Multi-Site POS Revision Dated 01/19/19

[crvetter]

It is not clear to me the value of the Multi Site POS. What counts really is still the single resort POS, I've been told here that in case od conflict the single resort POS is still the one to "win". So how can they write something with such an impact in the Multi Site POS and not change the resorts POS?
I do expect them to publish revised resort POS this year to allow themselves the changes they wanted to do in the 2020 year. At that time they'll also introduce the resale restrictions and they'll do it (hopefully) in a clearer way.

What really matters for the restrictions is the BVTC one is attached (as an exhibit) to the resorts POS but it is a separate document. I don’t expect the resorts POS to be updated since they updated the required document. If they update them it will be still the same and they will fix the general document we have seen.

 

[drusba]

It is not clear to me the value of the Multi Site POS. What counts really is still the single resort POS, I've been told here that in case od conflict the single resort POS is still the one to "win". So how can they write something with such an impact in the Multi Site POS and not change the resorts POS? I do expect them to publish revised resort POS this year to allow themselves the changes they wanted to do in the 2020 year. At that time they'll also introduce the resale restrictions and they'll do it (hopefully) in a clearer way.

That does not appear to be the route DVD is taking. Based on some of filings DVD has made with the Department of Business and Professional Regulation (its condo and timeshare division), which apparently approved the Multi-Site document that we now have, the route DVD is taking is to simply create a modified POS for Riviera that basically just changes the Club Member provisions to allow only that resort's "eligible" members to use the DVC Reservation Component to reserve resorts other than Riviera. Like the multi-site document we have, the site POS then mainly describes the resale restrictions that are spelled out in the DVC Membership Agreement and DVC Resort Agreement for Riviera that is attached to POS (but do not appear in the documents I have seen).

The changes to the multi-site POS are consistent with that. The multi-site changes are designed mainly to inform readers of the new restrictions applicable to Riviera that are actually made in the new Riviera membership agreements and resort agreement.

I will not be able to tell until we see the new agreements, but it thus appears that what DVD is mainly doing as to all members of the existing 14 resorts is to create a new DVC Membership Agreement and DVC Resort Agreement applicable to Riviera which sets out the same resale restrictions for which members are notified of in the new multi-site changes. I believe DVD raises some legal issues if that is the route it is taking, rather than just creating a new DVC 2.

Our POS's and applicable agreements expressly provide that both purchasers from DVD and resale purchasers have the right to use the DVC Reservation Component operated by BVTC to reserve any DVC Resort. The DVC Resort Agreement we all have also expressly provides that BVTC will not enter into any agreements to allow a new DVC Resort into the program to use the DVC Reservation Component unless the DVC Resort Agreement with that new resort has the same "material" terms as our DVC Resort Agreements.

Additionally, DVD is restricted in the kind of changes it can make to our POS which state that, absent an actual vote of the members, DVD cannot amend our POS (including our Declarations) if the changes "would prejudice or impair to any material extent the rights" of the resort's owners, and it is unlikely that creating new resale restrictions that would be directly contrary to our current POS can be considered an "immaterial" change. (I have seen before some posters supporting their belief that DVD can make any kinds of changes it wants to make at any time by asserting the public records show DVD has made dozens of amendments to the our POS's; if you actually review those amendments, they are all immaterial and practically all them do nothing more than add new units from the resort to be sold while the resort is still on sale as new.) Also, DVD actually has no right spelled out in our DVC Membership Agreements and DVC Resort Agreements allowing it to make any changes at all to those agreements. Only DVCMC can make changes to the membership agreements and, as to the DVC Resort Agreement, only BVTC gets to add a new resort, and that agreement cannot be changed, it can only be terminated. Moreover, DVCMC and BVTC are both, as a matter of law, deemed to be fiduciaries to the members and thus cannot really do anything to the existing resort agreements that would favor DVD by taking away the rights of members of existing resorts.

In other words, I do not see how DVD can do what it is trying to do by mainly just creating a new DVC Membership Agreement and DVC Resort Agreement for Riviera that have the restrictions, unless it is contending that the new resale restrictions are just "immaterial" changes, a position I doubt the legality of.

Also be aware that according to the documents I have seen (I cannot figure out how I can provide any pages on the site), the Riviera Resort is going to have 341 vacation homes consisting of: 12 GVs, 148 2BR lock-offs, 90 dedicated 2BRs, 29 dedicated 1BRs, 38 dedicated studios, and 24 Tower Studios. Based on that, one may assume that the low number of Tower studios is likely to create an 11-month issue, particularly if they have lower point requirements than other studios and DVD continues to require new purchasers to purchase only 50 to 100 points.

