May 22, 2010: WHAT’S ON THE MENU THIS WEEK?
THINK FAST: If you’re looking for something about the little basketball “kerfuffle” between a certain timeshare CEO and a referee, you’ll find it over at Hot Cuppa Joe (along with a short video– don’t blink). Has that CEO been putting on a little weight?
MIDNIGHT AT THE OASIS? If you didn’t already know, Black Gaming LLC in Mesquite, NV entered Chapter 11 bankruptcy last March. The company, which is in active reorganization mode, owns The Oasis Hotel & Casino, the Virgin River Hotel & Casino; and the CasaBlanca Hotel & Casino. The Oasis contains 73 timeshare units (the Grand Destinations Vacation Club with 34 units and the Peppermill Palms at Mesquite with 39 units). The CasaBlanca has 24 timeshare units (the CasaBlanca Vacation Club).
The Oasis has been pretty much closed down since December 2008, though hotel rooms on the property are occasionally used for overflow from the other two hotels and there are still a handful of slot machines in operation. Now the word is that The Oasis is slated for destruction in June– or maybe not, depending on which story you read. Black himself seems equivocal about it, though the bankruptcy documents call for it.
At any rate, it is almost certain that at least the casino and some portion of the 1,000 or so rooms will come down. The theory is that the hotel is too big, and that demolishing some of the rooms will decrease the number of available rooms in Mesquite, thus bringing up the room rates for the remainder.
But not to worry: the timeshare units are safe from the wrecking ball, and Black has promised to maintain them. I wouldn’t imagine the timeshare owners are real happy with the situation, though.
It will be interesting to see what is done with the portion of the 26-acre property that will be freed up by the demolition…
BLACK & BLUEGREEN & RED ALL OVER: It’s all so confusing if you aren’t an accountant. Bluegreen Corp.’s revenue for the 1st Quarter was up a whopping 36% to $55.8 million, yet the company took a loss of $7.9 million.
So Bluegreen, which should be in the black, is in the red instead. Whiskey Tango Foxtrot???
Once again, it’s all in the way you count things. You see, they took an accounting charge and wrote off bad debt for loans to its timeshare resort buyers. Here’s how it worked: Because of new accounting standards adopted by public companies on Jan. 1, Bluegreen added to its books seven special-purpose financial entities that were previously not part of its balance sheet. These financial entities were the mechanisms Bluegreen used to sell the loans it issued to timeshare buyers on the securities market. This caused a one-time, non-cash reduction of $61.3 million to the company’s retained earnings.
Bluegreen took a $10.7 million charge to reserve for loan losses – mostly due to the new loans it added to its balance sheet under the accounting change. The company had $759.4 million in loans on its books as of March 31, 4.4 percent of which were more than 30 days past due.
Bluegreen noted that the $130.1 million in loans it originated after Dec. 15, 2008, when it tightened underwriting standards, were performing more than twice as well as the rest of the portfolio.
The company took an additional $5.3 million charge to reflect the impaired value of its Bluegreen Communities timeshare and resort selling subsidiary due to lower property values.
Are you following? I guess I should have majored in business or something useful like that instead of language studies…
GETTING BIGGER: Mahindra Holidays & Resorts Ltd plans to launch four new products in the 2010-2011 fiscal year to boost its product offering, adding 600 new units to its existing portfolio. The new products include a camping product (tented accommodation), a membership product for senior citizens, another for the high-income group and a deeded product.
The deeded product is a fractional ownership product of premium villas aimed at high net worth individuals in close proximity to Mahindra’s existing resorts.
The firm is also in the process of acquiring three properties in Gujarat and Madhya Pradesh, and those acquisitions will be completed on June 30, 2010. The company is also looking at more buys across the country, but there are no plans to acquire any properties overseas at the moment.
Created in 1996, Mahindra Holidays & Resorts India Ltd., (MHRIL) is a part of the Infrastructure Sector of the Mahindra Group. Started in 1996, the company’s flagship brand ‘Club Mahindra Holidays’, today has a fast growing customer base of over 100,000 members and 23 resorts at some of the most exotic spots in India and abroad.
Pretty good for a firm that many industry analysts still consider to be a “Jeep and Tractor company”.
WHO HAS THE REACH IN MYRTLE BEACH? Is this a cautious sign that things are looking up? Burroughs & Chapin Co. Inc. owns some land in Grand Dunes where a single-family home subdivision and an oceanfront condo tower have been proposed.
