Home - Ilikai Concerned Owners Speak Out

7-3-09 REMINDER: The GRILL at CANOES is open on Friday nights! - Food, live music and Hula show

Every Friday evening, 5:30 PM – 8:30 PM, the Canoes is open for The Grill at Canoes, offered by the Ilikai hotel. Here is The Grill at Canoes menu. Visitors to The Grill can enjoy the sunset – and the traditional Ilikai’s live Hawaiian music and Hula show that takes place right in the same area.

7-3-09 A letter from an owner to the Ilikai AOAO Manager and Board re Hilon luau noise

Here is a letter re the Hilton luau noise that an Ilikai owner wrote to the Ilikai AOAO Manager and Board of Directors prior to the last Board meeting. The letter describes the situation and proposed action. The Board's position has been that it is up to individual owners to deal with this.

Owners have repeatedly reported the problem to the Liquor Commission. The Liquor Commission took multiple noise readings, established that the noise levels have been exceeding legal limits, and issued noise violation citations. There will be a LIQUOR COMMISSION HEARING re this - we are finding out when and where. The hearing will be open to the public, and attendees will be given an opportunity to voice in person their concerns. Meanwhile, if you are concerned re that noise, PLEASE make an effort to report your concerns to the Liquor Commission at their 24-hour line 768-7363 (leave a message there). Unless we act, nothing will change.

7-2-09 Here is the "Environmental Site Assessment Report" for the Ilikai Tower, dated February 2006. To make it easier for readers, here are the 10 most pertinent pages, that also highlight, with hand-written notes, key information. Please also keep in mind that there is a recently completed forensic architect study, available at the AOAO office.

6-30-09 VERY IMPORTANT UPDATE re Hilton luau noise - PLEASE READ AND ACT!!!

Well, folks, get this: According to the Liquor Commission, they (the Liquor Commission) have given two noise violations citations to Hilton – and there will be a LIQUOR COMMISSION HEARING re this! The hearing has already been scheduled. I am getting the details when and where, and will let you know of course. The hearing is open to the public, and attendees will be given an opportunity to voice in person their concerns. Meanwhile, if you are concerned re that noise, PLEASE report it to the Liquor Commission at their 24-hour line 768-7363 (leave a message there). This is our opportunity for a positive change.

6-30-09 Brian Anderson files another Chapter 11 bankruptcy, plus another update

Honolulu Advertiser reports on another Chapter 11 bankruptcy filed by Brian Anderson and his company. This one is for the Coconut Grove Marketplace in Kailua, Kona, on the Big Island.

By the way, as we are continuing to gather more information about the whole situation at the Ilikai, including the Yacht Harbor Tower (YHT), new details emerge. For ex., it appears that splitting off with YHT was not the original intent at all. Much of the due diligence groundwork did not have any assessment of feasibility and what it would take for YHT to become a stand-alone property, such as the infrastructure, incl. the loading dock etc. It appears, from various documents, that initially there was a well known condo-hotel conversion guru in the picture (from CA, with ties and projects in HI, we have the name). It appears that that person backed out, and then it became difficult for Brian Anderson to pull together enough moneys for both the main Ilikai Tower and YHT. Hence, YHT got sold off. It is hypotheses, but that is what it looks like based on various documents. Readers are invited to e-mail additional information (incl. anonymously).

6-29-09 “IT'S A LOT OF MONEY.”

Well, folks, please read this Honolulu Advertiser article re the Wallace Theater lease buyout. It offers much relevant insight. It reports on the original lease that Wallace, the Hollywood Theaters President, negotiated back in 1993 with the developer, Bruce Stark (same developer as at Canterbury Place, by the way). That lease allowed Hollywood Theaters to lease the space for 40 years for $1 a year. The lease was not due to expire till 2034. But in 2007 Wallace reached an agreement with Pacific Office Properties that allowed Pacific to end that lease in exchange for a cash payment. When asked re the buyout amount, Wallace replied, “It’s a lot of money.”

That’s what happens with those leases. For Lessors, those leases can be a huge-huge encumbrance. But for Lessees, those leases can be priceless assets and huge-huge leverage.

Why am I posting this? Because this example offers insight into our situation with the 99-year Security Office lease that the Ilikai AOAO has the Yacht Harbor Tower – in our favor. The Ilikai AOAO is the Lessee, and for us, that lease is a huge asset.

By the way, click here to view the official definition of “association property." Hawaii HAR Chapter 107, specifically HAR 16-107-62, states unambiguously, “"Association property" means those parts of a condominium project which an association is obligated to maintain, repair, or replace, including but not limited to:… (2) Any real property which is not part of the common elements but which the association either owns or leases for a term of more than one year…” (Emphasis added.)

So that 99-year Security Office lease constitutes the Ilikai Association property, i.e., of all of us.

Why am I writing this? Because there are indications that eRealty may want to buy out of that lease for peanuts, because for them, that lease could be considered a major encumbrance.

6-29-09 A new restaurant at the neighboring Hilton

Star Bulletin reports on a new restaurant, Tropics Bar & Grill, on the premises of our neighbor, Hilton Hawaiian Village. Please note that accessing the premises of Hilton Hawaiian Village for us now easier than ever. In the past, we had to walk all the way to the other side of the village. Now we just cross Dewey Lane (which got recently renamed, by the way) – and here we are, just walk through their new tower. It’s nice to have that, while our restaurants at the Ilikai are closed for the time being.

6-28-09 VERY IMPORTANT: eREALTY's work at YACHT HARBOR TOWER and potential serious SAFETY CONCERNS

When the Yacht Harbor Tower (YHT) was developed in 1966, it was built not as a stand-alone property but an ancillary building to the main Ilikai Tower. It shares with it the Pacific Terrace plaza area (the second level of the complex) and parking garage. The two-level garage extends under the YHT’s Pacific Terrace to the Ilikai Tower. Historically, YHT also shared the Ilikai Tower’s infrastructure, such as the trash compactor and loading dock, by virtue of YHT being an annex to the hotel component of the Ilikai complex, with the same ownership. When Brian Anderson broke up the Ilikai complex by selling off YHT, it appears that the parties involved did not fully realize the implications. Can YHT exist as a stand-alone property, rather than as an annex to the main Ilikai Tower? Could the breakup be in violation of the LUO and WSD density requirements?

Right now, eRealty is conducting really extensive work at YHT, incl. very extensive gutting, demolition, removal of wall sections, jack hammering into the ground, etc. Have they conducted the proper environmental assessment in accordance with HRS 343 and other regulations? What about a structural feasibility study by civil engineers? What about a load bearing study? Where is the documentation of that? With all that gutting, demolition and invasive jack hammering, incl. into the ground, is there potential for structural damage, considering that YHT is ancillary to the main Ilikai Tower and shares structural components? Considering that YHT is structurally connected to the main Ilikai Tower, shouldn't eRealty keep the Ilikai AOAO fully apprised of such major, invasive renovation plans? These are serious SAFETY CONCERNS.

As a counter example, take a look at the detailed “HRS Chapter 343 Environmental Assessment/Determination Negative Declaration” that was conducted and submitted by Jowa Hawaii Co., Ltd. back in 1990. Note how detailed it is, even though the actual proposed renovations were not structural (except for modifications to the porte cochere) but cosmetic in nature.

Also, what about the infrastructure, such as the loading dock, for YHT to operate as a stand-alone property? You may recall that eRealty resorted to using the Ilikai’s pedestrian ramp to transport their bobcat to the second level (and caused significant damage to the ramp). (Speaking of which: the Ilikai AOAO still has not collected any money from eRealty for that damage, even though it has been well over a year.)

Here is also the "Environmental Site Assessment Report" for the Ilikai Tower, dated February 2006. Has eRealty conducted such an assessment for YHT?

Please also note that eRealty has a track record of problems during renovations, without proper due diligence first. Here is a Star Bulletin article of 2007 reporting on eRealty's mold and water damage problems, resulting lawsuits and hotel closure at the Wyland Waikiki Resort & Spa. The article reports on a lawsuit against eRealty that alleged that eRealty sold the hotel with major construction defects while concealing those from the buyer, Lodging Capital Partners LLC. The article reports that “at the time the sale closed, eRealty Construction LLC was in the middle of renovating the hotel, according to the suit, which claims the company used unlicensed workers and failed to properly design and construct the renovations.”

Readers, especially those with engineering background, are encouraged to submit feedback (olga@ilikaiowners.com).

6-28-09 IMPORTANT: Upcoming vacancy on the Board of Directors

As you know, the foreclosure of Anekona’s property at the Ilikai is moving along. The judge signed off on the confirmation of sale on June 5, 2009, which means that the closing will take place sometime between now and July 10, 2009. Once the closing takes place, the court appointed commissioner/receiver, Mr. Van Buren, will no longer serve on the Ilikai AOAO Board of Directors. Thus, there will be a vacancy to fill.

The Ilikai governing documents provide for two ways to fill in a Board Director vacancy. If any permanent vacancy shall occur in the Board through resignation or other cause, the vacancy may be filled by a special meeting of the owners called for such purpose or by majority vote of the remaining directors. Of course, a special meeting does not need to a full-blown one at the Prince Hotel, but could be arranged at Canoe’s, as has been done before.

While the upcoming vacancy was mentioned at the June 25 Board meeting (actually mentioned by Mr. Emery in a totally different context while discussing delinquencies), the Board made no announcement re soliciting nominations. I don't know why.

In any event, we may as well plan ahead with nominations. Readers wishing to nominate themselves or somebody else are most welcome to e-mail that to me for posting on this website (olga@ilikaiowners.com).

