PelicanNews
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PelicanNews
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PELICAN RESORT CLUB T.A.P.R.C. 3rd QUARTERLY MEETING 2007 Oct 17th, 2007
The following took part in the conference call: Board Members: Jeff Pray, Chairman; Jerry Luke, Treasurer; Judy Young, Secretary; and Dan Menniti. Tom Hoshall, Legal Liaison, sent his regrets. From Royal were: Richard Corso, COO; Luis Cabrera, Resort Manager; Rodrigo Gamboa, Caribbean Division Coordinator and Ricardo Iman, accounting. Also taking part, in the call, were Frank Roozen, Antillean counsel, and Len Matsunaga, US counsel. The Chairman, Jeff Pray, thanked Luis Cabrera for the great job on the meeting agenda booklet. Royal Resorts is working to produce an abridged version of the agenda for the sales office and the owners to better inform everyone of our progress. Dan Menniti spoke to the Board a concerning a conflict of interest with his position on the Board and his wife’s management of a business at the Resort. He stated that for the best interests of the Board he would step down from the Board. Dan will send a resignation letter to the Board, which will be posted on the web sites. Please note that in accordance with the Articles of Association, Article 9, Board of Directors, Section 2, a vacancy on the Board shall be filled within a 90-day period by the remaining members of the Board. “The Board will remain legally constituted even when the number of Board members drops below five (5), but in the case of all such vacancies shall be filled for the remainder of the term (s) applicable to such vacancy within three (3) months by the remaining members of the Board as long as the majority of the remaining members of the Board have been appointed in accordance with the provisions of Article 23 hereof.” 1. Marina Project Update The planned building is an 8-story building, consisting of 83 apartments with 3 levels of central common facilities, being constructed at Pelican Resort in Pelican Key. Other facilities include: a sea wall, swimming pool, parking facilities, mechanical rooms and retaining walls. An inspection was made and photographs taken on Wednesday, 24th September, 2007. Construction of the Marina Project started on March 14th, 2006. Building one: The interior and exterior finishes, including tiling on corridors, has been completed. In the Central building, the contractor is currently working on the lobby. Construction on building two is up to the eighth and last floor. The contractor is assembling the Engine Room and the pool foundation is 100%. However the pool tiling has been delayed due to rain. The Marina Project will open on schedule (December 15) or perhaps 1 – 2 weeks earlier. As of September 25th, the construction is 71% completed. Landscaping of plants is schedule for October 15, for the first phase. A. CONTRACT STATUS The formal contract was signed with the General Contractor, SP&CC N.V. Excavation commenced in April 2006, following issuance of the Excavation Permit. The full Building Permit was issued on the 8th of June, 2006, and drawings subsequently stamped on the 29th of June, 2006. Actual construction commenced with pouring of the first concrete in the base of the service trench on 27th May, 2006. B. CURRENT PROGRESS The effective date of this report is 10th September, 2007. In building one, the rough structure is complete for the building, and patching and plastering is complete. Priming and painting of exterior walls is in progress and about 80% complete. Finishing works are in progress in building one, with tiling and interior painting complete, and finish carpentry about 95% complete. Electrical and plumbing is in progress, and sliding glass doors have been installed. Exterior railings are complete on front of building only. In Building three (center section) the foundations and ground floor slab are complete, and ground floor walls and first floor slab are complete. The first walls and beams are cast, and second floor slab and walls are complete and roof slab is complete, and the structure is complete. Motor lobby area is being completed. Finishes have commenced in Building three with preparation of walls and partitions in lobby, restaurant and gym levels. In Building 2, the level five floors and walls are complete, and level six decking is about 60% complete. The level seven walls are about 60% complete and 50% of the level seven slab is complete. Finishing is in progress with tiling on Level 0, 1, and 2, and sheetrock framing and boarding on levels 0,1, 2 and 3. 