Also Riviera will have a total of 6,739,966 points registered for sale. BWV, which has 383 vacation homes, has 4,888,837, 27% fewer points than Riviera. That indicates that Riviera's rooms, other than the unknown for the Tower studios, will require more points per night than those required at BWV but likely less than VGF or Poly, but possibly a little higher than BLT. I am guessing the Tower studios, if they are high floor rooms as suggested by their name, may have point requirements close to BWV preferred studios.

 

[Wakey]

That does not appear to be the route DVD is taking. Based on some of filings DVD has made with the Department of Business and Professional Regulation (its condo and timeshare division), which apparently approved the Multi-Site document that we now have, the route DVD is taking is to simply create a modified POS for Riviera that basically just changes the Club Member provisions to allow only that resort's "eligible" members to use the DVC Reservation Component to reserve resorts other than Riviera. Like the multi-site document we have, the site POS then mainly describes the resale restrictions that are spelled out in the DVC Membership Agreement and DVC Resort Agreement for Riviera that is attached to POS (but do not appear in the documents I have seen).

The changes to the multi-site POS are consistent with that. The multi-site changes are designed mainly to inform readers of the new restrictions applicable to Riviera that are actually made in the new Riviera membership agreements and resort agreement.

I will not be able to tell until we see the new agreements, but it thus appears that what DVD is mainly doing as to all members of the existing 14 resorts is to create a new DVC Membership Agreement and DVC Resort Agreement applicable to Riviera which sets out the same resale restrictions for which members are notified of in the new multi-site changes. I believe DVD raises some legal issues if that is the route it is taking, rather than just creating a new DVC 2.

Our POS's and applicable agreements expressly provide that both purchasers from DVD and resale purchasers have the right to use the DVC Reservation Component operated by BVTC to reserve any DVC Resort. The DVC Resort Agreement we all have also expressly provides that BVTC will not enter into any agreements to allow a new DVC Resort into the program to use the DVC Reservation Component unless the DVC Resort Agreement with that new resort has the same "material" terms as our DVC Resort Agreements.

Additionally, DVD is restricted in the kind of changes it can make to our POS which state that, absent an actual vote of the members, DVD cannot amend our POS (including our Declarations) if the changes "would prejudice or impair to any material extent the rights" of the resort's owners, and it is unlikely that creating new resale restrictions that would be directly contrary to our current POS can be considered an "immaterial" change. (I have seen before some posters supporting their belief that DVD can make any kinds of changes it wants to make at any time by asserting the public records show DVD has made dozens of amendments to the our POS's; if you actually review those amendments, they are all immaterial and practically all them do nothing more than add new units from the resort to be sold while the resort is still on sale as new.) Also, DVD actually has no right spelled out in our DVC Membership Agreements and DVC Resort Agreements allowing it to make any changes at all to those agreements. Only DVCMC can make changes to the membership agreements and, as to the DVC Resort Agreement, only BVTC gets to add a new resort, and that agreement cannot be changed, it can only be terminated. Moreover, DVCMC and BVTC are both, as a matter of law, deemed to be fiduciaries to the members and thus cannot really do anything to our agreements that would favor DVD by taking away the rights of members of existing resorts.

In other words, I do not see how DVD can do what it is trying to do by mainly just creating a new DVC Membership Agreement and DVC Resort Agreement for Riviera that have the restrictions, unless it is contending that the new resale restrictions are just "immaterial" changes, a position I doubt the legality of.

Also be aware that according to the documents I have seen (I cannot figure out how I can provide any pages on the site), the Riviera Resort is going to have 341 vacation homes consisting of: 12 GVs, 148 2BR lock-offs, 90 dedicated 2BRs, 29 dedicated 1BRs, 38 dedicated studios, and 24 Tower Studios. Based on that, one may assume that that the low number of Tower studios is likely to create an 11-month issue, particularly if they have lower point requirements than other studios and DVD continues to require new purchasers to purchase only 50 to 100 points.

Also Riviera will have a total of 6,739,966 points registered for sale. BWV, which has 383 vacation homes, has 4,888,837, 27% fewer points than Riviera. That indicates that Riviera's rooms, other than the unknown for the Tower studios, will require more points per night than those required at BWV but likely less than VGF or Poly, but possibly a little higher than BLT. I am guessing the Tower studios, if they are high floor rooms as suggested by their name, may have point requirements close to BWV preferred studios.

Drusba, this is an excellent post which I believe sums it up precisely.

 

[disneynutz]

Disney will do what's good for Disney, do they make mistakes while doing it, yes they do. They will do what they need to do to repair the damage without admitting that the did anything wrong, sure they will. Does the lack of studios affect the owners, yes it does, does it affect Disney, no it doesn't. They will still build new resorts, sell to direct buyers who don't understand what they are buying, modify the POS and other legal documents as necessary to achieve their goal and make tons of money.

