Maui Resort Property Tax increase significantly?

[gregb]

I was talking to Gregg Lundberg, the WKORV General Manager about the increases in property taxes. According to him, the county picked three "comparable" Condominium developments and used the average selling price of their units (in 2007) as the basis to set the valuation of units at WKORV and WKORV-N. 2007 was a hot year for Maui properties, so the comparables were high. 2008 was the start of the drop in real estate prices, so for tax year 2010/2011, the valuations should be going down.

So the county did not use the selling prices of the TS as the basis for valuation.
Gregg did mention a couple of strategies that might be used to get the valuation changed. But he asked that they not be spread around before the hearing. One doesn't invite the other team into the huddle.

Realistically, I don't expect that we will see much relief on the tax issue. So we may need to look for silver linings. One is the above mentioned drop in valuations that happened in 2008, so that should lower next years taxes. Another is that part of the increase this year was for taxes for the previous year. That should not happen again. So maybe we will see some relief in the MF for next year.

And remember, the HOA and SW did a good job of holding down controllable expenses, resulting in over $100 savings in operating expenses for this year. You should be happy about that.

Greg

 

[DanCali]

And remember, the HOA and SW did a good job of holding down controllable expenses, resulting in over $100 savings in operating expenses for this year. You should be happy about that.

Did they actually hold down expenses or were the savings a result of a decline in energy services prices in 2009 versus a budgeted increase in energy costs?

History shows the Starwood HOAs in general haven't been really good at holding expenses down anywhere, so my personal opinion is that a decline in energy prices caused the cost savings and such windfalls can go the other way the next time around.

 

[sjlola]

The energy cost savings were achieved by the following: renegotiation of rates with the local energy company, switching from the original doublr "heavenly" shower heads to a single head, and encouraging guests to have their towels and linen washed less frequently, among other small things which added up over time.

 

[DanCali]

My point was actually that energy rates charged by utilities fell in the economy in general in 2009... Did the local utility really give the Westin a "special" rate? Why would they do that? It's not like you can switch to a different provider. If WKORV budgeted a 10% (made up number) increase in energy rates and the reality was a 5% reduction, that's where savings can come from, especially with all that air-conditioning year round.

Towels and linen laundry, and one versus two shower heads, and even the trash liners do save something - but not $100 per 2BR unit per week...

I'm not saying the cost reductions are bad. I just don't think the HOA is as responsible for them as they would like owners to believe. Either way - lower costs are welcome anyday, especially if quality isn't compromised by much...

 

[gregb]

My point was actually that energy rates charged by utilities fell in the economy in general in 2009... Did the local utility really give the Westin a "special" rate? Why would they do that? It's not like you can switch to a different provider. If WKORV budgeted a 10% (made up number) increase in energy rates and the reality was a 5% reduction, that's where savings can come from, especially with all that air-conditioning year round.

Towels and linen laundry, and one versus two shower heads, and even the trash liners do save something - but not $100 per 2BR unit per week...

I'm not saying the cost reductions are bad. I just don't think the HOA is as responsible for them as they would like owners to believe. Either way - lower costs are welcome anyday, especially if quality isn't compromised by much...

I don't have my paperwork with me. But I believe that the savings made for this year are more than just a decline in energy costs. Also, I believe that some of the energy cost declines came from installing a co-generation facility. That seems to me to be proactive thinking on the part of the HOA and SW management.

Greg

 

[LisaRex]

Don't forget that all the savings we realized by cutting back on energy was offset by Starwood reneging on their "voluntary contribution" to the HOA. They used the fact that we saved so much on energy as a justification for pocketing all that money instead of using it to offset our enormous MFs as they had pledged.

So we Owners paid more out of pocket to get less.

 

[Fredm]

Don't forget that all the savings we realized by cutting back on energy was offset by Starwood reneging on their "voluntary contribution" to the HOA. They used the fact that we saved so much on energy as a justification for pocketing all that money instead of using it to offset our enormous MFs as they had pledged.

So we Owners paid more out of pocket to get less.

I was not aware of Starwood's voluntary contributions to the HOA.
I know they were making subsidy payments. But, these were not voluntary. They were required by law to cover the units built but not sold.

I am not trying to split hairs in characterizing the payments.
Just pointing out that if they were subsidies, Starwood did not renege. They simply stopped paying for what they no longer owned. Hence, they did not need an "excuse", since they did not "pledge" anything.

The electric co-generation plant will continue to produce lower energy costs.

 

[LisaRex]

I was not aware of Starwood's voluntary contributions to the HOA.

They listed them as "voluntary contributions" in their annual "State of the Timeshare" report (the budget we got along with our MF invoices), along with a section that explained that Starwood reduced this contribution BECAUSE of the savings we realized on utility reductions.

So, yes, they did renege.

 

[Fredm]

They listed them as "voluntary contributions" in their annual "State of the Timeshare" report (the budget we got along with our MF invoices), along with a section that explained that Starwood reduced this contribution BECAUSE of the savings we realized on utility reductions.

So, yes, they did renege.

Thanks.

Just an observation. A voluntary contribution to the HOA is highly unusual. I have never heard of a developer doing such a thing. I am very surprised that Starwood did it.

Not to diminish the impact on already high fees, but having done so I would think it a reason for thanks instead of criticism.

 

[gregb]

They listed them as "voluntary contributions" in their annual "State of the Timeshare" report (the budget we got along with our MF invoices), along with a section that explained that Starwood reduced this contribution BECAUSE of the savings we realized on utility reductions.

So, yes, they did renege.

When I read the Owners Manual, I did not see any section that required Starwood to make voluntary contributions to cover the resort expenses. They are supposed to pay their share for the unsold units they own and also for the resort stores and restaurants they own and operate. If they make a contribution beyond that, i.e. voluntary, then we should be glad for that contribution in earlier years. Not complaining that they "renege" when they decide to reduce that contribution.

Greg

 

[Troopers]

Update:

Starwood (and Marriott) appeals heard on March 31. See here.

Hopefully we'll hear result in a few months.

 

[okwiater]

Update:

Starwood (and Marriott) appeals heard on March 31. See here.

Hopefully we'll hear result in a few months.

I like how 23 of the 26 pages are filled with Maui Ocean Club and WKORV-S and -N units.