Festiva takes over resort

[Sou13]

Originally Posted by wmauryd

It's not directly related to Southcape but it's interesting to read about the $80k in unpaid vouchers, awarded by a Cape Cod timeshare marketing company, today on http://www.capecodonline.com/

How are sales going at Southcape anyone? Are promotional meal vouchers being awarded for tours?

Here's the article:

Promotional coupons burn businesses
By PATRICK CASSIDY
Published: March 21, 2009
DENNISPORT - For years, Cape Cod Holiday Promotions worked just like similar marketing strategies. Visitors who agreed to tour timeshare properties received coupons for restaurants and other tourist-friendly businesses. The marketing group reimbursed participating businesses for the value of the coupons used by customers.

Businesses got new customers. Customers got discounted meals or some other service, and the timeshare business made money from the people who purchased a vacation getaway. Everybody made out.

But not this year.

At least a dozen businesses who honored the coupons are owed approximately $80,000 and no one can tell them when they will be reimbursed.

One business owner is considering legal action, while others - leery of spending money in small claims court to chase down a few thousand dollars - have either stopped honoring the vouchers or are simply keeping their fingers crossed that they'll eventually get what they're owed.

Devitt Adams, a spokesman for a group of timeshare owners at Breakers Resort in Dennisport, acknowledged that he and his partners owe money to businesses who accepted the vouchers.

Adams, also the point person for the Cape Cod Holiday Promotions program, said a multimillion dollar decline in sales has made it difficult for them to reimburse some of the participating businesses.

Two years ago, Adams and his partners, who represent the various owners of 300 timeshare units in Breakers and Edgewater Resort, generated $21 million in sales, compared to $3 million last year, he said.

"We had a catastrophic year for business," he said. It is not clear where the $3 million that was taken in went and attempts to contact Adams yesterday for follow-up questions were unsuccessful.

About 40 businesses have participated over the dozen or so years the promotion has run, Adams said Tuesday. In 2007 the promotion paid out $550,000 to Cape merchants, he said.

"For many years it worked very, very well and everyone was happy," Adams said, adding that he was "personally committed to paying all of these people."

Adams estimated that $210,000 had been distributed to businesses for last year's certificates. An additional $80,000 remains unpaid, he said.

Goodwill, however, does little to make up for the missing money, affected business owners said.

"It makes you not want to participate with these people when you get burned," Felis Barreiro, owner of Alberto's Ristorante in Hyannis, said as he flipped through about $4,000 worth of the vouchers. It was especially difficult to go unpaid during the current economic tailspin, Barreiro said.

"I've got to make my payroll at the end of the week just like everyone else," Barreiro said. Taking the issue to court may not be worth it once attorney fees and other expenses are accounted for, he said.

Business owners in Barnstable, Dennis and Yarmouth who spoke to the Times reported more than $30,000 in unpaid certificates. The Times attempted to contact other businesses involved but they were either closed for the season or shut down for good.

A handful of business owners said they did not encounter many customers using the certificates. Some others said Adams paid them what they were owed.

The scope of the problem became apparent when Matt Muller, assistant manager at Cape Cod Central Railroad, realized his company was owed about $1,000 in $25 vouchers it had honored. Muller, who is also a bookkeeper, said he could not reach Adams no matter how hard he tried. When he contacted other businesses he heard the same story.

"That's probably what irks me the most," Muller said about the lack of communication.

Muller also said it had been hard to get money back for the vouchers even before last year, but not impossible.

"If there's a good explanation I'd love to hear it but I can't even get a hold of Mr. Adams," he said.

Adams said the slower-than-normal sales meant he had to shut down his Chase Avenue office and admitted he was difficult to reach. "There's been nobody here."

Despite the difficult year, the companies Adams works with are not filing for bankruptcy and are going to continue to operate, he said.

In the past five years, there have been complaints about Breakers Resort and Edgewater filed with the local Consumer Assistance Council. But Executive Director Paul Schraeder said he could not discuss the details of the complaints because they are confidential.

The state Attorney General's Office would not confirm or deny whether there is an investigation into Cape Cod Holidays Promotions, a spokesman said.

