New Info about KBV Issues

[DeniseM]

A friend and KBV owner sent this email to me (and other KBV owners) today, and I have his permission to post it. He has been investigating the KBV situation. This is not official - but I found it very interesting:

So.....to get started, I'll tell you about some things that are NOT in the newsletter that are important to know. Our particular board (as well as the associated AOAO, which we're also a part of), since having been taken over by Wyndham-sympathetic members, has not been very transparent about what is going on at the resort.

1) The AOAO owners, which is comprised of whole condo owners (and us, as well, but their main voice is the whole, year-'round condo owners), have filed a lawsuit against the AOAO board and Wyndham Management for a number of things, including the lack of good maintenance of buildings F, G, and H (as most of the wholly owned condo units are in those buildings). Part of their complaint is the inability to make money from private rental due to their inability to use their condos because of the lack of good maintenance of the buildings.

As you may know, the AOAO has the contract for the Plan Manager that is responsible for the maintenance of the integrity of the buildings (The IOA holds the contract that is responsible for the maintenance of the interiors of the units). So when Grand Pacific was our Plan Manager, they were only responsible for maintaining the interior of the units as well as other things. They were the ones who also arranged to allow us the use of the hotels next door. Interestingly, part of the AOAO's lawsuit includes a complaint for the use of funds allowing us to use the hotel's pools. But the fault in this is that the ENTIRE funding allowing us to use the pools is exclusively through the IOA maintenance fees. NO funds from the AOAO are used in the agreement between the IOA and the hotel.

2) In the latest IOA newsletter, the IOA board blames the need for major renovations (totalling 56 millions dollars) on the original construction of the buildings. Ironically, Wyndham Management has been responsible for the maintenance of the buildings since at least 2005. One of the reasons that the AOAO many years ago were trying to replace Wyndham is that they discovered that they were not doing their due diligence with regard to building maintenance. But Wyndham got their people on the AOAO board, throwing off those who were trying to fire their management company, and were able to avoid getting their contract ended. The IOA at that time, fortunately were able to get rid of Wyndham, at least for a few years, and replaced that company with Grand Pacific. But as you know, Wyndham was able to successfully get their people on the board for essentially hostile takeover.

But don't let the IOA board tell you that the current problems with the buildings is due to the original build quality. Wyndham had decades to work on these buildings. Instead, they took short cuts and didn't do proactive work on them, instead pocketing the maintenance fees as profit.

3) The ~$8000 assessment? Man, that's pretty outrageous. And I don't trust this board. That they didn't even tell you about the AOAO membership lawsuit (Again, this is not the AOAO board's lawsuit. It's a lawsuit against individual members of the AOAO board and Wyndham) should say something to you. I own two other timeshares. When their is a lawsuit against the association, we hear about it.

If this were Grand Pacific telling me this, I'd put more trust in them. But part of me wonders if some of this money they're asking for is about helping to fund they lawsuit against Wyndham and the board.

I can't help but remember the conversation I had with an industry insider who works in Hawaii who said that the KBV resort property is the finest location in all of Kauai. It's hard to let go of. I still get good value out of trading the RCI Points when I do for the maintenance fee, even as current, but the ~$8000 assessment? I could buy a nice week at another resort for that, with lower maintenance fees. But at KBV? And what would stop Wyndham from asking for more down the line? Again, if this were Grand Pacific, I might seriously consider it. But I'm so skeptical, even cynical, as well as practical. Your mileage may vary.

4) Finally, and this is third-hand info (and I'm trying to confirm this, but the source is a good one), this whole situation has gotten so big that Wyndham is trying to get out of KBV. That's a laugh if it weren't so sad.

So what are your choices at this point? We can discuss it. You wouldn't be able to sell your deed at this point, since their is a lawsuit against the resort. You'd have to mention it to a prospective owner. Should you just decide to let it go and stop paying your maintenance fees? Could do that, although your credit might take a hit. At this point, Wyndham isn't going to take your deed back, I don't think.

I have written the attorneys who have taken up the AOAO body's lawsuit against the board and Wyndham. I gave them a rundown on the history of Wyndham at the resort and their attempts to take over the boards. One of the attorneys wrote me back, thanking me for the info and said they'd be in touch. [A former KBV Board Member], (who is also on this list and this email), has also been in touch with the lawfirm, more than I have, actually. (The lawfirm is Revere and Associates, terry@revereandassociates.com, with Terry Revere being one of the lead attorneys.).

 

[pedro47]

DeniseM, that is a very powerful letter above and there is no needs to read between the lines. IMHO.

 

[CO skier]

Once spent three nights in an Oceanfront KBV unit, 2nd floor of (I think) building F. The other four nights were at Ka Eo Kai, which was a huge mistake. If I ever go back to Kauai, I now know it is well worth the extra points to stay Oceanfront at KBV, so there is some interest on my part in this developing soap opera.