The 16-story, 125-unit condo tower proposal, next to the Dunes Club, is from another developer who wants to remain anonymous for now, but it’s probable that the un-named developer will buy the land from B&C if all the approvals go through.
The proposed tower is one of three that the developer wants to build. The final plan, with the three towers, would have about 500 units with about 4 acres of pools, open areas and a potential restaurant along the ocean. Total value of the project is estimated at about $25 million.
If the project is approved, developers could apply for construction permits in as little as four or five months.
So who has the wherewithal in these tough times to build a brand new 500-unit timeshare resort in the upscale Grand Dunes? There aren’t very many names that come to mind…
ALSO IN SOUTH CAROLINA: More good news in Myrtle Beach: Sales of fractional properties at Dye Villas, a purpose built fractional ownership resort in the grounds of Barefoot Resort, have resumed after a break caused by the financial situation in the US.
The sales operation is being managed by Star Resort Group, led by Carl Berry, which has restructured the Dye Villas offer. Units at the resort were originally being sold on a 1/6th share basis, with prices reaching $150,000. After the relaunch, both 1/6th and 1/12th shares are on offer, at $120,000 and $60,000 respectively. Owners will have full access to all four of the Dye golf courses.
The developer, who is the master developer of the Barefoot resort, is providing buyer financing, and the project is affiliated with RCI’s The Registry Collection.
Star Resort Group has installed Hart Rist as site sales director. He was formerly at Bald Head Island fractions and has assembled a team of four sales executives to kick off the project.
OFFICIALLY DEAD: Way over on the other side of the country, the news is not so good. The 52-home fractional project called Sonoma Vineyard Estates, which was to be managed by Wyndham, is apparently dead as a door nail.
Napa resort developer Tim Wilkens, who bought the property in 2006 for $5.8 million, applied for a general plan amendment in 2008 to build a 57-acre resort with 52 homes, a 9,300 square-foot lodge, pool, spa, vineyards and trails. The project could have had as many as 1,300 fractional owners at 2 weeks per owner.
It was bad timing, unfortunately. There were objections to the project, which slowed things down. Then Wyndham pulled out of the deal when the timeshare industry headed south, and that was a major factor in the project’s demise.
As things stand now, a lender has started foreclosure proceedings against Wilkens, and Wilkens is planning on selling the property.
Rest in peace, Sonoma Vineyard Estates.
MAUI HATES YOU: Maui County has been working assiduously over the past couple of years to keep more timeshare projects away. They don’t like it over there, they don’t think timeshare owners are the kind of people the county wants to attract. To be fair, it’s not so much that the county doesn’t like the owners, it’s more that they perceive timeshare owners as spending less than traditional tourists because timeshare units have kitchens, so less money is spent out in the local community at restaurants, etc.
Well, they obviously haven’t thought that out very clearly but I’m not going there today. I’m heading straight to the bad stuff: TAXES.
Yup. They’ve gone and done it. The County Council voted unanimously on May 17 to fix the real property tax rates as it had last discussed them in April. Proposed rates range from $2.50 per $1,000 valuation for homeowners to $14 per $1,000 for timeshare properties. The contrast is even greater when you consider that with the deduction owner-occupants get on their assessed value the effective rate for homeowners is much less.
They hate you, I tell ya. They hate you!
DEAD SKUNK IN THE MIDDLE OF THE ROAD AWARD: Australian detectives from the Mill Park Crime Investigation Unit in Victoria have nabbed a pair of alleged fraudsters, on the charge that they were posing as agents who were offering to trade timeshare holidays. The two men were targeting elderly people looking for vacations.
The men were apparently operating under many business names, including Movacation, Aussie timeshare, and Minivacation. Arrested were a 29-year-old Kew man and a 41-year-old man from Whittlesea who is reportedly assisting police. Their names were not released as of press time.
Investigators say the scams aren’t limited to the Victoria area and believe people from other states may also have been victims. Police have located up to 30 alleged victims in Australia and New Zealand and think there could be more.
Police would like to speak to anyone with information about these companies or anyone who believes they may have had dealings with people stating they were representatives of these companies.
Anyone with information is requested to contact Crime Stoppers on 1800 333 000 or www.crimestoppers.com.au
Such scams are foul no matter what, but there’s something especially disgusting about targeting the elderly, don’t you think? Peeuuw!!
And that’s it for this week’s Roadkill. See ya next weekend, and keep your eyes on the road… Oh, and if you enjoyed this, tell a friend!
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