By now it is no secret around the Ilikai building that at the last Board meeting on January 28, 2010, the Board voted to re-bid the managing agent contract currently held by Hawaii First and that Hawaiian Properties would bid for this contract.  It is community knowledge around here that there have been concerns expressed about Hawaii First, especially regarding the Anekona delinquencies.  I am no fan of Hawaii First, as those who read this blog have certainly noticed by now.

But Hawaiian Properties as a potential replacement?!

I am sure Hawaiian Properties is a great and highly reputable company.  I have absolutely nothing about them themselves.  But that’s not what it is about.

I’ve already written on this subject.  See, for example, my posting on the Elephant in the Room.  So I won’t repeat myself.

The concerns – very serous concerns – are about the governance and management of the Ilikai AOAO and the trend of where this is going.  The concern is that commercial interests of some business (the companies of the Tokioka Family that is) that owns one unit in the entire building of 1,009 condominiums (or several units at most if under different names) have so much influence over the AOAO Board of Directors and now may be taking over the financial management of the AOAO as well.  In my opinion, this will sink our AOAO into even more potential conflicts of interest and situations when the governance and management of the AOAO may end up being controlled by these outside commercial interests.  Haven’t we had enough of this type of situations with Anekona?

As said, I have nothing against the Tokiokas and their Hawaiian Properties themselves, I am sure they are reputable.  That’s not what it is about.  It is about the governance and management of our Ilikai AOAO.  I wrote and sent the following letter to the AOAO Board of Directors and the AOAO legal counsel, Milton Motooka, regarding these concerns.  Click on the link to view.

Please also note that in my letter I explicitly ask the Board: “If there are any factual misrepresentations, I urge you to let me know ASAP at your earliest convenience.  If you think my concerns are ungrounded, I urge you to let me know why.  I look forward to hearing from you.”

If you appealed your 2009 property taxes (I did), then you probably heard by now from the City and County of Honolulu (I did).  Please feel free to share your experiences.  Did you hear from them?  What response did you get?  Taxes affect us all, let’s share notes and experiences.

The next Board meeting is scheduled for next week’s Thursday, February 25, 2010, at 3 PM, – unless it gets re-scheduled.  Ilikai owners are invited and encouraged to attend.  Be there!

Let me introduce, with great pleasure, a fellow candidate for the Ilikai AOAO Board of Directors: Robert Humphreys.  Robert and I share the vision for the Ilikai and have agreed to join our efforts in terms of collecting vote proxies.  As a reminder: the proxies are not the actual votes.  Proxies are used to delegate the power to vote to another person.  Proxies are commonly used to form a voting bloc so that votes can be consolidated.  In our case, Robert and I forming such a voting bloc.  As said, Robert and I are joining our efforts – and will consolidate our proxies.  I am writing this to communicate that this is a strategy to make sure vote proxies are not wasted.

Click here to read Robert Humphreys’ personal statement.  Click on this link to read Robert Humphreys’ Vision Statement for the Ilikai. 

Robert and his wife first stayed at the Ilikai as visitors in 1971 and became owners in 2004.  They are part of the newer, progressive generation of Ilikai owners (and so am I).  They are residents of the state of Hawaii.  Robert is an attorney, still in active practice.  He routinely serves as an arbitrator, advising state agencies and national and local organizations.  He also used to head a large federal agency and worked as a counsel to a U.S. Senate Committee, as some of his credentials.

Robert and I share the vision for the Ilikai.  We need intelligent, educated, progressive and forward thinking people on our Board.  It is time to break this circle of the fraternity/sorority formed by the OBC (Old Boys (and some ladies) Club) directors currently on the Board.  These OBC directors-old-timers are dragging the Ilikai and all of us into the Stone Age.  They claim to represent the “owners.”  But in reality, they represent an OBC “fraternity/sorority” that they have formed here in our building as a way to kill time and boredom while retired.

For those of you who do not know Robert Humphreys: You may have seen him and his wife at Board meetings and around the Ilikai.  He is a tall, handsome and intelligent looking gentleman, with an equally attractive wife, a wonderful couple.

Vote for me and Robert!

Here is some interesting sample reading of advice our (the Ilikai AOAO that is) legal counsel, Milton Motooka, gives to Boards of Directors. 

Milton Motooka, Ilikai AOAO legal counsel

This was published in the December 2005 Hawaii Community Associations newsletter - see pages 3, 8 and 9 there.  In it, Milton Motooka talks about “Avoiding & Responding to Recall Petitions” and gives advice to Board Directors on how to deal with what he calls “dissident owners.”  Among other things, Mr. Motooka explicitly advises (see page 3 of the attached document, item 4-d), “The board should be seated on a riser and there should be a podium from which the president can preside.  It is a psychological benefit for the board to be seated on a riser.”