 

[Carolinian]

If the resort won't allow flyers to be placed in the resort mailings, and they won't give you a list of names and addresses of owners because they say it would violate privacy laws, then how can a group get in touch with the majority of owners. We would love some advice on how to proceed contacting owners to form a Concerned Owner's group. Other than the annual meeting where ony a small percentage of the owners will attend, and a couple of web sites like TUG and Yahoo, gaining access to the owners is impossible.

The privacy laws argument is bunk, at least in the US. The applicable laws are the corporate laws. Every t/s HOA I am aware of in the US is organized as a non-profit corporation. Non-profit corporation law requires them to give you a list of names and addresses, but those cannot be passed on to others outside the organization, used for commercial purposes, etc. They can only be used to communicate with members on issues relative to the corporation (HOA). There is also usually a time frame during which they have to give them to you, which is a certain period preceding the annual meeting. Any other time they can refuse. You need to check the state non-profit corporation law of the state where the timeshare is located to learn the specific time frames during which you are entitled to the list. State non-profit corporation law also allows you to inspect and copy many corporate records of the HOA, and often a backdoor way to get the list at other times is inspect and copy the membership list while you are looking at minutes of directors meetings, monthly financials, etc. I would look up the statute number and specifically ask for the list according to that statute number. Talk to the state agency that regulates corporations (often the Secretary of State) and they can probably point you right to the applicable laws. Another place that can be very helpful is the state agency that regulates timeshare, usually the Real Estate Commission. If you get any flack from management, that is also where you should file a complaint.

A group was formed for just this purpose at Dunes South some years ago. After they had gone all the way to the state Supreme Court some years before that to kick out developer management, they had fallen under the thumb of a local management company which had gotten control of their board and was generally making a mess of things. The initial group was only three or four people, but they made a proper demand for the membership list, which management tried to blow off but one of them who was a lawyer went straight to the HOA lawyer and he straighten management out, which provided the list. That small group kicked in funds and mailed the whole membership twice. They send a proxy form and also asked help to defray expenese. They received enought contributions to pay for the first mailing and also a second. With their proxies, they defeated and replaced one of the two incumbents who were up for board positions that year, which then built a fire under management for a while to do things right. When management got back to its old ways, the full board, including those who positions had originally come courtesy of management, knew that they had a membership that was watching, so they fired the management company.

You might also want to set up a members only discussion board online for your concerned owners. I don't know if TUG provides those, but I think TS4MS probably would.

 

[Carolinian]

You also should get a copy of the HOA bylaws and look at provisions for election of directors and removal of directors. IMHO there is a very good argument that anyone connected to a management firm or sales firm has a conflict of interest in serving on the board. That is particularly true since the board hires and fires the management company and evaluates its performance.

Are there any independent directors currently on the board? Perhaps you can find some allies there.

Another area to look for conflict of interest is the split between the HOA and the points operation and its sales company on points conversions proceeds. You can probably find some data on what percentage is customary in the industry for the HOA to receive. If it is less than that, then there is a sweatheart deal and strong evidence of improper actions by the current board. Unless the HOA receives a substantial amount, it would be foolish for the HOA to participate in such a scheme. If the HOA does receive a substantial amount, then I guess it is just a business decision that could be made either way. However, there should be a condition that any voting rights obtained by conversions would be exercised by the members not by a points operation. Otherwise you lose the independence of your board.

 

[Carolinian]

That is not quite true. If your points are what Equivest calls New points (not converted from a deeded week, which you still own (Charter membership)), then the intervals are held by the trust, which Festiva already controls. Even with the Charter membership, Equivest, and hence Festiva, exercises a right to vote those intervals. One former Equivest/Pettertree resort, Outer Banks Beach Club, took Equivest to court and obtained a ruling that the Charters members/owners have the right to vote, not Equivest. That ruling occurred when Wyndham/Fairfield owned Equivest.

Outer Banks Beach Club (I and II)'s HOA board also kicked out Fairfield/Wyndham as management and brought in an independent management firm from South Carolina, which has been managing the resorts for several years. Fairfield was left with only the old sales office across the street. When they decided to reopen it to try to sell Fairfield points, the Beach Club refused to let them take t/s tours on their property and Fairfield had to pay the HOA at Seascape to take tours there, which was several miles away, instead. In a few months, Fairfield closed and sold the old sales office.

