Message from WSJ-VGV HOA BOD Owner Reps
March 2012
Message From Your Virgin Grand Owner-Elected Representatives
Dear Fellow Virgin Grand Owner:
As you know, we are your owner-elected representatives on the Board of Directors of the Virgin Grand Villas - St. John Condominium Owners Association. We have recently returned from the 2012 annual meeting and a regular Board meeting. Prior to the actual meeting, we toured the property to check on the status of ongoing improvements.
Property update:
Except for a few punch list items and the restoration of some foliage, the refurbishing project is complete, and no additional funds will have to be devoted to that project. The buildings have new stucco and new roofs, doors and windows. We have received many supportive notes from owners who like the new look of the buildings and the noise-reducing, energy-efficient doors and windows. We continue to appreciate owner feedback (positive or negative).
The pool between building 31 and 32 has been resurfaced, and the deck around it has been re-tiled. The new tiles are a real hit with owners to whom we have talked, because they do not get hot even in direct sunlight. The waterfall has been replaced, and the pool area now has improved, built-in grills. The entrance to the pool area between buildings 31 and 32 has been rebuilt; there is now a ramp that can accommodate a wheelchair. In the near future, a lift will be installed at the side of the pool to enable people with limited mobility to enter the water. This will bring the pool into compliance with the new regulations under the Americans with Disabilities Act (ADA). Also, while some plantings were lost during the reconstruction, the pool area will soon acquire new landscaping to make it more attractive. Later this year, the same improvements will be made to the pool between buildings 33 and 34, and that pool will then be compliant with the new ADA regulations. That pool will be out of service for about three weeks during construction.
We observed that there is, at present, no awning or bench for people to use while waiting at the iguana stop in front of the pool between buildings 31 and 32. Management agreed that shade and a bench should be restored, and options are currently being considered. Similarly, the upper pool will have an awning and a bench after the resurfacing and other improvements have been completed.
We are aware that not much shade is provided by the umbrellas at the tables on the two pool decks, and that there is essentially no shade over any of the chaises on those decks. We have asked management to investigate whether some additional shade can be provided at a reasonable cost, though such a project is complicated by the fact that the wind on the hillside might be inconsistent with solutions that would work at lower levels.
In buildings 41 and 42, the pools and patios have been resurfaced, new pipes have been installed, and the waterfalls and lights in the pools have been replaced. New built-in grills have been installed. In buildings 43 and 44, new grills and new outdoor spas will be installed this year. In buildings 41, 42 and 44, thirty-nine (39) individual air conditioners have been removed and replaced with central chilled water plant (pictured below) for all four buildings.
This change will lower electricity costs and therefore help to keep maintenance as low as possible. In addition, solar water heating evacuated glass tubes, not visible from the ground, have been installed on the roofs of those buildings. These tubes absorb heat from sunlight and, through heat exchanger, provide over 80% of the domestic hot water to the four buildings, further cutting our electric bill. Finally, the first group of photovoltaic cells will be installed on the roofs of those four buildings within the next few months and will also cut our electric bill. These cells are projected to save us up to 40,000 kilowatts per year. Later in the year, a second set of photovoltaic cells will be installed on the hillside, in an area that will not be an eyesore. Thirty-seven (37) pool pumps have been replaced with energy-saving equipment, and 650 light fixtures, using 75 to 100 watts each, are being replaced with 13 watt LED bulbs. The resort has already cut electrical consumption by 50% since 2008. At a current cost of 44 cents per kilowatt-hour in the U.S. Virgin Islands, these savings are substantial. You can help, too: please turn off air conditioning and interior lights while you are out of your unit during the day. This will help significantly to keep down future maintenance fee increases.
One more minor notes,
--We noticed that only one towel hook graces the bathrooms in the studios and one-bedroom units. More towel hooks have been ordered and will be installed over the course of the next year (probably during the one week each year when the unit is out of service for maintenance).
--The television and internet systems are being upgraded. The new television system will include PBS-TV and many of the channels will be in HD. HBO is being replaced by Showtime; this is a system-wide change for the entire Starwood system.
--A telephone has been placed in the main parking lot near the fitness center, so if you park there with luggage or groceries, you will not have to enter the fitness center or walk to the main lobby to call for a cart to go to your villa.
--The engineering department has begun a program of inspecting every unit for engineering problems (such as poorly functioning ovens or refrigerators) every three months.
--We are considering whether folding chairs could be stored in the closets of the two-bedroom units so that four people could have breakfast on the balconies.
--We have hired an acoustical engineer to advise us whether a sound barrier could be provided in the upstairs bedroom in buildings 41 and 42 to provide greater privacy to people occupying the two wings of that bedroom without creating a permanent wall that would require unanimous approval of all owners of the unit in question.
--Management is checking on the costs of putting waterproof cushions on the wooden balcony chairs.
Election of a director:
Robert Werbel was re-elected to a three-year term as an owner-elected director. The Board had appointed a proxy committee to vote shares for which proxies were not received, as required by the bylaws. A sufficiently large number of proxies were submitted and while the proxy committee did vote, the votes of the proxy committee did not change the outcome of the election. Mr. Werbel received the highest number of votes in combination of both limited and general proxies prior to the submission of the proxy committee votes.
