# Diamond Resorts to buy all of Sunterra?



## Carolinian (Mar 9, 2007)

There are reports from the media at Timeshare Talk that Diamond Resorts of Las Vegas is in talks with Sunterra to buy all of Sunterra.


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## Spence (Mar 9, 2007)

*Sunterra Acknowleges It Is in Discussions With Diamond Resorts*

News Release


> LAS VEGAS, NV, Mar 09, 2007 (MARKET WIRE via COMTEX News Network) -- Sunterra Corporation (PINKSHEETS: SNRR) today acknowledged, in response to a story issued by The Wall Street Journal, it is in discussions with Las Vegas-based Diamond Resorts, LLC regarding the possible acquisition of Sunterra, however, the company said it has not signed an agreement.
> There can be no assurance that any transaction will occur or, if undertaken, the terms or timing of such a transaction.
> 
> Sunterra said it will make no further comments at this time.


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## dougp26364 (Mar 9, 2007)

Now that would be an interesting merger. A two resort group (DRI) buys one of the largest timeshare companies out there. If that happens then I guess Sunterra has really hit rock bottom. 

Of course that would allow DRI to gouge Polo Towers owners for a few thousand more to convert to Sunterra's points program. Now THAT I can see. 

For Sunterra owners this would be a bad thing IMO. DRI is a poor management company looking out only for itself and not it's owners. I suppose if this were to happen, the timeshare industry would have another company like Westgate on it's hands.

Of course I'm assuming that Diamond Resorts is Diamond Resrots International which owns Polo Towers and the Villa's at Polo Towers.


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## SallyMagoo (Mar 9, 2007)

Interesting.  We own a Sunterra timeshare in Santa Fe, but it is not in Club Sunterra.

I googled Diamond Resorts, LLC, but could find no information about it. 

Does anyone have any information about this company; I would like to know if they own or operate any other resorts.  If so, what are those resorts.  

Thanks!


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## timeos2 (Mar 9, 2007)

SallyMagoo said:


> Interesting.  We own a Sunterra timeshare in Santa Fe, but it is not in Club Sunterra.
> 
> I googled Diamond Resorts, LLC, but could find no information about it.
> 
> ...



I hear they have some resorts in Texas, very high end, but mostly deal in housing projects not timeshares. This could be interesting especially if they want to be a premium brand.


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## jancpa (Mar 9, 2007)

I thought they were involved in the development of the Polo Towers timeshares in Las Vegas.


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## T_R_Oglodyte (Mar 9, 2007)

jancpa said:


> I thought they were involved in the development of the Polo Towers timeshares in Las Vegas.



Yes - you get more info if  you Google "Diamond Resorts International".  They did the Polo Towers, and are partied up with MVCI on the new development there.  They're also involved with Hilton, IIRC, on a development on I-15 just inside the NV border.  Also involved with Kona Reef.

Also try Googling "Cloobeck Companies"


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## dougp26364 (Mar 9, 2007)

T_R_Oglodyte said:


> Yes - you get more info if  you Google "Diamond Resorts International".  They did the Polo Towers, and are partied up with MVCI on the new development there.  They're also involved with Hilton, IIRC, on a development on I-15 just inside the NV border.  Also involved with Kona Reef.
> 
> Also try Googling "Cloobeck Companies"



There involvement with Marriott is only in the respect that they sold the rights to brand the Grand Chateau a Marriott. DRI had the land, the project plans and the permits to build GC but, ironically had decided to get out of the timeshare business. So they sold the rights to Marriott. Otherwise DRI has no involvement in Marriott's Grand Chateau.

Involement with Kona Reef was to puchase part of that resort with the idea they would become a player in the timeshare buisness and build a network. Rather than develope a timeshare they bought into one, Kona Reef. Then, again, decided this wasn't the direction they wanted to go. 

DRI has a history with PT's of making promises and not keeping them. Several years ago there was a legionella outbreak at PT's. We were, at the time, forced to pay an SA even though the owners document stated it had to be voted on. After collecting it they retroactively had a "vote." The SA included upgrading the on site water system to prevent another outbreak, upgrade security and replace the rarely used tennis courts with a kiddie water park. The work was suppose to be done within the year. Instead it took over three years to put in the water park and security upgrades weren't seen until last year when they made the elevators key card access only.

