Catching Up with Carl: May 2017

So, here it is May again. We at Star Resort Group are on ‘pins and needles’ awaiting Clairfield International’s response to our deck of projects for financing, which are:

Windham East, Windham Mountain Resort, NY
Merchant Woods, CT
Seagate, St. Simons Isle, GA
Rendezvous Bay, Antigua, the Caribbean
Stokes Park, outside of London, England
California Hotel, New Orleans, LA [under negotiation]

At Saratoga Springs Polo, NY, we are close to getting the project back with new partners. The problem, as you all know, with lawsuits is that they drag on. Our goal is to bring our errant partners to heel asap, and then move ahead with new partners. Duane Gerenser is honchoing this for SRG.

Ocean Lodge, in St. Simons Isle, GA, is a ‘slow go’ deal. The database of past hotel guests did not generate the leads or sales we expected, so we are now in the open market for leads. Our sales exec, Sandy Staudenmayer, is self-generating to make up for down time.

RG marketing guru Chris Cannon is very busy generating leads from the universe of Atlanta residents, who are income qualified. Atlanta is the main market to St. Simons, being five hours away. Jacksonville is closer, but looks to the South in Florida. We knew we’d be in this market later, but now sooner. So goes the marketing and selling business. One has to be on top of it, and a bit of a risk-taker to be successful.

Mill Creek Resort, Gruene, TX: The whole town is on the National Historic Register. Mill Creek Resort is a small project a short walk from the main drag; we’ll start marketing and sales after we exhaust a fee-for-service opportunity. The three partners in 2009 sold 36 units to Wyndham VO and Wyndham/World Mark sold the condos out in less than a year. Gruene has a dance hall that is famous for attracting country western headliners. I was in Gruene two weeks ago: It is 25 minutes from San Antonio, 35 minutes from Austin and 2.5 hours from Houston and Dallas; it’s a big Mexican market on holidays. It's also part of New Braunfels, a bustling city with a major discount mall. The welcome mat is out to all Texans and Mexicans, too. A new part of the country for us, but our good friend Pat Hanes, who spent over a year in that part of the Hill Country, gives it high marks.

Catching Up with Carl: April 2017

Here it is—Spring 2017 and Star still has only one project: Ocean Lodge, St. Simons Isle, GA. We have a key sales person on-site booking and selling the mini vacation tours that have been generated from past hotel guests.

To be sure, we have other projects in the pipeline: Key West Cottages in Key Largo, FL; Seagate next to Ocean Lodge; Saratoga Polo coming out of litigation; and Windham Mountain Resort, a New York State ski hill two hours north of NYC. We have an LOI on 300+ acres that directly abuts the ski hill including a run that goes through the ski in/ski out property.

Academy Securities of San Diego, named for alumni of the Annapolis and West Point service academies, is being looked at to provide financing for many of these projects. For an Academy presentation, this coming Wednesday, April 12, in NYC, we have put together all Star’s projects. It’s an impressive list going back to 1973 with the first fee-ownership timeshare in the world at Brockway Springs, Lake Tahoe, CA. Here it is:

Resort Fractional Projects:

     Ocean Lodge, St. Simons Island, GA

     Seahorse Beach Club, Follett’s Island, TX

     Dye Villas, Myrtle Beach, SC

     Anabui Private Residence Club, Aruba, Lesser Antilles, Caribbean

     Vallarta Gardens, Puerto Vallarta, Mexico

     Front Four, Stowe, VT

     Mt. Superior Residence Club, Snowbird, UT

     Residence Club at Whitefish Lake Lodge, MT

     Purgatory Lodge, Durango, CO

     Expedition Lodge, Kirkwood, CA

     Meriwether Ranch, Melrose, MT

     Rancho Manana, Cave Creek, AZ

     Northstar-at-Tahoe, Northstar, Lake Tahoe, CA

     Cottages at Pinehurst, Pinehurst, NC

     Christy Club, Phase One, Steamboat Springs, CO

           

Urban Timeshare Projects:

     Jackson Court, San Francisco, CA

     San Francisco Suites on Nob Hill, San Francisco, CA

     Powell Place, San Francisco, CA

     Avenue Plaza, New Orleans, LA

     The Manhattan Club, New York City, NY

Resort Timesharing Projects:

     Vail Run, Vail, CO

     Cliff Club, Snowbird, UT

     Casa del la Playa, La Jolla, CA

     Kingsbury Crossing, Lake Tahoe, CA

     Schooner Landing, Newport, OR

     First Cabin Club, Lake Havasu, AZ

     Cape Codder Residence Club, Hyannis, MA

     Brockway Springs, Lake Tahoe, CA

Collections:

     Holiday Clubs International, Holiday Inns, Memphis, TN      

     World’s Finest Resorts, Fractional Exchange Program

I’m tired just looking at the list. We’ve been a lot of places over the years, and had a lot of success… and also a few screwy developers to deal with.

