Capital Imprvement project

. I am for competitive bidding on request for proposal (RFP) from consultants/contractors . I am for appointing someone on the board that understand construction . I am against spending a lot of money to develop plans to be an “upscale condo resort” We are always going to be the cheap seats and there is nothing wrong with being the entry level investment. We do not need to chase a fantasy that we cannot afford or realize. When I tried to attend the board meeting on line( and failed ), I contacted our manger Joe at PMS to get updated on what happened at the meeting. After hearing his comments, it sounded like someone currently on the board is pushing this agenda hard for reasons that I do not totally understand. We have owned in Powderwood since 2005, it was our first purchase in the Park City market. We have since purchased properties in Crestview (2 Units) and in Lodges at Bear Hollow. At the risk of offending other owners, I feel it is important to do a reality check. We (Powderwood) are the low man on the pole. All of our competition is newer with vastly better amenities. Garages, secured building, heated underground parking, elevators, newer better amenities, and did I mentioned newer buildings? Joe mentioned to me an example of a property in Park City that has gone through an improvement process and has seen increased values. My response to this example was simply “location, location, location” the first rule of realty investment. We are not in a good location, we are not in Park City, we are buildings that are over 30 years old, poorly designed and constructed. Fortunately or unfortunately that is true for the majority of the complexes built with regard to construction. There competitive edge is that are much newer and designed better. We are probably not even up to standard for the current building codes. In addition to this we have 1 pool and hot tub for 12 buildings, the worse ratio of any of our competition and unfortunately hot tubs and pools in facilities that are well kept and new are a huge draw for nightly rentals. Our priority should be to fix the construction defects and maintenance issues that need to be addressed, and done in a manner that will not break the current owners. Anyone who thinks we can transform our buildings into a competitive complex that will increase hugely in value is not facing reality. Our increases in value will be due to us being pulled up by the surrounding values in Crestview, Bear Hollow, Canyon Creek, Red Stone Plaza area and others in our market. Our biggest increase may well come from being adjacent to the new Whole Foods Market being built. We should only be using requests for proposals (RFP) to control costs. Spending any money on trying to face lift, should only be done if it is a small incremental increase to repairs that have to be done. Sincerely David Mashaw and Mae Lon Ding Owners Powderwood 2 A

Showing 9 reactions

  • Joe Holland
    commented 2016-05-09 12:08:57 -0600
    Dear Mr. Krancer:
    I certainly can appreciate and understand your point of view. My basic business philosophy is to love what you do and work hard. With those principles people naturally gravitate to you. I have no place in my life for bad business deals, deceit, and drama. I would hope that you find that as we proceed through this process that it is 100% transparent and Powderwood Owners are the ones who ultimately make the decisions.
    As stated in the CC&R’s a majority of owners must approve reserve expenses. To be productive our discussions should be centered on ideas and options that have the potential to garner the support of a majority of the owners. The two extremes that I do not believe will garner a majority of owners support are:
    1. Restoring Powderwood to the level of a resort or other amenity improvements that require substantial funding.
    2. Maintaining the property at its current condition or making incremental repairs over a long period of time.
    Below are some of the ideas that I hear about frequently from owners, by no means is this list set in stone, I would prefer it be liquid and adjust to opinions and creative ideas presented by owners that will be supported by a majority of the owners.
    1. A majority of owners believe Powderwood is at the end of the regeneration cycle.
    2. A majority of owners would like a detailed breakdown of the condition of the building elements and which ones need to be replaced and the associated costs for repair and replacement.
    3. Improvements should only be completed if they are absolutely necessary, structurally sound and attractive.
    4. Once proposed reserve expenses are approved by a majority of owners. A majority would prefer work on improvements to begin immediately.
    Joe Holland
  • David Krancer
    commented 2016-05-07 08:34:13 -0600
    I think the timing of all of this is suspicious. Rushing into something now seems totally unwarranted to me. The way I invest in things is if I have the money I do it if I do not I don’t do it. the place is not falling apart. We can wait until the financial situation improves in my opinion as long as we try to cut some costs in other areas or raise the dues. Then reassess when we have a leg to stand on in five years.
  • Joe Holland
    commented 2016-05-06 17:28:01 -0600
    Mr. Krancer:
    That will be great to have you on the committee. We do not have a schedule for the committee yet but you will be included in the communication for the group once it begins.
    I have discussed the regeneration project with about one dozen owners over the last week. Most expressed interest in moving the project along. Very few expressed interest in extending the project for any period of time. I would refer you to the post by Chris Mega on April 28.
    Not knowing your potential portion of the Powderwood reserve expenditure can cause anxiety and sleepless nights for owners. It is very important to quantify the project and related costs as soon as possible. We want owners to have plenty of time to make plans.
    Loans from banks that specialize in homeowners associations offer viable options. A loan allows Powderwood to complete the regeneration project long before the necessary funds accumulated in the reserve fund. Banks usually require the regeneration project to be completed within one year. The rates I have recently seen for this type of loan are between 4-5% with a term of 5-15 years.
    The last regeneration project I completed has 192 units. 26 of the units paid their portion up front. The remainder participated in the loan. Below is an example of what owners may expect for loan payments depending on the regeneration funds that may be required. This is only an example. Currently we do not know the funds that will be required.

