Saturday, July 25, 2015

Management contract negotiations update


 Kiahuna Plantation Managing Agent Survey 

Dear Kiahuna Plantation Beachhouse Owner, 
As you know from the last Annual Meeting in May, the Kiahuna Plantation Managing Agent contract is coming up for renewal at the end of March 2016. In preparation for that contract we have assembled a team to execute a selection process. The Managing Agent Selection Team (MAST) is chartered with defining the requirements of the role, recruiting candidate companies with the required capabilities to make a bid for our business, execute a formal bidding process, make a recommendation to the Kiahuna Board of Directors, and negotiate the details of the contract with the chosen company. 

To better understand the scope of our objectives, it is critical that owners understand the role of the Managing Agent versus the other stakeholders in the Kiahuna Plantation property. The stakeholders and responsibilities are: 

Managing Agent – is responsible for the operation and maintenance of the Common-Element of Kiahuna Plantation phases 2, 3A, 3B, 4, & 5 (not phase 1). This only involves building structures (not the interiors of condos), grounds landscaping and maintenance, administrative services (including accounting and general management of the association) and 24 hour security & safety services. The Managing Agent has no responsibility for unit rentals. 

Unit owners – responsible for the interior of your condo, insuring your condo, and the success of your individual condo rental business 

Rental Agents – companies that unit owners may engage to rent your individual unit and perform the required housekeeping and interior maintenance required to operate your individual condo rental business. Rental Agents have no responsibility (or authority) for the Common-Element of Kiahuna Plantation. 

Land owners – since Kiahuna Plantation is built on leased land, we pay a monthly land lease fee to the owners of the land our particular building resides upon. The six different phases of Kiahuna Plantation do not all have the same land owners, so owners in different phases may make lease payments to different land owners and the lease fee of each phase, and even within a phase, is different. 

Today our association (AOBO) is managed by Hawaii Vacation Condos (HVC), formerly Outrigger Hotels and Resorts before the Outrigger condo business was spun out into a separate LLC. The fact that HVC is also a rental agent on Kiahuna Plantation is only a coincidence of convenience – HVC’s Managing Agent role and Rental Agent role are not connected from the association’s point of view. HVC does share some employees between the two functions, but only for convenience and when shared, the cost of those employees is assigned to the role they are performing, either association or rental. The Managing Agent contract and property declarations require that the Managing Agent not be involved in the sale or rental of condos at Kiahuna Plantation, thus the separation of the two stakeholder roles. 

As part of our process of Managing Agent selection for the next contract period, the MAST is sending you a survey to collect owner preferences and input on the Managing Agent role for Kiahuna Plantation. The contract is typically for a period of 5 years and involves more than $10 million in payments (mostly employee expenses) over the contract period to the selected company to execute the responsibilities of the managing agent role. Thus we take the Managing Agent selection very seriously with an objective of obtaining the greatest value for the Kiahuna Plantation ownership. To that end, our survey is intended to get the owners’ thoughts on our options for the next Managing Agent contract. The survey is not a vote and has no binding requirements associated with it. The survey will be administered by a company specializing in electronic surveys and the results will be presented to the MAST in an aggregate form so we will not see any individual response and cannot tie it back to any individual owners. 

You will be receiving an email from: 
aobo.kpr@gmail.com via surveymonkey.com 
We sincerely hope you will respond to the survey when you receive it. A button at the bottom of the email message will initiate the survey. 

Mahalo, 

The Kiahuna Plantation Managing Agent Selection Team