Catching Up with Carl: March 2017

We begin sales at our St. Simons Island, GA Ocean Lodge project shortly. Our marketing mastermind, Chris Cannon, has qualified leads ready to go and our Sandy Staudenmayer is on site and ready, too. So, we expect some quick success.

Even though Georgia is a full disclosure vs. registration state, we are doing the last-minute updates on our document package to ensure that buyers from Florida and the Carolinas are fully protected vis-à-vis their shared ownership registration. Our Scott Tracy is handling that for us.

Saratoga Springs, Polo: We filed suit last week and expect either a settlement or the property. We are very sorry about this, but it’s indicative of deals that were around pre-recession that have stayed in the original developer’s hands. Our Duane Gerenser is heading this up for Star.

Pickle Bay Condos, Granada: I was in Tampa two weeks ago and Skyped for an hour-plus with the owner of the project, who lives in London. I was with both a real estate ‘trader’ and a media trader. I think this will go once all parties agree on the dimensions of the project. Our former London-based World’s Finest partner, Russell Bragg of Premier Resorts, knows Pickle Bay and the condos. Small world.

Windham East Ski Mountain, Poconos, New York: Not a Western ski hill for sure, but the best just a few hours outside of NYC. The 300+ acres adjacent to the ski hill are owned by a Greek shipping family. We are engaging in a venture with them to develop and market single-family homes and condos. It’s ready to go; we’ll bring financing and JV to the property, while Mike Connor is to supply the homes. As with Polo, Duane Gerenser is heading this up for Star

Seagate Condos, next to Ocean Lodge, on St. Simons: The 24 condo units are currently waiting for the financing commitment in writing, acquisition and buyer, from BB&T. They have verbally committed. The BB&T financing is at 75%, so we need to raise the equity, and are in the process of doing so. Our Marvin Rappaport along with Peter Temling are spearheading this project.

Catching Up with Carl: February 2017

About Star Resort Group

Star Resort Group, and it predecessors, has its roots in the shared ownership business beginning in 1973 by getting registered in California and bringing to market the first fee ownership timeshare in the world at Brockway Springs, in Lake Tahoe, CA.

Since that time, the principals of Star have been involved in mixed-use and shared ownership projects.

Other notable firsts include urban timesharing in San Francisco, New Orleans and New York City, and the first fractional development company in the world, funded by Starwood Capital.

Since 2000, Star has focused on fractional ownership, with projects in Lake Tahoe; Steamboat Springs, CO; Snowmass, CO; Stowe, VT; Snowbird, UT; Whitefish, MT; Cave Creek, AZ; Myrtle Beach, SC; St. Simons Isle, GA; Aruba; and Puerto Vallarta.

A hallmark of Star is its understanding and application of innovative use and reservation plans, as well as a deep understanding of buyer motives for the purchasing of a fractional interest.

It's one thing to be an innovator; it's another to remain contemporary in the business. The principals of Star have done both.

Star develops for its own account and works with developers for advisory services and marketing and selling services.

Star and its team of planners, marketing and sales experts, developers, and legal and financial specialists have worked with some of the industry's most recognized and respected brands in locations all over the planet, including Raffles Hotels & Resorts, Four Seasons Hotels & Resorts, Fairmont Hotels & Resorts, and Starwood Capital, with projects in Manila, Croatia, London, Crimea, Seychelles, French Polynesia, Canada, Mexico, the Caribbean and throughout the United States.

Catching Up with Carl: January 2017

With Trump coming in the deal flow is picking up; Red or Blue, the market is upbeat about future resort development prospects.

Ocean Lodge on St. Simons Island, GA: The marketing plan, done by Star’s senior marketing exec Chris Cannon, is complete and accepted. We’re going after a wellness theme so our major market can see using four weeks of time. Our lead sales person, Sandy Staudemayer, is ready to leave Montana for Georgia. We plan to be in business the first week of February with dependable lead flow.

Seagate, or Ocean Lodge II: This is the 25-unit building ‘next’ to Ocean Lodge. The market report by Wally Hobson of Hobson Advisors is complete and approved. Now we need to secure the equity financing to go along with the BB&T banking commitment to acquire the property just a few steps from Ocean Lodge. The Seagate’s 25 units to go along with Ocean Lodge’s 14 units give us a decent size project, for an independent that is. Or 39 units x 12 shares each [for now] = 468 shares to sell.

Saratoga Springs Polo continues with the lawyers. Our lawyer had a phone call with the current owner’s lawyer to offer a settlement, a lawsuit or to have the current owners join we three buyers [Duane Gerenser, Mike Connor and myself] on our development LLC that has been formed for some time.

Windham Ski: The venture with the current owners continues on a positive track, and we expect to be in first phase development this spring.

Marina Pointe, Big Bear, CA, is at a stalemate for now. The owner is proceeding ahead with the development of ‘super sites’ that will house 14 to 28 pre-approved condominium units. Our interest is to buy, subject to a number of elements, one or more of the sites for fractional condominium sales.