6-26-09 I'll post unofficial notes from yesterday's Board meeting later today

A Board meeting took place yesterday. I’ll post unofficial notes today. With participation of several owners from the audience, the meeting got quite heated at times. And quite disgusting and shocking, too, in my opinion. E.g., when I asked permission, “May I ask a follow-up question?” following Mr. Richard Emery’s response re collection of Anekona's delinquencies (you know how he talks), the Board’s President, Mr. Charles Carroll, cut me off with, “No, you may not!!” At least two other owners had their hands raised at that time to ask re the same subject, and Director Carroll would not let them either. So we never got any clear answers, other than statements re "the Association's position" and the usual assurances from Mr. Emery that we should just rely on him and Mr. Hosoda as "experts." Another example: at some point in the meeting, Board members stated that they “will discuss the security office at the Executive Session.” This was not listed for the Executive Session on the agenda. When at the end of the meeting I asked to confirm that it would indeed be discussed, Director Carroll replied, “It may be discussed.” I asked, “May or will?” He tried to make a joke about it. When I pressed, “May or will be discussed?” he replied, “It may be discussed.” What is that about? What ever happened to Robert’s Rules etc? If this were Anekona directors behaving this way, everyone would be screaming. When I asked re the Board’s plans re timeshare, Director Carroll replied, “It is not on the agenda for this meeting.” When I asked to clarify if and what they are planning to do re timeshare, he kept repeating, “No Board Directors put it on the agenda today.” What kind of an answer is this?

6-25-09 A letter to the Board re important issues

I sent the following letter to the Board re important issues. Click here.

DISCLOSURE: Readers are fully, 100% responsible to obtain their own facts, their own information and to form their own opinions. I take no responsibility whatsoever; this is my personal opinion blogging and should be treated as such.

6-25-09 Next Board Meeting - today, June 25, 2009, at 2 PM, Maui Room on the 2nd floor

Board meetings (except for their Executive Sessions, usually at the end of the meetings) are open for Ilikai owners to attend. As always, owners are invited and encouraged to attend.

6-25-09 IMPORTANT: Pertinent information re collection of Anekona's delinquencies DISCLOSURE: Readers are fully, 100% responsible to obtain their own facts, their own information and to form their own opinions. I take no responsibility whatsoever; below is my personal opinion blogging and should be treated as such.

Re the Anekona’s delinquencies in the range of $1M, consider the following:

There are two pieces to it: (a) how did those delinquencies get to that astronomical level, and (b) collection of those delinquencies.

Leaving (a) aside for the moment, consider the following re collection of those delinquencies:

We have been hearing all along from Mr. Emery (of Hawaii First), Mr. Hosoda (who was retained specifically to assist with collection of Anekona’s delinquencies), and Mr. Goodwin (association’s legal counsel), all along from August 2008 till now, that the Association is certainly entitled to collecting $1,800 per unit, i.e., circa $360K, as per Hawaii Revised Statutes.

Here is what Hawaii Revised Statutes HRS 514A, specifically HRS 514A-90, state:
“(h) The amount of the special assessment assessed under subsection (g) shall not exceed the total amount of unpaid regular monthly common assessments that were assessed during the six months immediately preceding the completion of the judicial or nonjudicial power of sale foreclosure. In no event shall the amount of the special assessment exceed the sum of $1,800.
(i) For purposes of subsections (g) and (h), the following definitions shall apply: "Completion" means:
(1) In a nonjudicial power of sale foreclosure, when the affidavit required under section 667-5 is filed; and
(2) In a judicial foreclosure, when a purchaser is deemed to acquire title pursuant to subsection (b).”

(Note: this year’s state Legislature changed the $1,800 to $3,600. However, the change does not apply retroactively.)

Note that HRS 514A-90 state that the statutory $1,800 per unit refer to unpaid regular monthly assessments that were assessed during the six months immediately preceding the completion of the judicial or nonjudicial power of sale foreclosure.

Is the foreclosure of Anekona's units judicial or nonjudicial? Upon information and belief, iStar started out with a nonjudicial foreclosure of the Anekona’s units. – Then iStar canceled the nonjudicial foreclosure and switched to a judicial one. Around early March 2009, iStar notified the association, incl. Mr. Emery, Mr. Goodwin and Mr. Hosoda, that iStar was cancelling the nonjudicial foreclosure and switching to judicial foreclosure (documentation on file).

Note that the HRS 514a-90(i)(2) state that in a judicial foreclosure, “completion” means “when a purchaser is deemed to acquire title.” Isn’t iStar expected to acquire title some time between now and July 10, 2009? What would be the six months immediately preceding that? Note that iStar has been paying in full all maintenance fees since November 2008, i.e., within six months prior to the completion of the judicial foreclosure.

Is the AOAO entitled to those $1,800 per unit?

Of course, one can argue along the lines of the original intent and then the motivation for the switch to judicial, and I have no idea what the intent and motivation were. But wouldn’t this imply more legal battle and effort for the AOAO to collect that?

Please also note that Mr. Hosoda is paid on a per hour basis. The more legal obstacles arise, the more he gets paid. (Sorry for sounding cynical.)

Please also note that all these discussions get conducted during Executive Sessions of the Board meetings – presumably so that the Board with its experts can develop “strategies.” You may recall that at the last Board meeting (in May), Mr. Hosoda arrived in the middle of the regular session and the Board interrupted the regular session to go to another room to conduct its Executive Session with Mr. Hosoda (and of course, Mr. Emery and Mr. Goodwin).

Please also note that Mr. Hosoda and Mr. Emery have made repeated remarks to attribute the fact that iStar has been paying maintenance fees to Mr. Hosoda's effort. Do you believe that?

In my personal opinion (and this is just my personal opinion blogging), I would not be surprised if they try to blame iStar, along the lines of "that greedy NY bank, iStar." But let's be realistic: ever since appointment of receiver/commissioner, iStar has been paying their maintenance fees in full.

Of course, there are also questions re not just the $1,800 per unit, but the remainder, in the range of $600K. What is the Board planning to do to collect those?

6-24-09 Re the noise from Hilton luaus

Ilikai owners have called the Liquor Commission at their 24-hour line 768-7363 (leave a message there) to express concerns about the noise from the Hilton luaus. The Liquor Commission investigated, took several noise readings, confirmed that the noise was significantly over the legal limit, and issued citations. The noise continues. I and others have spoken to the Liquor Commission staff. Apparently, the Liquor Commission would not normally conduct any follow-up to check whether the violator has rectified the situation - UNLESS there are new complaints. Once the Liquor Commission receives new complaints, they investigate again etc. What a process. An idea is now circulating to start a petition and to also take this issue to the Waikiki Neighborhood Board. If you have thoughts re this, please e-mail me at olga@ilikaiowners.com

6-24-09 A letter from an owner to the Board re carpet replacement plans

An Ilikai owner has written a letter to the Board re carpet replacement plans, and sent me a copy asking to post it. So here it is. Please note that the letter's author cites cost estimates, I have not personally verified any of them. Many of us would agree that the Ilikai owners should certainly be given an opportunity to participate in the discussions and processes leading to decision making. Also, I've received e-mails from owners urging to wait to see what iStar is planning to do before the Board makes any renovation plans.

Owners are encouraged to write to the Board to communicate ideas, suggestions and concerns. Folks, just talking to each won't accomplish much :)) You are also welcome to write to me (anonymously is fine, I have no problem with that), and I can post things if you'd like (keeping in mind that the website does have a perspective, e.g., you know I am vocally against timeshare here).

6-21-09 IMPORTANT BEWARE: Commentary on the extreme danger of timeshare and other issues DISCLOSURE: This is my personal opinion blogging and should be treated as such.

To begin with, the Ilikai governing documents, the Declaration and By-Laws, only permit hotel, but not timeshare operations. It’s like talking about gambling. We can sit around and discuss the pros and cons of legalizing gambling in Hawaii. But the bottom line is that gambling is not permitted under Hawaii law. If someone wants to institute gambling in Hawaii, they should work with the state Legislature to get the law changed. Likewise, the Declaration and By-Laws that govern the Ilikai do not permit using units for timeshare purposes, as informed/confirmed by a recently obtained legal opinion by an outside expert in Hawaii condominium law. If Shell Vacations or another timeshare company wants to operate timeshare at the Ilikai, they are most welcome to work towards amending the Ilikai Declaration and By-Laws. Shell is most welcome to work towards convincing the Ilikai owners re why timeshare should be permitted at the Ilikai, to obtain the 67% consent needed to amend the Ilikai Declaration and By-Laws to permit such use.

Why is timeshare such a huge danger to the Ilikai? Consider this: Right now, Shell timeshare has 123 units at the Ilikai (80 units sold to them by Forward One plus 43 units sold to them by Anekona). Considering how much money Shell timeshare is making here, clearly, Shell or another timeshare company would be more than interested in getting the Anekona’s 203 units (those will become iStar’s units some time before July 10, 2009). Should Shell or another timeshare company get hold of those 203 units, this will bring the total number of timeshare units to 326.

It’s all predictable what could (and is likely to) happen next. With 326 units, they can (and are likely to) vote as a block and take control of the Board in no time. It’s just like what happened with Anekona. Keep in mind that the Ilikai Declaration and By-Laws do not contain proportionate representation provisions. The issue of proportionate representation has been discussed many times. The Hawaii Revised Statutes HRS 514A do provide for a proportionate representation, as per HRS 514A-82.15, but the Ilikai Declaration and By-Laws will need to be amended for the proportionate representation on the Board to happen (see HRS 514A-82.15 for more information on this subject). Given this, that is how Anekona took over our Board, their representation on the Board was nowhere near proportionate to their ownership at the Ilikai. They simply voted as a block and ended up taking control of the Board. Why would anyone think this cannot happen again?

What can (and is likely to) then happen if and when the timeshare entity takes control of the Board? That’s all predictable, too. Just look around at other condominium associations that got infested with timeshare. Increased maintenance fees and special assessments at will. Keep in mind that the Board has the authority to increase the maintenance fees and to issue special assessments. The Board does not need to seek 67% of owners’ consent or anything like that to do that.

Now, consider the following: Say, they issue a special assessment of $10K per a one-bedroom unit. For an owner of a one-bedroom unit, $10K is a lot of money. But for timeshare units, this would amount to only about $200 per a timeshare owner ($10K divided by 50 weeks of timeshare right-to-use ownership). Say, they issue a special assessment of $20K per a one-bedroom unit. For an owner of a one-bedroom unit, $20K is a lot of money. But for timeshare units, this would amount to only about $400 per a timeshare owner ($20K divided by 50 weeks of timeshare right-to-use ownership).

