April 19, 2010
Dear Aruba Resort & Casino Owners,
Bon bini from sunny Aruba! It is my privilege to share with you this update on important issues affecting the resort and your ownership. Your new Board of Directors, management, and all the staff have been working tirelessly on your behalf. Thank you for taking the time to carefully read this information.
In this report you will receive an update:
- Status of the resort
- Upcoming auction May 6, 2010
- Annual Maintenance Fees (AMF)
- Displaced owners of week 50, 2009 – week 9, 2010
- Interval International
- Rental program
- Resale program
- Board and Extraordinary Meeting Report
- Legal Update
- Financial Update
- Contact information
STATUS OF THE RESORT
We are all very pleased and proud to update you on the status of the resort. We have now opened about 50% of the available villas. We have chosen to only open the number of villas we currently need to accommodate all owners and which we can afford to operate. We plan to open all of the villas by the end of 2010. Other than the casino, all of the amenities are fully operational including exercise gym, Dunkin Donuts/Baskin Robbins, Divi Dushi Mini-mart, Pool Bar & Grill, and Payless Car Rental. We now also have a tour desk on-site and wireless Internet for a modest fee. Watch the website in a couple of weeks for our new webcams. The morale of the staff is very good. Royal Resorts corporate team has been working with us including the Engineering Department (analyzing all of our systems) and the Training Department (conducting needs assessments and beginning desperately needed professional staff development programs), and the IT Department reviewing systems and security of data. Occupancy has been ranging from 40% – 95% of available villas.
We have a great deal of work ahead of us, and also a significant of opportunity. Our weakest system is the air conditioning. Unfortunately when the air conditioning goes out so does the hot water (the systems are appropriately related but we have no back up for either system). The good news is that once replaced with a new and efficient system we expect to save 30% of our annual electricity costs. We have carefully been acquiring needed supplies as many of the villas did not have TVs, beds, etc. Everyday we continue to get stronger and the entire staff, led by GM Lica Galeano, is ready and waiting to welcome every owner back to their Aruba home.
UPCOMING AUCTION MAY 6, 2010
About eight weeks ago Carl Icahn, through one of his corporations, purchased the bonds (KL loans) on our resort. These bonds provide a right of first mortgage. We have had communication directly with Icahn’s attorney and were advised that the property will be auctioned. John Cole and I have met several interested bidders for the upcoming May 6, 2010 auction; however, Icahn may choose not to accept any of the bids and retain ownership of the resort. A simple Google search shows Mr. Ichan’s many years of shrewd and successful business experience in various industries including hotels and gaming. Mr. Icahn has the resources to invest the needed funds into the resort and has a reputation for rapidly increasing the value of his assets.
It is currently impossible to know what will happen during the May 6, 2010 auction; however, there is no reason to be negatively concerned about the outcome. All of the potential bidders and Icahn have expressed a commitment to immediately begin investing millions of dollars into the villas, resort infrastructure, and the new (large) casino. The arrival and actions of a new owner may very likely be in the interest of all of us – increasing the value of our units and our enjoyment of the resort.
The Board did review possibilities of the timeshare owners buying the resort, but the auction is occurring too quickly to put together the needed funds. We will keep all owners informed on this important issue.
ANNUAL MAINTENACE FEES (AMF)
After many hours of difficult work, Raysa De Cuba and the staff have recreated each owners account and have applied all payments we have records of. The Board and management have been carefully reviewing the issues with the input of our legal advisors. It has been concluded that consistent with our By-laws and the needs of the resort, all owners must pay their AMF to remain in good standing and use their villa. We are unable to accept or recognize so-called “waivers” or discounts issued by KL. We understand this is very frustrating, aggravating, and unfair. We ask you to please understand that the COOP can only recognize payments that were actually made. Billing of the AMF has been sent and is officially due by April 30, 2010. Late payments will be subject to standard additional fees. Please contact Rausa De Cuba at raysa.c@thearuban.com with any questions about your account. Due to the extraordinary volume of transactions we encourage you to send and email with scan copies of all documents in question (i.e. AMF statements, credit card statements, cancelled checks).
Owner who financed their timeshare purchase and have remaining payments are required to continue to make payments as agreed in the purchase contract. Companies who are properly servicing these mortgage payments include Platinum Financial and Resort Funding. If you are unsure about the details of who to remit payments to, please contact the resort.
