  

If I sold, I wouldn't buy back into Starwood.  I'd either buy a Marriott or go back to renting from VRBO.

I do realize that I have the option to sell, but in this economy I'm looking at a $25k loss, at a minimum.  That's a pretty expensive key.  I'm hoping the tax appeal will be successful and provide some relief from MFs and taxes.


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## nodge (Jan 28, 2010)

Check out here how local Maui realtors describe property taxes in Maui.

-nodge


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## Hole19 (Jan 28, 2010)

The "contact" I have referred to at Maui County is Wes Yoshida.  They transferred my call to him because he was aware of the property tax issue but he claimed he was a lower level employee.  During one of our conversations he admitted that the "locals" DO NOT like the tourists and restaurant owners hate time-shares mainly due to the fact that kitchen facilities are available limiting the need to eat out all the time.
They love our money but not us.  Kind of makes you want to bank those weeks and enjoy other destinations!!


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## LisaRex (Jan 28, 2010)

Hole19 said:


> During one of our conversations he admitted that the "locals" DO NOT like the tourists and restaurant owners hate time-shares mainly due to the fact that kitchen facilities are available limiting the need to eat out all the time. They love our money but not us.  Kind of makes you want to bank those weeks and enjoy other destinations!!



There's virtually no difference between a condo renter and a timeshare owner.  Both have kitchens and both invariably eat a lot of meals in.  I can say that my spending patterns were exactly the same when I rented a condo via VRBO vs. staying in our TS.  It would at least make a bit more sense to me if they targeted rental condos AND TSs.    

BTW, even when we go to the grocery store, we are STILL helping the locals because there wouldn't even be a Costco, that the locals have incidentally flocked to instead of supporting their friendly neighborhood grocer, without us horrific tourists. 

There are real issues in Hawaii.  Tourism is almost always a love/hate relationship. But I've rarely witnessed the targeting of one particular class.  Like I said before, they should have declined to permit TSs if they didn't want them.  But taxing them to death afterward as a means of driving them out of business is a sadistic way to govern.


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## DanCali (Jan 28, 2010)

jarta said:


> LisaRex,   ...   If WKORV-N on Maui is not where you want to own, you can sell a 2-br there on eBay and buy a platinum season 2-br at WKV (148,100 StarOptions) for about the same price.  Recently, they both have been selling for about $17K on eBay.  The lower MF at WKV in one year would let you recoup any difference in price or closing costs.  *Why wouldn't you (or anyone else) consider that?*
> 
> And, for the amount of StarOptions you get at WKV (a mandatory resort) you can trade into WKORV or WKORV-N any time you want - based on availability.  And, there should be plenty of availability given Maui's position on taxing visitors to support the lifestyle of the locals.
> 
> You are not without a key to your own jail.   ...   eom



Why do you think nobody is considering that? It's definitely something I'm even more than considering  And I'm probably not the only one...




LisaRex said:


> Because, as a trader, I'd lose my OF view.
> 
> If I sold, I wouldn't buy back into Starwood.  I'd either buy a Marriott or go back to renting from VRBO.
> 
> I do realize that I have the option to sell, but in this economy I'm looking at a $25k loss, at a minimum.  That's a pretty expensive key.  I'm hoping the tax appeal will be successful and provide some relief from MFs and taxes.



The loss is there, whether you sell or not... The only reason to hold on is if you think prices will appreciate or at least depreciate slower going forward than at other places (assuming the alternative investment has to be another timeshare). If MFs keep rising and you keep losing 10%-20% of your equity a year, is an OF unit worth the $5000+ annual cost (MFs + equity loss)?

Even if they win the appeal and the Maui tax goes away - do you think MFs will go down? Or will there be a new "excuse" to keep them high? 10%-30% increase a year is not sustainable. At some ponit MFs have to flatten out or the resort will implode. I think my threshold is probably a lower amount that SVO has in mind.

Ask yourself if you would buy the property today for $18K or whatever the current market value is. If the answer is that that price is too high, then that means it's a great price to sell it for...


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## DeniseM (Jan 28, 2010)

LisaRex said:


> Because, as a trader, I'd lose my OF view.
> 
> If I sold, I wouldn't buy back into Starwood.  I'd either buy a Marriott or go back to renting from VRBO.
> 
> I do realize that I have the option to sell, but in this economy I'm looking at a $25k loss, at a minimum.  That's a pretty expensive key.  I'm hoping the tax appeal will be successful and provide some relief from MFs and taxes.