Owners' electronic bulletin board:
As you know from our previous reports, management has been working to create a secure website for Virgin Grand owners on which an owner could (a) offer to exchange a unit with another owner, (b) offer a unit for rent, (c) indicate a week that the owner wanted to rent, (d) offer to sell a unit, or (e) indicate a desire to buy a particular unit type and week. The site would also enable owners to update their contact information and would include the on-line voluntary directory of owners. The project has moved more slowly than we hoped because of technical challenges, but we hope to have it active by the end of June. Taking the extra time to make sure the site will function properly and be self-administrating is worth waiting a little longer.
Rental of units on which maintenance had not been paid:
Last year, we were able to offer Virgin Grand owners a ten-day window during which they could rent, for the price of the maintenance fee, units that were unavailable to the owners because the owners had not paid their maintenance fee. The net rental paid by the owner was paid to our owners association and credited to the account of the delinquent owner. We hoped that this win-win-win offer could be repeated in 2012. However, management reported that only 15 units were rented in this manner last year, and that the cost of administering a special offer on last year's model could not be justified by the small revenue received.
Management is therefore working to develop a new system through which Virgin Grand owners could rent additional days or weeks (full week rentals would not be required), online, at any time during the year, at a substantial discount from Starwood's best available rate. The inventory would include not only units on which the maintenance fee was delinquent but also days or weeks still owned by Starwood and days or weeks acquired by the association through foreclosure or alternative processes and not yet sold to new owners. The rental income from time periods at the disposal of the association would be shared with Starwood to compensate it for its administrative costs. The Board asked management to report to it on alternative pricing models, with a view to determining the discount from Starwood's best available rate that would maximize the revenue by the Association.
Week 53:
We raised the issue of rental income from "Week 53", the week of use that occurs every few years becase a year last longer than 52 weeks. When Week 53 units are rented, who should receive the revenue: Starwood, or the owners association? We were informed that Starwood's position is that it never conveyed the use of Week 53 to the association, and therefore (a) it has no duty to pay maintenance fees on the week in question and (b) it may rent those weeks and keep all revenue. That is not our opinion. In our view, the original developers conveyed the entire property - all the land and all the weeks - for condominium use, and Starwood could not take back part of the property (that is, the right to receive revenue from Week 53) when it acquired the resort some years later. Neither interpretation is entirely free from doubt, so we asked that the Board obtain the opinion of an independent counsel, unaffiliated with Starwood, on this issue. The Board agreed to do so. The Board further agreed that we, as the two elected directors, select the counsel. (Note: At present, owners who own both week 52 and week 1 are offered the option of exchanging one of those weeks for week 53 when it occurs, and in any event we plan to continue to offer that exchange so that their weeks are not interrupted by a hiatus in which they have no housing).
Delinquencies, foreclosures, and resales:
The delinquency rate is slightly lower than it was at the same date for the last two years, perhaps a sign that the recession is lifting. Nevertheless, about 180 accounts remain delinquent and are not producing revenue for the association, requiring the rest of us to pay their share of operating costs. The owners in question are not permitted to use their units, and in addition we are moving to recover them through foreclosure (or, in appropriate cases, by allowing the owners to turn in their deeds in exchange for forgiveness of past due fees). We are working with counsel to foreclose in cases where the deeds are not relinquished through mutual agreement. Foreclosure proceedings have begun against 80 of those accounts, and other proceedings will be initiated. In addition, 26 unit weeks have been turned over to the association. Of these, 15 were sold to Virgin Grand owners in good standing at bargain prices through a special offer this year. Eleven (11) unit weeks remain in the possession of the association. A reminder: if you are in arrears and want to offer to turn in your deed in exchange for a release of your debt to the association, write one of us and we will put you in touch with Starwood Vacation Ownership's attorney.
Reserve audit:
We budgeted last year for a one-time expense to have our replacement reserve program independently audited by an outside company. That audit will be performed by a company called Association Reserves, and we will have the report in time for budgeting for 2013.
Two personal notes:
We noticed that the
Freecycle shed, while very popular with owners in principle, was nearly empty when we visited it on Sunday, March 18. (By contrast, it was bursting last summer with beach chairs, children's play equipment, snorkel equipment, and unopened beverages.) This innovative way of sharing equipment (and saving money) will only work if we owners make it work; Starwood has no duty to restock it, nor do we plan to ask the Board to provide funds from maintenance fees to keep it stocked. When you are leaving the island, please consider leaving anything that others could use in the Freecycle shed next to the roadway leading up the hillside. If two or three dozen people each brought a single beach chair and left it in the shed during the next year, our Freecycling program would be a major success. Of course, all other equipment donations would also be appreciated.
On an even more altruistic note, during our trip to the annual meeting we met with Joe Kessler, the Director of Friends of the Virgin Islands National Park, a charitable organization that through volunteers helps to keep the park clean, maintains trails, offers educational programs, and advocates for park improvements. We both joined the organization (individual memberships are $35), because we use the park when we visit St. John and know that its existence is one of the things that makes our resort unique and particularly valuable. The organization's website is Friendsvinp.org. We encourage all villa owners to check out the website and consider joining this worthwhile organization. We would also be happy to hear from owners whether they would like to have the resort organize occasional events in connection with Friends of the Virgin Islands National Park - for example, opportunities to meet with fellow owners for the morning while helping to clean a beach or trail, or attending an educational program of the organization, which might be held at the resort.
We will report again after the next Board meeting at the end of June.
Philip Schrag
phil.schrag@gmail.com
Robert Werbel
robert.werbel@yahoo.com