A comment about getting deals done without a lot of up-front cash, and trading on Star’s reputation of effective sales: As mentioned last month, the deals that were on the table pre-recession have a ton of ‘hair’ on them as the developers had to jump through many and varied hoops to keep control. It’s a delicate world out there. Even though September 2008 is almost a decade ago, the memory is still vibrant in the minds of many, and for good reason.

As California is ‘broke’ and overtaxed, Star has added Marvin Rappaport of Coral Springs, Florida, as Financial VP and Duane Gerenser of Manchester Center, Vermont, as our Northeastern VP of Development. A long overdue welcome to both. This extends Star’s reach to the East Coast. Both Marvin and Duane will work in concert with our Scott Tracy and Chris Cannon for administration and escrow and marketing respectively. There’s that dangling participial at the end of the sentence!

Catching Up with Carl: December 2016

Here we are at the end of another year.

I am reflecting a lot on the difficulty of getting projects signed that began their life before the recession, so pre-2009. In many cases, these are the ‘ready to go’ projects that we focus on. But, for the developer or owner to have them in their control, all these years means that the financing is convoluted, or they would have long ago lost the project back to the lender or its equivalent. So, lately we spend what I consider an inordinate amount of time working through the ins and outs of either a finance tangle or a developer who has so succeeded in keeping control of the project that he does not know how to let it go. All this assumes that Star offers a market rate deal and the prospect of success in marketing and sales.

That said, what does Star have ‘on the books’ at the end of 2016?

Ocean Lodge, the Golden Isles, GA: one of Star's real stars, in sales, has agreed to kick off our selling program in 2017. Sandy Staudenmayer is the key player for us and for Ocean Lodge. She'll arrive in January. We have our Scott Tracy to thank for getting Sandy in the 'do' mode.

The Seagate building, across the street from Ocean Lodge, includes 24 one-bedroom units, condominiumized and ready to go for sales of whole or fractional units to extend the sales program at Ocean Lodge. It’s in the process of getting financed thanks to Peter Temling and our Marvin Rappaport, who is Star’s VP of finance. We are there December 8th to start the financing process. Wally Hobson is doing the feasibility for Star.

Saratoga Springs Polo is still in legal limbo as we work through the process of leveraging out the two errant partners. We believe, at worst case, we'll end up with either the property [our first choice] or a financial settlement.

Windham Ski, Poconos: Duane Gerenser, Star’s VP of development in the Northeast, is working with the owners to get an agreement that will also allow Star to finance and build out the some 300+ home sites there.

Alas, I am afraid the Big Bear, CA, project, Marina Pointe, is slipping away as the owner does not want to sell all or part of it to our group. See my notes at the beginning of this newsletter about developers who have kept the dream alive for over a decade.

Mahalee, in Markleeville, CA, is a large development in California’s Sierra Nevada, about 30 minutes to South Lake Tahoe, and includes unspoiled country and four-season activities. It was counting on what Star considered unrealistic financing avenues, but is back again and more realistic this time around. We are assisting the owner to correctly package the property for sale or for selling.

So, Merry Christmas and let’s all plan for a grand New Year.

Catching Up with Carl: November 2016

It’s been a long drought, but we finally signed a marketing and sales contract at Ocean Lodge on St. Simons Island, just off the Georgia coast. Brunswick is the nearest town. We’ll be selling fractions and time share interests. A big ‘shout out’ goes to Marvin Rappaport, who engineered the ‘deal’ for us. Also to Chris Cannon, our chief marketing guru whose work is now just beginning. And, of course, to our Scott Tracy, who as always keeps Star on the right path.

At Ocean Lodge—a boutique hotel, 15 rooms and rooftop restaurant—we are taking it ‘private,’ or from one owner to many… a transfer of debt from one to many to say it another way.

St Simons Island is adjacent to Sea Island, long the ‘class’ of the barrier islands. Pre-recession they instituted a quarter share program; purpose built, with very large units. They were all reserved, but not closed.

Then, September 2008 came and most dropped out. Just recently Sea Island, itself having gone through a change of ownership for the hotel and unsold lots, re-commissioned the quarter share program. Randy Burgess is the PD and sales manager, and a top-flight professional. The two products [Sea Island quarters and Ocean Lodge 1/12 fractions] are so different that we don’t see much in the way of one-on-one competition.

Our other deals are moving along, but not ready to activate:

•Marina Point at Big Bear, CA—we are negotiating with the owner on a purchase of JV.
•Saratoga Polo, NY—we are in the process of calling for mediation on the way to arbitration, or to file a lawsuit to bring our two of five partners to heel.
•Windham Ski, Poconos, NY—we are moving ahead with the owner on a venture.

 There really is something to be said of the ‘Art of the Deal’ in getting these pre-2008 projects to a point that it makes sense for Star to either buy, venture or market and sell.

Or, to say it another way, if one wants a current deal, ready to go save registration, etc, then if it existed pre-2008 it’s got a lot of ‘hair’ on it. Congratulations are due to the owner for keeping it alive these past nine years [or more]. But that means the debt is turned upside down and the approvals, still valid, may have changed over the years.

So, onward Star goes. For a Western-based company St. Simons is a long way to go. But, a deal is a deal.