50% of sliding glass doors are installed on levels 0 and 1. The sea wall is complete, with concrete retaining wall and rock revetment in the front along the full length. Stub columns are in place along the full length. The retaining wall along the side of the main road is about 95% complete, and the Mechanical Room structure is complete. The pool base and walls are complete and pool bar structure is complete. Air conditioning chiller units are on site and installed. Generator is on site. C. Schedule The general progress of the work is approximately in accordance the contractor’s schedule. A valid claim for delay has been made for a 3 day delay, due to preparation and rain caused by Tropical Storm Chris, from Tuesday 1st August to Thursday 3rd August 2006. Building 2 is now approximately on schedule although the sequencing is different from that planned. D. FINANCIAL STATUS The following percentages/amounts are based on a Contract Value at 1st July, 2006 and the original Contract Amount of US$25,300,752.00. There have been a number of additions and reductions to the original contract amount, amounting to a slight increase at present. Certificate #14 indicates completed to date of US$19,159.691.60 including extra works. Retention of 5% is now being applied and total payments to date amount to US$18,524,669.50. The balance due on the Contract is US$8,232,245.90. The work completed to date amounts to 71% of the Contract. 2. MarketingForced Re Sales - There are approximately 1216 units in forced resale. There are 427 FIP units and an additional 57 units. The Board will receive a spreadsheet on the status of these units. Units for Sale will be listed on the web site and should start in November 2007. Sales - The sales department has had a change in staffing and Jozef O’Neil has been appointed as interim sales manager. Alan Timko will be joining the sales department at Pelican. He is a long time owner at Pelican and has had experience in the sales department at Royal Resorts for about a year. Alan will join on the 28th of Oct. and report to Jozef O’Neil. Website Improvement Plan - The Pelican Resort site has gone through some major improvements over the past 12 months which include the Gallery, more detailed Resort Services and Activities, Rates and Packages, just to name a few. To be rolled out onto the site over the next month will be the listing of all Pelican resale inventory online. Not only will Pelican members have all resale and forced resale inventory available to review, they will be able purchase inventory online. Newsletter - The Pelican News has been warmly received by Pelican Owners and guests and has been published monthly. However it may change to a quarterly publication. The Pelican News will be joined by the Pelican Marina Residences News. This newsletter is meant for all Pelican Marina Residence Members, Pelican Members, and anyone who has toured the model and asked to be kept notified as to the progress of the project. The on island magazine is expected to be published every two months; the first edition was published July 2007. Sotheby’s – There are discussions to possibly engage Sotheby’s International Realty as the exclusive real estate broker for the sales of Pelican Marina Residences. This decision was based on the understanding that we have created a fantastic addition to Pelican, but there is a need to focus on the distribution and marketing of the project internationally. 3. Resort Insurance PMR (Pelican Marina Residence) insurance is under negotiation. There are three options at the moment for PMR: Option 1 for the first phase of the PMR would be three months of coverage including catastrophe (hurricane, earthquake, etc.) for US$34,000. Option two would be three months of partial insurance without catastrophe insurance for US$10,000. Option three would be self- insurance. The Resort is only looking at 3 months as the coverage for the entire Resort comes due on Feb 23rd. The Resort is paying US$453,000 for 342 villas. PMR does not need the storm insurance as the hurricane season will be over when we receive the building from the contractor.
The Board has decided to purchase US$10,000 insurance for three months and renew for entire Resort on Feb 23rd. It was noted that the coverage does not include catastrophe insurance. 4. Legal Update The Quantum Mortgage was signed on 19th September, 2007 and copies have not been sent to Pelican as yet. Friendly Island Properties: It has been agreed that FIP votes for units “not in good standing” will not be counted until they return to good standing. L’Aqualigne: Frank Roozen gave an update on negotiations with L’Aqualigne. The Board was apprised on final negotiation points. Sunterra – Flamingo accident: Luis informed Frank Roozen of an issue, which came up last year, concerning a claim of a lady that apparently fell and injured herself. She filed a claim with Sunterra a/o Pelican. Sunterra now supposedly is taking care of this claim. She was not a guest at either Resort. The parking lot exit at the Flamingo building was commingled with Pelican property by the original developer, Vlietman. The driveway coming out of the parking area is actually Pelican property. The two Resorts are currently looking for any documentation and treatment in the past of a similar situation. Pelican is also looking for a long-term arrangement for this location and the Pelican use of their sewage treatment facility at Flamingo. AGM/Elections 2007 It is expected that Mr. Joe Costa and his group will raise the issue of the FIP weeks again during the AGM. Len Matsunaga confirms that Joe Costa has been informed on the decision that weeks not in good standing cannot be voted. “Good standing” is not the proper term, as it is not used in the