Monterey Financial is contacting, on behalf of the resort, all owners who are behind on payments for AMF and late fees. We have a contract with this company to assist in collection of past due accounts. Please contact the resort if you have any questions.
We thank you for your patience and support and ask you to keep in mind that the current Board, staff and management are not the ones who did not keep their promises.
DISPLACED OWNERS OF WEEK 50, 2009 – WEEK 9, 2010
The Board and management have established procedures for owners who lost use of their weeks while the resort was closed. If you lost occupancy during the closure you may either enjoy an alternate week stay in 2010 (based upon availability) or we will get you a credit with Interval International. Please contact Maria at maria.b@thearuban.com or Yvonne at yvonne.c@thearuban.com for details on this valuable and limited time offer.
INTERVAL INTERNATIONAL (I.I.)
Royal Resorts management recently met with the top executives of Interval International, including Chairman Mr. Craig Nash. Our resort is now open for exchanges and Aruban Resort owners are eligible for a “2 years for the price of 1” I.I. Membership.
Owners who recently purchased villas from KL may not have been enrolled with I.I. and will need the assistance of the resort to resolve new membership issues. For any questions, please contact Maria at maria.b@thearuban.com or yvonne at Yvonne.c@thearuban.com.
For I.I. Membership Renewal or Extension, residents:
- US, Canada and Caribbean refer to Source Code # 22930 & call 1-888-310-7267
- Latin America refer to Source Code # 22931 & call
Columbia (57)1-376-7135
Ecuador (57)1-376-7135
México (52)55-5627-7301
Uruguay 0004-054-202
Venezuela (58)212-761-3709
Bolivia 800-100-211
Paraguay 009-800-54-2-0002
Perú 0800-50-646
All Other Latin Am Residents 305-665-1918
RENTAL PROGRAM
All owners are being provided with super discounts on rentals for additional nights and weeks. The Board and management have authorized all owners to receive an unlimited number of rentals in 2010 at only the AMF. Take advantage of the great rates and spend more time in the island we all love. Please contact Maria at maria.b@thearuban.com or Yvonne at yvonne.c@thearuban.com for availability and reservations.
RESALE PROGRAM
We have reopened the sales office and owners are welcome to list their units for Resale. Now that we control the resort we do not have a Developer blocking us from trying to sell our weeks through the resort. Royal Resorts has been offering Resale programs to their members for more than 30 years and has provided us a system for owners looking to sell their units. Owners looking to purchase more weeks may stop by the sales office Monday – Friday. We currently have a very limited number of weeks available for sale; however, this number will grow as we repossess all units that do not pay their AMF.
BOARD & EXTRAORDINARY MEETING ISUSUES
The Board has been working daily and in complete harmony with management to achieve the results you expect and deserve. Our Board got off to an unusual start as our newly elected Chairman was under the incorrect impression that he would be compensated for his position. The other four Board Members were in unanimous agreement that Board service at The Aruban Resort is a volunteer position. The Chairman resigned during the first meeting and a new Board member will be appointed in the next owner’s election. In the next few days the Board will be posting the Minutes of the Extraordinary Meeting. We appreciate your patience on this issue. We know this is important information to share with all owners and have simply been prioritizing other more urgent issues.
LEGAL UPDATE
The Board has continued to work closely with our Aruba Counsel to manage the legal issues of the resort. As part of our initial negotiations we are receiving US$1,000 per day to offset our costs for legal fees and insurance. We will repay the timeshare owners who generously contributed to the legal fund needed to get the resort into our day-to-day control and reopen. We have filed the judgment of US$55 million against the bankrupt estate of KL with the Curators. The Board and management are also reviewing other potential actions and claims that will serve owners and the COOP, and have reasonable chances of success.
FINANCIAL UPDATE
Our accounting and financial reporting continues to rapidly improve. Our Financial Controller, Robert Koolman, has done a fantastic job in just 30 days. We will be publishing these statements on the website for your monthly review.
CONTACT INFORMATION
We look forward to seeing you back soon in your Aruba home. Thank you for your continued support.
Sincerely,
Richard A. Corso
CEO
Royal Resorts Caribbean