Bill

 

[crvetter]

Also be aware that according to the documents I have seen (I cannot figure out how I can provide any pages on the site), the Riviera Resort is going to have 341 vacation homes consisting of: 12 GVs, 148 2BR lock-offs, 90 dedicated 2BRs, 29 dedicated 1BRs, 38 dedicated studios, and 24 Tower Studios.

I’d be really interested in seeing this information. How were you able to find this?

 

[drusba]

I’d be really interested in seeing this information. How were you able to find this?

I made a written request to the DBPR and its Division of Florida Condominiums, Timeshares, and Mobile Homes for a copy, via email, of the site and multi-site POS's filed by Disney in relation to Riviera site. I made the request back in Jan after we were notified of the Jan 19 changes and exceptions. As is typical for that agency, it took over four weeks to provide the documents (and I had to pay $23. and some cents for the copies) Basically what I have is the draft revised site POS and multi-site POS which appear to essentially just be draft additions to what was the CCV POS's while changing the name to Riviera. Neither contains copies of everything -- the only thing provided for the site POS is the portions that come before the actual declarations in the POS, and thus it has the disclosure statements and the "Public Offering Statement Text"; as to the multi-site, it has the prior CCV multi-site with the changes made for Riviera.

 

[crvetter]

I made a written request to the DBPR and its Division of Florida Condominiums, Timeshares, and Mobile Homes for a copy, via email, of the site and multi-site POS's filed by Disney in relation to Riviera site. I made the request back in Jan after we were notified of the Jan 19 changes and exceptions. As is typical for that agency, it took over four weeks to provide the documents (and I had to pay $23. and some cents for the copies) Basically what I have is the draft revised site POS and multi-site POS which appear to essentially just be draft additions to what was the CCV POS's while changing the name to Riviera. Neither contains copies of everything -- the only thing provided for the site POS is the portions that come before the actual declarations in the POS, and thus it has the disclosure statements and the "Public Offering Statement Text"; as to the multi-site, it has the prior CCV multi-site with the changes made for Riviera.

Thanks for the clarification on how you obtained it.

 

[crvetter]

Also Riviera will have a total of 6,739,966 points registered for sale. BWV, which has 383 vacation homes, has 4,888,837, 27% fewer points than Riviera

Based on these numbers I think it will be similar in price to Bay Lake Tower which has ~5,732,762 total points across 281 rooms. Which makes sense because the rack rates for these resorts aren't significantly off. Since we know they plan on having at least two classes of views I am going to guess the base view is cheaper than that at PVB and VGF. Also glad to see they put in dedicated studios and 1 bedrooms so the Lockoff Premium here is somewhat naturally limited by the cost to book the entire resort, depending on how they plan on treating this in subsequent point charts.

 

[drusba]

Just adding one additional point from the documents filed on the Riviera POS. They say the annual dues for operations and reserves at Riviera for 2019 will be $6.5478 per point and that does not include property taxes. That number indicates that once you add property taxes, the dues are likely to be higher than any other WDW resort. No one will actually pay that amount in 2019 because it will be pro-rated from time of sale or time Riviera can first be occupied by a member, whichever is later, but that portends very high dues for 2020.

 

[crvetter]

Just adding one additional point from the documents filed on the Riviera POS. They say the annual dues for operations and reserves at Riviera for 2019 will be $6.5478 per point and that does not include property taxes. That number indicates that once you add property taxes, the dues are likely to be higher than any other WDW resort. No one will actually pay that amount in 2019 because it will be pro-rated from time of sale or time Riviera can first be occupied by a member, whichever is later, but that portends very high dues for 2020.

Here are the Dues (less property taxes to get it similar as above):

HHI: $8.1786
Aulani: $7.2461
Vero: $6.816
OKW: $5.9323
AKV: $5.8914
BRV: $5.8628
BWV: $5.6008
CCV: $5.5717
BCV: $5.4945
VGC: $5.2253
SSR: $5.089
PVB: $5.0353
VGF: $4.7131
BLT: $4.6966

So yeah it makes it the most expensive onsite (WDW) DVC hotel. Interesting to see what is really contributing to it's budget. Did they build in the fact already that CMs being hired here will immediately be getting a raise at the end of this year to $13 an hour at minimum. In 2 years it will be interesting where it actually sits considering that the adjustments because of the pay raises aren't done being added yet. I could see them setting this a bit more conservative to avoid Aulani or the accusations (never proven) of BLT. I'm guessing part of the cost might be the Skyliner and the required capital that will be needed to keep it maintained. This isn't like the monorail hotels that the DVC is only about 1/3 or less of the total resort rooms there. More rooms to spread the cost over.

 

[freediverdude]

Just adding one additional point from the documents filed on the Riviera POS. They say the annual dues for operations and reserves at Riviera for 2019 will be $6.5478 per point and that does not include property taxes. That number indicates that once you add property taxes, the dues are likely to be higher than any other WDW resort. No one will actually pay that amount in 2019 because it will be pro-rated from time of sale or time Riviera can first be occupied by a member, whichever is later, but that portends very high dues for 2020.