You can say: how can they just start issuing special assessments? Folks, let’s not be naïve. One can hire some engineering firm to examine the lanai railings, garage etc, come up with bogus or exaggerate real safety, liability etc issues, etc, etc. Remember how Anekona kept pushing the idea of replacing the lanai railings? Lanai railings ended up as one of the items in the scope of services for the Forensic Architect study, click here to view the scope of services, courtesy of Mr. Richard Emery of Hawaii First. And guess what? The lanai railings ended up in our Reserve Study, with $6,030,554 planned for future (not immediate) replacement, click here to view.

True, repairs and other work have to be done to maintain, and possibly improve, the project. There is absolutely no question about it. It has to be done. But special assessments at will can also be used as a tool to “force” private owners to sell and leave, so that the timeshare entity can expand. Alternatively, a timeshare company may want to proceed with over-the-top renovations - so that they can justify more timeshare points for a stay at a project. (Not to mention the kickbacks. Again, let’s not be naïve.)

Can an owner dispute the validity of a special assessment? Good luck with that. See HRS 514A-90(c) for guidance re this. As per HRS 514A-90(c), an owner wishing to dispute an assessment must first pay, then dispute. (Unless, of course, you are Brian Anderson disputing electricity charges. Remember the “The court will not look favorably at this” statement by our legal counsel as he was citing those disputed electricity charges as grounds not to initiate legal action to deal with the then rapidly growing Anekona delinquencies?)

Various renovation projects at other condominium associations offer much insight into what can happen in renovation situations. Consider, for example, The Whaler on Maui, with its saga and drama surrounding a huge special assessment to fund multi-million garage plans. The drama involved confrontation between The Whaler's Board populated with the condotel front desk and timeshare folks, and a group of concerned owners, with debates re possibly a new garage or/and fixing the existing one, incl. a lengthy legal battle by owners who challenged that idea and assessment. It was a complicated situation, with any plans for additions to the garage requiring, of course, amending the Declaration, etc etc etc. Well, The Whaler is a story for another day. But for starters, take a look at The Whaler’s Biennual Registration – take a look at the $17,000 - $56,800 per unit Special Assessment to fund their “Garage Rehab Project.” The “loud” owners eventually sold and left. You are also welcome to google search timeshare units for sale at The Whaler – take a look at how much smaller their shares of the special assessment are, - because it’s timeshare owners, they pay a pro-rated amount for their number of weeks.

6-21-09 Pertinent information re Ala Wai Harbor

Some Ilikai owners have developed truly remarkable expertise as a result of their efforts to assist the Ilikai. Here is a letter sent by such an owner to the Board to bring to their attention important information related to the Ala Wai Harbor. There appear to be significant mooring restrictions in favor of our property. As you know, harbor commercialization plans are not dead, with at least one private developer having a strong vested interest. Any restrictive covenants should be brought forward. SINCERE THANKS to Ilikai owners devoting their time and passion to help all of us.

(As a comment: Historically, ignorance has been one of our main enemies. Just take timeshare as an example and how long it took us to realize that the Ilikai governing documents do not permit timeshare. That's just one example. Well, we learn as we go.)

6-19-09 For those with interest to review the Final Public Report 5753 for Hilton Kauai Beach Resort, here it is, with the developer Brian Anderson. It's very interesting reading actually. Note, for ex., how the developer reserved the rights to make certain very significant changes to the Declaration etc, without having to obtain the 75% apartment owners' consent.

At the Ilikai, changes to the Declaration and By-Laws require at least 67% consent. The Ilikai Declaration and By-Laws contain significant restrictions, incl. re permitted uses of apartments. For ex., the Declaration and By-Laws only permit hotel, but not timeshare use.

6-19-09 Star Bulletin of June 19, 2009 reports "Workers at Hilton Kauai Beach face layoffs, then possible rehire." This is a property that Brian Anderson/Anekona converted from a hotel to a condotel model. It has the same lender, iStar, as the Ilikai. Please note a fundamental difference from the Ilikai. The Ilikai was developed as a mixed-use project, with a mix of a full service hotel and private condominiums in the same project. This is fully embedded in the Ilikai project instrument, incl. the Ilikai Final Public Report No. 22 (FPR No. 22), Declaration and By-Laws. Brian Anderson arrived at the Ilikai with his conversion ideas - only to realize that for those to materialize, the Ilikai Declaration and By-Laws had to be amended. Unlike his Hilton Kauai Beach and other projects, Brian Anderson was actually a minority owner at the Ilikai. As a result, he could not obtain anywhere near the 67% of the votes needed to amend the Declaration and By-Laws.

6-19-09 Re effective strategies to collect delinquencies used by some associations

Mounting delinquencies in maintenance fees are a common problem now. At the Ilikai, non-Anekona related delinquencies are already in the $250K-$300K, give or take, range. This includes some “die-hard” owners who stopped paying months ago. A Wall Street Journal article of June 18, 2009 “Condo Boards Take On Lenders” reports on effective approaches that some condominium associations take to collect delinquent maintenance fees and assessments, including condominium associations foreclosing on units that had already been seized by banks. As a comment: The article’s title emphasizes “condo boards.” True, the AOAO Boards make the decisions. But let’s face it: Board Directors volunteer their time to serve on the Boards and for the most part, are not experts in collection of delinquencies. They rely on the experts that the AOAO pays to, namely its legal counsel, financial management agent etc, for guidance for their decision making. Since we are on this subject, here is another interesting article that reports on effective strategies to collect delinquencies used by some Florida associations. Of course, keep in mind HRS 514A (and HRS 514B, depending on when the association was created) and associations’ governing documents as the foundation for collecting delinquencies in Hawaii.

6-14-09 Next Board Meeting - June 25, 2009, at 2 PM, Maui Room on the 2nd floor

Board meetings (except for their Executive Sessions, usually at the end of the meetings) are open for Ilikai owners to attend. As always, owners are invited and encouraged to attend. We still have a mountain of issues: $1.3M in delinquencies, Shell timeshare operations in violation of the Ilikai governing documents, questions re Hawaii First and legal counsel etc.

6-14-09 IMPORTANT: What is the status of collecting Anekona’s $1M+ delinquencies?

As you know, the Association has the following contracted individuals to assist with recovering the delinquencies: Mr. Chris Goodwin (legal counsel), Mr. Richard Emery (of Hawaii First, the Ilikai’s financial management agent) and Mr. Lyle Hosoda (an attorney retained specifically to assist with collecting Anekona’s delinquencies; Mr. Hosoda has a long history of doing work for Mr. Emery). We pay them - and we pay them a lot.

So what is the status of collecting Anekona’s $1M+ delinquencies? Based on our research, the Association (and the owners of course) may have been duped again. The Association may be getting literally nothing, not a penny – in fact, a negative, if you factor in the fees paid to Mr. Emery, Mr. Hosoda and Mr. Goodwin. Not only that, but it appears that the trio received really pertinent important information already back in March 2009, if not before, specifically relevant to the Anekona's delinquencies (there is documentation). Whether they understood the implications of that information (the competence question - well, hello?!) or simply did not act remains to be answered. Instead, they kept providing us with ongoing assurances regarding the statutory $1,800 per unit. Not to mention the history of how those delinquencies even got to that astronomical level. Well, let’s see what Mr. Emery, Mr. Hosoda and Mr. Goodwin will get for us in terms of recovering Anekona’s delinquencies – and then we will go from there.

6-13-09 On the subject of Richard Emery and loans

Last year (2008 that is), Mr. Richard Emery of Hawaii First (the Ilikai's financial management agent) actively encouraged our (relatively speaking) neighbor, Canterbury Place, to obtain a $2.7M loan. You may recall that right around the same time, in the summer of 2008, Mr. Richard Emery was also actively marketing to the Anekona-controlled Board the idea of having the Ilikai AOAO get a $10M loan. Given the fiasco of Anekona’s “conversion” plans and Anekona’s financial problems, Brian Anderson and his team were delighted to have Richard Emery pitch the idea of the $10M loan to the Ilikai AOAO. Also note that these discussions about the $10M loan were happening last summer (2008), with the Anekona’s financial problems deepening right at the same time. Not only that, but Hawaii First and Mr. Richard Emery were supposed to provide a “free” reserve study to the Ilikai, as per their contract. Instead, Mr. Emery announced that he could not do a reserve study unless/until a “forensic architect” study is done. He then wrote the work scope, recommended the company he typically uses, and got the AOAO to contract with that company for a fee of over $18K. By the way, what ever happened to that study?

But back to the $10 M loan idea. You may find it interesting to read the communication between Mr. Richard Emery and the previous administrator of the Ilikai Owners website, click here. In Mr. Richard Emery’s own words: On 6/16/08, Mr. Emery wrote, “the budget demonstrated that the Association … could borrow up top $10 million at a cost of $12 per month per homeowner.” In another e-mail dated 6/16/08, Mr. Emery elaborated, “Each year the Ilikai prepares a budget to determine the maintenance fees. … Hawaiiana’s reserve study is artificial at best. … Hawaii First is more sophisticated in the preparation and funding through a reserve study. … Therefore, there is opportunity to fund a loan (or partial loan) because the existing contributions are inflated and arbitrary. The loan is paid partially from the existing maintenance fees and the $12 was the additional amount necessary to borrow $10 million. Although I have not calculated the number, the association could borrow approximately $7.5 million without an increase to the owners as the current maintenance fees support that amount.” Have we received an explanation from Mr. Emery how the AOAO could borrow $10 million for $12 a month per homeowner and how the AOAO could borrow $7.5 million without increasing maintenance fees?

6-13-09 Can Condominium Association funds be misappropriated?

