Board of Directors

David - Please contact me @ cmichaelis@msn.com. I am curious to see what we can do - is there someone coordinating this effort against DRI? This is BULL. cm

Class action lawsuit will cost a fortune and we will pay for it and it would take years. In the meantime, we would have damaged credit ratings and foreclosures. There was group fighting DRI but it looks like they have fallen away. I got no response from them. DRI will not release names of owners and unless we all unite, we are screwed!

Would like to share a post from another forum regarding this issue:

The Attorney General's office gave me the contact information for RICO. Below is the response I got via email:

"...the Regulated Industries Complaints Office (RICO), of the Department of Commerce and Consumer Affairs investigates and where appropriate prosecutes complaints against timeshare organizations. Thus, RICO has jurisdiction and is the appropriate agency to review your complaint. Should you wish to file a complaint with RICO you may reach them as follows":

Regulated Industries Complaints Office Department of Commerce and Consumer Affairs Leiopapa A. Kamehameha Bldg. 235 S. Beretania Street, FL. 9 Honolulu, Hawaii 96813

Telephone: (808) 586-2666

RICO can also be reached via the web at the following address:

Regulated Industries Complaints Office (RICO) — Department of Commerce & Consumer Affairs

I have an active complaint with the RICO office. It has had an "official" compliant number for over a year. They have done nothing and two days ago the attorney to whom it had been assigned said they planned to do nothing.

The other way to get control is to elect a Board that is not in the pocket of DRI. I have run for the last two years but since almost none of the owners bothers to vote, the DRI sponsored candidates always win. I will run again this year. Perhaps people will be upset enough to bother to vote.

Hi I also own a week at poipu. My mantainece fees are $2000 extra for three years. Unacceptable ! I am a builder on the the east coast and I know about building codes and other regulations when building on the water. Water intrusion is not our responsibility to pay for. If the building was never built up to code to begin with? What do the building plans say when the building was being built?Why were there no inspections done? Was the insurance company doing and inspection every year? How can the ins co say they do not cover this when it seems to be a not up to code issue that was never hidden. It was only hidden from us. Seems like there are a lot of people involved here. Probably an up hill battle I would take on with some others. I feel like they are forcing us out. Think about the next five years work will be on going. Units will he less available. Prices going up. It's sad is any owner a lawyer?

If you really want to do something, we need owners like Halem elected to the Board so that we can gain control of our property. I can't emphasize enough that CONTROL OF THE BOARD IS EVERYTHING. To do this and win, you need to get a lawyer and go to the State Attorney General for a court order to force DRI to share the owners list with the rest of us owners. When DRI refuses, that is where your attorney will earn his fees. Apparently, another group obtained the court order about two years ago, but I've heard nothing further after DRI refused to provide the owners list to them. I think trying to do anything else has a less than favorable chance of success, will be expensive, and will certainly take many years given the appeals process. I doubt very many owners have the stamina to go through several years of litigation stress and expense. In my opinion, small owners banding together is the quickest and cheapest way to succeed, but we need the list of owner names to have any chance of voting as a majority. In the meantime I intend to pay the special water intrusion fee and again vote for Mr Halem. I hope others will join me in voting for ONE person to represent us. Don't forget that DRI loves to put lots of names up for election, that way, small owner votes get diffused and we have no chance of winning an election.

We would like to add our names to the list of property owners fed up with maintenance costs and water intrusion fees. We do not feel we should be paying for this. We don't know what we can do, but want to be included. Please contact us at evans.marlene@att.net.

We have an every other year week. It seems completely out of line to be billing owners when we have no information on the project... To the best of our knowledge a contract has not be given. We are being asked to put money up front years in advance of when it is needed. If it's a 5 year project it should be prorated over 5 years. If they are spending this much money on renovation the regular maintenance fees should go down as the buildings should be as good as new.

Has anyone check with the local title insurance companies to see if they can generate a ownership list? Our week is paid for and we have some kind of Deed that was suppose to have been recorded. Also Is the project taxed on a unit basis or on a project basis. There should be more than one way to get ownership information. I'll check my file and see where our paperwork says it was recorded and will make a call. If I find anything I'll report back.

How does not paying this impact one's credit if one were to walk away?