Gee whiz.  What can one say.

P.S.: Here is something to think about: Milton Motooka was the Ilikai AOAO’s legal counsel at the time Forward One (the hotel owner prior to Anekona) sold 80 units to the Shell timeshare company.  That is when we got timeshare here, which we now are trying to get off the premises.  As we eventually learned, Forward One was in great hesitation about legitimacy of timeshare for the Ilikai.  But they made A LOT of money by selling those units to Shell.  They were planning that transaction for at least 8-9 months – apparently, with full knowledge of the Board of Directors and the AOAO legal counsel, Milton Motooka.  Yet they kept this as top secret from the AOAO members, owners that is.  Ilikai owners did not find out about this until AFTER the fact. Questions remain about the role Milton Motooka played at that time.  Mr. Motooka is yet to come forward to explain himself.  WE INVITE AND ENCOURAGE MR. MOTOOKA TO PROVIDE EXPLANATIONS.

By the way, Bill Moore and Lavonne West  who are currently on the Board of Directors were on the Board at that time, and so was John Popovich who is now the AOAO manager.  Bill Moore and Lavonne West are also now trying to get re-elected to the Board.  Perhaps they could offer some explanations, too, as to what they were doing on the Board at the time Forward One brought Shell with their timeshare here and what makes them think they deserve to get re-elected to the Board.  Also on the Board at that time was Frank Tokioka of the Tokioka Family (see my “Elephant in the room” posting for some information about the Tokioka Family).  (One of the readers wrote to me, “With people like that on the Board, who needs enemies?!”)

P.S.: Readers have been commenting that the blog looks dull without pictures.  Excellent feedback.  Hence the picture.

As a reminder, here is what the Ilikai covenants (Declaration and Bylaws) say about permitted uses of Ilikai apartments:

1. Pursuant to Section 7(a) of the Ilikai Declaration, “[t]he owner of each apartment within the building shall use such apartment only as living accommodations for hotel or apartment purposes” (emphasis added).
2. Pursuant to Article VI Section 1(a) of the Ilikai By-Laws, “[t]he owner of each apartment within the building shall use such apartment only as living accommodations for hotel or apartment purposes” (emphasis added).

Timeshare is NOT one of the permitted uses!

At the last Board meeting (January), a representative from the Sarento’s restaurant debriefed on their news.  He stated that iStar renewed their lease (as far as I understood, for another 20 years).  He also informed that they are planning significant renovations.  He sounded very upbeat and optimistic about the future.  It was refreshing to hear good news. 

By the way, iStar offered the services of the same professional designer who is working on Sarento’s renovations to our Board of Directors.  iStar stated that they had offered this designer’s services – to be paid by iStar - repeatedly to our Board to assist with Common Elements renovations, such as the lobby furniture.  But no, our Board refused these professional services.  Instead, the Board Directors themselves chose the cheap ugly fabric for the furniture, the “design” for the elevator cab (cheap carpet on elevator cab walls and floor; they simply ruined the elevator), and cheap faux flowers all over the lobby.

The good news is: We have money in our Reserves.  Once we remove some of these Directors from the Board at the upcoming Annual Meeting, we can get professional designers and fix this damage.  This damage is not long-term.  It can be fixed relatively easily.  We just need to get fresh representation on the Board.

Back to Sarento’s:  Here is a report in the Pacific Business News of 02/08/2010.  Another article, in Honolulu Advertiser of 01/17/2010, reports, “Sarento’s adds live music on Thursdays.“  Apparently, the live music and Jazz Nights are quite popular there and bring significant crowds.

A reader posted the following comment on 02/12/2010: “I’m curious as to how much money iStar is offering to put toward the common elements. If they’re paying for these common elements, then they should have a say. If not, they shouldn’t. I understand they’re not even paying for the torch lighting and music on Friday nights. Shouldn’t they since these amenities are for the hotel guests as well?”

