Streamside: Has The Aspen Board Gone Crazy?

[Hoc]

It appears that the Aspen Board just approved a refurbishment plan for their building that calls for a fairly substantial special assessment to be made each of the next four years. As an example, an owner of a Week 52 1-br. unit will be paying annual fees and Special Assessments of $2,885 for each of 2006, 2007, 2008 and 2009. Weeks 2, 5, 6, 7 and 9 are getting off easy, having to pay only $2,134 for each of the next four years. There are other, cheaper units, with the majority of annual fees being closer to $1,300+ a year for the next four years.

I just don't see the owners being very happy with that decision. As an example, a week 52 owner will be paying in excess of $11,200 in fees over the next four years -- probably as much as the purchase price of a unit four years from now.

So, I ask: Has the Aspen Board gone crazy?

 

[mj2vacation]

good thing Marriott isn't involved.......

 

[ondeadlin]

Pretty bizarre. If they were willing to go with that large an accessment, you figure they could have stayed with Marriott and at least kept resale values high.

Now?

You can't give away a July summer week on eBay for $1:

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=4471100359&rd=1&sspagename=STRK:MEWA:IT&rd=1

The Aspen board always struck me as bent on self-destruction. This confirms it.

 

[daventrina]

As an example, an owner of a Week 52 1-br. unit will be paying annual fees and Special Assessments of $2,885 for each of 2006, 2007, 2008 and 2009. Weeks 2, 5, 6, 7 and 9 are getting off easy, having to pay only $2,134 for each of the next four years.

Interedting to know why some weeks were more than others

 

[ondeadlin]

Aspen has different MF based on time of year, so the owner of a 2BR ski week will pay more than the owner of a 2BR summer week, who'll pay more than the owner of a spring or fall week.

Birch is the same way. So's Eagle Point.

So your accessments show the same disparity.

I expect you're going to see a ton of these weeks dumped on eBay or just go into default. The homeowners association already owns 75 weeks. 75 WEEKS! This time next year? It could be double. This property is in serious, serious trouble. If I were an owner, I'd get what I could for my week. You can always buy back in when the accessments are over. Prices might rise a little, but there's no way you don't come out ahead.

 

[Hoc]

Pretty bizarre. If they were willing to go with that large an accessment, you figure they could have stayed with Marriott and at least kept resale values high.

I think that their problem with Marriott was twofold. First, they felt that Marriott was overcharging for everything, and that it intentionally failed to properly maintain the building, so that many of the problems with the building were actually Marriott's fault due to lack of proper maintenance. Second, Marriott insisted on doing all of the renovations, and charging for them, in one year, while the board wanted to spread it out over a four-year period.

Clearly, that's what they've done here. Still, the amount of the special assessments, imposed each year over four years, is really ridiculous.

 

[Hoc]

I expect you're going to see a ton of these weeks dumped on eBay or just go into default.

That wouldn't surprise me. I might take a look at the property again in 2009, and see how nice it has become. If it can be bought cheap then, with only one outrageous annual fee, and it is extremely nice, I might consider repurchasing.

 

[ondeadlin]

Hoc,

I think that's a smart strategy, but I also wonder if the next few years might be really rough ones. There's either going to be an owner revolt or a ton of defaults.

And, yeah, I certainly think Marriott bears a share of responsibility for the state of the program ... but I still think they would have been much better off working something out rather than letting it come to this point.

Seriously, how do they justify such a large accessment? I know the Birch and Evergreen accessments are much smaller, and I think Douglas is doing their renovation without even accessing.

 

[Hoc]

Seriously, how do they justify such a large accessment?

I'm not sure, because I sold my unit before they reached that decision. I do know that they were considering a program they had called, "Project Phoenix," where they were going to raze the building and build all of the units from scratch. The rationale was that it would not cost much more than a renovation, they could offset the cost through the sale of new, third-floor units, and that it was impossible to bring old units up to the point where they could match brand new ones.

For example, the layout of a new unit, which would include a large master bath, etc., would require tearing the unit down to the shell and rebuilding. In addition, most newer units are now larger as a whole than older units.

Perhaps the rennovation they decided on is some kind of hybrid of that, which would explain why it is so much more expensive. I guess it remains to be seen whether they will be able to do it, or be so saddled with defaults that they can't do anything.

Glad I got out when I did. I seemed to get exactly the right timing on it.

 

[JimJ]

According to the unsold ebay item (see post #3 in this thread), the special assessment for a 1BR summer week would only be about $300/week for each of the 4 years. It is hard to really imagine a $10,000 assessment per week.

 

[Kazakie]

Get the building on the cheap...

The homeowners association already owns 75 weeks. 75 WEEKS!

So could a developer (or HOA member) scoop up the weeks for next to nothing, do whatever they want with the building/land and then resell the new whatever with "shared facilities with the Marriott's next door" ? Heck, they could even build their own hotel - maybe they can license the "Marott" hotel name.....

 

[wsrobinson]

Not to seem ignorant. Did Marriott stop managing all of Streamside? If so, why does it show up on www.vacationclub.com? Thanks.

 

[Kazakie]

Not to seem ignorant. Did Marriott stop managing all of Streamside? If so, why does it show up on www.vacationclub.com? Thanks.

www.vacationclub.com/resorts/_s/default.jsp

 

[Steve]

Marriott still manages 3 of the 5 buildings at Streamside: Birch, Douglas, and Evergreen. The Aspen and Cedar buildings are now managed by VRI.

Steve

 

[wsrobinson]

Will Marriott bail out on the other buildings as well? As was the case with Swallowtail and Spicebush on HH, they conveniently stopped managing the property and the new mgmt company found they were very deficient in the job they did. Now they are being sued. Any ideas on this?