My biggest concern is that this company will further scam us... with cost overruns... management fees etc. I see no provision for escrowing these funds? Just handing over $65,000,000. with now progress is scary...

kjwreinc@gmail.com

I would think that for a project of this size the owners would have been in on the fact that it was "out for bid" assuming that they even got bids. I would also like to think that they would provide us with the ability to see the contract paperwork. I would like to know who the contractor is!

Is there anyone here from the orginal group of owners that sought the owner list from DRI? I can't get them to respond to me. We should start with that organization and get their list. I believe it was about 500 owners. Then we can start adding names from this forum. Anyone know any of those folks? DRI is not going to give us the names. We will have to compile this list on our own. How do we get the word out that a list is being created. Any ideas? Anyone willing to take on the list management?

I've got to this DRI blog my mistake. I am a Manhattan Club TS owner and looking at your DRI posts I would say that your problems are the same as ours. Manhattan Club owners found a law firms and launched the Class Action in regards to raised maintenance fees, no reservations, and fraud sale. Here is an article on the law suite: http://therealdeal.com/newyork/articles/timing-new-york%E2%80%99s-timeshares--2

Timing New York’s timeshares

While some say the tiny market for shared apartments will expand, others say they’re too costly to develop and have high foreclosure rates August 01, 2011 07:00AM By Adam Fusfeld

For all the unconventional housing arrangements people devise to afford living in New York City, the timeshare, historically, has not been one of them. There are just two timeshare-only buildings in all of Manhattan. And, at first blush, the owners of those timeshares -- at the 161-unit Hilton Grand Vacations Club on West 57th Street and the 300-unit Manhattan Club on West 56th Street -- appear to be struggling. Since opening in 2009, the Hilton Grand has seen 52 lis pendens, or pre-foreclosure filings, and six foreclosures among its timeshare owners. Meanwhile, the Manhattan Club has witnessed 17 lis pendens and 22 foreclosures since 2007, according to real estate data website PropertyShark. If you include data from Manhattan's other big block of timeshares -- 72 units on the top two floors of 1335 Sixth Avenue, which share the building with the Hilton Club hotel -- the totals balloon to 285 total lis pendens and 108 total foreclosures spread over a pool of 533 units. (There are other scattered timeshare units throughout the city, but no comprehensive list of those units is publicly available). With all of that distress, it might appear obvious why no developer has swooped in to expand Manhattan's very small timeshare market. But those first-glance numbers don't tell the whole story. Firstly, timeshares can be expensive, meaning they may only appeal to a small group of buyers. The average cost of a week at the Hilton Grand is between $40,000 and $60,000, according to Michael Brown, executive vice president of sales and marketing for Hilton's U.S. Division; he noted that the price can climb to $165,000 for a high-demand week such as Christmas in New York. Also, the sponsors often act as lenders to buyers in need of financing , and the money doesn't come cheap. Buyers often put 20 percent down, just as many apartment buyers do, although they face higher interest rates. According to Mark Eble, a senior vice president at hospitality advisory firm PKF Consulting, a 15 percent interest rate is standard nationally for such loans. And buyers are limited in when they can use units. Owners pay for the right to a week in a specific unit type (most commonly a studio or a one-bedroom) -- during a specified season, but they're not guaranteed the same unit each time. So, each unit can be sold to upward of 50 shareholders. (Generally, one to two weeks are left unbooked, so that the unit can undergo maintenance.) Under this structure, if one of a unit's owners defaults, it's not necessarily