March 27, 2010: WESTGATE RESORTS GETTING SMALLER: When you need cash, you gotta make some serious moves.
DIAMOND RESORTS GETTING BIGGER: Even as ILX gets smaller…
TIMESHARE RESALE COMPANIES ARE IN THE SPOTLIGHT: And they’re taking hits from State governments from sea to shining sea.
What? Only three things to talk about this week? Ahhhh… But they’re GOOD!
WESTGATE RESORTS GETTING SMALLER:: In my last report I mentioned Westgate Anaheim still being a viable development. I was wrong, at least as far as Westgate is concerned.
As you may already know, David Siegel has retained New York-based Carlton Advisory Services Inc. to sell off about $352 million of Central Florida Investments’ assets that are “non-core assets” that don’t pertain to the company’s timeshare business– though it’s difficult to see how some of the listed assets fall into that category. They include timeshares, hotels, condos, raw land– and rights to develop the GardenWalk resort across from Disneyland.
That property will come with all the developer’s architectural sketches, utilities, and parking. The current price is $37 million, however, in an auction it’s hard to predict what the winning bid will be. Other assets up for grabs include the Grenelefe Resort in Polk County, Fla., a 500-room Ramada hotel in Kissimmee, Fla., and two airplanes. Sources estimate conservatively that the total assets could generate about 40 percent of their current listed value, or about $140 million, and Carlton Advisory sources have so far not denied that the assets will be offered at fire sale prices.
In addition to Westgate Resorts, CFI owns or has interests in magazines (I Love Orlando, I Love Vacations), commercial real estate (Westgate Plaza Center retail space in Las Vegas), health spas (Papillon Spas), and restaurants (Westgate Smokehouse Grill).
I could be wrong, but I’d guess that Siegel is betting a lot on the success of his big resort in Vegas, which is a magnificent property. Or maybe it would be more accurate to say he already did bet large on that resort, since its inception came at the top of the real estate bubble and the big question is whether or not enough inventory can be sold for enough money in these tough economic times to recoup the original investment.
I hope Siegel comes out at the end of this mess still standing. He’s a colorful character who keeps things, um, interesting. In the meantime, there’s some great stuff available at that auction for anyone with deep pockets…
I wonder in whose pockets the GardenWalk resort will end up?
DIAMOND RESORTS GETTING BIGGER: I haven’t seen anything official, but a little birdie tells me that it looks like DRI will be taking over ILX Resorts sometime in April. This leads me to wonder how DRI will merge everything. Will upgrade attempts be made to shove entice current owners/members into “The Club”? Will ILX be held as as a separate but connected affiliate of some sort? Will all the resorts be rebranded? What about the Varsity Clubs of America and HOAs and deeds and stuff like that? What will DRI be likely to sell off, and what would they keep?
The original heads up on this issue said that DRI’s offer includes a $100,000 deposit and a promise to pay off ILX’s debts of $34.5 million (listed in the documents as the “purchase price” for the assets). In exchange, Diamond would assume control of certain of ILX’s assets, which include its resorts; its real estate holdings; all its sales and marketing centers; physical property such as equipment, company vehicles, furniture, etc.; and resort management contracts. You can access a PDF file of DRI’s offer (January 2010) here.
ILX has some good inventory, not the least of which is the 14-acre parcel of land adjacent to the Los Abrigados Resort in Sedona, AZ and a couple of acres in Puerto Penasco, MX that was originally purchased while land was still well priced there. This could be good stuff for DRI owners/members.
TIMESHARE RESALE COMPANIES ARE IN THE SPOTLIGHT: And not in a good way.
ConsumerAffairs.com has received a sizable number of complaints about the practices of timeshare sellers from consumers across the nation. Common complaints about these companies involve the use of false and deceptive claims to entice consumers to pay up-front fees, including assertions that buyers are allegedly ready and willing to buy or rent the consumers’ timeshare.
Companies also often allegedly fail to honor cancellation policies, misrepresent the actual services that will be provided to consumers, and fail to comply with elements of state and federal telemarketing acts.
Starting with Florida, Attorney General Bill McCollum has declared war on those in the timeshare resale industry who engage in questionable and – in some cases – fraudulent practices, recently unveiling ongoing investigations into at least 17 timeshare companies and their affiliates throughout the state for deceptive trade practices. One of the biggest names in timeshare resales is in his crosshairs, being on the list of companies subpoenaed: Timeshares Only. You aren’t surprised, are you?
Of course I’m not saying saying they’ve been doing anything wrong, and Timeshares Only has access to good lawyers, so who knows how that will work out. But it IS interesting to find them on the list.
You’ll find the whole list here: http://www.insidethegate.com/2010/03/…/
On the other side of the country, in Colorado, the State Attorney General has spotlighted the top 10 list of companies drawing the most complaints from consumers, and “complaints about vacation home resales, specifically Timeshare Rescue” made the list. Of course Timeshare Rescue is actually more of a “postcard company” than a reseller. If you aren’t familiar with the term “postcard company”, read “Timeshare Repurchaser Settles With Vermont Attorney General”. Timeshare Rescue is one of the more notorious outfits operating in that manner. The AG said Suthers said his office is still actively investigating several of the companies to determine if any Colorado consumer protection laws were broken. If the AG really does a thorough investigation of their modus operandi maybe that company will finally get its just desserts.
And that’s it for this weekend. See ya next weekend, and watch that VPG… Oh, and if you enjoyed this, tell a friend!
Published every Saturday, or whenever there’s something that hits Woody’s VPG-ometer.
Got any hot stuff you’d like to see exposed here? How valuable is YOUR gossip? Your confidentiality is guaranteed; just make sure it’s a real deal and verifiable… Email: [email protected]