PelicanNews
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PelicanNews
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Communications from the Board,
MINUTES FOR 2006 2006 1st Quarter Minutes 2006 2nd Quarter Minutes 2006 3rd Quarter Minutes 2006 4th Quarter Minutes A.G.M. 2006 Minutes Booklet will be posted shortly (2003-2005 - minutes below) Letter to owners - Marina Residence Marina Residence - Board-Management Position Statement 2006 MARINA PROJECT - LETTER FROM THE CHAIRMAN June 6, 2006 Dear Pelican Owners, I want to thank all of you who continue to support our Sint Maarten home, The Pelican Resort Club. We have endured many challenges in the years since we took over the club in 1997 and we have made great progress. Over 50% of the villas have been remodeled, most of the common areas including all swimming pools have been upgraded, food and beverage service has been improved, and we have settled all litigation (at a cost of over US$3.4 million plus our attorney fees). Several Pelican owners have expressed deep concern about topics including the new construction, the Board, and our management company Royal Resorts. I welcome all comments and ask that all facts be understood before casting judgment. With over 14,000 owners in our club, we undoubtedly will have differences in opinion about almost every topic (in my own family of five we have the same challenges). What we all share is the commitment to create the very best resort we possibly can. In 2005 the Board approved a 10-year plan which includes remodeling of all remaining villas, paying off all current debt (over US$6.5 million), and establishing the first-ever reserve fund. This 10-year plan is the result of hundreds of hours of work and significant deliberation. The short-term impact of the plan is uncomfortable. It includes the 2006 increase in AMF averaging 20%, scheduled 3% "cost of living" increases in AMF in each of the next 4 years, and a large construction project. Please keep in mind our reality. We currently have debt of over US$6.5 million (without the construction project). The resort needs at least US$8 million in repairs and rehabilitation of existing units to bring it back to what we, as owners, expect. The PCIP program was a great plan to finance the immediate needs of the resort but we cannot continue to borrow from Peter to pay Paul. That is not fiscal responsibility. You have all heard this several times before but if the resort is to survive, we have to either buy our way out or earn our way out. Your current Board, and those before us, have been unanimous in favor of earning our way out vs. assessing you, the owners. My current projections would require an assessment value of approximately US$1330 per unit per week after taking into account an estimate of the owners who will not pay the assessment based on historical numbers. Nearly one thousand owners decided that just an increase in their AMF of US$120 per year was too much and decided to let their units go into foreclosure. How many more owners would make the same decision if a $1330 assessment was made only one year later? This would be catastrophic to the ability to continue business at the Pelican. Even with the increase in AMF this year we are expecting a cash shortfall. This is partially due to the one thousand forced resale units that the Resort has in inventory. These units are not contributing their share of AMF monies to the tune of about US$750,000. Other reasons are final legal settlements and debt service. We have, with the help of Royal Resorts, secured a bridge loan to get us through until 2007 AMF receipts begin to be collected. The new Marina project is very important as it will contribute the millions of dollars needed to pay off debt and additional needed monies to upgrade our resort. Without the Marina project our only other options for a viable future include Assessments and even higher AMF’s… obviously not desirable choices. The Marina expansion includes 83 two-bedroom lock-off villas. Our analysis clearly concludes that the two-bedroom units are highest in demand, and that building less than the planned 83 villas is not economically viable (scale of economy). It is true that the height will affect some views from the Croton and 'D' buildings. It is also true that over the years comments have been made about not blocking views. In reality though, circumstances have changed dramatically. We did apply for a building permit in 2005 using a box-like design which had only 6 stories and had minimal impact to existing views. We did not receive the necessary permit for the plan submitted in 2005. The current plan goes as high as 8 stories with only 4 villas on the 7th floor and 2 villas on the top floor. We understand that the Simpson Bay view is a significant part of what we love about our Pelican home. I am a ‘D’ owner and certainly understand your concerns but in simple terms, we had to make the tough decision that the needs of the whole outweighed the desires and expectations of the few. However, we are looking into the feasibility of amending the plan as part of our continued efforts to preserve the Simpson Bay views and the overall beauty of the resort, but all owners need to know that re-engineering and marketing delay costs are significant (well over US$1 million). I would like to address a few comments about our management company. Many well deserved comments have been received on the significant improvements made to Pelican since our relationship with Royal Resorts began in 1997. They should be congratulated for a job well done. There have been a few comments though that the Board members are owned by Royal. I can assure all of you that I and every Board member hold Royal Resorts to the highest standards of performance and always keep the resort owners best interest in mind. I can’t begin to count the hours of time this Board has dedicated to ensuring the continuing success of our Resort and I am grateful to serve with such enduring individuals. They all deserve your appreciation. Fellow owners, these are tough times but they are also exciting times. There has been much accomplished since 1997. The past has been tough, and the tough times are far from over. For Pelican to be what we all want and expect it to be, we must work together. I am very excited about our future and thank you for your continued support. Sincerely, Jeff Pray PRC Board Chairman TAPRC FINANCE COMMITTEE – MARINA PROJECT We take this opportunity to remind the owners that your Finance Committee members are elected at the Annual General Meeting. Our primary responsibility is to report to the TAPRC Board of Directors regarding the financial condition of the Resort at the AGM in December 2006. As an independent committee, all information pertaining to the finances of the Resort are made available to us for analysis and reporting to the Board at the A.G.M. We must remind the owners that the Resort has historically had a cash shortfall each year in the operating budget but has managed to keep operations going. However, it is extremely important that your memories be refreshed. Prior Boards, Royal Resorts Group and Finance Committee members have indicated that the long-term financial solvency of the Resort rests in the development of the “Prime Rib” on our property, namely the Marina land. This Marina development has been discussed numerous times in the past, and now the land is finally being developed. You the owners have to take pride in the fact that you provided the funds via special contributions, Pelican Capital Improvement Program (PCIP) and increased maintenance fees to allow our Resort to survive. The development of the Marina property is the only viable financial solution to a balanced budget and cash flow. In addition, the monies which will accrue to Pelican should facilitate the establishment and initial funding of cash reserves for the Resort. You can read and re-read the memos on the internet, but the fact remains that we have to move forward on the development. As owners, we have waited since 1996 to resolve our legal issues and finally begin the development of the “Prime Rib”. Your Finance Committee endorses this project and fully understands the owners’ concerns. We have to understand that we must wear our “corporate hat” for the long-term financial stability of the Resort. Hopefully, we will see you at the A.G.M. in early December 2006. TAPRC FINANCE COMMITTEE MEMBERS Norman Dodson Charles Ryan Dave Stevenson MINUTES FROM 2005 AGM 2004 - Annual General Meeting of Owners Minutes, April 2003 First Quarter Minutes July, 2003 Second Quarter Minutes October 2003 Third Quarter Minutes 4th Qtr 2003 Fourth Quarter |
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