"Aruba Ocean Club Owners, Sign up for a letter to Marriott on Maintenance Fees"

[nyreguy]

Where's the money?

As a commercial real estate property manager what also troubles me is the free space that Marriott occupies in the Ocean Club, e.g. sales office, Pavilion Bar, and all stores in the lobby. Marriott has the right to those spaces in perpetuity for $0 in rent to us. Just imagine how much lower our maintenance fees would be if the rent that Marriott collects goes to us?

In the meantime, we pay the cost of lighting and cooling those spaces but get nothing in return. We should be receiving a fair rent from the merchants as well as Marriott for the spaces that they occupy.

Marriott should be embarassed as to how much money they made in the development of the Ocean Club. Do the math. 213 units x 52 weeks x $20,000 average price = over $200,000,000. And for this they can't pay rent for use of our building?

I think that it is time for these shenanigans to be made public. Can anyone get these facts out to the travel industry press?

 

[lovearuba]

this thread

Hi
This thread was opened to try to work with the board and Marriott to get a response. I received emails from many member and they sent letters to Frank. No response was given. At this point I am supporting Marksue in getting the news out and think that complaints to better business. federal trade commission and your local news advocate groups will keep the heat on Marriott to step up to the plate. I personally am very interested in a class action suit. I know lots of folks only believe the money goes to the lawyers but I have been involved in some and that is not my experience. Before Eric writes about how I sue everyone, I've never sued anyone. I've only benefited from class action suits and happened to have purchased the products involved.

The most important thing about a suit is that it forces the defendent to change their business practices. Marriott needs to change theirs. So my advise to all owners that want a voice on this is to keep Marksues thread alive and reach out and let every consumer rights group you know how unfairly Marriott is treating you and how deceptive their business practices are.

 

[timeos2]

They wrote the book and it can be tough to undo

As a commercial real estate property manager what also troubles me is the free space that Marriott occupies in the Ocean Club, e.g. sales office, Pavilion Bar, and all stores in the lobby. Marriott has the right to those spaces in perpetuity for $0 in rent to us. Just imagine how much lower our maintenance fees would be if the rent that Marriott collects goes to us?

In the meantime, we pay the cost of lighting and cooling those spaces but get nothing in return. We should be receiving a fair rent from the merchants as well as Marriott for the spaces that they occupy.

Marriott should be embarassed as to how much money they made in the development of the Ocean Club. Do the math. 213 units x 52 weeks x $20,000 average price = over $200,000,000. And for this they can't pay rent for use of our building?

I think that it is time for these shenanigans to be made public. Can anyone get these facts out to the travel industry press?

Unfortunately this is a very common practice at far too many resorts. It takes a really strong HOA Board - and maybe a bit of luck - to dislodge a developer sales operation or get them to pay their fair value for the space as they wrote the very documents that give them the rights. And they will fight tooth and nail to hang on to those rights. Not a good thing for the owners or the resort.

 

[gator236]

Actually, as I understand it Marriott pays for those spaces beacause they pay maintenance fees tied to teh commercial space. The latest board letter pegs that at something like 12% of the total budget is paid by Marriott for those spaces.

 

[nyreguy]

In the real estate business, the "tenant" pays both a rent and their share of the common maintenance charges. In this case, Marriott is only paying their maintenance charges (which I wouldn't mind seeing how those are calculated), but not rent.

What are maintenance charges? Typically, they are the costs of cooling, lighting, cleaning of public areas, insurance, maintenance, etc. If this was a shopping mall it would also include parking lot maintenance, snow removal, roof repairs, etc.

Assuming that the maintenance charges are being calculated fairly, which is always a controversial item between landlords and tenants, that's fine. But what about rent for use of the spaces? Think of the lobby stores and restaurants (Champions). Marriott collects rent from those tenants for the use of OUR building. Then add in the spaces that Marriott itself occupies and does business, i.e. the snack bar/ice cream space, Pavilion Bar and Grill by the pool. They are doing business, generating revenues for themselves but not paying rent to the landlord which is us, not them.

In my 40 years in this business this ranks as one of the best real estate deals (for Marriott) that I have ever seen and one of the worst real estate deals (for US) that I have ever seen.

How can I make a deal like this?

If you would like further information, please contact me at nyreguy@gmail.com.

 

[marksue]

Marriott does pay 12%. The issue though is the fair value they pay the Ocean CLub for putting sales desks in the Ocean Club. For the longest time, they have not paid anything to the OCean Club for the sales desks, even though they are jsut selling the Surf Club. Only recently have they agreed to pay for 1 desk at a below fair market value.

THis is another one of these practices where Marriott is ramming it down the owners throat by saying this is what we will pay and too bad. THey refuse to pay us for back rent for the desk space.

 

[Dave M]

Ramming it down the owners' throats?

As Eric has suggested in the other thread, you should carefully read the CC&Rs before you commit to buying at a resort. Had you done so, you would have found that Marriott was entitled to that space without paying rent. If that didn't sit well, you shouldn't have purchased. If you didn't bother to read that provision, you have no basis for a complaint about the practice, which has been written into the CC&Rs for every new MVCI resort at least since 1992.

 

[marksue]

I disagree with you. That is why the board has been negotiating with Marriott for fair compensation and it has been a point of contention between the board and Marriott. In fact that was one of the items the board was considering in their filing for a class action against Marriott.

Here is the verbiage directly from the board announcement.

(iii) S&M Desks in the AOC Lobby: The Coop is entitled to
receive a monetary consideration for the past, current and future
installation and operations of the numerous S&M Desks operated by the
Marriott Affiliated Parties, such without prejudice to the right of the
Coop to exercise its right to terminate, in whole or in part, as the
case may be, the installation and operations of such S&M Desks in the

(iv) Lobby Desk Space Rentals: The Coop is entitled to all
income derived from the grant by the Marriott Affiliated Parties of
concessions and licenses to persons or entities to provide facilities
and services to and within the AOC;


SO i stand by my comment that Marriott is ramming it down the owners throat.

 

[Dave M]

Please read my post more carefully and how it relates to your previous post. Marriott was entitled to free space for sales and administrative functions. See the CC&Rs for that language. When that "free rent" stops is a matter for negotiation between Marriott and the Board, just as it is at other Marriott resorts. Does Marriott hold the upper hand? Sure it does. But the CC&Rs give it that upper hand. You should read them.