Articles of Association. The Articles mention that a member can be suspended if he/she does not comply with his/her payment obligations. In accordance with the Articles, members should formally be suspended if they have not paid their dues. For the purpose of properly identifying which member (weeks) are not in “good standing”, and need to be suspended, a Board resolution as of the record date for the AGM will be prepared and passed so that a record exists and also be produced during the AGM, at which time we need to determine which weeks can and cannot vote. Resort Manager / RRG to inform details on agreements: General Electric water plant (Aqua Design) – The contract is still under negotiation. Aqua Mania - The Resort is expecting a response from them on the new contract. The contract should be signed by the end of the year. WIFOL / UFA : UFA was trying to have a referendum for a change in representation of the employees of the maintenance department. UFA pulled out of the referendum as it looked like they did not have the majority to win the referendum. The comprehensive labor agreement (CLA) with WIFOL expires on December 31st, 2007 and WIFOL has sent a notification to start negotiations for a new CLA. Long Lease Extension Application Long lease extension was submited to government last month. Status of Letter to Government A letter requesting beautification for the entrance and surrounding areas of Pelican signed by all major hotels of the area, was submitted to the government last month. Long lease Annual Fee Reduction Application: Under review. 5. Concessionaries Report Pool & Beach Bars DK&C, N.V. – There is a new lease for the current bars as the new company is willing to renovate the old beach bar. Also there will be a lease on the new PMR pool bar and lobby bar. PMR expects to recover the investment in the first year. Gym at PMR and the Pool bar & Lobby Bar at PMR. - The Pelican Resort should receive the profits from these facilities. The Board will be given the numbers and a payment plan to have the Pelican Resort own these new facilities at the fourth quarter meeting. Old Doctor’s Office: French Pastries Coffee Shop: The Resort manager has issued a contract for signature. The renter will invest significantly in the business. Casino Hollywood Parking Agreement. The Resort continues to work with the Casino on the parking problems at the Resort. The Car Rental Company will have their rent increased. 6. Financial Information as of August 31, 2007 Financial information can be found on Pelicanresort.com, in the Members section for the financial statements as of August 31st, 2007. 7. Maintenance Fee Amount Billed 2007 US$11,978,415.50 AMF Collected US$11,713,818.73 Uncollected Balance 2007 US$ 264,596.77 units 326 Uncollected previous years US$ 1,553,892.72 units 890 (The total AMF uncollected balance including previous years as of Sept 30/07)
US$ 1,818,489.49 units 1,216
8. PCIP Status The target to reach is US$4,000,000.00 which has not been achieved due to Rollovers being only 59%; however from May to August we had new investments of US$275,000.00 total and two cash outs of US$35,000.00 leaving a balance of US$3,628,000.00. The interest rates to Investors (Starting December 6th, 2006)
US$ 5,000.00 5.50% US$10,000.00 8% US$25,000.00 9% US$50,000.00 10% Significantly more than US$50,000.00 Negotiable 9. Operations Report “B” Corridors – The walkways have been tiled in order to prevent humidity and moisture going into units. The old steel handrails had been replace with low maintenance aluminum ones that will match the existing new ones. This project is scheduled to start in May and finish in October. Currently we have finished Beaumontia Building. The Resort is currently working on first block of Bougainvillea building. The Project should be finish by week 49 (December 8th – 15th, 2007). “A” Pool – This pool was originally constructed with hollow concrete blocks and due to terrain movements we have been facing cracks very often, resulting in loss of water and chemicals. The chosen option is a “Liner” and the start date schedule for this project is from September 17th to November 30th. 50% down payment has been paid. “A” Pool was finished and was operational as of mid October. Wireless / Security - For the existing resort, 100% coverage of villas, including the executive offices, sales office and lobby the cost will be US$365,856.00. The estimated date to start operating will be week 48 (end of November). Switchboard Upgrade - Existing switchboard (PBX) has been replaced with a state of the art Avaya Voice over IP platform. All PMR units and common areas will have this technology. “B” building A/C in living rooms: Under evaluation – The Resort tested nine units with central type A/C at a cost of US$2,500 per unit. The total cost to do all 79 one-bedroom units at both “B” buildings is US$198,000. Electrical load consumption is two amps less than current old A/C units due to the fact that it is new cost effective technology. The project has been tested and running for about three months and it has been working effectively and efficiently. This project will be implemented in all