KBV News letter - the resort is in bad shape

[pedro47]

DeniseM, you are doing an outstanding job in keeping your fellows timeshare owners up to date on what is going at your home resort.IMHO

 

[DaveNV]

They are allowing owners to reserve Bldg. F or units in other view categories. For instance, if the dates you want are not available in Bldg. F - you can reserve a Lagoon View unit.

I also asked if Oceanfront owners would be disadvantaged by not being able to deposit an Oceanfront reservation, and she said no, that RCI only looked at the size. The Oceanfront units are 2bdm/2ba - but I'm not sure if other views have 2 bathrooms.

From what I remember, I think the resort has only two or three view types: Lagoon View, Ocean View, (and possibly Garden View (for the 1br1ba units "behind" the 1br2ba units on building corners.) And three unit sizes: 1br1ba, 1br2ba, and 2br2ba. The only difference to the Resort is the deeded building number, which comes into play when the Owner wants to make a reservation to stay at KBV, along with the check-in day of the week. For exchanging, a unit is a unit.

Dave

 

[jacknsara]

Aloha (try to remember that as you read this message)

I and several other owners dialed into the IOA BOD 10/12/22 meeting. Two things to report from that are (1) the cessation of posting BOD minutes and agenda inside https://kauaibeachvillasresort.com/owners-community/ was an inadvertent result of a handoff gap from someone’s retirement and will be resumed; and (2) there would be a full building project report at the end of the AOAO board meeting on 10/13/22.

I and several other IOA and non-IOA owners dialed into the AOAO meeting. We were told that the powerpoint report would be shared. It would not surprise me if the numbers changed based on research into some of the questions. Three I posed were (1) whether the funding vote be yes/no or a choice between funding the remediation or funding the condemnation and demolition, (2) the inflation factors used for the multiple year projection of remediation costs and (3) the impact of a newly passed regulations in Kauai that “requires the lowest floor of any new dwellings in the Sea Level Rise Constraint District be raised 2 feet above the highest sea level rise flood elevation as projected by a scientific model. New, non-livable buildings need to be raised 1 foot above the flood elevation projection. This differs from other sea level rise regulations, which tend to rely on historical data rather than future models. . . . . also apply to significant rebuilds of existing structures, where the total cost equals or exceeds 50 percent of the market value of the building” per article in The Garden Isle 10/6/22 https://printreplica.thegardenisland.com?selDate=20221006&goTo=A01



I’d rather not quote specific numbers until I have something in writing to back them up. For now I am interested to see if we (TUG KBV owners) can have a thoughtful conversation about potential alternatives without going off on tangents and tirades. For these purposes I propose the following assumptions; the first is higher than presented at the AOAO meeting; the second is my estimate out of the blue based on nothing:

(1) The special assessment cost per IOA annual week for remediation is $9,000 upfront and will take about 5 years to complete during which the resort will be operational but capacity will be reduced.

(2) The special assessment cost per IOA annual week for condemnation, demolition and removal is $4,500 upfront with lingering risk of additional financial liability until final disposition of the land.

(3) The IOA BOD adopts heavy handed enforcement of collections such that the only way for owners to avoid paying is bankruptcy or death.

No one has asked me to pose this question on TUG though it is possible that the BOD will be aware of it.

What do we individually think? Should we try to converge on a consensus among us Tuggers who own at KBV?

Jack
re-editted to increase my cost estimates to allow for potential increases and be based more on 2B2B than a blend of all unit sizes

 

[DeniseM]

Thank you, Jack. I insist on a tiny tirade: THIS SUCKS!

QUESTION: Did Wyndham know about this when they staged a hostile takeover? What is their long game?

QUESTION: Is this for the whole resort or only the OF buildings?

(1) The special assessment cost per IOA annual week for remediation is $3,600 upfront and will take about 5 years to complete during which the resort will be operational but capacity will be reduced.

 

[jacknsara]

Thank you, Jack. I insist on a tiny tirade: THIS SUCKS!

QUESTION: Did Wyndham know about this when they staged a hostile takeover? If so, what is their long game?

Aloha Denise,
The flooding event led to a series of discoveries almost all of which were original design or construction defects. It is hard to imagine that anyone including Wyndham decision makers knew the extent of the issues. OF owners like us knew something was wrong whenever we sat on the lanai. I certainly had no idea of the seriousness of the construction defects and the extent of the damage.
I believe that a rational Wyndham decision maker who knew of these defects would have found a way to exit their management contracts with both AOAO and IOA as early as possible years ago. They are now on the hook for $millions in costs with drastically reduced revenue recognition opportunity.
Jack

 

[DeniseM]

Karma possibly?

They are now on the hook for $millions in costs with drastically reduced revenue recognition opportunity.

 

[bnoble]

What do we individually think?

My gut reaction is that I'd be willing to pay more to have the resort continue, even though it probably makes little to no actual financial sense. The two of us need to think about it though.

 

[jacknsara]

QUESTION: Is this for the whole resort or only the OF buildings?

All 8 buildings. It turns out that F, G & H are above the base flood elevation per historical standards. A-E are below and if historical standards apply, a ~4-5 foot flood wall is required around them. The structural problems were initially detected in the A-E buildings whose 1st floors were flooded.

 

[bnoble]

(2) The special assessment cost per IOA annual week for condemnation, demolition and removal is $4,500 upfront

There is another option, lets call it 2A, which would be: liquidate and sell the property as-is, letting the buyer decide between remediation/renovation or demolition/removal. That would not require as much in the way of up-front costs, but may also net less in the end.

Of Options 1, 2, and 2A, I might be inclined to go with 2A, in the spirit of "it was fun while it lasted."

 

[npratt333]

My understanding is "yes" but I am neither a Wyndham owner nor a Wyndham expert

It did but as of probably mid- year (I called today) KBV is not part of the exit program. I’d happily give my week back to them but they don’t want it at the moment.

 

[bianchicycle]

There are way too many owners that have multiple weeks (I have 5) who will just walk away. Bankruptcy is not the answer! It stays on your credit for 10 years and you have to play the court game which is not free either. It will cost KBV a LOT of money to try to go to collections.

It has been a great second home but I vote to sell, as is, and let the buyer start from scratch. I can come back to the island MANY times for the money I would have to spend on assessments.