Marriott getting tough with BeachPlace HOA!!!

The annual letter from Marriott BeachPlace’s HOA president with the maintenance invoice has some worrisome comments that indicates a strong battle brewing between Marriott and HOA. Personally I am glad Marriott is on the owner’s side in this fight. The condition of BeachPlace has deteriorated for years and I’m surprised Marriott didn’t do something about it before now.

Is BeachPlace in danger of losing Marriott management because of poor decisions made by the current HOA? The letter goes so far as to say:

“Marriott threatened BeachPlace owners with a 15% loss of Marriott Reward Points if the board did not change BeachPlace’s parking fee policy; change BeachPlace’s occupancy policy; and purchase Sony or LG flat panel TVs for the refurbishment project.” It continues: “The Board had no advance warning on these issues and was stunned by the threat.”

Re: Studio Occupancy Issue: When the HOA announced studio occupancy was being reduced to 3 persons (or 2 adults and 2 pre school children) they did it in isolation without surveying owners. So parents faced a serious problem if they had 2 teens – one would be turned away. This was a very contentious issue when announced, and I assume owner calls, letters and comments to MVCI and JW himself, and perhaps from reading TUG BBS, have all had a positive result in Marriott refusing to accept the HOA decision. Good move by Marriott IMO, but the board is very upset with comments in their letter to owners like:

“Marriott sold BeachPlace as a resort, but wants to overcrowd it like a second rate hotel. Violating its own occupancy brand standard and overcrowding our resort is unacceptable to our board.”

Re: Parking Fees: The HOA plans to raise the parking fee in that terrible garage from the already high $14 to $17 a night bringing in an estimated $894,000 (taxable) income in 2008. Pure greed. The letter states,

“Marriott wants to exclude all MVCI owners from paying our parking fee.”

Re: Flat Panel TVs: Marriott wants a 40” Sony or LG flat panel TV in the living room, but the Board wants the smaller, cheap 37” Olevia instead, and proposes that Marriott pay the difference if they continue to insist or give up some fees. If you do a décor upgrade, do it right. A 37” widescreen flat panel TV is the same height as an old 25” TV and really too small for a living room these days. The extra cost of about $15 a week is minimal if the HOA really wants a ‘wow’ effect instead of going cheap like in the past. Instead, they unrealistically planned to have no MF increase and that tells me the new décor will be a grave disappointment.

The board is planning to get tough with Marriott, it seems, mid January to try and reconcile these issues. It surely appears the HOA just wants it their way, a few people in seclusion making decisions for thousands of owners who want to keep it a Marriott managed timeshare. Marriott has made their reputation for quality and are tough masters in protecting their name - rightly so. I’m pleased to see Marriott step in and say it has to be their way for the sake of the owners. The Board makes decisions based on a handful of owners attending board meetings, but Marriott is in contact with all owners all year. So, keep those comments and letters going to MVCI as the HOA needs to realize they represent the owners, not themselves.

The final paragraph of the HOA letter and shows their attitude towards Marriott:

“The Board represents our Owners on all financial and operations issues. The Board exercised its fiduciary responsibility in making these three decisions and they were in the best interest of BeachPlace Owners. The parking fee and TV purchase decisions were budget decisions and the Board has the authority to approve the budget. COA Rules and Regulations give the Board the authority to amend villa occupancy limits. Marriott has the right to change the rules of its rewards program, but when it does so with the intent of overturning legitimate Board decisions, it is an act of intimidation and an attempt to undermine the Board’s authority. Marriott’s action in this matter is very disappointing and reveals a vindictive side of the company that is so different from the friendly vacationclub company that sold us our timeshare weeks.”

With comments like these, IMO the Board hasn’t learned a thing and has no idea of what the owners want. I, for one, hopes Marriott doesn't yield an inch.

Brian

Sounds like BP could use you on its board. Have you thought of runing?
Sheldon

Thanks for posting this information Brian - I am glad the owners sounded off loud and clear. You need to protect your investment.

Brian,
I love reading about the continuing saga at BeachPlace. If these isssues come to pass and prices continue their slide, I sure would like to steal one of these units?

thinze3 said:

Brian,
... I sure would like to steal one of these units?

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But would you still want it if it wasn't a Marriott?

pwrshift said:

But would you still want it if it wasn't a Marriott?

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I really hope that it does not get that far. I received my letter less than a week ago and the first thing I thought was...The HOA needs to play nice, not nasty. They emphasized that they are looking out for the owners best interest but what is in the owners best interest is to remain a Marriott. So, let play this game nice HOA!! The letter had undertones in it that seemed a little too hostile which did not seem like words needed to be put in writing in such a manner. The owners are really stuck in the middle.

pwrshift said:

But would you still want it if it wasn't a Marriott?