bad news for the building owner. The building owner simply puts the unit back on the market, and ultimately generates even more revenue because another buyer means another down payment. One obstacle developers face is marketing costs, especially in an economic environment like this. Unlike typical condo sales, where just one buyer is needed per unit, it can take years to completely sell out even a single timeshare unit. "Twenty to 30 percent of the cost of timeshares is derived from marketing and sales," Eble estimated. Given that lengthy sell-out process, it's easy to see why timeshares have been far less popular with developers than hotels. (There's also the fact that as far as consumers are concerned, hotels have more brand recognition, and that timeshares haven't fully shaken off the idea that they're somehow fraudulent -- a reputation they earned when they first became popular in the 1950s, Eble said.) The two most recently developed timeshare properties in Manhattan are owned by Hilton Worldwide. In 2002, the company converted the top two floors of 1335 Sixth from hotel rooms into timeshares. Those timeshares sold out, and in the wake of its success, Hilton introduced the 57th Street ground-up timeshare in 2009. Brown said the former has 3,100 owners (some owners take more than one week), while the latter is "ahead of projections," as nearly 75 percent of its inventory is sold. According to Brown, less than 4 percent of the owners of the New York properties are in some stage of foreclosure (though that is much higher than Manhattan's overall residential foreclosure rate). There are those who doubt whether Manhattan will see more timeshare development in the future. Skeptics include Bruce Eichner, who developed the Manhattan Club, which debuted as the first New York timeshare in 1997. "I don't believe the Manhattan timeshares have made any money for Hilton whatsoever," said Eichner, chairman of Continuum Construction, which still manages the Manhattan Club. "It has to be a loser." But Brown called the project a "success," noting that owner occupancy has been high, and said Hilton is interested in "future projects in Manhattan." "Since sales of West 57th Street began, we've been attracting owners who return to New York City several times a year," he said. Eichner said he believes Hilton converted part of 1335 Sixth, and eventually built the second Hilton Club, for the benefit of its internal timeshare exchange program, which allows owners to trade their week in, say, Disney World, for a corresponding week sightseeing in the Big Apple. "New York has the highest 'trading power' of any timeshare market in our system," said Gordon Gurnik, president of Resort Condominiums International, which first developed the exchange concept in the 1970s and currently has 3.5 million members. According to RCI -- which is not affiliated with any Manhattan timeshares, but has a system that allows customers to find timeshares here -- New York is the most coveted destination. "There's more demand than our system can handle, so we book hotels to accommodate some of our customers," Gurnik added. Brown agreed that New York "is in high demand," and said that one aspect of Hilton's decision to build in New York was its internal exchange program. While he wouldn't comment on the building's financials, he argued that if the converted part of 1335 Sixth wasn't successful, "we wouldn't have built the 57th Street timeshare." But according to Eichner, "you simply cannot make any money under the current market conditions in New York." But Eichner claimed he earned four to five times his investment in the Manhattan Club back in the 1990s. When he bought the building at 200 West 56th Street in 1997, he paid $100,000 per room in acquisition and renovation costs. Now the building has 15,000 owners, some of whom bought the most coveted weeks for as much as $50,000. Eichner said today an investor couldn't develop a timeshare for $100,000 a room. He estimated, on the low end, that rooms in Midtown would cost seven to eight times what they did when he bought them. "I can't charge seven to eight times what I do now, though," he said.