I agree Lisa - I don't know why anyone would sell their WKORV week, take a $25K loss, and then turn around and buy at WKV!  Talk about throwing good money after bad!     If/when I decide to get out, I will be done with Starwood!


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## DanCali (Jan 28, 2010)

DeniseM said:


> I agree Lisa - I don't know why anyone would sell their WKORV week, take a $25K loss, and then turn around and buy at WKV!  Talk about throwing good money after bad!     If/when I decide to get out, I will be done with Starwood!



Those are two separate decisions.

(1) Sell WKORV and take the loss, whatever it happens to be?

(2) Buy WKV?

I understand you think buying WKV is unwise. But why? Is it because you think Platinum season there is too expensive? Is it just a matter of price or you wouldn't even take one free because it's Starwood?

How about a decision to sell WKORV? Hanging on to it because one incurs a loss is more of a psychological thing and less of a rational decision... If you think Starwood is that bad, you can still exit and get a reasonable price. If you think Starwood still has merits (which I do), then my claim is that owning WKV has many more merits than WKORV... personally, I'd even settle for the dreaded highway view if it means paying half of the MFs (but that's easy for me to say having had a stake in an IV unit to begin with...).


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## jarta (Jan 28, 2010)

DanCali,   ...   "Why do you think nobody is considering that? It's definitely something I'm even more than considering  And I'm probably not the only one..."

From the reactions, maybe you are the only one.

Can't fathom why, if you really like going to WKORV-N and hate the MFs, you wouldn't trade even up for WKV to continue access and loer carrying costs.  Maybe you and I are nuts.   ...   eom


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## DanCali (Jan 28, 2010)

jarta said:


> DanCali,   ...   "Why do you think nobody is considering that? It's definitely something I'm even more than considering  And I'm probably not the only one..."
> 
> From the reactions, maybe you are the only one.
> 
> Can't fathom why, if you really like going to WKORV-N and hate the MFs, you wouldn't trade even up for WKV to continue access and loer carrying costs.  Maybe you and I are nuts.   ...   eom



HA! I guess we finally found one issue we agree on...


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## jerseygirl (Jan 28, 2010)

Dan -- I think you place way to much faith in the concept that WKV is not going to have huge maint fee increases in the future.  Granted, they won't have the tax situation, but I think Starwood has proven, time and time again, that controlling costs is not a priority.  In fact, I'd go so far as to suggest that their past behavior suggests quite the opposite.   

Separate subject -- I don't know if anyone follows the HGVC threads but someone made what I think might be a very prolific statement there today.  A relatively new poster was asking about the potential for Hilton to change the rules as they relate to resale purchases.  This was part of the response:

_3. HGVC must allow resale, if they dont, they will wind up with a ton of forclosure units and this will ultimately cause a negative impact on their product. Why would anyone buy retail when they know that they will never be able to sell it through resale. I believe this will cause the market to crash._

You can see the whole thread here, but I think we've discussed tons of reasons for the huge maintenance fee increases, but I don't think I've really thought about the impact of "voluntary vs. mandatory" on the deliquency and foreclosure rates until today.   Good food for thought on the impact the policies have on maintenance fee rates at voluntary resorts.

http://tugbbs.com/forums/showthread.php?t=114653


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## DeniseM (Jan 28, 2010)

DanCali said:


> How about a decision to sell WKORV? Hanging on to it because one incurs a loss is more of a psychological thing and less of a rational decision...



Try to find one post where I ever claimed to be rationale!  



> Is it just a matter of price or you wouldn't even take one free because it's Starwood?



Under the current management and their policies, I have zero interest in buying more Starwood timeshares.  

I am also a view snob - I would be very unhappy to trade in and get the dreaded Highway view... I'd rather not go at all.


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## Hole19 (Jan 28, 2010)

WKV is abbreviation for.....???


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## DeniseM (Jan 28, 2010)

Westin [Kierland] Villas - for a complete list of the many acronyms we like to throw around, see the list in Starwood Owner Resources, at the top of the forum.


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## RLOGO (Jan 28, 2010)

Hole19 said:


> WKV is abbreviation for.....???