A friend and KBV owner sent this email to me (and other KBV owners) today, and I have his permission to post it. He has been investigating the KBV situation. This is not official - but I found it very interesting:

The bias in the email oozed out of my computer while reading it like something out of Ghostbusters.


Just one example (the writer of the email must not have understood the original newsletter information)

2) In the latest IOA newsletter, the IOA board blames the need for major renovations (totalling 56 millions dollars) on the original construction of the buildings.

No, the IOA relayed the information from the third-party engineering firm, who determined the construction defects:

In addition to the above and as a further result of the inspection process, multiple defects of the original construction were uncovered. The following is a list of some of the more impactful issues:
• The sill plates of the walls sit on the concrete floor placed over bolts installed in the concrete when they were poured. Many of these bolts did not have washers and nuts installed as they should have. Some of the nuts installed were never tightened.
• The outside edge of the sill plate should be flush with or behind the concrete floor edge to allow for caulking to keep moisture out. Engineers have repeatedly found locations where the sill plate hangs over the edge of the concrete. This leaves a path for moisture to enter the building.
• Some of the concrete slabs are spalling, eroding the area that is meant to support the sill plates. This creates another path for moisture to enter the building.
• The engineers evaluating the support columns have discovered no flashing or other means of sealing the walls where they meet the lanais at the locations concrete was poured. This provides another path for moisture to enter the walls. This has been most evident at the corners of the lanais, which is why those columns exhibit the most rust and deterioration.
• The AOAO Board contracted with Avelar of Walnut Creek, Calif. (www.Avelar.net), whose engineers and architects specialize in building envelope evaluation. They discovered many places on the buildings where flashing, sealants, and other means to prevent moisture intrusion were not installed when the buildings were originally constructed. Avelar produced a 93-page technical report with photographs of the problem areas. The following are quotes from the Avelar report. The words in parentheses are added for clarification.
o “The base of the siding extends past the face of the foundation and exposes the underlying gypsum sheathing to moisture”
o “The face of the foundation edge is uneven and/or incomplete allowing for moisture intrusion into the interior”
o “The building paper (vapor barrier) at exterior walls is not continuous behind belly bands (area between floors) which allows water intrusion into wall cavities” o “The flashing and original trim installation at doors and windows is incomplete which allows water intrusion; window flashing is not installed and building paper is not continuous to the window frame”


and on and on and on.

Anyone reading the original newsletter can understand these are serious construction defects and not maintenance issues, which is why whatever lawsuits mentioned in the email are destined for the trash heap

 

[DeniseM]

CO Skier - If you are not an owner at this resort, then you are not aware of the issues we've already had with Wyndham and their board. Not just disagreements, but illegal business practices., including a fraudulent election and a hostile takeover. In simplest terms, we don't trust them. If that's bias - count me in.

 

[jacknsara]

A friend and KBV owner sent this email to me (and other KBV owners) today, and I have his permission to post it. He has been investigating the KBV situation. This is not official - but I found it very interesting:
<snip> As you may know, the AOAO has the contract for the Plan Manager that is responsible for the maintenance of the integrity of the buildings (The IOA holds the contract that is responsible for the maintenance of the interiors of the units). So when Grand Pacific was our Plan Manager, they were only responsible for maintaining the interior of the units as well as other things. They were the ones who also arranged to allow us the use of the hotels next door. Interestingly, part of the AOAO's lawsuit includes a complaint for the use of funds allowing us to use the hotel's pools. But the fault in this is that the ENTIRE funding allowing us to use the pools is exclusively through the IOA maintenance fees. NO funds from the AOAO are used in the agreement between the IOA and the hotel. <end snip>