    Average Owner Portion Interest Rate Term Monthly Payment Proceeds
    1,000.00 4.5% 10 yrs 10.36 228,000.00
    2,500.00 4.5% 10 yrs 25.91 570,000.00
    5,000.00 4.5% 10 yrs 51.82 1,140,000.00
    7,500.00 4.5% 10 yrs 77.73 1,710,000.00
    10,000.00 4.5% 10 yrs 103.64 2,280,000.00
    15,000.00 4.5% 10 yrs 155.46 3,420,000.00
    20,000.00 4.5% 10 yrs 207.28 4,560,000.00
    30,000.00 4.5% 10 yrs 310.92 6,840,000.00
  • David Krancer
    commented 2016-05-06 13:27:32 -0600
    I would like to be on this committee. When do they meet? We may want to wait a while though to start in anything until the reserves get built up. It does not see to be urgent.
  • David Krancer
    tagged this with good 2016-05-06 13:27:31 -0600
  • Joe Holland
    commented 2016-05-06 13:19:15 -0600
    Dear Mr. Krancer
    I understand your concerns about the costs for an engineer. It does seem like a large pill to swallow for me as well. Often properties like Powderwood afford “economies of scale” meaning we could thoroughly do forensic investigation on one building and apply the knowledge to the other buildings. Unfortunately, it appears this is not the case at Powderwood. The exterior of the buildings appear similar but the materials and processes used in the construction process are drastically different in each building. Applying knowledge learned in building 1 could have disastrous results if applied to building 5. I have been told by many, including the previous management company that managed the property for nearly its entire existence, the construction processes used were unique to each building. It is essential we use this information in planning for the future.

    In a previous post I asked owners to contact me if they were interested in working on a committee to review the bids from engineers. Three owners have contacted me with interest in serving on this committee. These owners appear to have substantial experience, some with extensive construction and engineering backgrounds. I am hopeful this committee along with support from the Powderwood Board of Directors and my office can come up with some innovative ideas that could save dollars and improve the community for the long run. David, your posts indicate you are very passionate and knowledgeable about this project. Your input and opinions would be valuable to this committee and the other residents at Powderwood. I would recommend that you consider serving on this committee.

    Once the committee has completed its review and receives the support from the Board of Directors, a breakdown of the findings and recommendations will be mailed to all owners and posted on the website. At minimum a majority of owners must approve the recommendations before any analysis of the buildings can begin.

    In your post you do suggest contacting electricians, roofers, etc. to do free estimates if you consider awarding them contracts.

    My comments regarding your suggestions come directly from the Community Association Institute (CAI). CAI is the leading national trade organization for effective community management. I have found following their recommendations effective in avoiding many of the pitfalls associated with community management throughout my career. The following is taken from the M-201 Facilities Management participant guidebook. The following is outlined under Bidding and Contracting Process for major reserve expenditures.

    The board needs to pay a professional to develop customized specs for their specific work requirements.

    The professional that completes the customized specs should understand that their firm will not be awarded the contract to compete the repairs.

    It is important to draft complete, specific, and accurate bid specifications (specs) to help ensure a community association’s needs are met.

    A manager must have a good understanding of bid specification requirements in order to ensure the RFP (Request For Proposal) is complete.

    It is important to encourage the board never to sign a proposal from the contractor. The association should sign a contract approved by the attorney that contains all necessary provisions that protect it and the management company.

    Joe Holland
  • David Krancer
    commented 2016-05-05 19:33:41 -0600
    Electricians Roofers etc usually come out and do free estimates if you consider awarding them contracts. Maybe we can get a list together of soem contractors who can come out and take a look at some stuff. but to spend $100k seems a little too much that oculd go a long way to actually fixing some things. We need an assessment of how urgent any renovations really are.
  • Joe Holland
    commented 2016-04-28 09:50:00 -0600
    I think the Powderwood Board of Directors are in agreement with most of your statements. I have not talked to anyone on the Board who thinks we need to upgrade to a resort type community. Everyone responds to how a property looks. If we have to repair decks we should not use barbed wire service in there is an alternative that is better looking. The lights in all the buildings are rusting. Too much rust can lead to short circuits so if we have to replace in the future let it be something attractive.

  • David Mashaw
    published this page in Suggestions 2016-04-27 12:53:23 -0600