Westin Kierland Villas.  The Starwood Owner Resources  sticky above has a list of abbreviations.

Denise,

Beat me to it again.


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## Hole19 (Jan 28, 2010)

Thank you DeniseM and RLOGO!! I was hoping there was a place to learn the acronyms!


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## LisaRex (Jan 28, 2010)

DeniseM said:


> Westin Kiernan Villas



Silly, Denise.  She means Westin KIERLAND Villas.


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## DeniseM (Jan 28, 2010)

Sorry - I was holding a screaming baby and typing with one hand!


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## Ken555 (Jan 28, 2010)

DeniseM said:


> I am also a view snob - I would be very unhappy to trade in and get the dreaded Highway view... I'd rather not go at all.



FWIW, I'm at WKORV-N this week in building 7, high floor, with a great ocean view. And I'm here with an II SVR trade. It might have to do with when I place my trades, or that the resort isn't at capacity, but I have yet to have a highway view. Last Sept I was at WKORV on another II trade, and was in building 2 with an OV. Ironically, I've had great results with the II trades - in fact, they may have actually been in better units than when I visited using my SO's.


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## DeniseM (Jan 28, 2010)

I agree Ken - you have a great chance of getting a good view, but I am locked into the school schedule & my husband's rather inflexible schedule,  and we usually have to go 4th of July week or another prime time, so I'm not willing to chance it.  That's why we bought 2 OF weeks on Kauai.


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## DanCali (Jan 28, 2010)

jerseygirl said:


> Dan -- I think you place way to much faith in the concept that WKV is not going to have huge maint fee increases in the future.



I actually think WKV also had large fee increases over the years (I think it's about 50% increase since 2004 - certainly in line with Starwood's internal CPI metrics...) and I can only hope they don't get out of control.

I do however think that resale values will remain more stable at WKV in general and here is why:

I view the resale value composed of two components. The first is the value you get from using the VOI relative to "comparable" accomodations (hotels, direct rentals, VRBO etc.) This is why many timeshares in Orlando have low valuations - because MFs are not low enough compared to alternatives. As MFs rise compare to comparable alternatives, this component of the resale price drops. We saw this recently with 30% WKORV resale price declines due to the tax increase.

The second component to the resale value is the value you get from the option of "trading up". This component of the price explains why mandatory resort SVV (2BR Lockoff with MFs = $1600) still sells for $3K-$4K while comparable accomodations at voluntary resort SVR (2BR MFs = $900) have zero resale value. With SVV you can trade into a 1BR in Hawaii or possibly into a 2BR at HRA in the summer or fall.

Now you can start thinking how MF increases affect resale values in various places. For example, everything else unchanged, an MF increase at WKORV will lower resale values at WKORV for reasons discussed above. But what is less obvious is that it can actually increase resale values at WKV because the option to trade to Hawaii can now be perceived to be more valuable. Conversely, an increase in MFs at WKV would reduce resale values at WKV both because usage is less attracive and the option to trade to Hawaii may be perceived less attractive.

Arguably, the most desired (and expensive in terms of MFs) resorts WKORV/N, HRA, WSJ are not bought to be traded internally so the option to trade is not that valuable. The main value is from usage. Increasing MFs erode the resale value (our equity).  At resorts like WKV and SVV, the option to trade internally has substantial value, at least the way the market prices it. I would in fact argue that there is no value in buying SVV to use... the entire resale value of SVV is based on the option to trad within SVN becuase comparable SVR, which has much lower MFs, cannot be sold for even $1. Even at WKV I would maintain that most or all of the resale value comes from this option. Otherwise why would SDO sell for 10% of WKV price? WKV has 50% higher MFs offset by a nicer resort but if WKV was voluntary it would probably sell at similar prices to SDO in the respective season.

So if MFs at WKV continue to go up it affects its resale value negatively, but that should be offset at least in part if MFs at other resorts also go up... Putting it a different way - if MFs at WKORV and WKV go up 50% over the next few years they will be $3800 at WKORV and $2000 at WKV; my argument is that WKORV will lose a lot more in resale value (both in percentage and dollars) than WKV. Of course if fees are in a death spiral and SVN ultimately implodes none of this matters...