According to Crain's, Eichner and the other owners and operators of the Manhattan Club were sued last month by five timeshare owners who claimed they were overselling the facility and making it impossible for them to book stays -- even well in advance. While Eichner declined to comment on the lawsuit, before it was filed he told The Real Deal that Manhattan Club has a 5 percent vacancy rate.

Several other insiders doubted the viability of another timeshare in New York. But Gurnik said the demand for timeshares here is so high, that it's only a matter of time before more developers pursue them in the city. "Timeshares are a great way for developers to maximize their return and monetize their asset," he said. "It might take more time to sell, but you can generate more revenue by orders of magnitude." PKF's Eble disagreed. Because of the effort needed to sell units, he noted that timeshares are simply too illiquid to overcome the costs of development.

"Timeshares can be exceptionally profitable," he said. "But if you believe in efficient markets, the cost of all that goes in to creating and marketing a timeshare in the city is evidently providing a hurdle that's too high for developers to cross."

SHARE COMMENTS(2) Darnesha Hey, that post leaves me feeling fooslih. Kudos to you!

Comment #1 Posted By: Darnesha 08/18/11 MC owner 'So, each unit can be sold to upward of 50 shareholders. (Generally, one to two weeks are left unbooked, so that the unit can undergo maintenance.) ' That what is supposed to be. In case with Eichner, he goes much smarter. Manhattan Club created 22 different types of interest - annual, holiday, split, bi-annual, tri-annual, and so on. That gives a chance to sell a unit multiple times. The owners are eliminated with the access, but according to the MC budget, MC makes big money. Now MC came up with a new idea: quad-annual. The most owners will never see their 'deeded' units in the nearest future. Comment #2 Posted By: MC owner 09/06/11

Here is another article on Manhattan Club TS law suite:

http://therealdeal.com/newyork/articles/timeshare-owners-sue-bruce-eicher-over-a ccess-to-manhattan-club/comments

Timeshare owners sue Eichner over access to Manhattan Club

Five timeshare owners in the Manhattan Club in the Park Central Hotel at 200 West 56th Street, a timeshare condominium resort, are suing developer Bruce Eichner and the club's other owners for fraud and "breach of implied covenant of good faith and fair dealing," according to court documents, Crain's reported.

The timeshare owners allege that Eichner is not granting them access to their timeshares, despite booking up to nine months in advance, and is instead renting them out to the general public.

"Through a coordinated and uniform marketing strategy, defendants fraudulently create and maintain the impression that access to and beneficial use of timeshare units in the Manhattan Club is completely or almost completely limited to timeshare ownership interests," the court filing says, but the reality is allegedly otherwise.

"Timeshare owners paid valuable money and they are not being permitted to use the apartment," said Steven Blau of the law firm of Blau Brown & Leonard, which represents the plaintiffs.

Instead, Eichner is allegedly renting out the units to the public through travel websites such as Expedia. "It's in the best interest of the sponsor, who runs the management company, to rent it to strangers because when owners use of the apartment they make nothing," Blau said.

Buyers spent from $10,000 to $53,000 for access to the units, depending on the type and size of unit, according to Crain's. [Crain's]

TAGS: 200 WEST 56TH STREET BLAU BROWN LEONARD BRUCE EICHNER LAWSUIT MANHATTAN CLUB * * * Please read the comments!

Just find a way to get in touch with each other.

They have an interesting idea of privacy. When I submitted my statement of candidacy for the Board election last year, I included my email address so people could contact me with questions. They removed it claiming they were protecting my privacy. The fact that I wanted it published didn't change their position. I wonder what they will do if I include a link to a web site that states my positions ( and place to register their email address).

halems wrote:

They have an interesting idea of privacy. When I submitted my statement of candidacy for the Board election last year, I included my email address so people could contact me with questions. They removed it claiming they were protecting my privacy. The fact that I wanted it published didn't change their position. I wonder what they will do if I include a link to a web site that states my positions ( and place to register their email address).

This was in the Poipu Point Newsletter of Summer 2011. Soffits were repaired and everything was looking beautiful. To me this is gross misrepresentation. I was also looking at the financial report for 2010 and noted that Diamonds contract will expire 12/31/2011; 3 year contract will automatically be re-newed unless voted down by the Board. Now is the time to act if any changes are to be made. Also what happened to our reserve that is over $1,000,000.

If we are able to oust DRI I feel that rather than a management company we should simply hire a manager to run the place. I keep hearing about lots of crappy management companies. If we have a responsive board, why hire a management company that may screw us again?

Maybe we should check out ad prices in local newspapers. Take out ads ANYWHERE there is advertising for vacations to find owners. Maybe we take out ads in multiple papers across the country. As I understand the majority of the owners are on the west coast.

halems wrote:

I have an active complaint with the RICO office. It has had an "official" compliant number for over a year. They have done nothing and two days ago the attorney to whom it had been assigned said they planned to do nothing.

HALEMS- I spoke to Kathleen from The Office of the Auditor for the State of Hawaii. She said that if after I filed a RICO to contact the SUPERVISING EXECUTIVE OFFICER at the Auditor's Office. Rather than waiting for me to get burned, perhaps you could contact them. You are already there! (808) 587-0800 and tell them about your RICO that nobody cares about. A report from that office (Sunset Evaluation Report: TIme Sharing, #92-19 sited "In particular, time share owners increasingly have run into difficulties with the management of timeshare plans. ...they need strong protection from management abuses such as exorbitant increases in maintenance fees and unexpected assessments." Perhaps suggest that it has become a business plan recommendation for management companies. They at least seemed to believe that there was a process in place to help us. Tell them that it is not working. ANYONE THAT HAS BE BRUSHED ASIDE BY RICO OR THE A.G. OFFICE SHOULD CONTACT THE OFFICE OF THE AUDITOR.