May 22, 2019 Increasing Property Value We are focused on Improving - - PowerPoint PPT Presentation

May 22, 2019

We are focused on Improving Owner Experience

Increasing Property Value Reducing Operational Costs and Improving Revenue

In Introduc ductio ion

• The building is 44 years old
• Time and the Elements have

taken their toll

• Under funded Reserve Account
• We experienced back to back

Hurricanes; the worse in over 100 years

Hur Hurric icane M ane Mar aría ía

Hur Hurric icane M ane Mar aría ía

Hur Hurric icane M ane Mar aría ía

Insur Insuranc ance P e Projec ects t s to C Comple mplete

• Common Area HVAC
• Roof Ventilation and Membrane
• Parking Structure
• Hallways and Landings
• Exterior Structure & Painting
• Employee Facilities
• Men’s Changing Rooms
• Telephone System Switchboard

and Units

• Installed over 95 state-of-the-art HD cameras

throughout the building. 10-year warranty on equipment.

• Added Command Center allows eyes all over the

Building secure entry for employees and vendors.

• There are issues/concerns like the Front Gate and,

access points, parking garage and “blind zones”. This is an area of focus for management

• New Security Check Point
• When Jade opens, they will contribute to the road

use and help pay for security. This will be discussed in detail later.

Ch Challenges - Se Securit ity

Security is important to us, What are you doing to improve it?

Command Center

Challeng Challenges es - Ins Insur uranc ance

• Insurance Company has not paid out enough

to repair the damage including full owners

• Insurance Company is not acting in good faith
• We are pursuing the best path for better

payout

• Time is limited by statue of limitations, must

act quickly

• Law firm engaged and carrier advised council

vote required prior to dispersing final funds

I have submitted my claim and it has not been resolved, Why?

Ins Insur uranc ance T e Tim imeline eline

• Sept. 2017

Hurricane Hits

• Sept. 2019

Statue of Limitation March 2019 March 2018 Sept. 2018

Working Claim with Insurance Company Submitted Claim on October 11, 2017 – Extended Claim to $9.8m on Nov. 14th, 2017 Interim payment of $4.8m on December 21, 2017

June 2018 Dec 2018 Dec. 2017 June 2019

Final Claim – Submitted (Feb. 28th, 2019) Based on an assessment of the claim made by a third party adjuster, and the legal analysis made a law firm, we expect to receive under the supplemental claim that we filed with the insurance company approximately $13.5M. Claim The Claim Submitted was within 30 days of the storm with no power and limited communication. Received interim payment within 60 days

• f storm. Once we started work, we found significantly more damage

to the building and infrastructure and filled a supplemental claim. Our insurer dragged their feet, and with the statue of limitation fast approaching, we had to engage law firm to file suit.

$ 4,745,823.54 Keith St. Clair $ 1,576,786.47 Assessment $ 4,800,000.00 Insurance

$ 11,122,610.01 TOTAL

CAPEX

This slide represents the amount of funds that have been injected in to the building since Keith St. Clair assumed management . The $4.7m is from Keith St. Clair, ESJ Inc and affiliates at no cost to the membership. The Assessment of $1.5m represents what has been received from the Timeshare assessment billings. The Insurance amount represents the first payment from the Insurance Company for the initial claim.

Funds R Funds Rec ecei eived ed

INSURANCE FUNDS USES TO DATE

• Roof
• Windows
• Pool
• Building exterior
• Walkways
• Generators and parts
• Elevator Mechanical
• Fuel
• Landings
• Food during storms
• Hallways
• Transportation
• Roof (remediate)
• Engineer Roof
• Engineer Building
• Lanais rooms & hallways
• Engineer
• Lanais roof

As Assessment Update

Total Project $5,000,000 ESJ, Inc. $2,000,000 Owners Collected $1,576,786 Owners Un-collected

• $1,423,214

Curent Bad Debt

• $1,423,214

TIMESHARE ASSESSMENT SOURCES

Total Project $5,000,000 FF&E $2,000,000 Floors 17-11 $1,576,786 Floors 11-1* $1,423,214

*Represents bad debt

TIMESHARE ASSESSMENT USES

Original project was $5m, $3m to the members and $2m to the INC. The INC. Has funded their $2m with furniture, fixtures and electronics which are currently stored in Isla Verde. The $3m billed to the members, there is currently an amount of $1.4m that is uncollected. Construction has stopped on the lower floors until this amount is collected from the delinquent members or we receive the supplemental insurance proceeds.

Fut Futur ure e Insur Insuranc ance U e Uses ses

PROJECTED INSURANCE CLAIM $13,500,000 $13,500,000 Priority of Distribution New Deductible $1,200,000 $12,300,000 Full Owners Provision $600,000 $11,700,000 Roof $1,200,000 $10,500,000 Corridors $500,000 $10,000,000 Building Exterior $4,900,000 $5,100,000

• Balconies, Paint, Concrete-rebar,

Windows, AC’s, Sealant, common areas Fund Reserves (Deductible + ½ Ins.) $2,000,000 $3,100,000 Legal Reimburse $1,200,000 $1,900,000 Parking Garage $400,000 $1,400,000 INC and VO's $1,400,000 $0 Remaining Balance

*

Fu Futu ture Goals s - Ad Admin

• Better maintained facilities
• Fair maintenance fees
• Transparency with BOD
• Semi-Annual Meetings to over performance

and approve management of ESJ

• Clarity on Rules and Regulations

• Beach Level Restaurant & Bar
• Beach Level Restrooms
• Beach Level Pool
• In exchange for use of the land, the INC.

will pay the HOA increased rent.

REVENUE OPPORTUNITY #1: BEACH LEVEL RESTAURANT & BAR

A Successful Business benefits all of us. For example: We are lacking F&B facilities to serve the Beach Front. The INC., if agreed by the council members, would invest over $1m in a new Beach Bar Restaurant located at the North side of the building. Currently there is rubble on that area that will be used for flooring if approved.

Ne New Projects ts Inc ncreas ased d Revenue nue to Membe mbers

Ne New Projects ts Inc ncreas ased d Revenue nue to Membe mbers

• Through the energy savings that this will provide the increased

insurance premium could be offset within 4 years.

• We will be off-grid with full power. No Hurricane impact and

significant increase in property value.

REVENUE OPPORTUNITY #2: ENERGY CO-GENERATION FOR ESJ, How to Fix our $560,000 problem?

The INC. is willing to invest $6.4m to provide full off-grid power to ESJ. The INC and KSC are prepared to pay that and provide the energy at a discount to our members.

The only increase members have seen in 4 years is the $560,000 increase in Insurance. It is our goal to eliminate this increase in 4 years by providing an energy solution that saves us that or more.

Ne New Projects ts

• With the extra spots we will free spaces in

the ESJ Tower for the benefit of Owners and Visitors.

• ESJ HOA will contract with Jade for a use fee

for the road. Than revenue will be used to

• ffset HOA costs at ESJ.

REVENUE OPPORTUNITY #3: JADE AND THE ACCESS ROAD

When Jade opens, their on-site parking will be more than is needed, since there are no residents and only hotel and timeshare guests.

Bu Budget 2020

Comparative Budget by Year

• No increases in the past 5 years
• Our strategy is to manage the budget with no increases and possible

decreases for the next 4 years through the revenue opportunities discussed in this presentation.

Th Thank k You!