refurbishing of units and as cash flow allows it. Insulation on One Bedroom’s Ceilings - We have been placing insulation on three “B” building bedrooms ceiling in order to avoid transfer of temperature to the units above causing humidity to collect. This project will cost approximately US$129,200 for 168 units. There is no contractor involved as the maintenance department is doing this task at its own pace. The project began on May 28. So far 26 units have been done and there is no estimated finish date. Owner’s Storage Room - Old management area will be redone into an Owner’s locker room to keep items for long periods of time. Currently the project will hold up to 50 lockers. Management suggests a total of 250 lockers. This project is under review and the estimated cost will be US$40,000. The Resort is currently evaluating alternative use of smaller lockers. Beach Bar Extension - The actual bar facilities will be remodeled and a sundeck added. We are currently negotiating with new vender regarding this investment. Lobby Remodeling - Remodeling of lobby area will cost US$90,000 and will take about eight weeks to accomplish. We have set up unit A1 A&B as a temporary front desk. The facility should be ready by the end of November, before the AGM. B Pool Bridge Handrails – The old wooden handrails for B pool-bridge have been replaced with aluminum ones that match the rest of the hand railings in corridors and units. Elevator’s emergency phones - Emergency phones were installed in all eight elevators for additional safety and security, which automatically connect calls to operators. We ordered sufficient phones to be placed in the four new elevators at PMR and all pool areas will have phones as well. Marina Pool Gazebos - We have replaced the old fragile metal gazebos with wooden structures that withstand the winds better than old ones. We will rebuild the existing Marina Pool Canopy with a wood roof and shingles. D Building - The green areas are being improved at the D building. Anti-Mildew Program - This cosmetic program started mid February 2007 with a team of 2 people and now is up to 4 people from House Keeping staff and their task is to clean and remove mildew stains from air conditioning units and bathroom tiles. Currently, they are focused at both “B” buildings, where we have 90% of the problem. So far we have covered 100% of both “B” buildings inventory. We have covered about 315 rooms, some of them we did twice already. During the period of August and September, staff was working on this program three days per week. Web based Pre-Check In Program - There are an average of 35 registration forms per week. Would it be possible to remind owners when they call in to make their AMF payments that they can register on line? 10. AGM / Elections 2007 AGM It was suggested that Gene Magliocco from Interval Servicing (ISCO) attend the meeting. 11. PRC 25th Anniversary Program Marketing Events: Promotional Items: T Shirts, Beach bags, Caps, Coffee Mugs, Disposable Lighters, Koozies, Stadium Cups. Signage: Anniversary logo banners on pool areas, tennis courts and stickers on utility vehicles doors. Staff Wear: Anniversary logo T Shirts for all employees Ribbon / pin Lanyards for VingCard keys 12. Dollar a Day Program Fund Contributors (2006-2007) 1. Pelican Resort Club 2. Sunterra Flamingo (Diamond Resorts) 3. Sunterra Royal Palm (Diamond Resorts) 4. Belair Beach Hotel 5. Oyster bay Beach Resort 6. La Vista 7. Sea Palace 8. Port de Plaisance 9. Ocean Beach Club
Fund Collections June 2005 through May 2006 $81,638.72 June 2006 through May 2007 $120,941.35 Total Collected $202,580.07 Less Administration Fees $36,547.57
Net Collected $166,032.50 Total Paid Out $63,961.03 Net Balance @ 5/31/07 $102,071.47
Sponsored Projects in 2006: I Can Foundation: Planting of Trees CIFSEF/ Wifol Children’s program University of SXM: A year’s scholarship for a student
Sponsored Projects in 2007: Cultural Center: Emancipation Mural Painting Starlight Foundation: Books for undocumented children Cultural Awareness Foundation: Statue for school Prison Guard Courses No kidding with our kids foundation Teachers Work shop CIFSEF/ Wifol after school youth education program Belvedere playground project White & Yellow Cross / Crystal Home Orphanage Sunday School D.A.R.E. Personalized Creations NV: materials handed out at schools SHTA: passport promotional flyers for tourists Imagen Graphics: Dollar a Day front desk stickers. 13. Communication Materials Pelican Resort News. We are using edition Vol. 2 #9 (October /07) 14. Training Program Update The training program and strategy are running very well and with very good results. The Pelican staff will receive three weeks of training instead of two from each of its four RR Corporate visits per year. In addition, all Front Desk, Bell boys and PBX staff received special two weeks, twice a year training from Guest Services Department Head at Royal Resorts in order to improve quality of service and guest satisfaction. There will be cross training for Key Staff at Royal Resorts facilities in Cancun between June and September 2007.
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