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NO! That what I meant by "issues come to pass."

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I own a Marriott MMC and live in South Florida. The BeachPlace property is a real jewel and the HOA is thinking very short sighted when you see the quality and prices of the surrounding buildings going up. They should do a cost per square foot comparison with their neighbor the St Regis!

The parking garage is a disgrace and can easily be improved with a power washer and paint. Nice things like plasmas, LCD, granite add a WOW factor that can lead to increased rental rates and demand.

I was surprised at how high the BeachPlace is ranked by redweek. This property could be a flagship Marriott with a small % increase in annual dues. Heck, if I can buy a 2 bedroom unit for a steal, I might buy one for my mother as a trader and occasional use for out of town family members.

When you compare BeachClub with Exclusive Resorts Destination Club at the St Regis, I have to agree with Brian, that the Marriott is a SMARTER buy.

I wonder how much it would cost to buy 52 weeks for a 2 bedroom place as this unit would charge $1-2m for a condo of that size in that location.

Sounds a lot like the letter we got as Streamside Cedar owners a few years back when Marriott put the gun to our head......if the owners want to keep Marriott, they better be prepared to pay up big time with special assessments.

Steamboat Bill said:

...I wonder how much it would cost to buy 52 weeks for a 2 bedroom place as this unit would charge $1-2m for a condo of that size in that location.

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Probably about $650K based on $15K platinum and $10K other - without looking at the calendar.

I totally agree with you and have been telling Brian for months that I would love to have a week here. I want one good week that will trade me into HI without a problem so that I can spend two weeks there when I go. Have also been considering Ko Olina, but cost is 50% more and MF's higher as well.

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Steel5Rings said:

Sounds a lot like the letter we got as Streamside Cedar owners a few years back when Marriott put the gun to our head......if the owners want to keep Marriott, they better be prepared to pay up big time with special assessments.

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The word "streamside" is exactly what came to my mind when I read Brian's post.

Maybe the Board has the right idea

Steel5Rings said:

Sounds a lot like the letter we got as Streamside Cedar owners a few years back when Marriott put the gun to our head......if the owners want to keep Marriott, they better be prepared to pay up big time with special assessments.

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Exactly. While it may be great if the resort can remain a Marriott what is the true cost? How many postings would there be if the HOA Board (OWNERS representing Owners not Marriott) simply gives in & adds all those "only $15/week" items? I hope there was a long standing plan for renovation and upgrades that is now bing implemented. If that doesn't include the cost of Sony brand LCD's in the living room but "only" some other brand who is picking up the tab for the excess? Marriott? Nope. They will charge their (rising) fees as well as demand unplanned improvements then leave the Board to take the heat for the sudden rise in costs. I'm all for improvements but you have to be financially prudent and work with a plan.

It sounds like the Board is doing exactly what they should and not simply give into Marriotts every whim and wish. The side that needs to show some flexibility is Marriott. Best wishes to the Board.

To the OP I certainly applaud your spirit. I wonder how you know better than the sitting Board members and "those few owners who attend meetings" what the majority wants? As you seem to feel you do it would be great if you took the time to attend meetings, published your ideas to the owners in the form of a candidacy resume and ran for the Board. Then the majority of owners could in fact let their feelings be known by electing you as a representative for them or by electing another candidate. The ultimate owner poll.

I wonder what other issues aren't being publicized. Sounds like the tip of the proverbial iceberg to me, and not just with BeachPlace...

The condition of BeachPlace has deteriorated for years and I’m surprised Marriott didn’t do something about it before now.

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How long ago did the independent HOA take control from Marriott "people" and, under the terms of the management contract, who is responsible for maintaining the resort to the "standard"? I always thought that was Marriott's job as manager...

All in all, 2008 is shaping up to be a difficult year for Marriott, IMO.

Pat

OK, this is a mirror image of the dispute at Streamside about 2 years before Marriott refused to renew the contract for the Aspen and Cedar units. You can almost bank on the fact that Beachplace will likely lose Marriott management as of the next management contract renewal.

Wow, Hoc, that is troublesome! If I were an owner I'd be very upset. Wouldn't that change your standing and opportunities for exchanging? Marriott has more exchange value than a non-branded resort. Wow!

Also, for other Marriott owners (like me) this means we would have one less resort in our pool. That could be troubling, but we've got the new one in Florida on the west coast being built to even the count. Still, I'd rather have more choices for exchange within Marriott. What happened to the owners from the Vail resorts when Marriott backed away? Did they lose exchange power?