Here is an example from our (relatively speaking) neighbor, Canterbury Place. Last year they had an investigation into a mysterious, undefined loan in the amount of $905,845.70 from the Bank of Hawaii, which appeared to have been originated without the knowledge and approval of the AOAO. The loan originated in the fall of 2005, without clear documentation other than a mention in the 2006 audit report. Not only that, but there were at least $187K of disbursements with no payee names recorded. This continued for several years. Once this got uncovered last year, the AOAO ended up hiring certified fraud examiners to assist the investigation.

6-6-09 IMPORTANT: Re Ala Wai Harbor development plans

As you know, this year’s state Legislature was considering two Bills that, among other things, proposed leasing the Ala Wai Harbor to a private developer for major private development plans, incl. building a multistory complex and so forth. Here is, for ex., an overview provided by the Pacific Business News back in March 2009.

These Bills did not make it through the state Legislature this year. But are those plans dead?

The Department of Land and Natural Resources (DLNR) has been a major force behind these Bills and ideas. This Tuesday, June 9, 2009, Director of DLNR, Laura Thielen, will present a “DLNR Program Update” at the Waikiki Neighborhood Board meeting, here is the agenda. The meeting will take place at the Waikiki Community Center, 310 Paoakalani Ave., 7:00 - 9:30PM. By law, the public has the right to comment on any agenda item. Thus, there will be time and opportunity for the meeting attendees to comment following the presentation by Laura Thielen.

Keep in mind that there are major commercial interests behind this whole harbor development idea. DLNR has a lot of say in what happens or could happen to the harbors. Based on the information from the sources that follow the situation, those harbor development plans are not dead and the vested interests behind the idea are already gearing up for the next year’s Legislature. An ounce of prevention can save us a lot of trouble later on. Concerned parties are encouraged to attend the Waikiki Neighborhood Board meeting to voice their views and to get involved.

6-3-09 Star Bulletin reports on Thomas Schmidt, a local investor, who is stepping forward as someone openly interested in purchasing the Ilikai hotel.

6-2-09 Those in town have been enjoying the absolutely gorgeous floral arrangements in our lobby. These are provided and maintained by the hotel. Below is a picture of the arrangement currently on display (the arrangement is very sizeable in size). Also, as of May 1, the AOAO has a new landscaping contractor, LA Landscaping, Inc. (at savings of $400 a month to AOAO). It is a highly reputable company, with their own nursery. The LA Landscaping folks are doing a really amazing job, they are like worker-bees! They have been busy improving our landscaping in front of the building, trouble shooting the irrigation system, fertilizing and so forth and so forth. Today I observed them all busy placing new plantings in the porte cochere area, power-washing with water hoses various trees in the courtyard, trimming trees, scrubbing our palms in the courtyard (they have special tools for that), and so forth. It is nice to see such professionalism, energy, enthusiasm, work ethic, and of course, improvements in our landscaping. Great job!

6-2-09 An update re Hilton's restaurant by the lagoon

Pacific Business News presented an interview with the general manager of Hilton Grand Vacations Club’s Grand Waikikian, Dione Lewis. I.e., this is re the new tower that the Hilton Hawaiian Village has built, adjacent to the Ilikai. That tower is used for timeshare operations.

Ms. Lewis states, “As a result of the recession, we had our restaurant tenant pull out…The restaurant — which will be run by the Hilton, not us — is in place by the pool and lagoon. But, because of the economy, it’s been postponed indefinitely.”

The restaurant Ms. Lewis refers to is that structure that Hilton has built by the lagoon. (You can view a picture of it by going to the "Archived" button above.)

6-1-09 ILIKAI OWNERS website on TWITTER

With a suggestion from a couple owners, I've set up a Twitter account for Ilikai Owners, it is ilikaiowners. Those who use Twitter, can go to http://twitter.com/ilikaiowners to start following. Those who don't twitter, can go to www.twitter.com to sign up. I've personally never twittered, but it does not seem like "rocket science." Twitter is a free social networking and micro-blogging service. Users can send and read other users' updates, called "tweets." Tweets are text-based posts of up to 140 characters. For e-mail oriented folks, the tweet messages go to their e-mail.

5-31-09 This is not Ilikai news, but from our (relatively speaking) neighbor, Canterbury Place. The Honolulu Advertiser reports on the saga between the developer, Bruce Stark, his company, 1910 Partners, and the AOAO.

The article states, “Stark also said he quit paying utility charges and maintenance fees to the building for his commercial tenants — even though they were paying him some rent — because he believes the building association for years has overcharged him for such expenses. "They've been overcharging us on all kinds of things — especially utilities — for many years," said Stark, who referred to the association of apartment owners as "pirates."”

It sounds like déjà vu, doesn’t it?

What was Hawaii First and Richard Emery’s involvement with Canterbury Place and 1910 Partners last year? “Free reserve study”? 1910 Partners/commercial arbitration?

Since we are on this subject, what ever happened to those electricity charges in the range of $300K that Richard Emery alleged Brian Anderson and Anekona had overpaid to the Ilikai AOAO? I.e., those same disputed electricity charges that the Ilikai’s legal counsel, Mr. Goodwin, subsequently used as an excuse to delay action to deal with Anekona’s then rapidly escalating delinquencies, with his “The court will not look favorably at this”? Have any of them read HRS 514A-90(c), the legal foundation for handling disputed fees and payments in condominium associations?

5-30-09 Local media reports on new developments at The Lotus, another one of Brian Anderson’s foreclosed properties. Here are articles in Star Bulletin and Honolulu Advertiser. The media reports that Richard Emery of Hawaii First is the foreclosure commissioner there, - “all in the family,” isn’t it?

5-28-09 Ideas from readers

I’ve already received several e-mails with suggestions re my post below. HUGE THANKS! Some of the suggestions are such that I will pass them along privately to appropriate persons. Here is one that seems like a terrific idea and certainly appropriate for posting: How about the Association or the Board or the Board President holding a Coffee Hour, to discuss what’s on owners’ minds and obtain input? Right now, there hasn’t been any real mechanism for such discussions or input. The Board meetings are very structured, and private communications are very different in nature. Owners really want to support the Board. I, too, want to support them, but as said, have a hard time figuring out how, other than becoming a Watchdog. So how about owners having a Coffee Hour with the Board?

5-28-09 Soliciting Input

(Note: If you have objections to my "blogging" style, then please don't read.)

Hi folks. I have to say, I really struggle with how to best approach the whole current situation. For one thing, I am rapidly transforming into some sort of a Watchdog (I certainly sure hope not a whistleblower). Becoming a Watchdog is certainly not one of my goals in life. It is really like an "identity crisis" for me now. Nor do I want in any way to exaggerate the amount of problems here. But what else to do? How can I or anyone remain a bystander? Let’s take some specific examples, and maybe someone can write to me (olga@ilikaiowners.com) with ideas how to best approach this. I am wholeheartedly asking for ideas and suggestions how to best tackle this. If you have any thoughts, ideas, suggestions, please share.

Let’s start with Anekona’s delinquencies, in the range of $1M ($1.3M in total delinquencies now, incl. non-Anekona ones). The Board is now working on figuring out ways for us to get the statutory $1,800 per unit for the Anekona units (as per HRS 514A-90). Let’s hope we are successful, no guarantees at this point. But even then, this will be circa $370K. What about the other circa $600K? I and some other owners have questions re whether or not our financial management company and legal counsel did everything they could and in a timely manner (“timely” is the key word here) to minimize those. In no way whatsoever am I suggesting that they did not perform. I am just saying that we have questions. It is “our” money, and we are entitled to have these questions.

So how should we approach this? Should we just rely on Mr. Goodwin’s and Mr. Emery’s opinion re this? – I am sorry, I don’t think so. I’ll give you a couple of blatant examples to make my point: (a) When Anekona was promoting their “renovation package,” Mr. Goodwin could not or would not point out that if that package was voted in, Anekona was under no obligation whatsoever to do any renovations, but owners would have made very significant concessions in the form of changes to the Declaration and effectively giving away large segments of common areas. It was an owner who did the needed research, pointed this out and raised everyone’s awareness. (b) When asked about timeshare and the Ilikai governing documents, Mr. Goodwin repeatedly insisted in favor of timeshare. Again, it is owners who have done the research to point otherwise. A subsequently recently obtained legal opinion by a condominium law expert confirmed what the owners found out through their research, that the Ilikai governing documents only permit hotel, but not timeshare operations. There is now a pending lawsuit by an owner against Shell timeshare. (c) At a recent Board meeting, Mr. Goodwin recommended to the Board that the Association should start paying for cleaning the garage, even though the garage belongs to the hotel and owners with cars pay to the hotel $200+ a month per parking space.

These are just examples. What I am trying to say is that we, owners, find ourselves in a situation where we have to micromanage, research, check and verify every advice we receive from our legal counsel in order to protect our assets. We, owners, have to spend personal time to research, check and verify everything. What else can we do to protect our assets?

The same holds for the subject of Anekona and other delinquencies. We are now spending personal time researching this. So that should Mr. Goodwin and Mr. Emery advise us to just write off those hundreds of thousands of dollars of delinquencies or should they advise that they did everything they could and in a timely manner to minimize those delinquencies, we understand whether or not that advice makes sense.

So we are researching this. And we are learning about highly relevant considerations, such as HRS 514A-90(c), such as non-judicial power of sale to get rental income and so forth. And we are certainly going to explore and pursue this further.

Likewise, at the last Board meeting, Mr. Goodwin and Mr. Emery touted their “aggressive collection” strategy and efforts to collect delinquencies. When asked what this “aggressive collection” strategy consists of, it turns out it pretty much consists of writing lots of letters (and of course billing the Association an arm and a leg) during the first 90 days and then a lien. Is this an effective strategy? If it were, then why do we have $1.3M in delinquencies?

So again, the owners are researching this. And the owners find out that other associations implement far more effective approaches, such as moving very swiftly with certain strategies before banks get into the picture, it is a window of opportunity - if the Association moves swiftly. Not to mention other creative approaches that Associations use, such as shutting off cable TV, which for some people is very painful (we all know some TV addicted ones, don’t we).