 

[ondeadlin]

Will Marriott bail out on the other buildings as well? As was the case with Swallowtail and Spicebush on HH, they conveniently stopped managing the property and the new mgmt company found they were very deficient in the job they did. Now they are being sued. Any ideas on this?

No, Marriott just re-signed a new contract with all three buildings running through 2011.

 

[Dean]

Will Marriott bail out on the other buildings as well? As was the case with Swallowtail and Spicebush on HH, they conveniently stopped managing the property and the new mgmt company found they were very deficient in the job they did. Now they are being sued. Any ideas on this?

My opinion is they will bail on the next management contract cycle or the next one after that at the latest but we shall see.

While I'd heard rumors of a law suit against Marriott from SB/ST owners, has one actually been filed? Regardless of management company, the BOD is ultimately responsible. To have a successful legal action against Marriott for failure to perform, I'd think they'd need to prove mismanagement of funds, failure to carry out planned items, embezzlement, or intentionally misleading the BODs there. Even then, they'd really need to prove that any omissions or commissions led to an increase cost because of the original problem outside of simply inflation.

 

[ondeadlin]

Re: Get the building on the cheap...

So could a developer (or HOA member) scoop up the weeks for next to nothing, do whatever they want with the building/land and then resell the new whatever with "shared facilities with the Marriott's next door" ? Heck, they could even build their own hotel - maybe they can license the "Marott" hotel name.....

I don't know how many units there are in the Aspen building, but let's say there are 20.

20 * 52 weeks = 1040 weeks

So, in theory, you'd have to buy 521 weeks to be assured of gaining control of the property. Pretty difficult.

But 75 weeks is an amazing number to be in default IMHO, between 5 and 10 percent of the units, and that's BEFORE the big accessments have really kicked in.

This property is in serious, serious trouble.

And remember, for every week that goes default, that's part of the accessment and MF not getting paid. The other owners have to eventually make that up.

 

[wsrobinson]

Thanks for all of your input.

Here is the article.

http://www.islandpacket.com/news/business/story/5555316p-5000209c.html

 

[Dean]

Thanks for all of your input.

Here is the article.

http://www.islandpacket.com/news/business/story/5555316p-5000209c.html

Interesting that of two of the maint entities in the new Management company were on the BOD (one each) of SB and ST during most or all of the time in question and live within an easy bike ride of the two properties. Nice people, I'll have to ask their take when I have the chance.

 

[Kazakie]

Re: Get the building on the cheap...

I don't know how many units there are in the Aspen building, but let's say there are 20.

20 * 52 weeks = 1040 weeks

So, in theory, you'd have to buy 521 weeks to be assured of gaining control of the property. Pretty difficult.

You think buying half the weeks would be difficult with a SA of 8+k??- c'mon. Lets run some numbers:

I don't know the number of weeks either, but let's stick with your 1,040, you already have 7% owned by the HOA (and if you're the sole owner - then you own them - if you're going for half, then you own half the HOA units). If the average special assessment is $2,134*4 years = $8,536/unit.

So lets say you buy all the remaining units before the special assessment for an average of $2,000/week (most will be much less/free, some would be a bit more). (1,040 weeks - 75 owned by HOA)*$2,000/week = $1.9 million - to OWN the building. I bet a home with that type of location runs more than 1.9 million, much less an entire building!!

Now you pay all the special assessments or $8,536*52 weeks = $443,872/unit times the 20 units = $8.9 million. Now keep in mind, the SA per unit is OBSCENELY high (probably by a factor of 3 - but maybe they assume only one in three will pay it, which means the HOA may own 2/3's of the building for FREE :whoopie: ) - since the Marriott hotel that was sold averaged out at $180,000/room (see below). This also adds creditability to an earlier post that said they could tear down the building and put up new construction for about that amount.

So would it be worth $11 million to buy the Aspen building in Vail, tear it down, have brand new construction and one of the top resort locations - and still share you facilities with Marriott??

www.bizjournals.com/denver/stories/2005/05/16/daily17.html
"Vail Resorts Inc. of Colorado is selling its 345-room Vail Marriott Mountain Resort & Spa for $62 million [$180,000 per room] to DiamondRock Hospitality LP."

You can toy with the construction cost and number of units, but it seems there's lots of opportunity to make some serious (easy) money over ~5 years (construction and sales timeline) if you knew what you were doing. :ignore:

 

[Eric]

Really. A smaller company didn't love the job the leader in the industry did. What a shock !!!!!!!

Will Marriott bail out on the other buildings as well? As was the case with Swallowtail and Spicebush on HH, they conveniently stopped managing the property and the new mgmt company found they were very deficient in the job they did. Now they are being sued. Any ideas on this?

 

[Hoc]

According to the unsold ebay item (see post #3 in this thread), the special assessment for a 1BR summer week would only be about $300/week for each of the 4 years. It is hard to really imagine a $10,000 assessment per week.

Look here for the 2006 special assessments and fees for each week.

And then here to verify that the same special assessment is being imposed for each of the next four years.

 

[Hoc]

My opinion is they will bail on the next management contract cycle or the next one after that at the latest but we shall see.

I think that's likely.

While I'd heard rumors of a law suit against Marriott from SB/ST owners, has one actually been filed?

Not yet, but they have until 2010 to actually file one.

 

[Hoc]

Re: Get the building on the cheap...

Now you pay all the special assessments or $8,536*52 weeks = $443,872/unit times the 20 units = $8.9 million.

The plan calls for a total SA over the next 4 years of $2.4 million for the entire building.