I found Festiva's press release when they bought the Equivest/Peppertree points club dishonest, in that they claimed they had ''bought'' Outer Banks Beach Club I and II, which of course they did not. They only bought a small percentage of weeks that were in the points club. at those resorts. Most weeks there are individually owned fixed weeks.

 

[tombo]

I guess my posting of the auction for 1500 Festiva points at Peppertree Ocean Club on this forum really drove the price and number of bids way up. Unlike the other recent Festiva resort auctions which ended with zero bids, the auction I posted on this thread ended with 3 bids and a selling price of $1.25 (auction #220379214962). This should answer any questions concerning the value of points at Festiva resorts.

 

[tombo]

Carolinian, thanks for the advice. I know it can help some of the members here wondering about Southscape and many other Festiva resorts. If a letter could be mailed to the owners explaining the situation, few if any would swap to FAC, and very few would vote for the Festiva and outfield associates to get on the board or be re-elected to the board.

 

[ecwinch]

Non-profit corporation law requires them to give you a list of names and addresses, but those cannot be passed on to others outside the organization, used for commercial purposes, etc.

Carolinian,

A lot of good pointers. When I first read your reply, the point above seemed a little open-ended. However in checking the tentative ruling in the WorldMark owners case to obtain the mailing list, you are dead on.

Tombo -

I am not a lawyer, but have stayed at a number of Holiday Inns. It would appear that this section of the NJ Statue pertaining to non-profit corporations is the one that you need to reference in your request.

15A:5-24. Books and records; right of inspection
a. Each corporation shall keep books and records of account and minutes of the proceedings of its members and board and executive committee, if any. Unless otherwise provided in the bylaws, the books, records and minutes may be kept outside this State. The corporation shall make available for inspection at its registered office, in this State, or at its principal office if it is in this State, records containing the names and addresses of all members, the number, class and series of memberships held by each and the dates when they respectively became members of record thereof, within 10 days after demand by a member entitled to inspect them, as defined in subsection c. of this section. The foregoing books, minutes or records may be in written form or in any other form capable of being converted into written form within a reasonable time. A corporation shall convert into written form without charge any records not in that form, upon the written request of any person entitled to inspect them.

b. Upon the written request of any member, the corporation shall mail to that member its balance sheet as at the end of the preceding fiscal year, and its statement of income and expenses for that fiscal year.

c. Any person who shall have been a member of record of a corporation for at least 6 months immediately preceding that person's demand, or any person holding, or so authorized in writing by the members holding, at least 5% of the memberships of any class or series, upon at least 5 days' written demand, shall have the right for any proper purpose to examine in person or by agent or attorney, during usual business hours, its minutes of the proceedings of its members and record of members and to make extracts therefrom, at the places where the same are kept pursuant to subsection a. of this section.

Here is the link to the complete statues: LINK.

 

[tombo]

That will help those in New Jersey and is appreciated.

My resort is in North Carolina where Festiva is based. Have you stayed at any Holiday Inns in North Carolina lately?

 

[FestivaRep]

I found Festiva's press release when they bought the Equivest/Peppertree points club dishonest, in that they claimed they had ''bought'' Outer Banks Beach Club I and II, which of course they did not. They only bought a small percentage of weeks that were in the points club. at those resorts. Most weeks there are individually owned fixed weeks.

Actually the press release did not say anything about us 'buying' OBX I/II, it just said that a resort in St. Augustine was 'involved in the acquisition' which it was. From the press release, which can be found in the Press Room on our website:

Resorts involved in the acquisition and previously owned by Peppertree Resorts are located in Wisconsin Dells, Wis., Branson, Mo., Gatlinburg, Tenn., Myrtle Beach, S.C., and St. Augustine, Fla. Four North Carolina resort locations include Outer Banks, Atlantic Beach, Banner Elk and Maggie Valley. The properties in Wisconsin Dells, Banner Elk and Atlantic Beach also include undeveloped land.

 

[ecwinch]

That will help those in New Jersey and is appreciated.

My resort is in North Carolina where Festiva is based. Have you stayed at any Holiday Inns in North Carolina lately?

