Dear Southcape Owner
We have a lot to tell you about this year and we hope you'll take the time to read this newsletter so that we can bring you completely up to date.
First, we'd like to inform you that
New England Vacation Services, LLC has purchased the unsold inventory at the Southcape from Vince Earth and Robert Woods. New England Vacation Services, LLC is made up of a group of experienced timeshare professionals with solid backgrounds in resort management, sales and marketing.
We have been trying to purchase the inventory for many years and we're very excited about the future of Southcape Resort. The resort will be managed by
New England Vacation Management Services, LLC and
we intend to make substantial improvements to the resort both physically and operationally. My name is Cliff Hagberg and I'm the Managing General Partner. I'm a native Cape Codder and I have been involved in managing resorts across the U. S. and Europe for the past twenty years. I have been an owner at Southcape myself so I'm intimately familiar with the resort. In this newsletter, I want to talk with you about our plans for the resort.
As part of our continuing effort to keep you informed about new things at Southcape, we're delighted to inform you that we have affiliated Southcape Resort with one of the premier vacation companies in the country - Festiva Resorts.
We are in the process of afflliating the entire resort with RCI Interval International and Festiva Resorts to give you as many vacation opportunities as possible.
We will be happy to answer any questions you may have about these exciting, new vacation options and Outfield Marketing will be contacting you directly to explain the new benefits and what they mean to you as an owner. When Outfield contacts you, please know that they are working directly with resort management for your benefit. Outfield will also be able to update you on the financial situation at Southcape Resort.
We need to talk about the realities of the financial situation at Southcape Resort. The fact of the matter is that the current maintenance fees do not cover the operating budget of the resort. The main reason for this is that we have a large number of owners who do not pay their maintenance fees.
We have a plan in place to deal with this effectively for the first time. We have contracted with Monterey Financial Services to begin a professional collection effort with the delinquent owners. Those collection efforts have already begun. We need to do this to generate income for the resort.
For years, the resort operated without a real budget. Without a budget, it is impossible to calculate what the maintenance fees should be. For the past few years, the resort only increased maintenance fees a small amount and the result has been that there is not enough money to pay the bills.
For 2009 we have created a detailed budget that will pay all of the bills for the entire year. With NEVMS, Southcape Resort will have a professional management company assisting resort management with controlling the operating budget.
While we realize that this years maintenance fee represents a significant increase, it is still lower than many similar resorts. For example, Brewster Green maintenance fees are as high as $740.00 and the Ponds at Foxhollow are as high as $811.00. Holiday Estates is $680.00 so the new maintenance fees are not at all out of line with other resorts. Maintaining a resort can be expensive and the new maintenance fees will allow us to do that.
The next financial issue we need to tell you about concerns the resort's reserves for capital expenditures. Simply put, there are no reserves. Improvements to the resort have been paid out of the operating budget. This has not only resulted in a shortfall in operating income but has caused the resort to make improvements in a piece meal fashion without an overall plan.
We are changing that situation immediately.
We need to fund the reserve accounts so that, when a major repair is needed, the money will be there. We have begun that process by including a payment into the reserve account to begin building up the resort's reserves. You will notice that by basing the budget on the number of owners who are current in their maintenance fees, when the weeks from the delinquent owners begin paying, we can deposit that money right into a reserve account to fund the improvements. This will take some time but it is part of our overall operational plan.
The final fmancial area we need to address is the timely payment of maintenance fees. Currently, the maintenance fees are due when received. As of January 31, 2009, a late fee of $50.00 will be added to accounts that are not paid. After March 1, 2009, if the maintenance fee bill is still unpaid, the account will be turned over to Monterey Financial and additional collection fees will be added to the outstanding balance and
your account will be blocked from usage. While we are reluctant to do this, it is critically important for budgeting purposes that we know, as early as possible, how much money we will have to run the resort every year. Owners who are late in paying their maintenance fees seriously affect that budgeting process so it is very important for you and the resort to pay your maintenance fee when it is due. Your cooperation in paying your maintenance fee bill when received will greatly assist us in bringing financial stability to Southcape Resort and we sincerely thank you for you continued cooperation.
Over the coming months, we will be developing a detailed plan of improving the resort and how we can complete the upgrade of the resort. When that process has been completed, we will be sending you a copy of that plan. While it's impossible for us to take phone calls from thousands of owners,
we will be setting up a brand new web site for Southcape Resort. As part of the website, there will be a special area just for owners where you can go to get current information on exactly what's going on at Southcape. We will give you the information on the new web site in our next update.
The area we're most excited about is bringing to Southcape something it's never had before. With the help of Outfield Marketing, Southcape Resort will now have the services of a professional sales and marketing company. This is critically important in order to bring in new owners and generate maintenance fees.
Over the next several months. vou will be hearing from us on a regular basis as we introduce new plans for the improvement of the resort. We firmly believe that Southcape Resort can be one of the premier resorts in New England and we're dedicated to making that happen. While we know that you may have questions, if at all possible, please email them to us at
rcassidy@southcaperesort.com. With thousands of owners, it is just physically impossible for us to speak with all of you and email helps us respond to you in a timely fashion.
Thanks for your continued support and all of us here at Southcape look forward to welcoming you back next year.
Sincerely
Cliff Hagberg
New England Vacation Management Services, LLC