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## James1975NY (Jan 28, 2010)

DanCali said:


> I actually think WKV also had large fee increases over the years (I think it's about 50% increase since 2004 - certainly in line with Starwood's internal CPI metrics...) and I can only hope they don't get out of control.
> 
> I do however think that resale values will remain more stable at WKV in general and here is why:
> 
> I view the resale value composed of two components. The first is the value you get from using the VOI relative to "comparable" accomodations (hotels, direct rentals, VRBO etc.) This is why many timeshares in Orlando have low valuations [......................................................]



Very well said.


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## zinger1457 (Jan 28, 2010)

Ken555 said:


> FWIW, I'm at WKORV-N this week in building 7, high floor, with a great ocean view. And I'm here with an II SVR trade. It might have to do with when I place my trades, or that the resort isn't at capacity, but I have yet to have a highway view. Last Sept I was at WKORV on another II trade, and was in building 2 with an OV. Ironically, I've had great results with the II trades - in fact, they may have actually been in better units than when I visited using my SO's.



Was at WKORV-N two weeks ago, traded in using staroptions.  Asked for an ocean view and was given an ocean front, building 8.  There seemed to be a lot of guest staying just for the weekend, there was a noticeable drop off in people at the resort during the week days.


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## Hole19 (Jan 28, 2010)

Oddly enough we are owners at WKORV and went to WKV to see family in June 2009. We booked 8 months in advance and by no means were we "upgraded".  Had a partial view of a golf course fairway but nothing spectacular.  I think it was building 7.  We were sort of off to the side and they were re-paving the parking lot while we were there.  I guess I just find it funny that a WKV member can come to Maui and get OF and we go to Arizona and get the leftovers.  June in AZ isn't exactly prime-time!
I'm happy for anyone who has a great view and wonderful vacation but the "system" seems to be a little out of whack!!

Honestly, glad you had a great trip Zinger!!


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## jerseygirl (Jan 28, 2010)

Dan -- you are absolutely correct but that's not new information.  It's been that way since seenet published his original article that clarified Voluntary and Mandatory resorts, circa 2003.  And, since that date, maintenance fees at WKV have risen dramatically and resale prices have dropped dramatically ... so have those people who have been buying for years using your same justification/rationale really come out ahead?  I can see WKORV with unbranded timeshares with maintenance fees under $500 -- in fact, I've given two weeks as wedding gifts for about $600/week.  

Is it easier to trade in with SOs?  Of course.  But, there's a hefty cost associated with it.   I'm simply pointing out that history indicates that those costs will only increase at a rate much greater than other timeshare systems.  (Of course, past performance is no guarantee of future performance,, but IMO, the long-term outlook for Starwood properties is not good unless some dramatic changes occur.)  If someone absolutely has to have prime-time (e.g., 4th of July) at WKORV/N, they need to buy WKORV/N.  If not, they can trade in with properties that cost MUCH less than WKV, both on an upfront and ongoing basis.  Your point regarding Harborside is somewhat valid as it is most assuredly easier to get in with SOs than on an exchange, but even then -- summer SO trades are very rare, and the same weeks that are historically available with SOs generally end up in II as well.  I don't think there's a long-term SVN-member alive who would advise anyone to buy WKV/SVV to get into Harborside every year ... unless that buyer is always willing to go in January (cold), early May, hurricane season, or the dead weeks between Thanksgiving and Christmas.  And, again, those same weeks have historically been available via II (I know that for sure, as I have picked up at least one every year since about 2004).


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## Ken555 (Jan 28, 2010)

jerseygirl said:


> I don't think there's a long-term SVN-member alive who would advise anyone to buy WKV/SVV to get into Harborside every year ...



Um... me?



> unless that buyer is always willing to go in January (cold), early May, hurricane season, or the dead weeks between Thanksgiving and Christmas.



Oh, never mind.  



> And, again, those same weeks have historically been available via II (I know that for sure, as I have picked up at least one every year since about 2004).



Nice. When I'm not traveling in a large group (which is most of the time) and head to Harborside, I like to stay for 9-10 days. Using StarOptions rather than II actually is less expensive, based on my MF for WKV, vs using one of my other weeks via II (of course, a less expensive resort will net lower costs than my SVR weeks). In any case, this is where SOs can make a difference. For example I was there last May in a small 1-bed (corner unit) and it only cost 55,000 SOs for 9 nights.