Not sure why I thought we were talking about a resort in Atlantic City, NJ. Here is the info for North Carolina:

55A‑16‑02. Inspection of records by members.

(a) A member is entitled to inspect and copy, at a reasonable time and location specified by the corporation, any of the records of the corporation described in G.S. 55A‑16‑01(e) if the member gives the corporation written notice of his demand at least five business days before the date on which the member wishes to inspect and copy.

(b) A member is entitled to inspect and copy, at a reasonable time and reasonable location specified by the corporation, any of the following records of the corporation if the member meets the requirements of subsection (c) of this section and gives the corporation written notice of his demand at least five business days before the date on which the member wishes to inspect and copy:

(1) Excerpts from any records required to be maintained under G.S. 55A‑16‑01(a), to the extent not subject to inspection under G.S. 55A‑16‑02(a);

(2) Accounting records of the corporation; and

(3) Subject to G.S. 55A‑16‑05, the membership list.

(c) A member may inspect and copy the records identified in subsection (b) of this section only if:

(1) The member's demand is made in good faith and for a proper purpose;

(2) The member describes with reasonable particularity the purpose and the records the member desires to inspect; and

(3) The records are directly connected with this purpose.

(d) This section does not affect:

(1) The right of a member to inspect records under G.S. 55A‑7‑20 or, if the member is in litigation with the corporation, to inspect the records to the same extent as any other litigant; or

(2) The power of a court, independently of this Chapter, to compel the production of corporate records for examination.

(e) A member of a corporation that has the power to elect, appoint, or designate a majority of the directors of another domestic or foreign corporation, whether nonprofit or business, shall have inspection rights with respect to the records of that other corporation. (1955, c. 1230; 1985 (Reg. Sess., 1986), c. 801, s. 31; 1993, c. 398, s. 1.)


LINK

Here is also some info on HOA's and the NC timeshare act.

 

[Sou13]

Southcape?

Eric, could you find the info we Southcape Resort interval owners need? (Somehow this discussion seems to have gone off track into a general FAC discussion).

 

[Carolinian]

Some of the techniques used to con people out of their timeshare deeds for worthless points might also be of interest to the North Carolina Real Estate Commission.

It was the North Carolina Real Estate Commission which forced RCI's hand to modify some of the more egregious aspects of RCI Points (or GPN as it was called then) when it was first rolled out. They threatened to treat RCI Points as a timeshare developer with all that entailed rather than an exchange program unless they made some changes to the most anti-consumer aspects, like the automatic renewals. RCI caved.

Some of the very techniques described are used to con people into other points programs including RCI Points.

 

[Carolinian]

Tombo - I am curious as to which resort in NC you own at that has this problem.

 

[Carolinian]

Here is a good example of what can happen if you let a points operation push your members to convert their weeks:

www.timesharetalk.co.uk/forum/topic.asp?TOPIC_ID=10835

Weeks members are being pushed out the door and forced to convert, then the resort itself will likely be sold.

Points operators have pulled the same scam repeatedly in South Africa conning people into converting to points, then taking over the resort and ultimately selling either some of the units or the whole resort. There are multiple stories on this scam on the Crimeshare site. It has also been pulled on the Canary Islands.

 

[ecwinch]

Eric, could you find the info we Southcape Resort interval owners need? (Somehow this discussion seems to have gone off track into a general FAC discussion).

Here is the Massachusett Timeshare Act: LINK.

The address list portion is covered here:

(b) The managing entity shall keep reasonably available for inspection and copying by any time-share owner all addresses, known to it or to the developer, of all the time-share owners with the principal permanent residence address of each indicated if known. The managing entity shall revise continually the list of addresses in the light of any information it obtains, and the developer shall keep the managing entity advised of any information he has or obtains

Much more reasonable than the one for Florida, which prohibits the managing entity from sharing the list, and requires an owner to pay for the cost of mailing proxy solicitations.

 

[Sou13]

Thank you, Eric!

Here is the Mass Timeshare Act: LINK.

The address list portion is covered here:

(b) The managing entity shall keep reasonably available for inspection and copying by any time-share owner all addresses, known to it or to the developer, of all the time-share owners with the principal permanent residence address of each indicated if known. The managing entity shall revise continually the list of addresses in the light of any information it obtains, and the developer shall keep the managing entity advised of any information he has or obtains

Much more reasonable than the one for Florida, which prohibits the managing entity from sharing the list, and requires an owner to pay for the cost of mailing proxy solicitations.

