North County Times Article
TUG mentioned and Steve quoted:
http://www.nctimes.com/articles/2009/07/12/business/za81ebe225bd0c50f882575e8007be796.txt
Time-share owners on sidelines of Aviara dispute
Effects expected to be minimal, but Four Seasons and hotel owner mum
By CHRIS BAGLEY -
cbagley@nctimes.com | Sunday, July 12, 2009 12:08 AM PDT
CARLSBAD ---- Time-share owners at the luxurious Aviara resort are waiting on the sidelines of a legal struggle between the hotel's owner and Four Seasons Hotels and Resorts Ltd., which manages the entire resort.
The partnership that owns the hotel has been trying since March to sever a management contract that extends decades into the future, arguing that Four Seasons has failed to run it in a cost-effective manner. Four Seasons has said the resort remains profitable before servicing the partnership's debt tied to it.
The matter has been before an independent arbitration panel since late May.
The dispute isn't likely to affect the time shares, condominiums that owners have bought the right to use for one or more weeks per year. Four Seasons manages the time shares under a separate contract with the owners group. Known as the "Residence Club," the time-share area has its own pool and fitness club.
But owners also have access to many of the same facilities as the guests who pay $400 or more per night, a selling point that Four Seasons uses in its promotional materials, and it isn't totally clear whether owners would keep their access if Four Seasons were to be ousted.
Time-share owners have discussed the tussle on at least one online comment board since early May, when the matter broke into open court. Four Seasons alleged that the partnership, a joint venture of Broadreach Capital Partners and Maritz, Wolff & Co., sent representatives into the resort's offices in the middle of the night to swipe accounting ledgers.
"This will certainly have an impact," Aviara regular Steve Tuttle wrote in May at
www.tugbbs.com, "especially if Four Seasons is eventually booted from the hotel."
Tuttle moderates a forum on the Web site, an information board for time-share owners and users.
Four Seasons sought to calm fears in a June newsletter to the time-share owners, saying that the Residence Club wasn't directly involved. But the newsletter pointedly declined to speculate on what might result from the arbitration.
A Four Seasons spokesman at the resort said the arbitrators had forbidden both sides from discussing the dispute, including potential effects on time-share owners if his company were to lose the management contract. The spokesman said Monday that arbitrators haven't indicated when they might reach a decision.
A representative of the hotel partnership couldn't be reached for comment last week.
Aviara time-share owner Mario Collura said he expects only minimal effects.
"The hotel is a plus, but when I'm there, I'm pretty much spending all my time at the Residence Club," Collura said.
Collura said Four Seasons has given no indication that it would back out of the management contract at the Residence Club. He said it's conceivable that Four Seasons might raise management fees for the time shares if it's no longer able to spread overhead expenses across the entire resort, but he added that he'd probably be willing to pay it because he has been happy with Four Seasons management. Fees run about $2,000 annually per week of ownership, according to owners and users on the comment boards.
Collura, who also runs the time-share brokerage TRI West in Los Angeles, said he hasn't noticed the four-month dispute having an effect on prices, though prices did head down late last year as the recession deepened. He declined to discuss specific figures, but several Web sites list one- and two-bedroom Aviara time shares for resale at $10,000 to $40,000.
Time shares have continued to change hands as usual, Collura said.
"We're still selling a good number," he said.
Call staff writer Chris Bagley at 760-740-5444. Read his blogs at bizblogs.nctimes.com.
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