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## jarta (Jan 28, 2010)

Hole19,   ...   "Had a partial view of a golf course fairway but nothing spectacular. I think it was building 7. ...   off to the side and they were re-paving the parking lot while we were there. I guess I just find it funny that a WKV member can come to Maui and get OF and we go to Arizona and get the leftovers."

I don't understand the "partial" golf course fairway view from Building 7 at Kierland.  All there is is a golf course view directly across 2 fairways for every one of the units in Building 7 - with single family homes behind the fairways and the mountains far in the distance.

Perhaps you were in the smaller 1-br where the balcony was set back in the building and the view is not as broad in scope.  But, you were not discriminated against.  All small 1-brs at Kierland have the set back balcony and, in part, it is done to avoid the effects of the broiling Phoenix sun during summer and make the units retain the coolness of the air-conditioning.

The repairs at the parking lot would not have affected your view.  None of the balconies look at the parking lot.  They look the other way.

However, for obvious reasons, there are no ocean views at Kierland.  In one of the buildings toward the center of the grouping, you (and the balconies) look at the pool.  All the rest have views directly across 2 golf course fairways.  Most people prefer the golf course views to the pool view.  To each his own, though.

If placed in Building 7 (or 6) you were placed in the newest part of the resort.  I would not consider the newest section "leftovers."  Sorry you felt that way.

The only "upgrade" anyone gets is a higher or better view of the mountains in the distance.  Personally, I like the NE mountain views and the location of Building 3 (close to the adult pool, main office and snack bar, but a longer walk to the parking lot).  However, I've stayed at and liked both 7 and 6.  My only criticism is that they are the buildings farthest from the pool area.   ...   eom


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## jerseygirl (Jan 28, 2010)

Ken555 said:


> Nice. When I'm not traveling in a large group (which is most of the time) and head to Harborside, I like to stay for 9-10 days. Using StarOptions rather than II actually is less expensive, based on my MF for WKV, vs using one of my other weeks via II (of course, a less expensive resort will net lower costs than my SVR weeks). In any case, this is where SOs can make a difference. For example I was there last May in a small 1-bed (corner unit) and it only cost 55,000 SOs for 9 nights.



Good point -- SOs allow you to stay for "non-traditional" timeshare timeframes.  But, again, there's a cost if you're using a resort (i.e. a Starwood resort) with higher maintenance fees than another resort that can be used to trade in during traditionally low-occupancy weeks.  And --- you're making part of my argument for me since you didn't need anywhere near 148,100 SOs!  

If a consistent Starwood preference period was in effect, I might change my position (just a little ).  I saw there was some good news on that front today with the latest WKORV bulk bank, but it's sure been missing lately (like a lot of Starwood policies -- lack of consistency!).


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## grgs (Jan 28, 2010)

jerseygirl said:


> Your point regarding Harborside is somewhat valid as it is most assuredly easier to get in with SOs than on an exchange, but even then -- summer SO trades are very rare, and the same weeks that are historically available with SOs generally end up in II as well.  I don't think there's a long-term SVN-member alive who would advise anyone to buy WKV/SVV to get into Harborside every year ... unless that buyer is always willing to go in January (cold), early May, hurricane season, or the dead weeks between Thanksgiving and Christmas.  And, again, those same weeks have historically been available via II (I know that for sure, as I have picked up at least one every year since about 2004).



I may have just lucked out, too.  But with my WKV options I was able to book the following at Harborside for this year:

16 days in mid June-early July in a small 1 bedroom

AND

7 days in late June-early July in a small 1 bedroom

Given the talk of how difficult this exchange was, I was pleasantly surprised.  I think 23 days at Harborside is an outstanding use of my WKV unit and well worth the mf (works out to less than $60/day).  I originally only planned to book the 16 day reservation, but then realized I had enough SOs left for another week.  So I called the following weekend and was lucky to get the second reservation.  I'm happy to say my sister-in-law and her family will be using the second unit.

But I do agree with you that it would be highly unlikely that I could make this trade regularly.  I'll just be grateful for my good fortune this time out.

Glorian


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## DavidnRobin (Jan 29, 2010)

Given recent posts - it appears that WSJ and HRA are getting easier to exchange into.