Meanwhile, our Association has already paid $74K in general legal fees this year and $47K in fees to Hawaii First (compared to $12K and $14K budgeted), in addition to $11K in fees for the Annual meeting. This is just for the first four months of this year. What have we gotten for that money? What is the point of this? As one reader of the website wrote to me, “We pay, pay, and get nothing.” By the way, do you think those amounts are reasonable?

So ok, we are researching this and we are finding out highly pertinent information. What should we do with it? Should we just communicate this to the Board and assume the Board will take care of this? – I am sorry, I don’t think so. Let me again give a couple of blatant examples to make my point: (a) The recently obtained legal opinion by a condominium law expert confirmed that the Ilikai governing documents only permit hotel, but not timeshare use. The Board has a fiduciary duty to enforce the governing documents. It is not optional. It is their fiduciary duty. So how come they are not enforcing the governing documents? The process is clearly delineated in our documents: give the violator a notice and 30 days to rectify the situation and, if not rectified, start levying daily fines for the continuing violation. Is this preferential treatment? (b) The future of the hotel: The hotel is the integral part of the Ilikai. It is the hotel and its “hotel atmosphere” why many owners have chosen the Ilikai, and that has been a huge positive factor for our property values and rental income for those who rent. There are real threats to the hotel. Yet, the Board’s President, Charles Carroll, clearly took the position of doing absolutely nothing. Owners have written to him repeatedly with specific ideas and suggestions, but received no response. (c) During the Anekona era, owners were frustrated and concerned that Anekoan did not solicit input re renovation plans (and in fact they did, remember the coffee hours?). – Yet, the current Board has already made plans to reupholster the lobby furniture – and even chose the fabric – without giving owners any opportunity whatsoever to provide input. Owners were concerned when Anekona hired a AOAO manager without asking owners’ input. Yet the current Board has been actively advertizing and recruiting the AOAO position for over a month already – and gave owners no notice or opportunity whatsoever to provide input.

Same thing re the delinquencies and other items. I have, for ex., written to Mr. Charles Carroll repeatedly regarding timeshare and other issues facing the Ilikai, incl. in the most forthcoming, reaching out and friendly manner - but received no response. It's like writing to a "black hole." And I am not the only owner with this experience.

So back to my questions that I stated in the beginning. How should we/I approach this? Should I just write to the Board privately and hope for the best? You think this will produce positive outcomes? Should I/we continue to raise awareness of others? Is there value in raising awareness re these issues? What else can we do?

5-27-09 Some numbers to think about

I really urge Ilikai owners to go to the Ilikai section of Hawaii First website and take a look at the financial summaries. Please take a look at fees to Hawaii First and legal. I thought of posting some of it, but you know, this is a public website.

5-27-09 Another local news re iStar

Here is a report in Star Bulletin about another local foreclosure by iStar. This one is for a project in Upcountry Maui. As you may recall, Fremont was the initial lender for Anekona at the Ilikai, and those loans were subsequently acquired by iStar. The Upcountry Maui project is another one that had a loan from Fremont, subsequently acquired by iStar.

5-26-09 Quick notes from today's Board meeting

A Board meeting took place today. I’ll post my unofficial summary notes, once I get them organized, in the next day or so. Here are some comments for the time being. (It is a personal, unofficial effort to maintain this website, so I am entitled to post comments. I understand that not all may agree.)

There was no discussion or mentioning of timeshare.

It was total news to most (incl. myself) that the Board voted already at the last Board meeting (April 13) to advertize the AOAO manager position. They have been accepting applications. Reviewing those and deciding was an item for the Executive Session at today’s Board meeting. I don’t know what happened. Based on what the Board stated at the meeting, it was not clear whether this is for a potential replacement for Mr. Randy Kowalkowski or in addition to him. The Board did not explain.

I find it really bizarre, to say the least, that the Board made no effort to solicit any input from owners. Randy or any AOAO manager is not just a personal employee of the Board. The AOAO manager is to work with all owners. Besides, Randy has been here for some months already, and owners have first hand experience and thoughts that they may want and are certainly entitled to share. Why the Board made no effort to solicit input is totally beyond me.

Since I am writing this, I may as well express my personal view. I think Mr. Randy Kowalkowski has been doing a terrific job, with competence, energy and enthusiasm. I say this most wholeheartedly. And he manages to get along and maintain neutrality! I sure hope he stays.

Another news is that the Board has set its mind to reupholster lobby furniture. I know I’ll upset grossly some folks by writing this, but so be it. They (Common Elements Committee) did have a meeting last Friday, and I was there – But the fabric choice had already been made etc! It was a bizzare meeting. You can stop by the AOAO office to look at the fabric. Come on. First, what is this huge rush to do it “now” – by “now” I mean their drive to do it “now.” Why not wait for one month till the foreclosure sale closes and iStar takes procession? iStar will take procession literally within 35 days. Wouldn’t it make sense to wait and see what iStar plans to do? Also, why is it that owners were not given an opportunity to participate in the decision making? For the record, I did offer in writing in an e-mail to put pictures of the fabric etc on this website so that people can provide feedback. Come on. It is our home for all of us. And lastly, Shell Vacations is contributing to this project $1,500 and the hotel is contributing another $1,500. Obviously, this project would cost some thousands, to be paid by the AOAO (other than those $3K from Shell and hotel). Is this reasonable? It was not clear what the next steps are re the reupholstery project, except that the fabric had been decided on. The whole process of handling this is bizzare, not "together."

The fact that owners were not given an opportunity to participate is just wrong.

I wrote the above to select Board members, incl. the Board’s President. I did receive positive, encouraging responses from some Directors, but that’s it.

This Board is weird. It’s got some really wonderful people that we are so lucky to have there. But the Board is just not “together” – because there is no leadership.

5-25-09 Next Board meeting - May 26, 2009, at 2 PM

The next Board of Directors meeting is scheduled for Tuesday, May 26, at 2 PM, in Kauai Room on the 2nd floor. The Board inherited tough challenges. Owners are invited and encouraged to attend Board meetings to provide the Board with input and support they need to make the right decisions.

5-25-09 The GRILL at CANOES is now open on Friday nights! - Food, live music and Hula show

Those in town have certainly noticed just how beautiful the Sorentos area is now. The outdoor sitting area by Sorentos is now neatly maintained and furnished with beautiful granite-top tables and colorful new chairs. It is open for anyone to use and provides a delightful setting to enjoy Hawaii’s outdoors. During the day, it offers both shaded and sunshiny sitting areas. In the evening, it is brightly lit and is equally enjoyable.

There is more great news: Every Friday evening, 5:30 PM – 8:30 PM, the Canoes is open for The Grill at Canoes, offered by the Ilikai hotel. Here is The Grill at Canoes menu. Visitors to The Grill can enjoy the sunset – and the traditional Ilikai’s live Hawaiian music and Hula show that takes place right in the same area. Even though at this point it is just on Friday nights and with a simple menu, it is so encouraging to see this.

5-25-09 From marketing materials of Shell Vacations Club (SVC)

After I wrote re the distinction between repeat violations and continuing violations (please see below my post as of 5-24-09 about this distinction, using a big/small dog example, and implications for levying fines for violating a condominium project's governing documents), it crossed my mind to post some items taken directly from Shell Vacations Club's marketing materials. Apparently, one of Shell's money-making strategies is to franchise. Below are excerpts (verbatim) from Shell's marketing materials, incl. the dog picture:

Shell Vacations Systems

Vacation ownership has become a dog-eat-dog business: the big dogs keep taking bites out of the market, and small independents don't have the muscle to do much about it.

But now there's a way to bite like a big dog.

Franchise your project with Shell Vacations Systems

Don't just yap about the competition. Bite Back.

5-25-09 An important clarification re HRS 514A and HRS 514B

It has been pointed out to us that since the Ilikai was built prior to July 1, 2006, it is HRS 514A, and not HRS 514B, that apply, with some exceptions. Here is HRS 514A for your reference. Please see specifically HRS 514A-90, the section about delinquencies and liens. Read the whole section, as it is the legal foundation for handling delinquencies. Please also make sure to read HRS 514A-90(c) there and keep that particular Section (c) in mind when thinking back to the "The court will not look favorably at this" statement and justification by our legal counsel, Mr. Goodwin, made last year when discussing the then-disputed electricity charges and whether those could be used to justify delaying legal action against Anekona for their then rapidly growing delinquencies. How come Section (c) was not used by our legal counsel at that time?

5-24-09 Re a distinction between repeat violations and continuing violations

Here is information I came across re a distinction between repeat violations and continuing violations (Source: Davis-Stirling condo law blog). – This is useful when considering Shell’s ongoing timeshare operations, even though the Ilikai governing documents only permit hotel, but not timeshare use, as confirmed by a recently obtained legal opinion by a condominium law expert.

Repeat Violations: An example would be an owner who violates a rule by letting his dog off the leash. The Board would hold a hearing and fine him. Then at another time the owner lets his dog off the leash again. The Board would need to conduct another hearing and another fine. If the owner lets his dog off the leash again, this would require another hearing and another fine. Each violation incident requires a notice, a hearing, presentation of evidence, and a written decision.

Continuing Violations: - is a single violation that persists. E.g., say, the governing documents of a condominium association allow owners to keep one dog of no more than 25 lbs, and an owner moves in with a 200-lbs dog. This would be a continuing violation. In this situation, the Board would typically levy a daily fine against the owner until the dog is removed from the property. The Board would hold one hearing and impose a continuing daily fine for the continuing violation.

5-23-09 Regarding the delinquencies. Well, folks, please read carefully what Hawaii Revised Statutes, for condominiums, §514B-146(h) state, click here. Please read specifically section (h) and take a guess what is coming. Question: Don’t we have “experts” that the Association hired and keeps paying to? What is their function? Isn't it "It's like déjà vu all over again," as Yogi Berra would say? We'll keep you posted.