Thank you, Eric! You've done us an enormous favor! Long live TUG!

 

[tombo]

Tombo - I am curious as to which resort in NC you own at that has this problem.

Blue Ridge Village. I own a week in the older section Phase one which is not totally controlled by Festiva (at least not yet), and a week in Phase two where one of Festiva's CEO's came to our annual meeting and informed the owners that Festiva could do whatever they want to in Phase two since they control the majority of votes in Phase two.

I love this resort and like both my winter ski week in phase one and my summer week in phase two, but my favorite time to visit unfortunatelly is the week I own in Phase two. The board in phase two as of 2 years ago was 3 Festiva employees and 2 who I think are't associated with Festiva. Phase one was still controlled 3 to 2 by non Festiva board members (thank goodness). Festiva became the mgt company when they acquired the resort and there is no way we can get rid of them even though they have proven themselves to be poor money managers with regards to keeping MF's down at numerous resorts. I know your resort hired SPM, and I love them. I own at a resort SPM manages, and I am impressed. I wish SPM had the opportunity to manage Blue Ridge Village but the board(s) will never let anyone but Festiva manage our resort . This will cost the owners a lot of money because Festiva pads the cororate bottom line with money they make by overcharging the owners since they are the mgt company IMO

Ever since the CEO stood at the annual meeting in 2007 and said that if we didn't like what festiva was doing at our resort that they would allow us to deed our weeks or points to Festiva and we could leave, I have been really mad. I like this resort a lot and owned my weeks long before Festiva showed up. They are trying to make any dissenters leave, but so far I have refused to capitulate even though leaving would be easier than fighting them.

 

[somerville]

Actually the press release did not say anything about us 'buying' OBX I/II, it just said that a resort in St. Augustine was 'involved in the acquisition' which it was. From the press release, which can be found in the Press Room on our website:

Resorts involved in the acquisition and previously owned by Peppertree Resorts are located in Wisconsin Dells, Wis., Branson, Mo., Gatlinburg, Tenn., Myrtle Beach, S.C., and St. Augustine, Fla. Four North Carolina resort locations include Outer Banks, Atlantic Beach, Banner Elk and Maggie Valley. The properties in Wisconsin Dells, Banner Elk and Atlantic Beach also include undeveloped land.

What does St. Augustine, FL have to do with Outer Banks Beach Club in NC?

I thought the resort in St. Augustine was Ocean Gate. The reviews for Ocean Gate on Trip Advisor are horrendous - mostly 1's.

 

[FestivaRep]

What does St. Augustine, FL have to do with Outer Banks Beach Club in NC?

I thought the resort in St. Augustine was Ocean Gate. The reviews for Ocean Gate on Trip Advisor are horrendous - mostly 1's.

Sorry, you're right, I posted that in a hurry on my way out of the office last night - it mentions the location Outer Banks, and doesn't say anything about 'buying' the beach club, just that it was involved in the acquisition.

 

[Carolinian]

Sorry, you're right, I posted that in a hurry on my way out of the office last night - it mentions the location Outer Banks, and doesn't say anything about 'buying' the beach club, just that it was involved in the acquisition.

That is playing on words, sort of like a former president debating ''what 'is' is''.

 

[Carolinian]

Blue Ridge Village. I own a week in the older section Phase one which is not totally controlled by Festiva (at least not yet), and a week in Phase two where one of Festiva's CEO's came to our annual meeting and informed the owners that Festiva could do whatever they want to in Phase two since they control the majority of votes in Phase two.

