Post reply

Re: Special assessment (by Gregory B.):

neds5 wrote:

The largest assessment was for 48% of the $12 million job for the emergency replacement of groundwater/stream diversion pipes installed to allow the Kahili and Ha'upu wings to be built, which were punctured by debris and failed during the "40 days of rain" in 2006, causing a very large sink hole (as I remember, there were 6 cars which fell into it) and flooding. Then, when the main job was done, the engineers determined that another section of diversion pipe which they thought they'd be able to seal had to be replaced, so that was another single assessment, charged this current year ...

We visited the Kauai Beach Club two weeks ago. 20 months after the flooding, the parking lot is still completely torn up. Guests must park up the hill at the Kauai Lagoons parking lot. So there is obviously still a lot of work to be done to get things back in order.

The sad truth is that this is an aging hotel property that dates back to the 1950s. Old properties require a lot of money to keep them going. This is nothing new. In the 1980s, developer Chris Hemmeter poured an unbelievable amount of money into this property to convert the old Kauai Surf Hotel into the Westin Hotel. The Westin operated for only 5 years and lost money for its investors. Then in the 1990s Marriott poured in more money after Hurricane Iniki for timeshare conversions to breath new life into an unprofitable albatross. Smart business decision - and Marriott made a lot of money in the sales of those timeshares to be sure. But now Marriott (and the timeshare owners) are discovering how much it costs to keep an older property like this going. This goes way beyond new carpet and drapes. I'm talking about the infrastructure of a large resort (like drainage systems, and parking lots, and electrical generation, and pool heating systems, etc).

With such large infrastructure expenditures, the money for other maintenance seems to be running short. With each visit I am noticing more deferred maintenance issues (peeling paint, chipped tiles, inoperable hot tubs, non-functioning fountains, etc). It leaves you with the impression of faded elegance of a once-grand hotel.

The Kauai Beach Club is a huge resort. As maintenance issues continue to multiply, it will take a lot of $$$$ to put the shine back on this place. Thus all the special assessments. I hope it will be enough.