5-22-09 An update re the foreclosure confirmation: iStar got both the hotel rooms and commercial units - articles in the newspapers got updated

A foreclosure auction confirmation hearing took place yesterday. Judge Blondin confirmed the lender, iStar, as the high bidder. Click here for an updated report in the Honolulu Advertiser, click here for an updated report in Star Bulletin, and here for a report in Pacific Business News. As you know, the 203 hotel rooms and the 16 commercial units (front desk, office space etc) were offered through two separate auctions. Today, a local bidder made a bid to try to get the commercial units (but not the hotel rooms). iStar outbid to hold on to the commercial units. In other words, iStar got both the 203 hotel rooms and the 16 commercial units (front desk, etc). So far so good, we at our end are pleased so far (I can’t help state that, we were worried :)). The closing of the sale should occur within 35 days after the Judge's order gets filed in court.

5-20-09 An update re the foreclosure confirmation hearing

The next step in the foreclosure of the Anekona owned portions of the Ilikai will be the confirmation hearing, scheduled for tomorrow, May 21 at 9 AM. New bidders may emerge. There are still uncertainties re the hotel situation. There are new developments. One of them is that Aston (formerly ResortQuest), which was doing the sales and marketing for the hotel, has just made a motion to intervene in the lawsuit, claiming unpaid payments for their services. Click here to view. Clearly, whoever is owed (or thinks or claims to be owed) money here is activating their proactive efforts to get paid. Questions: What is the Association/Board doing to get our money back and to play an active role in shaping our future in terms of what will happen to the hotel?

5-19-09 Hi folks. I’ve already received a couple comments and suggestions in response to my solicitation for input for an Overview (see below). Huge thanks! Just to clarify: I am asking not just the Ilikai owners, but also present, past and future Ilikai friends, employees and guests. Even though the website is called IlikaiOwners, it is not limited to current owners. Ilikai has so many friends, who follow what is happening even if not affiliated with it now, with best wishes.

5-19-09 Soliciting Input

Hi folks. The website attracts quite a few visitors. Judging by the e-mails I get, many website visitors are not Ilikai owners. In light of that, I am planning to put together and post an overview along the lines, “Why you should stay at the Ilikai” and "All you need to know while staying at the Ilikai" (tentative titles.) As I mentioned to one of the readers, despite the current saga at the Ilikai, I personally would not trade the Ilikai for any other condo building. Where would I go? I am familiar with other buildings, but the Ilikai has just so much to offer. There is no comparison.

The target audience for the overview would be prospective renters and hotel visitors. (There is also the audience of prospective buyers, but not my realm.) I don’t rent, so don’t know what typical questions renters and visitors may have. Parking would be one (anyone to e-mail me a list of parking options?) What other typical questions, information etc? Internet access, how to get to the Ilikai, shopping options are other topics. Any other ideas, suggestions? E-mail me to olga@ilikaiowners.com. Thanks.

5-19-09 Copies of invoices

The Ilikai section of the Hawaii First's website, accessible to Ilikai owners, provides copies of various invoices paid with the AOAO's funds. It offers a lot of insight where our money goes, especially when it comes to invoiced legal fees.

5-19-09 The rumors at the Ilikai are, as usual, ample. The rumors as in this article are notably persistent, heard it again today. Why am I putting it here? I don't know, just wishful thinking, about the good old days when we had a great hotel and together with the Yacht Harbor Tower.

5-19-09 The next step in the foreclosure of the Anekona owned portions of the Ilikai will be the confirmation hearing, scheduled for this Thursday, May 21 at 9 AM. New bidders may surface.

5-19-09 A Letter from Unite Here Local 5

Unite Here Local 5 has sent a letter to the Ilikai owners. Click here to view. Their concerns about the future of the Ilikai hotel are very much as ours. Folks, these are real concerns.

5-19-09 The Ilikai AOAO Board’s current President, Mr. Charles Carroll, wrote a “President’s Message,” which was included as a cover letter with the most recent Association’s newsletter, dated May-July 2009. Click here to view. Is this a joke? This is the Board President’s “vision” of the priorities? The present Board, with Mr. Charles Carroll’s leadership as its President, has been in control since March 4. What has been accomplished? What has he even undertaken? What ever happened to the $1.3 million delinquencies, only a portion of which is protected by the state law? What role do we play in shaping our future in terms of what will happen to the hotel? What ever happened to the fact that we still have Chris Goodwin, whose latest “legal advice,” at $215 + tax an hour, includes his recommendation to the Board that the AOAO should start paying for cleaning the garage, even though the garage belongs to the hotel and owners with cars pay over $200 a month to rent parking space. Not to mention his "legal advice" re timeshare at the Ilikai and the fact that under his tenure, the Association amassed $1.3 million in delinquencies. What ever happened to addressing Shell’s timeshare operations in violation of the Ilikai governing documents? Why is Shell still operating their timeshare here and why is the Board not levying fines on them? The condo law lawyer that Mr. Carroll mentions in his “President’s Message” clearly stated, “your documents only permit hotel, not timeshare use.” (By the way, how we got this legal opinion and Mr. Carroll’s role in this is a whole other story. I’ll spare the details, since not everything belongs to a publicly viewable website.) Obviously, it is easier to get the beach ramp repaired and the loading dock covered than address the $1.3 million delinquencies and Shell. Why did Mr. Charles Carroll got on the Board and become the Board’s President? I know I sound frustrated, but these are months of frustration already since March.

5-19-09 An update re noise from Hilton's luaus

With extraordinary, focused efforts of some owners, the Liquor Commission launched an investigation and took sound readings. The Liquor Commission Investigator advised that the sound readings were significantly over the legal limit and that the premise (Hilton that is) has been given a violation, but the saga is not over. Concerns about the noise can be expressed to the Liquor Commission at their 24-hour line 768-7363. This is a hotline, callers need to leave a message.

5-16-09 Next Board meeting - May 26, 2009, at 2 PM

The next Board of Directors meeting is scheduled for Tuesday, May 26, at 2 PM, in Kauai Room on the 2nd floor. As always, owners are invited and encouraged to attend.

5-9-09 More re timeshare at the Ilikai and on the incredibly preferential treatment the timeshare industry enjoys when it comes to paying taxes in Hawaii

(Note: Folks, I realize this may be more than you would want to know about taxation of timeshares in Hawaii. I am planning to create a separate website for various topics related to condo living, timeshare etc. But for now I am putting it here.)

The Ilikai governing documents delineate permitted uses of units. Specifically, both the Ilikai Declaration and By-Laws state, “The owner of each apartment within the building shall use such apartment only as living accommodations for hotel or apartment purposes” (emphasis added).

Believe it or not, one of the main arguments by those attempting to justify Shell’s timeshare operations at the Ilikai is that timeshare and hotel uses can supposedly be equated with each other (I am trying hard to avoid, at least for now, pointing fingers at those making this bogus argument). Question: If timeshare and hotel uses are to be equated, then how come timeshares and hotels are taxed so differently under Hawaii law?

Sally Kwak, Ph.D. and James Mak, Ph.D., Professors of Economics at the University of Hawaii, have put together an excellent, thorough overview of Taxing Timeshare Occupancy in Hawaii click here to view. It is an eye-opener. Below is a summary that I have put together based on the review by Profs. Kwak and Mak. Apparently, when it comes to taxes, timeshare is in a class of its own and is taxed very differently – and highly favorably – compared to hotels and other transient accommodations.

I’ll start by pointing out that the American Resort Development Association (ARDA) is the main entity to represent the timeshare industry and lobby for their interests. Much of the information about the timeshare occupancy taxation comes from the ARDA and their reports boasting successes of the ARDA’s lobbing efforts. Check out their website www.arda.org, incl. their reports “Legislative Advocacy On Behalf Of Timeshare Owners: What Has ARDA-ROC Done For You Lately?” By the ARDA’s own information, in 2005, rental of U.S. timeshare units generated only $80 million in state and local occupancy taxes. Compare this to the more than $88 million over the two-year budget term that the state of Hawaii hopes to generate as a result of the recently passed highly controversial increase in the transient accommodations tax!

In 1986, the state of Hawaii started to levy a statewide Transient Accommodation Tax (TAT) on the occupancy of transient accommodation units, incl. hotels, in addition to the general excise tax. Even though timeshares had been operating in Hawaii since 1968, the TAT did not apply in any way to timeshare occupancy till 1998. In 1998, the state of Hawaii began to apply TAT to timeshares by enacting Act 156, with HRS 237D detailing the specifics. While the HRS 237D language is relatively simple, experts point out that the administration of the tax is actually complex and hard to fully enforce.

Specifically, the timeshare occupancy taxes are based on an estimated “fair market rental value” (FMRV), which the HRS 237D defines as one-half of the gross daily maintenance fees. Experts claim that the current FMRV definition, as in the HRS 237D, used to tax timeshares grossly understates the actual fair market rental value. “ARDA Hawaii Chapter’s 2008 study of the state’s timeshare industry estimates that in 2007 the average daily rate for a rental timeshare unit was $218 (Hospitality Advisors LLC, 2008). The average daily maintenance fee was $143.71 (=$1,006 per week divided by 7 days); one-half of that amount is $71.85. Thus, in 2007, the statutory average daily timeshare tax base amounted to a mere one-third of the unit’s fair market rental value” (Kwak and Mak 2008).

Why did the 1998 Hawaii Legislature decide to tax timeshares this way? The PMCI Hawaii, the local lobby retained by the Hawaii chapter of the ARDA, gives the answer: “Beginning in 1992, measures began being introduced to impose the State hotel room tax on timeshare properties. … PMCI was able to defer enactment of the tax for six years. Because of the leadership change in 1998, there was a virtual certainty that a bill imposing a hotel room tax on timeshare properties would finally pass. The focus of PMCI’s engagement was then shifted to minimize the impact of the tax…. PMCI was able to negotiate an acceptable protocol for application of the tax based on a percentage of maintenance fees.” The ARDA (2005) claims that this political victory in Hawaii “limited the amount when actually enacted from about $24 per day to about $6 per day.” I.e., by the timeshare industry's own acknowledgment, the Hawaii timeshare occupancy is taxed at 25 percent of the fair market rental value.