I love this resort and like both my winter ski week in phase one and my summer week in phase two, but my favorite time to visit unfortunatelly is the week I own in Phase two. The board in phase two as of 2 years ago was 3 Festiva employees and 2 who I think are't associated with Festiva. Phase one was still controlled 3 to 2 by non Festiva board members (thank goodness). Festiva became the mgt company when they acquired the resort and there is no way we can get rid of them even though they have proven themselves to be poor money managers with regards to keeping MF's down at numerous resorts. I know your resort hired SPM, and I love them. I own at a resort SPM manages, and I am impressed. I wish SPM had the opportunity to manage Blue Ridge Village but the board(s) will never let anyone but Festiva manage our resort . This will cost the owners a lot of money because Festiva pads the cororate bottom line with money they make by overcharging the owners since they are the mgt company IMO

Ever since the CEO stood at the annual meeting in 2007 and said that if we didn't like what festiva was doing at our resort that they would allow us to deed our weeks or points to Festiva and we could leave, I have been really mad. I like this resort a lot and owned my weeks long before Festiva showed up. They are trying to make any dissenters leave, but so far I have refused to capitulate even though leaving would be easier than fighting them.

I suggest you set up a concerned owners group and get an internet discussion group organized. I know that www.timeshareforums.com has provided these free to such groups in the past, and I suspect they would do so for you. Do a proxy fight to vote out the two conflict of interest board members from Festiva. Write an article for the resort newsletter on the dangers of converting to points.

 

[FestivaRep]

That is playing on words, sort of like a former president debating ''what 'is' is''.

Actually, it was simply to keep the press release brief without delving into the details of each individual resort as the relationships vary and it wasn't necessary to get into such details in a press release to the industry. As press releases go, it was already 'long' being more than one page. It was not intended to be deceptive, and that's all I'm going to say on that subject as someone pointed out before that this thread has already strayed away from the original topic.

 

[Sou13]

Back to those Outfield Marketing offers

Actually, it was simply to keep the press release brief without delving into the details of each individual resort as the relationships vary and it wasn't necessary to get into such details in a press release to the industry. As press releases go, it was already 'long' being more than one page. It was not intended to be deceptive, and that's all I'm going to say on that subject as someone pointed out before that this thread has already strayed away from the original topic.

So getting back to the Outfield Marketing offers, I've learned from other sources that the going "conversion" price may be the same for two weeks which means that the $3185 goes to Outfield Marketing, not Festiva Adventure Club or Southcape Resort.

What I'm trying to ascertain is whether a "red" week at Southcape is worth as many points as a "red" week at other resorts in the Club. How many points is a "red" week at Southcape worth?

Originally Posted by wmauryd
It's not directly related to Southcape but it's interesting to read about the $80k in unpaid vouchers, awarded by a Cape Cod timeshare marketing company, today on http://www.capecodonline.com/

How are sales going at Southcape anyone? Are promotional meal vouchers being awarded for tours?

All I got for my trouble was a cup of coffee, unless the promo was 3500 points for a week that is worth only 2900 in the FAC.

 

[Carolinian]

So getting back to the Outfield Marketing offers, I've learned from other sources that the going "conversion" price may be the same for two weeks which means that the $3185 goes to Outfield Marketing, not Festiva Adventure Club or Southcape Resort.

What I'm trying to ascertain is whether a "red" week at Southcape is worth as many points as a "red" week at other resorts in the Club. How many points is a "red" week at Southcape worth?



All I got for my trouble was a cup of coffee, unless the promo was 3500 points for a week that is worth only 2900 in the FAC.

HOA's that allow marketing companies to sell RCI Points conversions get a cut of the take. That is the industry standard, but I could not tell you precisely the going percentage.

If Outfield, which has two members voting on the board, is selling points conversions and not giving anything to the resort, that is a huge red flag. Their involvement on the board had conflict of interest written all over it. I would try to have a state agency, either the one that regulates real estate sales (probably the Real Estate Commission) or the one that regulates timeshares (probably also the Real Estate Commission) take a hard serious look at this situation. The way to do that is file a citizen complaint. Someone taken in by their spiel who has now wised up would be the ideal complainant, but any member would probably do.

 

[FestivaRep]

What I'm trying to ascertain is whether a "red" week at Southcape is worth as many points as a "red" week at other resorts in the Club. How many points is a "red" week at Southcape worth?

The points required to stay one week at Southcape through the Adventure Club ranges from 2100 to 5300, depending on the week number. The points values for week long stays are comparable (though may not be exactly the same) at all FAC resorts when comparing the same unit sizes.

For another comparison, a Red week at Southcape = Interval International exchange, red week, 2 bedroom unit.