Unlike the other Marriott's that I own, Beachplace does not give the e-mails of its HOA members. So if owners want to oppose the decisions of the HOA, how do we go about it? I am opposed to the three person rule that they have put on the studio but other than Eric Minotti who visits this board, how do we , as owners , other than flying to Florida from Boston for a board meeting, post our opposition to some of their decisions that will directly affect not only our Marriott standing but the resort itself?

vacationmama said:

Unlike the other Marriott's that I own, Beachplace does not give the e-mails of its HOA members. So if owners want to oppose the decisions of the HOA, how do we go about it? I am opposed to the three person rule that they have put on the studio but other than Eric Minotti who visits this board, how do we , as owners , other than flying to Florida from Boston for a board meeting, post our opposition to some of their decisions that will directly affect not only our Marriott standing but the resort itself?

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They should give email addresses to contact the Board members but if they don't email the resort (or fax, phone, write, whatever) and ask that the messages/fax/letter be given to the Board members. Hopefully they are interested in what the owners think.

John ... If you don't own and use Marriott BeachPlace you have no idea how depressing it has been to see it get worse year after year as the MF increased and nothing seemed to be done. Pitted fixtures, wallpaper held in place with duck tape, burned counters, worn out carpets, soft and hard goods, and TV's and appliances that haven't been changed or upgraded since the resort opened. You would never allow your own home to fall that far before taking action.

It's no wonder that so many MBP owners don't use it anymore and it has become an 'exchange' haven full of transients. As an original owner, I bought MBP to use every year - splitting my 2 weeks into 4 with the lockoff feature - love the location and winter weather, but there is certainly no 'wow' factor to ownership. Inside, it's a dump. Hopefully the new decor will bring the owners back. Even so, limiting occupancy isn't the solution to keeping it a nice place - it's collecting an upfront fee from transients and inspecting the place before they get it back after check out.

The solution is not as simple as running for HOA office, as you know, and I assume you are on a board from your comment. You have to get elected and even then so many of the good people get frustrated and leave the board as they are always outvoted by the old boy's club. It was pretty clear on some of his posts that TUG member Minoter has had frustrations as a board member and I wonder if he has ever been taken to task for communicating with us on TUG ... which makes me fear he might not run for re-election, as it is so refreshing to at least feel we have a contact.

I wouldn't have bought MBP if it wasn't for Marriott's name and reputation and I'll bet I'm not the only one. Here is a resort that resales for less than half of a week at its offspring - Ocean Pointe which originally sold for less money. The value of ownership would plummet even more without that name. I wouldn't care if there were several extra $15 per week charges to make the place look great - and I'd be happy just if it looked like GO and other fine Marriott TS - but I do want to see the money properly spent to enhance pride of ownership rather than having to go next door to the St. Regis, Hilton, W, Trump, Atlantic to see that MBP could be so much better than its become.

Originally there were to be two 'towers' for BeachPlace Towers, but something happened over the years and Marriott let the space go to the St. Regis condo-hotel. Who knows if that was an early indicator that the HOA was marching to dump Marriott, as this is not the first time there's been a flare up between them.

Brian

timeos2 said:

...While it may be great if the resort can remain a Marriott what is the true cost? How many postings would there be if the HOA Board (OWNERS representing Owners not Marriott) simply gives in & adds all those "only $15/week" items? I hope there was a long standing plan for renovation and upgrades that is now bing implemented. .

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One way to "test" Marriott's will is to try and get a cheap week through ROFR. If Marriott buys it back, that to me would indicate they still have interest in MBP, unless, of course, they have buyers currently standing by.


What is the date that the OLD contract expires?
Is there a "must meet requirements" date for a new contract?

Marriott and Starwood over the last 5 years have followed a pretty comparable stock performance line. I don't think there's any worry these companies will file for Chapter.

http://moneycentral.msn.com/investo...=0&MA1=0&symbol=HOT&nocookie=1&SZ=0&CP=0&PT=9

thinze3 said:

Maybe worse than you think!! Please read below.

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That's the second time you have posted that information. If you look at what's going on, you'll see that Marriott is as healthy as ever. It's income is still high and on track for a record year of revenue and profits in 2007. It's balance sheet is healthy with equity of over $1.6 billion. A major reason its liabilities have increased significantly (with the resulting decrease in net assets) over the past several years has been Marriott's aggressive and responsible stock buy-back program.

To suggest that a company that earns in excess of $600 million per year with positive cash flow might have to enter bankruptcy seems silly.

I still thonk a good Board member helps

pwrshift said:

John ... If you don't own and use Marriott BeachPlace you have no idea how depressing it has been to see it get worse year after year as the MF increased and nothing seemed to be done. Pitted fixtures, wallpaper held in place with duck tape, burned counters, worn out carpets, soft and hard goods, and TV's and appliances that haven't been changed or upgraded since the resort opened. You would never allow your own home to fall that far before taking action.