The developer also retained all rights to the common area's in the original documents. During active sales, the 18th floor owners lounge with great views of the Las Vegas strip was HEAVELY marketed as a benefit of being an owner. Shortly after active sales were completed it was boarded up and converted to an accounting office. Before that and without owners approval, it was rented out and turned into a dance club which brought in all sorts of foot traffic on the weekends, causing a larger need......and larger expense.....for security officers. The resort would at times be overrun with 20 somethings looking for a good time. It definately was NOT the nice quite timeshare feel owners had come to know and essenially ruined going up to the "owners lounge" on the weekend for a quite drink and beautiful night time views of the Las Vegas strip before turning in.

No, as DRI has not maintained Polo Towers, owners have had to "vote" on another expensive SA to bring PT's back up to  standards. The resort is in danger of losing it's 5 star rating with I.I. The vote itself was ill prepared and managed with several extensions and clouded in secrecy. There was little to no communication and the auditing firm issued a statement with wording distancing itself from responsibility in the actual vote count. 

The SA did pass and now they are already back tracking on the start/completion date or, they just don't have a plan. A couple of weeks ago I e-mailed customer service to see when the renovations would be started. I was told they would start in March and be completed in December. Another owner has posted on a thread in the Western forum that they were recently told the start date is June. By June I'm sure they'll have another start date.

The company that has become DRI was also the developer/manager of Jockey Club. Ask a JC owner how they felt about DRI. They managed to kick them out and bring in another company to manage the property but not before Jockey Club lost it's 5 star I.I. rating. I believe that the company was just called Diamond Resorts LLC at the time they developed and managed JC. Although I'm not to certain they actually developed JC. I think JC was a full ownership condo before being taken over and turned into timeshares.

DRI also had a falling out with Coast casino's recently. They were to develope a timeshare concept with them at one point. I thought it had something to do with their Red Rock casino/hotel but am not sure. I only recall reading a blurb about it in either the Las Vegas Sun or Review Journel.
Presently I believe they are involved with redevelopement of some Jean hotel/casino's for MGM/Mirage in converting them into affordable housing for MGM/Mirage workers. Again it seems that it was just a blurb in the LV Sun that I read about this. A search for DRI or Stephen Cloobeck, the CEO, might turn up more information about what they've been up to in and around Vegas. 

Sorry to give discouraging news but DRI has not been, IMO, a responsible management company. They certainly don't seem to feel the need to be responsible to, or communicate with their owners. Owners seem to be more of a cash cow than anything else. I suspect now that PT's has been out of active sales for over a year, DRI feels the need to find new income sources and Sunterra must look like a good target.


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## cluemeister (Mar 10, 2007)

Doug,

I'm confused. How would Cloobeck/the new Sunterra be able to offer PT's as one of its resorts, as it is sold out as a weeks resort?  

In theory, I think you're saying Cloobeck will offer PT's owner the chance to join Sunterra for $$$.  Then let's say 5% of PT's owners switch to Sunterra points.  As thousands of people in the Sunterra system try to trade into PT's units with their Sunterra points, won't they all be fighting for a few  tradeable units?

And what happens if eventually the owners at PT's were to replace Diamond Resorts?


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## dougp26364 (Mar 10, 2007)

cluemeister said:


> Doug,
> 
> I'm confused. How would Cloobeck/the new Sunterra be able to offer PT's as one of its resorts, as it is sold out as a weeks resort?
> 
> ...




That's what I'm saying. He'll try to scalp us for thousands of more $$ to join Sunterra's point system or give up our deed to join whatever Sunterra's trust is. 

It would work the same way as Sunterra's weeks owners who did not convert to Sunterra's point system works. As I understand it, you'll be able to use your unit or trade your specific week or trade your specific week. But you'll have a tougher time trading within the Sunterra system since points are more flexible to use/spend. Sunterra also has a system where points can be used for things other than timeshare stays like paying your MF's. They also seem to allow you to bring other resorts into your account for additional Sunterra points. 

Essentially, it's another way to get more money out of you for what you already own but with the promise of more flexibility. Cloobeck would love nothing more than to get another couple thousan dollars out of every owner at PT's if he can. 

Exactly WHY Cloobeck really wants to get back into timeshare is beyond me when he sold out just a few years back. The only thing they really have now is PT's and maybe the 23 Kona Reef units they bought a few years back. Jockey Club owners were able to kick DRI out as management several years ago. Now he wants back in? All I can say is he must see a lot of $$ in managemnt fee's or he needs a cash infusion from unit sales. His sales force was very successful at PT's selling up to $2,000,000 in inventory in a one week span at times. To bad they're not as good at customer relations. 

I don't see this as hurting PT's owners. In fact, for us it could be a bonus. But I don't see it as necessarily a good thing for Sunterra owners hoping for better or more responsive management.


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