Thanks for articulating this question!  This is actually commonly asked.  Here are some answers.  The hotel owner (currently iStar) currently owns circa 28% of the Ilikai (p.s.: I use the “hotel” etc terminology rather loosely, but you know what I mean).  Their contribution to the Ilikai AOAO maintenance fees amounts to about 28%.  So certainly they should have a say in how the AOAO funds are spent, wouldn’t you agree?  Yet, at the moment, they do not have any representation on the Board.  Last year (2009), there were multiple openings on the Board of Directors due to resignations.  iStar attempted to get their representative, Leslie Love, who is Senior Vice President at iStar, elected to the Board.  But the OBC-controlled Board of Directors (OBC stands for Old Boys Club) voted her down.  Instead the OBC-controlled Board elected to the Board Lavonne West (who then left on a cruise for at least two months and was not even here to contribute to Ilikai affairs), Bill Lawrence, and Dass Ramadass.  Dass Ramadass does not own anything at the Ilikai.  He works for the various companies of the Tokioka Family.

By the way, here is some trivia to think about: As you may or may not know, Bill Lawrence is a Director on the Ilikai Board as well as on the Board at the Ilikai Marina.  Ilikai Marina has a resident manager.  I.e., their AOAO manager actually lives on-site.  The Ilikai Marina AOAO rents a condominium for that resident manager and pays for it with Ilikai Marina AOAO funds.  And whose condominium do you think the Ilikai Marina AOAO rents for their resident manager? – Bill Lawrence’s!  In other words, Bill Lawrence is on their Board of Directors.  And the AOAO rents his condominium, with AOAO funds.

Back to iStar.  As said, they own 28% of the Ilikai and their contributions to the Ilikai AOAO funds amount to circa 28%.  So, surely, they are entitled to have representation on the Board and to have a say in how the AOAO funds are spent, wouldn’t you agree?

Speaking of which: As I pointed out in my posting re “The elephant in the room – the Tokioka Family”, the Tokioka Family owns ONE unit (unit # 1623; it is possible that they own a couple more units, if under different names, but certainly not more than five units total).  Yet they control circa 20% of the vote proxies!  How?  Because they operate their rental company, Marina Vacations, at the Ilikai.  When Ilikai owners place their units into that rental program, the default is that those owners give up their proxies to Marina Vacations – i.e., the Tokioka Family.  True, those owners can request to take back their proxy.  But let’s face it, many owners don’t even know what proxies are, or don’t care, or would not want to go against the Marina Vacations in fear of jeopardizing their rentals.  Not only that, but several Board Directors, incl. Directors Bob Romo, Bill Lawrence and Bob Currie, rent their units through Marina Vacations program – i.e., these Board Directors depend on Ilikai Marina for their rental income.  Another Director, Dass Ramadass, does not own anything at the Ilikai.  Yet, he is on the Board because one of the Tokioka Family’s companies owns ONE unit at the Ilikai (several at most, if under different names) and Dass Ramadass happens to be an employee of the Tokioka Family’s companies.

What is my point? – My point is that there are two many conflicts of interests on the current Board.  Yet, these same individuals want to get elected to the Board again.  Do we need all these conflicts of interest and problems?

So anyone wondering why iStar, with their 28% of ownership at the Ilikai, should have any say in Ilikai renovations, should instead ask why the Tokioka Family gets to have so much control at the Ilikai even though in terms of ownership, they own less than 0.1% of the Ilikai (one unit to be precise, several at most in case they are owned under other names).

Back to the common elements renovations: Let’s get some facts straight here.  Here are some examples.  Several months ago, the current Board authorized spending thousands of dollars of the Ilikai AOAO funds on renovating one of the parking elevators.  I and other owners repeatedly and repeatedly asked whether the elevator at issue actually belonged to the hotel.  At a Board meeting, a representative from the hotel stood up and stated explicitly that the elevator at issue belonged to the hotel.  Yet at the same Board meeting, our Board authorized spending thousands of dollars of the AOAO funds on renovating that elevator (with ugly materials)!  Here is another example: most of the lobby, except for a narrow walkway, actually belongs to the hotel and not the AOAO.  Much of the furniture belongs to the hotel.  So why did this Board decide to waste thousands of dollars on reupholstering that furniture with that cheap and ugly fabric?  I and other owners repeatedly and repeatedly raised this concern.  The Board’s response was: “Ilikai owners sit on that furniture.”  Well, many Ilikai owners frequent the neighboring Hilton and sit on Hilton’s furniture.  How about the Ilikai AOAO reupholsters Hilton’s furniture?  In the case of our lobby furniture, iStar (who owns most of the lobby and furniture to begin with) repeatedly and repeatedly offered to the Board the services of their professional designer (paid by iStar).  But no, our designer-wannabe Board Directors refused the services of that professional designer and proceeded to indulge in their designer-wannabe pursuits at the AOAO expense.  You all can see the result: cheap (although new) fabric on the furniture, nothing matches anything, cheap faux flowers all over the lobby, ruined elevator with cheap ugly carpet on the elevator cab walls, that one elevator looks totally different from the other ones, etc etc.  In other words, it is NOT iStar pushing these expenditures.  iStar is not even on the Board.  It is the current Board pushing these ideas.