Back to the Ilikai: Anyone claiming that timeshare and hotel uses can be equated should be asked, “If timeshare and hotel uses are same, then why are they taxed so differently under Hawaii law?”

5-6-09 A letter to Mr. Van Buren and Mr. Mau

In light of the developments at the Ilikai, I sent a letter to the receiver/commissioner and Ilikai AOAO Board Director, Mr. George Van Buren, and the local attorney representing iStar, Mr. Stephen Mau. Click here to view.

5-4-09 What is happening with the Ilikai hotel?

Click here to view the notice filed by Anekona with the state Department of Labor re hotel operations. We were advised to post the following important disclosure: "This is a procedural notification. Anekona has indicated that after the sale, its current management agreement at the Ilikai will end and it will no longer be managing the property or be the employer of Ilikai workers. This does not necessarily mean that the hotel will shut down or that the workers will not have a job."

5-4-09 What is happening at the Ilikai?

Click here to read an update provided in a Star Bulletin article of May 2, 2009. It reports that a notice was filed with the state Department of Labor to cease the Ilikai hotel operations and lay off the hotel’s 142 employees on June 3. The Star Bulletin article also reports on a complaint filed by Unite Here Local 5 with the National Labor Relations Board alleging that the court appointed receiver/commissioner, Mr. Van Buren, failed to bargain collectively and failed to provide information about potential buyers.

The Ilikai hotel could cease operations on June 3?!

Obviously, hotel workers are not the only ones to be affected should the hotel cease to operate. We again remind everyone that the Ilikai hotel is not a stand-alone property, but is part of a mixed-use property, with private condos in the same complex. The Association maintains the pool, elevators etc, so none of those would be affected should the hotel operations cease. Having said that, the mixed-use nature of the Ilikai, with its full-service hotel and private condos components in the same complex, is fully embedded in the Ilikai governing documents, the Final Public Report No. 22 (FPR 22), Declaration and By-Laws. Many condo owners chose the Ilikai precisely because of its mixed-use nature and full-service hotel, with its hotel atmosphere.

Have Judge Karen Blondin and other relevant parties been fully informed of the Ilikai’s mixed-use designation and its governing documents? Have Judge Karen Blondin and others been informed that shutting down the hotel may constitute material change and have devastating effects on property values of others at the Ilikai?

5-3-09 Terrific news re the Ala Wai Harbor Bills - they are dead!

The deadline (last Friday's midnight) has passed for passing the two Ala Wai Harbor bills, the Renaissance bill SB636 and Harbor bill HB1766. This means that for 2009, these bills are dead!

HUGE-HUGE-HUGE THANKS to those who fought these bills! Some members of the community have contributed endless hours and passion to defeating these bills, incl. written and personal testimonies, phone calls, working with individual legislators, and following up on all developments related to these bills. HUGE THANKS!!! HUGE THANKS also to the state legislators who have listened to the community and not passed the bills.

4-25-09 Aloha everyone. Sorry about slowing in posting on the website, I've been busy with prior personal commitments. Meanwhile, we have been obtaining and accumulating more information, incl. about the Yacht Harbor Tower situation and the hotel deed. I just need to process this information and post as appropriate. Sorry about the delay. There have been no Board actions to address the timeshare problem or take a more proactive role in the hotel auction and future. Several owners have urged the Board to act re the above issues, but nothing happened. On another subject, several owners are stepping up efforts to address the Hilton luau noise. Please see below the contact information for Hilton's Resident Manager and Liquor Commission.

4-18-09 Noise from Hilton's Luaus

Those in town have certainly noticed the loud noise coming from Hilton’s luaus. Ilikai owners have made good faith effort to communicate the issue to Hilton and ask for a solution. Click here to read an example of Hilton’s response. According to Hilton representatives, they are in the process of establishing the garage rooftop as a “permanent” location for their luaus. Concerns can be expressed to Hilton Hawaiian Village Resident Manager Michael Wilding at Michael.Wilding@hilton.com and the Liquor Commission at their 24-hour line 768-7363 (leave a message there).

4-18-09 In this time of transition, it is important to state PRIORITIES:

1) Preserving the Ilikai hotel: The Ilikai complex was developed by Chinn Ho as a unique mixed-use resort, with private condos and a full service hotel in the same complex. This full service hotel component, with its “hotel atmosphere,” has been a huge factor contributing to our property values and rental income, for those who rent their units. Many owners chose the Ilikai precisely to be in this full service hotel setting, and not a timeshare joint or condotel-type rentals. The mixed-use model of private condos and a hotel in the same complex is fully embedded in the Ilikai project instrument, including the Ilikai Final Public Report No. 22 (FPR No. 22), Declaration and By-Laws. Prospective buyers of the Ilikai hotel are urged to take the above documents seriously, not to repeat the fiasco of Brian Anderson’s “conversion” ideas.

2) Removing timeshare: As confirmed by a recently obtained legal opinion, the Ilikai governing documents, the Declaration and By-Laws, only permit hotel, but not timeshare use. The Ilikai governing documents must be uniformly enforced for all owners, residents and guests. The efforts to address Shell’s timeshare operations in violation of the Ilikai’s governing documents are gaining momentum, incl. a lawsuit recently filed by an owner against Shell.

3) Preserving the Ilikai’s assets at Yacht Harbor Tower: As you know, even though Brian Anderson lynched the Ilikai complex into two pieces and sold off the Ilikai’s Yacht Harbor Tower (YHT), the Ilikai AOAO still has the 99-year lease for a security office at the YHT, public easements and the fire fighting system components, in favor of the Ilikai AOAO. Those constitute priceless assets of the Ilikai AOAO, for many far reaching reasons. Any attempts to loot those assets through some behind the scenes negotiations with eRealty are NOT going to work.

4) Needless to say, recovering the huge delinquencies (from Anekona, others and/or whoever else may be responsible) and assuring that we have competent and qualified experts to help us operate our Ilikai are also top priorities.

4-17-09 New information suggests that there may be more to it in terms of what Brian Anderson did with the Ilikai hotel deed on July 12, 2006. Stay tuned.

4-16-09 Click on the following links to read coverage of the auctions of portions of the Ilikai owned by Brian Anderson: Star Bulletin, Honolulu Advertiser, Pacific Business News, and KGMB9 News. The 203 hotel rooms and 16 commercial units were offered through two separate auctions. The Star Bulletin reports, “The sale of the commercial units comes with the front desk, parking, restaurants, offices and meeting rooms.” Obviously, for whoever eventually buys the hotel rooms to successfully operate the hotel, he/she will need to own the front desk, parking, meeting rooms etc, since those are essential hotel components. Prospective buyers are forewarned not to attempt to use the two auctions scenario to carve a way to get rid of the hotel component at the Ilikai complex, thinking that they could then convert the Ilikai hotel into condotel-type rentals or timeshare. Much of Brian Anderson’s and his lenders' fiasco at the Ilikai had to do with their failure to perform due diligence. Prospective buyers are urged to obtain thorough and competent legal assistance regarding the Ilikai’s Final Public Report No. 22 (FPR No. 22), Declaration and By-Laws. Click here to obtain a copy of the Ilikai's FPR No. 22.

4-16-09 Ilikai's 99-year Lease for a Security Office at Yacht Harbor Tower

When Brian Anderson and Anekona lynched the Ilikai into two pieces and sold off the Ilikai’s Yacht Harbor Tower (YHT), this created a number of still unresolved encumbrances at the YHT, now owned by eRealty, incl. a 99-year lease in favor of the Ilikai AOAO for a security office at the YHT and unresolved issues pertaining to public easements and the fire fighting system arrangements, in favor of the Ilikai. Click here to view the 99-year lease in favor of the Ilikai AOAO. At the last Board meeting, Director Caroll reported that he and the AOAO manager, Randy, met with executives of eRealty and Marriott for discussions to “resolve these issues.” It is prudent to remind that this 99-year lease and other items are priceless assets for the Ilikai, for many far reaching reasons. Until there is clarity with what will happen at the YHT, there is really nothing to "negotiate" regarding these priceless Ilikai assets. Therefore, these secret, behind the scenes negotiations with eRealty must stop.

4-15-09 A COPY OF LAWSUIT AGAINST SHELL TIMESHARE

As confirmed by the recently obtained legal opinion by an outside attorney, Mr. Morris, the Ilikai governing documents, the Declaration and By-Laws, only permit hotel, but not timeshare use. While our timid legal counsel and timid Board continue to sit back and do nothing about enforcing the Ilikai governing documents with regard to Shell, individual owners are taking this matter into their own hands. An individual owner has filed a complaint against SVC-HAWAII, L.P., Shell Holdings, Shell Vacations and Shell Owners Association alleging that operating a time share business in the Ilikai is contrary to the Ilikai's governing documents and asking for permanent injunctive relief. Click here to view a copy of the complaint. Our timid Board leadership and timid legal counsel should be reminded that the Board has a fiduciary duty to enforce the governing documents without exception and preferencial treatment, and needs to start levying Shell with fines for the violation.

4-15-09 AN UPDATE RE ILIKAI AUCTION

The Ilikai units owned by developer Brian Anderson and his companies were offered today at public auction, at the 1st Circuit Court building in Honolulu. Click here to read a report in Pacific Business News.

4-15-09 A RECAP OF THE BOARD MEETING ON APRIL 13, 2009

Click here for a recap of the Board meeting. It includes a summary of the Ilikai financial situation.

4-15-09 Discussion re Garage Cleaning at Board Meeting UPDATED

Ok folks, I grossly exaggerated the condition of the garage at the Ilikai. For that I apologize. Just to mention, for those not in town: the Ilikai looks as beautiful as ever. It's really well maintained. A couple of years ago we had some problems with some common areas in need of cleaning attention. Not to mention the elevator problems. But it got all solved. It looks neat and beautiful, and all the elevators are running great. My point had nothing to do with the garage, but with the "timid" mentality of the Board and our legal counsel. If they are so timid that they can't even simply inform someone and ask to address a trivial item like this, then can they address timeshare, huge delinquencies etc? There was no arm-twisting required at all, all they needed to do is to ask.

