Page 12 - virna2017april-june

20 21
APRIL – JUNE 2017 RESORTDEVELOPER.COM VACATION INDUSTRY REVIEW LEGACY MATTERS
STONERIDGE RESORT
Club Tesoro at Tesoro Los Cabos Resort:
Mixed Blessing
Built 30 years ago by a now-bankrupt developer, Club Tesoro at
Tesoro Los Cabos Resort in Cabo San Lucas, Mexico, has undergone
several changes in ownership. More recently, the mixed-use property
had successfully operated as a hotel from 2004 until the downturn of
2008. Renovations that had begun were completed, but other plans
were canceled. And timeshare’s appeal as a bulwark against changing
economics became clear.
“Their occupancy was averaging just 35 percent in 2010,” says
Jeffrey S. Healy, managing director of Club Tesoro Resorts. “Other
players in the market with timeshare had over 60-percent occupancy.
They wanted to get into the vacation ownership business, so I part-
nered with them to develop the Club Tesoro concept.”
While the units worked for a hotel property, they didn’t cut it as a
timeshare project. “They weren’t luxurious or inviting,” he recalls. “The
location was great, right by the marina, the bars, and all the activities.
At night, you have amazing views of the million-dollar yachts parked
at the marina.”
To differentiate the resort, Club Tesoro decided to upgrade the
units for timeshare owners. They began with nine units, adding kitch-
ens, luxurious beds, and improved technology.
The next year, the pool, spa, and restaurants were renovated.
“It’s had a huge impact on what we needed for this vacation club,”
Healy says.
Because this was a conversion, the developer financed the reno-
vations out of its operating budget. Reaction has been very positive,
and the construction was even used as a lure for new owners. “We
could show that the project was being expanded and improved,” he
says. “It’s a real help on the sales side.”
Stoneridge Resort: Idaho Gem
Now, back to Stoneridge, where the dramatic transformation had an
inauspicious beginning in 2014. “The vote on the special assessment
to finance the project required a two-thirds majority to pass, and for
the first vote, we only had 50-percent support,” Thomas recalls.
Apparently, many owners thought the assessment would be annual
instead of a one-time charge. After clarification, the resort got the go-
ahead at its annual meeting later that year.
Owners had been asking the resort to add elevators since it opened
in 1979, but because it had four separate buildings, this seemed im-
possible. Then came a new idea: building two additions between two
sets of buildings to house the elevators. This way, the elevators could
serve two buildings instead of one.
Other projects included in the US$4.2 million–plus project were re-
placing the windows and siding, relocating the registration office from
a basement, upgrading the units, and adding a media room, commer-
cial laundry, barbecue areas, gift shop, and suites suitable for guests
with disabilities. Among the details were USB outlets on the night-
stand lamps, a switch to LED lighting, and a coffee station in the lobby.
Many of these features weren’t just aesthetically pleasing; they
also resolved functional issues that had plagued the resort. “We were
able to make our resort a lot more viable,” Thomas says. “This puts us
in the best possible place for the future.”
Owners who had been unable to use their own units because they
couldn’t climb stairs now can, which is important because all the larger
units are on the upper floors.
In addition to funds from the special assessment, the resort took
advantage of energy-savings rebates from local utilities, including a
US$31,000 rebate for the LED lights and new windows.
To soften the impact on guests during the two-year project, the
resort gave out free passes to its award-winning miniature golf course.
Although the project was just completed in fall 2016, Thomas is
already seeing positive results. “I had a couple who had been here
many years, and are now in their 90s, approach me to ask if we would
buy their week back,” she says. “I explained our deed-back program,
but later that day she came to me to say that a couple she met in the
laundry room was going to buy their unit. That couple had been renting
here for years, but seeing the improvements made them ready to buy.
This is becoming typical. The effects have been really positive. We
have put ourselves in a really great position.”
Judy Kenninger, RRP, heads Kenninger Communications and has been covering the
shared ownership and vacation real estate industries for nearly two decades.
CLUB TESORO AT TESORO LOS CABOS RESORT
Club Tesoro at Tesoro Los Cabos Resort
Year Opened: 1989
Renovation Period: 2005 – 2015
Cost of Renovations: $15 million
Funding Source: Developer
Mariner Beach Club
Year Opened: 1981
Renovation Period: 2009 – 2010,
reopened January 2010
Cost of Renovations: $4.13 million
Funding Source: Reserve funds plus special
assessment
Stoneridge Resort
Year Opened: 1979
Renovation Period: 2014 – 2016 (some projects
continue into 2017)
Cost of Renovations: $4.2 million
Funding Source: Reserve funds plus special
assessment
Villa del Palmar
Year Opened: 1987
Renovation Period: 2013
Cost of Renovations: $6.7 million
Funding Source: Developer plus maintenance fees
Before