It's no wonder that so many MBP owners don't use it anymore and it has become an 'exchange' haven full of transients. As an original owner, I bought MBP to use every year - splitting my 2 weeks into 4 with the lockoff feature - love the location and winter weather, but there is certainly no 'wow' factor to ownership. Inside, it's a dump. Hopefully the new decor will bring the owners back. Even so, limiting occupancy isn't the solution to keeping it a nice place - it's collecting an upfront fee from transients and inspecting the place before they get it back after check out.

I wouldn't have bought MBP if it wasn't for Marriott's name and reputation and I'll bet I'm not the only one. Here is a resort that resales for less than half of a week at its offspring - Ocean Pointe which originally sold for less money. The value of ownership would plummet even more without that name. I wouldn't care if there were several extra $15 per week charges to make the place look great - and I'd be happy just if it looked like GO and other fine Marriott TS - but I do want to see the money properly spent to enhance pride of ownership rather than having to go next door to the St. Regis, Hilton, W, Trump, Atlantic to see that MBP could be so much better than its become.

Brian

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Brian - I am a Board member and I do know exactly what you mean about watching a resort slide into mediocrity while fees just go up. There certainly is blame to be placed but even more importantly work to get accomplished.

When a Developer hangs on to management after the building is over they tend to have a heavy hand of control. It's tough for the owners - on the Board or not - to question them as they usually act like they are the ultimate decision maker. When things get bad, as it sounds like it has & I saw at my resort over a three year period, the Board needs to step up and take the reins. I hope thats what your Board is doing - not just butting heads with Marriott to make things miserable.

Have they presented a long term capital improvement plan? A reserve study? Are they setting fees to properly fund operations and reserves each year? Or do they make everything an emergency and then they float talk of special assessments?

Who holds the voting power? Are the Board members truly elected by a majority of owner voters or does Marriott still hold votes that can control the outcome?

I'm always more comfortable with a Board controlled by owners but just having that does nothing to guarantee they will do the job right. You need members who want to volunteer the time and have an interest in improving the resort. Thats why someone who cares - an owner who USES the property like you - makes the best type of Board member.

As for the frustration it is real. At our resort the owner Board had to sit by and watch as things got bad not because we didn't see it but it took time to clean up the financial situation (also allowed to become completely out of control by the sales focused developer/management), get a change made in management (something you may wish to avoid at your resort), address short term needs, put together a workable long term plan and finally get to see the improvements take shape. Not a one or two year process and plenty of frustrating times.

Overall I hope your Board and Marriott sit down and seriously address the issues. Neither should be handing down ultimatums but each should bring plans to get things right. With some serious effort (and money) almost anything can be done if both parties work to make it happen.

email address

Marriott does NOT Give out email info. HOA do not have owner info. Marriott should give out email's for board members. The only way you get this info like aruba or ocean pointe or others is if they have their own web page or forum. I dought very strongly that Marriott would walk away from beachplace. They are being paid, I think $1,000,000.00 A YEAR to manage this place. Marriott has very few beach locations in florida. If Marriott gets everything they want our Maintance fee would go thru the roof.

Fees sem way out of line - wheres the performance?

davemy said:

Marriott does NOT Give out email info. HOA do not have owner info. Marriott should give out email's for board members. The only way you get this info like aruba or ocean pointe or others is if they have their own web page or forum. I dought very strongly that Marriott would walk away from beachplace. They are being paid, I think $1,000,000.00 A YEAR to manage this place. Marriott has very few beach locations in florida. If Marriott gets everything they want our Maintance fee would go thru the roof.

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Wow! $1 million in management fees? Thats about 4 times the average for a third party management firm. What the heck are they doing for that type of fee and how can things get run down of they are doing the job correctly?

Back in 2001 our old management was taking about $550,000 in fees and they had delinquencies at more than 50%, the resort on the path to losing all RCI award recognition, units that were nearly a decade old and not close to what they were when new, a pattern of changing managers every 9 months (no continuity for plans or employees) and more. We felt that wasn't a good situation and opted for new management at half the cost who stepped in and worked with the owner Board to fix collections, get a stable on site management presence, tackle both the short and long term needs of the resort and get things turned around. I truly doubt it could have been done had we stayed with the original management operation despite their never ending promises to improve. Based on history at other resorts where they did stay on and the poor results there as well as the 180 degree turn around at our resort it seems we made the right choices over 5 years ago.

If Marriott is really taking that level of annual fees simply for management I would have to ask if the return of keeping the Marriott name on the resort sign is really worth the cost. You could be putting at least $500,000/year or more toward improvements rather than feeding the Marriott management group. Thats a lot of money for a name.