I have rented, stayed, and SVN exchanged our WKV 1Bd Plat/Prem weeks - all good values.


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## Ken555 (Jan 29, 2010)

grgs said:


> I think 23 days at Harborside is an outstanding use of my WKV unit and well worth the mf (works out to less than $60/day).



*SUPER* use of WKV SOs! Congrats, Glorian!


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## jerseygirl (Jan 29, 2010)

Glorian -- that's a great trade.  Good for you!

David -- I think you're right that things are easier right now ... probably due to the economy, but I hope it lasts.  I too was able to get a Harborside trade with SOs recently ... and it was after the 8-month mark, but I attributed it to the fact that I was asking for Labor Day week, when all the NE kiddies are back in school and hurricanes are a risk.  I called religiously a couple of months ago, trying to change our late May week to a late June/early July week, at 9:00 on the dot.  I  never had the luck that Glorian had.  I found availability once -- but the rep said she couldn't hold it until she processed my May cancellation and it would likely be gone by the time she finished processing the cancellation.  Since I was afraid I would lose my May reservation (stuck between a rock and a hard place!), I didn't take it.  Moral of the story -- those with available SOs have an edge over those trying to change a reservation.  We're renting the May weeks instead as we are going to Hawaii for 2 weeks to celebrate dd's college graduation, and then heading to St John for 2 weeks (with 48 hours or so in Florida as a stopover).  Have you decided if you're using your week 23?  If so ... would love to meet ... I'll buy you and Robin a drink!  Perhaps we could even share the costs of a charter and go island hopping!  I've been in touch with these guys --- you only get the basics (i.e., no bathroom on the boat, BYOB and food), but they get wonderful reviews and their price is terrific!

http://www.lionindasun.com/aboutCharter.html


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## gregb (Feb 3, 2010)

I was talking to Gregg Lundberg, the WKORV General Manager about the increases in property taxes.  According to him, the county picked three "comparable" Condominium developments and used the average selling price of their units (in 2007) as the basis to set the valuation of units at WKORV and WKORV-N.  2007 was a hot year for Maui properties, so the comparables were high. 2008 was the start of the drop in real estate prices, so for tax year 2010/2011, the valuations should be going down. 

So the county did not use the selling prices of the TS as the basis for valuation.  
Gregg did mention a couple of strategies that might be used to get the valuation changed.  But he asked that they not be spread around before the hearing.  One doesn't invite the other team into the huddle.  

Realistically, I don't expect that we will see much relief on the tax issue.  So we may need to look for silver linings.  One is the above mentioned drop in valuations that happened in 2008, so that should lower next years taxes.  Another is that part of the increase this year was for taxes for the previous year.  That should not happen again.  So maybe we will see some relief in the MF for next year.

And remember, the HOA and SW did a good job of holding down controllable expenses, resulting in over $100 savings in operating expenses for this year.  You should be happy about that.

Greg


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## DanCali (Feb 3, 2010)

gregb said:


> And remember, the HOA and SW did a good job of holding down controllable expenses, resulting in over $100 savings in operating expenses for this year.  You should be happy about that.



Did they actually hold down expenses or were the savings a result of a decline in energy services prices in 2009 versus a budgeted increase in energy costs? 

History shows the Starwood HOAs in general haven't been really good at holding expenses down anywhere, so my personal opinion is that a decline in energy prices caused the cost savings and such windfalls can go the other way the next time around.


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## sjlola (Feb 3, 2010)

The energy cost savings were achieved by the following: renegotiation of rates with the local energy company, switching from the original doublr "heavenly" shower heads to a single head, and encouraging guests to have their towels and linen washed less frequently, among other small things which added up over time.


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## DanCali (Feb 3, 2010)

My point was actually that energy rates charged by utilities fell in the economy in general in 2009... Did the local utility really give the Westin a "special" rate? Why would they do that? It's not like you can switch to a different provider. If WKORV budgeted a 10% (made up number) increase in energy rates and the reality was a 5% reduction, that's where savings can come from, especially with all that air-conditioning year round.

Towels and linen laundry, and one versus two shower heads, and even the trash liners do save something - but not $100 per 2BR unit per week...

I'm not saying the cost reductions are bad. I just don't think the HOA is as responsible for them as they would like owners to believe. Either way - lower costs are welcome anyday, especially if quality isn't compromised by much...