Aloha,
The excerpted statement includes misinformation. It was made repeatedly on the SaveKBV yahoo email group and I repeatedly attempted to set the record straight. But the meme lives on. Some discussion occurred within TUG in 2018 https://tugbbs.com/forums/threads/pahio-kauai-beach-villas-board-election.240675/post-2185014
One of my earliest meetings following my election to the BOD was to participate in the decision about funding access to the hotel’s pool. By now, that original contract may have been modified/renewed.
The original total cost to the AOAO was $275,000 per year. The IOA subsidy was $125,000 but appears in the minutes as 23.34 per week (125K~=23.34*51*105) which was done at my request to preserve an option to study progressive de-annexation of units in default. The remaining $150,000 was covered in the AOAO budget of which approximately $105,000 was passed to the 105 units in the IOA. The 45 wholly owned units were charged approximately $45,000 in total. The reason for the “approximately” is allocations are based on square footage of the particular units. So, the IOA paid $(125+105)/105 ~= $2.2K per unit compared to the wholly owned units at $1K each. On a per week basis, that was approximately $43 in each timeshare units MFs. RCI exchangers and Grand Pacific renters were to be charged (based on hazy memory) $70 per week; it was estimated that the fees would cover most of the actual cost with a resulting impact to MFs being much lower than $43/week.
The board minutes of Friday, August 3, 2018 can be found at https://kauaibeachvillasresort.com/wp-content/uploads/2018/08/080318.spmins.pdf
which is posted under 2018 Minutes within the Board of Directors tab https://kauaibeachvillasresort.com/owners-community/bod/ Here’s the relevant text from the minutes:
II. KBR POOL USE EXPENSE President Kolstad advised the Board that the total cost for KBV IOA and AOAO pool use is approximately $275,000. The Board discussed the proposal for the IOA to subsidize the program in the amount of $125K, to prevent a significant increase to the 2019 AOAO maintenance fees, given that the AOAO is unable to generate revenue. On motion of Vice President Warner, seconded by Director Goodstein, the Board moved that the Kauai Beach Villas Interval Owners Association (KBV IOA) provide an annual payment to Kauai Beach Villas Association of Apartment Owners (KBV AOAO), commencing January 1, 2019, in the amount of $23.34 per interval to subsidize the Pool Licensing Agreement between KBV AOAO and Kauai Beach Resort Association of Apartment Owners (KBR AOAO), for the duration of that agreement. Furthermore, this sum is to be revisited annually by the KBV IOA Board of Directors to ensure that the subsidy amount is sufficient to support the continuation of the pool usage program, should the IOA determine that continuation of the program is in the best interest of our owners. The motion passed 5-0. On motion of Vice President Warner, seconded by Director Goodstein, the Board moved to ask the KBV AOAO to start the agreement effective August 1, 2018 if the KBR AOAO will agree to accept not to exceed $18,000 per month, inclusive of General Excise Tax, for August through December 31, 2018 and the KBV IOA will pay the full fee. The motion passed 4-1, Director Harrington voted against.

 

[CO skier]

CO Skier - If you are not an owner at this resort, then you are not aware of the issues we've already had with Wyndham and their board. Not just disagreements, but illegal business practices., including a fraudulent election and a hostile takeover. In simplest terms, we don't trust them. If that's bias - count me in.

Your bias is showing, and you are counted in - fwiw. There have been accusations of Wyndham's "fraudulent elections" and "hostile takeover" in WorldMark for like 20 years. There are now posts about Wyndham "devaluing" Club Wyndham ownerships with the changes of the past few years. How does prioritizing Club Wyndham owner stays over rentals through the "Owner Priority Reservations" "devalue" a Club Wyndham ownership? It is all just some sour grapes from a super minority of WorldMark owners and Club Wyndham landlord/renters and ex-renters.

 

[DeniseM]

CO skier - 1) You are not an owner at this resort. 2) You clearly are not familiar with the history of the situation. 3) You are just speculating, which doesn't serve a purpose here. 4) Your comments about Club Wyndham and WorldMark have nothing to do with this thread at all. Have a good evening!

 

[CO skier]

2) You clearly are not familiar with the history of the situation.

Anyone, whether an owner at KBV or not, can see how wrong the email statement, "2) In the latest IOA newsletter, the IOA board blames the need for major renovations (totalling 56 millions dollars) on the original construction of the buildings." if they just read the newsletter

Expresso

expressoprod.com

where multiple independent, third-party engineering firms detail the construction defects for which neither Grand Pacific nor Wyndham as managers had knowledge of or responsibility for.

It is the email author who seems unfamiliar with the history of the KBV resort.

The email is written for those who "want to believe there is a Wyndham conspiracy" because "conspriracy" sells. It is just a distraction from the sad situation owners at KBV are facing.

 

[CO skier]

4) Your comments about Club Wyndham and WorldMark have nothing to do with this thread at all. Have a good evening!

It would be no surprise to me if the author of the email is also someone who promotes the fake news about "fraudulent elections" and a "Wyndham takeover" in WorldMark.

 

[DeniseM]

CO skier - he's not, and frankly, you don't know what you are talking about, so I am not going to respond to any more of your off-topic posts.

 

[CO skier]

CO skier - he's not, and frankly, you don't know what you are talking about, so I am not going to respond to any more of your off-topic posts.

Then what do you have to say about the on-topic post about the multiple independent, third-party engineering firms that determined the laundry list of construction defects and the fact that the email author, when he writes, "2) In the latest IOA newsletter, the IOA board blames the need for major renovations (totalling 56 millions dollars) on the original construction of the buildings." does not know what he is talking about, because the IOA is not "blaming" only "reporting" the results of the independent evaluations?