Berry on Fractions & Shared Ownership: July 2007

Monday, July 23, 2007

July 23, 2007

Just returned from Hawaii's first fractional seminar sponsored by Pacific Rim Bank, ResortQuest Hawaii and TransPacific Mortgage. Dick Ragatz put on the daylong program. Invited attendees numbered about 75 plus some local speakers notably market-maker lawyers Charlie Pear and Steve Lee.

Coming down from the Mainland in addition to Dick and Tracy Ragatz: Art Spaulding on legal issues, Steve Dering on marketing in general, Jim Beckham and myself on implementing marketing, sales and HOA budgeting, and Tom LaTour on hospitality management.

The 'big boys' have yet to move into fractions on the Islands. It's a matter of time. The business there is getting started, which as usual for a new product, involves small developments or 'one off' homes of which there are by some count 30 or 40 being offered in one from or another. Most of these will go nowhere.

Due to the convolutions of Hawaii real estate law and timeshare being managed by the consumer affairs department a 'stand-up' fractional project, registered as timeshare [as we do up here] needs to be in a transient or hotel zone.

The other option is to offer the fraction under the registration minimum, which means a 1/6th interest. To complicate the immediate future; the regulators apparently have attempted to better define what 60 day use means, and have come up, so it looks, with a 60 consecutive day stay. That's not workable for a fractional, so there's work being done to clear up the definition. Hawaii's a 'small town' when it comes to real estate development, and with the rough-shod past of timesharing there is a knee jerk reaction, by many, to any shared ownership product.

Due to whole unit pricing in the Islands fractions will become a big business - it's as natural as fractions in Aspen, Vail or other steroid-driven home priced areas.

For me it was a sweet homecoming of sorts. In the early 70s, when we aggregated the condo rental inventory and brought it to the lower 48 in association with United 'Airlines, we had offices on each, major island and Mainland offices in San Francisco, LA, Denver, Chicago and New York.

We sold that company to join a Hyatt subsidiary, and that resulted in the World's first fee timeshare at Brockway Springs, Lake Tahoe CA.

I've been back to Hawaii as a visitor since, naturally. If find it kind of amazing that there are not only business associates from that period still there, and how great to see them, but some of the same old haunts. Dinner at Huggos, over the water, in Kailua was and still is a treat.

Dick Ragatz will repeat next year.

About Carl Berry

Carl Berry is CEO of Star Resort Group, which is the nation’s oldest and most respected fractional/private residence club developer and marketer. Star is headquartered in Bozeman, Montana.

Star’s current projects are located in St Simons Island GA, Saratoga Springs NY and Windham Mountain NY. Completed projects are located in Lake Tahoe CA, Snowmass CO, Steamboat Springs CO, Cave Creek AZ, Pinehurst NC, and Stowe VT.

Carl was the founder of The World’s Finest Resorts, the leading luxury exchange company acquired in 2005 by The Registry Collection a unit of RCI.

Shared ownership projects have been the focus of Carl’s development career for 40 years. He brought to market the first, fee ownership timeshare project in the World, in 1973 located at Brockway Springs, Lake Tahoe CA.

The Manhattan Club, New York City is the largest urban timeshare project in the World with 242 luxury apartments. It has completed sales. Other urban timeshare projects developed by Carl are located in San Francisco and New Orleans.

Timeshare projects, in the Western United States, are located in Lake Tahoe CA, Sun Valley ID, Vail CO, Sunriver OR and LaJolla CA.

Holiday Clubs International was the first multi site hotel program, which was a venture with Holiday Inns using company owned properties from Bermuda to Hawaii.

He is a former Chairman of ARDA and a member of its Board for over 18 years. Previously he served a Chair of the ARDA International Foundation Educational Institute, Chair of the Meetings and Membership Committees and Chair of the National Timeshare Council.

Carl is a founder and director of the Meritus College Fund, nonprofit providing four-year college scholarships, a National Board Member of the Lionel Hampton Center Initiative for the University of Idaho, a former president of the University of Idaho Foundation and a former president of the Alumni Association. He was recently named to the University of Idaho Hall of Fame.