Sounds like Riviera owners are paying for the gondola system, sigh.

 

[crvetter]

Sounds like Riviera owners are paying for the gondola system, sigh.

I think it makes sense they would be. If this is indeed a line item then you can expect a certain level of upkeep that Disney would be required to maintain. So hopefully what is happening with the monorail wouldn't happen here. It's just interesting how they will reconcile what will happen with the fact it is serving more than just the resort guests.

 

[freediverdude]

Why, is there an issue with how the monorail costs are being split? Haven't heard about that.

 

[crvetter]

Why, is there an issue with how the monorail costs are being split? Haven't heard about that.

I don't think there is an issue, nor was suggesting there was one. I was saying there is much more "people" to spread the cost over as opposed to the Skyliner which only has 4 resorts (and 2 smaller parks, 1 of which is the smaller entrance to that park). And Riviera itself only has DVC rooms so the cost of it's usage of the Skyliner can't be split between a cash hotel side of the resort. And what I was saying is I hope they are taking more to put into capital reserves for the Skyliner than they ever did for the monorail to prevent the situation present on those resorts (under maintained at the very least).

 

[drusba]

Since transportation costs in the resort budgets are for a share of the costs of the transportation systems actually used by the resort (that is actually stated as a rule somewhere in the official documents, I just cannot remember where), I would guess the Skyliner has something to do with the cost. Another issue is that Riviera is purely a DVC resort not combined with a Disney Hotel -- the other DVC Resorts, including all the monorail and Epcot resorts, and except for SSR and OKW, each share costs applicable to the combined resorts, which include not just transportation costs but also front desk, maintenance of common areas, and security, with the sister Disney Hotel.

 

[freediverdude]

That would be interesting to see how they divide up the Skyliner costs, whether they seperate the different lines or just total the cost of the whole system and try to divide it between the resorts somehow. And there's a park to park aspect to it as well for day guests.

 

[crvetter]

That would be interesting to see how they divide up the Skyliner costs, whether they seperate the different lines or just total the cost of the whole system and try to divide it between the resorts somehow. And there's a park to park aspect to it as well for day guests.

I think essentially Disney owns the Skyliner than Riviera/DVC would pay Disney for the right to use the Skyliner. So Disney itself would set what it feels is the associated cost to support Riviera on that line. This is how the buses, boats, and monorails all work (the associations are just paying for the right to use not buying the equipment or staffing costs). I don't imagine it to be different.

With that in mind I'm sure Disney allocates costs to the parks, AofA, Pop, and CBR as well as Riviera.

 

[drusba]

I think essentially Disney owns the Skyliner than Riviera/DVC would pay Disney for the right to use the Skyliner. So Disney itself would set what it feels is the associated cost to support Riviera on that line. This is how the buses, boats, and monorails all work (the associations are just paying for the right to use not buying the equipment or staffing costs). I don't imagine it to be different.

With that in mind I'm sure Disney allocates costs to the parks, AofA, Pop, and CBR as well as Riviera.

That is also what I had learned before. The main WDW resorts and parks company operates all transportation and then charges a fee to each resort that uses any particular transportation systems. It is one of those areas where I have always wondered whether a profit is being built into our dues for Disney entities that are not DVC-related, even though our dues are limited to the association's actual costs, i.e., though the association can only bill us for its actual estimated costs per year, nothing seems to prevent a non-DVC related Disney entity from charging the association a number that is based on costs plus some profit for the services that the non-DVC related Disney entity provides.

 

[crvetter]

That is also what I had learned before. The main WDW resorts and parks company operates all transportation and then charges a fee to each resort that uses any particular transportation systems. It is one of those areas where I have always wondered whether a profit is being built into our dues for Disney entities that are not DVC-related, even though our dues are limited to the association's actual costs, i.e., though the association can only fill us for its actual estimated costs per year, nothing seems to prevent a non-DVC related Disney entity from charging the association a number that is based on costs plus some profit for the services that the non-DVC related Disney entity provides.

I would assume there is a profit to Disney for thing ours dues pay for. We essentially are paying a different company, and companies can set the price for their services as they see fit. Sadly conflicts of interest do exist here. The profit component, the way I took it, in our contract was basically to say DVCMC can't essentially be padding the costs (basically taking kickbacks). Glad to see another views it my way for how it is broken down.

 

[ziravan]

I’m involved in a suit right now that turns on exactly the kind of ambiguity involved with the POS.

Our contention, it’s not ambiguous at all; it says just what we think it says. Or, if it IS ambiguous, their hand held the pen; it must be construed our way.

Heads we should win, tails they should lose.