But there is good news to it.  We do have money in our Reserves.  Let’s work together with the hotel!  Let’s get professional designers to help make our Ilikai beautiful again!  With all the renovations in store in the near future, this is our opportunity to upgrade our Ilikai.

Folks, our Ilikai has SO MUCH POTENTIAL!  It is a great building, great location, great history!  We need to bring back its glory and beauty!  The current Board has had a whole year to prove themselves, but they failed.  That is why I am running for the Board, we need fresh representation.  I need your VOTES!

THANKS to those who have written to me to ask why I haven’t been posting and also for the kind and supportive words.  I appreciate it so much.  I have NOT resigned from the Ilikai affairs in any way.  It’s just I have been very busy, mostly with work, with a major deadline looming next week.  I will do my best to resume posting.

I will have some spare time this Friday-Saturday and will post notes from the Board meeting etc (I promise!)  But here is a quick synopsis for starters of what we found out at the last Board meeting:

1)  The Board decided to write off circa $800K of the Anekona delinquencies.  This was followed by some incoherent talk about the remainder of the delinquencies.  It was disgusting.

2)  We also learned that the current Board Directors totally ruined rapport/ relationship with iStar.  There was quite a drama towards the end of the Board meeting.  We are talking drama, folks.  Based on what was told at the Board meeting, the current Board apparently also repeatedly refused iStar’s repeated offers of assistance with common elements design and also assistance re the easements at the Yacht Harbor Tower.  Did you see what this Board did to our elevator, with the ugly carpet on the elevator cab walls?  The cheap faux flowers all over the lobby?  That’s just some examples.  And they refused the help of a professional designer (paid by iStar) that iStar was offering to them!

3)  Did you know that eRealty wants to relocate that walkway in front of the ballrooms from the bridge over the Hobron Lane to our building?  Apparently, our Board has known about this for a long time.  What have they been doing about that, other than rejecting offers of help from iStar?  What ever happened to the prescriptive easement etc?

It was surreal to watch this Board and listen to them.  It’s just beyond belief.

In my previous post, I wrote that there are lots of Ilikai owners who are really concerned about what is happening and the current Board.  Many owners – those who are informed – would not have anything to do with voting for the current Board of Directors to be re-elected.

If you are sceptical about the above statements, then you should have been at today’s Board meeting.  The general session lasted 2.5 hours and towards the end, got really heated, to put it mildly.

I will post notes, but give me a couple days, as it was overwhelming.

Here is some clarification.  We have now at the Ilikai this OBC group of Board Directors who are also running for re-election.  The OBC stands for Old Boys (and some ladies) Club.  By the way, I am not the one who thought of this term.  It was another concerned Ilikai owner who is concerned about what is happening.  The OBC Directors (also running for re-election) are: Lea Sasak, Bill Moore, Bill Lawrence, Dass Ramadass, and Lavonne West.

This OBC group is actively pitching the argument that goes like this, “We must retain control of the Board.  For that, we need to have four owner Directors elected.  The only way to accomplish this is if you [owners that is] give us your proxies.  We will collect all these proxies and then use them.  No votes will be wasted that way.  That way we will get elected, we will retain control of the Board.  Otherwise, iStar or iStar and Shell will take over the Board, and the world will come down.”

That is a totally BOGUS argument.  Why?  Here is why:  There are LOTS and LOTS of owners who do not want to have anything to do with that group of OBC Directors and will not give their vote proxies to them.  Because these owners got completely disillusioned with this group (e.g., this group has been in full control of the Board for a year now; what have they accomplished?), or they personally dislike the people in that group, or other reasons.  So if that group is the only owner representation choice available, then the disillusioned owners will either not vote at all or vote for iStar.  A lot of owners have more confidence in iStar – or me – than in this group.  That is the reality.

What is the solution?  Here is the solution:  There should be more than one option for owners to vote for.  The OBC group is one option, they do have their constituents.  I am representing the OPPOSITION.  Somebody was trying to talk me into partnering with the OBC group.  That would be exactly the way to lose owner votes, because many owners do not want to be part of that group and their mentality, way of conducting business, and so forth.  My goal is to represent owners who have a different, progressive vision for the Ilikai than what we have seen with the OBC Directors.  We urgently need fresh representation on the Board.  That is why I am putting my candidacy.

Click here for an outline of my vision as a Board Director candidate for the priority areas.