Original post re garage: I am writing about this in detail below because this example speaks volumes about the current Board’s mentality and what is in store for Ilikai homeowners. With this Board and with this legal counsel, the Ilikai homeowners are going be bullied by everybody under the Sun, that’s what in store.

The parking garage at the Ilikai is owned and supposed to be maintained by the hotel. Individual owners with cars pay to the hotel $200+ a month per parking stall to use. Also importantly, the hotel is also liable, should anything happen, and maintains proper insurance.

Those using the garage are aware that it needs cleaning. At the Board meeting yesterday, Director John Hall suggested to the Board that the AOAO hire someone to clean the garage – and pay for it. Apparently, he or somebody even found a vendor willing to power-wash the garage and obtained a cost estimate of $1,800. So, he made a motion for the Board to approve for the AOAO to pay the $1,800 to clean the hotel-owned garage. The Board and the AOAO legal counsel, Chris Goodwin, then proceeded to discuss this. Mr. Goodwin made repeated arguments along the lines that the hotel cannot pay or is not in the position to pay, especially with the impending auction etc (Mr. Goodwin should be reminded that even if the hotel gets sold at the auction tomorrow, it will still take 6-8 weeks for the sale to be completed, and that the garage is income-generating for the hotel), and that therefore, it would be reasonable for the AOAO to pay for the garage to be cleaned. Naturally, perplexed, if not outraged, owners in the audience pointed out that they were paying the hotel $200+ a month per stall etc etc. Director Moore also pointed out that if the AOAO hires a vendor to clean the garage, this could put the AOAO in the position of secondary liability, should something happen during or right after the cleaning process, and that it was the hotel that had the insurance coverage. Note that Mr. Van Buren (Board Director and court-appointed foreclosure commissioner and receiver) was right there watching silently this "show." None of the Directors dared to turn to Mr. Van Buren and to ask him for the hotel to pay the $1,800 – none of them. Director Romo then asked Chris Goodwin if he could ask Mr. Van Buren if the hotel would pay the $1,800 for the garage to be cleaned. Silence followed. Director Romo again asked Chris Goodwin if he could ask Mr. Van Buren if the hotel would pay for the garage to be cleaned. Mr. Goodwin replied that he would not ask. So, neither the Board nor the AOAO legal counsel would even ask Mr. Van Buren. It was finally Mr. Van Buren who commented that he was perplexed why the Board/AOAO would consider picking up the cost of having the garage cleaned. Mr. Van Buren also sarcastically added that if the AOAO would pay for cleaning the garage, then he’s got some units that needed to be cleaned, so maybe the AOAO could get those cleaned as well. He did not offer to pay the $1,800 – why should he, if neither the Board nor Chris Goodwin would even ask him?!

So what eventually happened? Nobody seconded that motion, so the Board did not approve for the AOAO to pay the $1,800. But since neither the Board nor the AOAO legal counsel would even simply ask Mr. Van Buren, no plans to clean the garage. As said, this is a preview of what’s in store for the Ilikai homeowners. With this Board and with this legal counsel, the Ilikai homeowners are going be bullied by everybody under the Sun, that’s what in store.

4-14-09 Ala Wai Small Boat Harbor Bills in the Legislature

Those Bills are alive and moving along. On Tuesday, April 14, 2009, at 7 PM, there will be a Waikiki Board Meeting, at 310 Paoakalani Ave. Members of the Waikiki community are invited and encouraged to attend. There will be presentations and reports regarding the Ala Wai Small Boat Harbor Bills in the Legislature. What they are proposing is beyond belief and is likely to have devastating effects on the Ilikai and our Neighbors. The Bill is worded in such a way that could permit building a large structure, with seemingly no enforceable height restrictions, next to the Ilikai; not to mention potentially huge increases in traffic etc.

These Bills were brought up to the Board's attention at the Board's meeting yesterday. The Board took the position that there is nothing they could (or would) do, and that it is up to individual owners to address this.

4-14-09 This is not Ilikai news, but some of it has relevance: "As of March 1, Fannie Mae will no longer be financing new condo developments where less than 70% of units have been pre-sold. Before, the cut-off was 51%. It also bans mortgages in projects where 49% of all units are owned by investors, where more than 15% of owners have fallen behind on paying association dues or where more than 10% of the units are owned by a single investor, individual or company. Freddie Mac is getting tough on condos, too: Recently, it upped the minimum down payment on condo loans to 25%," (from Wall Street Jornal, April 10, 2009). Banks may follow...

4-13-09 A Board meeting took place today. It was a depressing meeting. I will post a recap, hopefully tomorrow.

4-13-09 Next Board meeting - April 13, 2009, at 3 PM, in Maui Room. Owners are invited and encouraged to attend. As Steve McGarrett used to say, "Be there."

4-12-09 Pacific Business News reports on another auction, scheduled for May 6, for the Hilton Kauai Beach Resort's portion owned by developer Brian Anderson. Click here. Same lender (iStar) and same Commissioner (Mr. Van Buren), as at the Ilikai. The Hilton Kauai's auction will offer Anderson's 145 condo hotel units and 15 commercial condominium units in bulk through one auction. - Unlike the Ilikai, where they opted to offer hotel rooms and commercial units through two separate auctions, even though they are on the same deed. The implications of the two auctions, instead of one, may be very significant and far reaching. We are continuing to investigate this matter and will keep you apprized. [UPDATE RE DEEDS 4-17-09: New information suggests that there is more to this, we are investigating this matter further.]

4-12-09 Why two auctions instead of one? UPDATED

[UPDATE RE DEEDS 4-17-09: New information suggests that there is more to this, we are investigating this matter further.] The Ilikai units owned by developer Brian Anderson and his companies are scheduled to be offered at public auction on April 15, 2009, through two separate auctions. One will offer 203 residential units (hotel rooms on the upper floors), to be sold in bulk. The other is for a bulk sale of 16 commercial condominium units, which include the front desk, restaurant, retail and office space, fitness room, and parking. The fact that the 203 hotel rooms and the commercial units (front desk etc) will be offered through two separate auctions, instead of combining them into one auction, raises serious questions and concerns. Note that, upon information and belief, the rooms and the commercial units are together on one deed. For the hotel component to function successfully, it needs to own those commercial units, incl. the front desk, parking etc. If the ownership of the front desk, parking and other essential hotel components is separated from the hotel’s 203 rooms, then how can whoever buys those 203 hotel rooms operate them as a full service hotel? This suggests that offering the hotel rooms and the commercial hotel units (front desk, fitness room, parking etc) through two separate auctions may well be nothing but a new scheme to carve a way to get rid of the hotel component at the Ilikai complex and to convert the Ilikai hotel into condotel-type rentals or timeshare. Prospective buyers are urged to obtain thorough and competent legal assistance regarding the Ilikai’s Final Public Report No. 22 (FPR No. 22), Declaration and By-Laws, incl. restrictions on permitted uses of units delineated in the above documents, not to repeat the fiasco of Brian Anderson’s “conversion” plans. Click here to obtain a copy of the Ilikai's FPR No. 22. There are also serious questions about what Brian Anderson put in the Supplemental Public Report No. 4, dated Oct. 24, 2008. Again, prospective buyers are urged to obtain thorough and competent legal assistance re this. Anyone with "conversion" plans should also be aware of the fact that many of the Ilikai condo owners bought their units at the Ilikai precisely because of the Ilikai's unique "mixed-use" combination of private condos and a full service hotel.

4-10-09 IMPORTANT UPDATE RE SHELL TIMESHARE AT THE ILIKAI

As you know, the efforts to address the potentially illegal timeshare operations at the Ilikai have been gaining momentum. The Ilikai governing documents (the Declaration and By-Laws) only permit hotel, not timeshare use. Last week, a lawsuit was filed against Shell to challenge Shell's timeshare operations at the Ilikai. Stay tuned for more updates.

4-8-09 Next Board meeting - April 13, 2009, at 3 PM

The next Board of Directors meeting is scheduled for Monday, April 13, at 3 PM, in Maui Room on the 2nd floor. With so many new developments, incl. the upcoming auctions scheduled for April 15 (see below for more info), we need to remain vigilant, informed and involved. Board meetings are great for learning what is happening, voicing your concerns and for providing input to the Board. As always, owners are invited and encouraged to attend.

4-8-09 The Ilikai units owned by developer Brian Anderson and his companies are scheduled to be offered at public auction on April 15, 2009, at noon, at the 1st Circuit Court building in Honolulu. Two separate auctions will be held. One will offer 203 residential units, to be sold in bulk. The other is for a bulk sale of 16 commercial condominium units, incl. restaurant, offices, retail space, and parking. The upcoming auctions were covered in the media, incl. in Pacific Business News.

4-8-09 THE WEBSITE IS UP AND RUNNING AGAIN!

Aloha everyone! My name is Olga and I am an Ilikai owner for over five years. I feel really honored and privileged to become the site's new administrator, publisher and editor. As we all know, the site's creator and previous administrator, a long-time Ilikai owner, Mr. Hans Puehse, has devoted so much time, effort, passion and unlimited dedication to the Ilikai and its community. Hans continues to devote time, effort and passion to serving the Ilikai, but I will be taking over maintaining the website. I can't even tell you how excited I am about it. You are welcome to communicate news, concerns and updates to me at olga@ilikaiowners.com.

In the near future, I am planning to post on some important topics, such as information from the Ilikai governing documents regarding whether they allow timeshare operations (no, they don't). We will also continue bringing up other priority tasks, such as the recovery of unpaid maintenance fees amounting to more than a million dollars, new developments in addressing the potentially illegal operation of a time share business in the building, the protection of the status as a non-conforming hotel, the enforcement of a long-term lease in the Yacht Harbor Tower, and the performance assessment of the AOAO’s legal counsel and financial management agent.

If you are interested in previous posts, by the website's previous/original creator and administrator, please go to the "Archived" tab.