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New Board letter. Special Assessment estimate.

MOXJO7282

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Wow this is bad news for owners. I own at the Marriott Maui Ocean Club and we're facing a special assessment for like $800 and I was upset. A special assessment of $7300 per week is crazy. There has to be more than few owners who have multiple weeks that are facing a huge assessment.
 

DeniseM

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We own 4...

Why can they only borrow $10 million? Is Wyndham a bad credit risk, or won't they guarantee the loan?
 
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bnoble

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We own two. We love it there, but I'm not sure we love it there to the tune of another $15K. We'd pay it if we had to, but we sure wouldn't be happy about it. I also have to believe that a non-trivial fraction of owners will take one look at that and walk, which is only going to make it worse. I can't imagine what the whole-owners are thinking right now.

It's not obvious to me that the resort survives if this is the final plan to go forward.
 

bizaro86

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We own 4...

Why can they only borrow $10 million? Is Wyndham a bad credit risk, or won't they guarantee the loan?

I assume they won't guarantee a loan for that amount. Why would they - a special assessment like that they're going to get the deeds to as much of the resort as they want.
 

bnoble

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I also noticed this note in the letter:
Interior FF&E, which includes fixtures, appliances, counters, flooring, lighting, and soft goods as examples,
are the responsibility of the IOA or the individual whole owners. These costs are not included in the above
remediation estimate.

Also:
I will not pay a special assessment. They can have it back.
You won't be alone, I'm sure.
 

dioxide45

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At the tune of $7300 a week shouldn't the board be looking at the feasibility of the resort overall? Wouldn't it be better to just hang it up, dissolve the timeshare and sell the property?
 

vacationtime1

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At the tune of $7300 a week shouldn't the board be looking at the feasibility of the resort overall? Wouldn't it be better to just hang it up, dissolve the timeshare and sell the property?
That's $380K/unit -- excluding any interior refurbishment.

The units are worth >$380K each as condos but will still not have any (or much) value after the proposed work is completed. Which means the owners would be better off by selling the project and dividing the cash. But I suspect Wyndham has other ideas.
 

bnoble

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With the Shell additions in Hawaii, Wyndham might not need this in the portfolio; there are a LOT of Kauai resorts now. It’s in an out of the way place which is part of why we like it. But it does make it a harder sell to someone who doesn’t already know it is there.
 

rickandcindy23

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That's pretty shocking. I would really not be happy with the SA, but if you love the property and don't want greedy Wyndham to take back all of the weeks, owners will have to pay.

Wyndham has to be loving this SA because they will get back hundreds of weeks.
 

LisaH

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That’s crazy! The obvious answer is to sell the timeshare units and owners divide the proceeds if the condos are worth more than $380K, which I think they do.
 

rickandcindy23

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That’s crazy! The obvious answer is to sell the timeshare units and owners divide the proceeds if the condos are worth more than $380K, which I think they do.
Wyndham will keep all of the money "to fix the place," I am sure. They will get around it so they don't have to give owners anything.
 

bianchicycle

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At the tune of $7300 a week shouldn't the board be looking at the feasibility of the resort overall? Wouldn't it be better to just hang it up, dissolve the timeshare and sell the property?

And.... if they sell the property, who gets the money? We are supposed to be the owners. I can't imagine what the people who live there are thinking..
 

bianchicycle

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I, for one, would walk away. I have 5 weeks and would be $25000 in the hole... No way!
 

magmue

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Wyndham has to be loving this SA because they will get back hundreds of weeks.
As of early October, the Wyndham Ovations program was not accepting KBV weeks. We decided to check while waiting for this shoe to drop.

From the most recent newsletter "It appears clear that the KBV’s buildings were not constructed properly". Wondering why the original construction company is not being held to account? Point at Poipu recently got a settlement related to faulty construction that will be helping pay for some needed refurbishment.

And "Assuming that the required AOAO vote is obtained...." So every owner will have a vote at some point? And Wyndham will have a vote for each interval they own - what percentage does that come to?"

"the AOAO will have two bank loans... Repayment of these loans are estimated to increase the IOA maintenance fees by up to $184 per year per interval for a 2BR/2Bath
" On top of the special assessment.
 

dioxide45

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As of early October, the Wyndham Ovations program was not accepting KBV weeks. We decided to check while waiting for this shoe to drop.
I suspect they mean that they will be getting them back through default. Unfortunately it will be the HOA that actually gets them back. THus why they really should consider the feasibility of the resort as a whol.e
 

magmue

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.... converted to points, or not?
Not. However, Jack posted this in April (post # 23) in DeniseM's thread about the resort being in bad shape (bolding mine): "When the IOA management contract was returned to Wyndham, we were informed of an improved Wyndham program of taking back unwanted units. During our February 2022 stay at KBV we called the Certified Exit phone number. ( https://clubwyndham.wyndhamdestinations.com/us/en/help/wyndham-cares/certified-exit ) Each ownership unit was individually checked. All were eligible. All but one were resales bought on ebay; none had been converted to the Wyndham program. About two weeks ago, we submitted our notarized paperwork to return our one non-OF unit. I suggest that geist123’s question be expanded to include: Will Wyndham continue to accept unconverted KBV units into its Certified Exit program? If the answer is ‘yes’ then DeniseM’s concern in post #9 (Secondly, you can't even give these timeshares away under the current conditions) is mostly addressed."

So in February, Wyndham was accepting KBV units in to Ovation. As of early October, they were not.
 

dioxide45

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So in February, Wyndham was accepting KBV units in to Ovation. As of early October, they were not.
THey knew the SA was coming...
 

magmue

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They had to have known it in February. Perhaps their corporate strategy shifted.
 

bnoble

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...or they only recently started to understand the sheer magnitude of the problems. The whole process has been like pulling the thread of a sweater and unraveling the whole thing.

As I sit here today, my preference would be to discontinue it as a resort and liquidate. That's hard to say, because we really do like it there, but objectively it's not worth $7+K/week. Subjectively, well, there are lots of other Hawaiian resorts we could learn to love. If I was given the option to pay some modest fraction of that to divest myself, I would consider doing that before paying full freight to stay in, I think, but I'm not sure about that one yet.

Also, kudos to @jacknsara; your estimate was just about dead on the money. When you back in the $10M borrowed, you get about $8,900 per 2BR interval ($7.3K*56/46). Your estimate if I remember it correctly was $9K; that's Vegas-level prognostication.
 
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djyamyam

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What percent of the entire facility is owned as full condo ownerships and what percent is represented as timeshares?

Even if the TS owners say wrap up the TS association, the units are still part of the larger KB condo association and that liability still exists at the macro level, doesn't it? I don't think it's straight forward clear path of exit
 

VacationForever

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Shouldn't there be a vote to owners as to 1) Sell the property, and maybe the value is only the land for the developer to rebuild vs. 2) Special assessment to fix it up?

If I were to own there, I would vote to sell it off.
 
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bnoble

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What percent of the entire facility is owned as full condo ownerships and what percent is represented as timeshares?
Judging based only on lanai furniture, I'd say about half of the oceanfront buildings are whole-ownership condos. Not sure about the others. But yes, I suspect this will end up complicating things.
 
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