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## gregb (Feb 4, 2010)

DanCali said:


> My point was actually that energy rates charged by utilities fell in the economy in general in 2009... Did the local utility really give the Westin a "special" rate? Why would they do that? It's not like you can switch to a different provider. If WKORV budgeted a 10% (made up number) increase in energy rates and the reality was a 5% reduction, that's where savings can come from, especially with all that air-conditioning year round.
> 
> Towels and linen laundry, and one versus two shower heads, and even the trash liners do save something - but not $100 per 2BR unit per week...
> 
> I'm not saying the cost reductions are bad. I just don't think the HOA is as responsible for them as they would like owners to believe. Either way - lower costs are welcome anyday, especially if quality isn't compromised by much...



I don't have my paperwork with me.  But I believe that the savings made for this year are more than just a decline in energy costs.  Also, I believe that some of the energy cost declines came from installing a co-generation facility.  That seems to me to be proactive thinking on the part of the HOA and SW management.  

Greg


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## LisaRex (Feb 4, 2010)

Don't forget that all the savings we realized by cutting back on energy was offset by Starwood reneging on their "voluntary contribution" to the HOA.   They used the fact that we saved so much on energy as a justification for pocketing all that money instead of using it to offset our enormous MFs as they had pledged. 

So we Owners paid more out of pocket to get less.


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## Fredm (Feb 7, 2010)

LisaRex said:


> Don't forget that all the savings we realized by cutting back on energy was offset by Starwood reneging on their "voluntary contribution" to the HOA.   They used the fact that we saved so much on energy as a justification for pocketing all that money instead of using it to offset our enormous MFs as they had pledged.
> 
> So we Owners paid more out of pocket to get less.



I was not aware of Starwood's voluntary contributions to the HOA.
I know they were making subsidy payments. But, these were not voluntary. They were required by law to cover the units built but not sold.

I am not trying to split hairs in characterizing the payments. 
Just pointing out that if they were subsidies, Starwood did not renege. They simply stopped paying for what they no longer owned. Hence, they did not need an "excuse", since they did not "pledge" anything.

The electric co-generation plant will continue to produce lower energy costs.


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## LisaRex (Feb 7, 2010)

Fredm said:


> I was not aware of Starwood's voluntary contributions to the HOA.



They listed them as "voluntary contributions" in their annual "State of the Timeshare" report (the budget we got along with our MF invoices), along with a section that explained that Starwood reduced this contribution BECAUSE of the savings we realized on utility reductions.

So, yes, they did renege.


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## Fredm (Feb 7, 2010)

LisaRex said:


> They listed them as "voluntary contributions" in their annual "State of the Timeshare" report (the budget we got along with our MF invoices), along with a section that explained that Starwood reduced this contribution BECAUSE of the savings we realized on utility reductions.
> 
> So, yes, they did renege.



Thanks.  

Just an observation. A voluntary contribution to the HOA is highly unusual.  I have never heard of a developer doing such a thing. I am very surprised that Starwood did it.

Not to diminish the impact on already high fees, but having done so I would think it a reason for thanks instead of criticism.


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## gregb (Feb 7, 2010)

LisaRex said:


> They listed them as "voluntary contributions" in their annual "State of the Timeshare" report (the budget we got along with our MF invoices), along with a section that explained that Starwood reduced this contribution BECAUSE of the savings we realized on utility reductions.
> 
> So, yes, they did renege.



When I read the Owners Manual, I did not see any section that required Starwood to make voluntary contributions to cover the resort expenses.  They are supposed to pay their share for the unsold units they own and also for the resort stores and restaurants they own and operate.  If they make a contribution beyond that, i.e. voluntary, then we should be glad for that contribution in earlier years.  Not complaining that they "renege" when they decide to reduce that contribution.  

Greg


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## Troopers (Apr 20, 2010)

Update:

Starwood (and Marriott) appeals heard on March 31.  See here.

Hopefully we'll hear result in a few months.


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## okwiater (Apr 20, 2010)

Troopers said:


> Update:
> 
> Starwood (and Marriott) appeals heard on March 31.  See here.
> 
> Hopefully we'll hear result in a few months.



I like how 23 of the 26 pages are filled with Maui Ocean Club and WKORV-S and -N units.


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