RMA2020 - Blue Mountain Resort
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RMA2020
AGENDA Understanding RMA2020 •Primer on Players, the history and the legal landscape Creating A Path Forward •Professional representation and developing consensus among homeowners •A call to action •Misconceptions, misinformation and points of disagreement •The value of long term certainty BMR’s Rental Management Record •Alignment of vested interests and value added to date
UNDERSTANDING RMA
2020
THE PLAYERS
Condo Corporation: Property Manager and Condo Board
• Responsible for hallways, parking garages, mechanical systems, exterior features and
grounds
• Governed by the Ontario Condominium Act. Direction and oversight is provided by a Condo
Board made up of owner-volunteers
Rental Manager:
Manager: Blue Mountain Resorts
• As a requirement of the Condo Declaration and Zoning, every owner is party to a Rental
Management Agreement (RMA), implemented by the Rental Manager.
• The current RMA expires in November 16, 2020
Unit Owners: Who are you?
• A regular user of your village unit, subsidising the costs of ownership with rental income?
• An investor expecting ROI from rental income?
• An investor expecting ROI from equity growth?
THE HISTORY
With village agreements in place in Recession in 2007 significantly Since 2001, BMR invests over $125M
1999, GG opens 2001, WL opens revalues condo-hotel units at ~25% in ski facilities, conference center
2002, SAB opens 2003 below original sales price. and summer attractions, driving
$119M invested by homeowners,
56% of unit owners have purchased average occupancy from 45% to 63%
unit sales are strong with $/ft2
since 2007 annually
prices increasing each year
THE LEGAL LANDSCAPE
Provincial BMVA ACT
Official Zoning
Municipal Plan and Bylaws
Condo Discovery
On Title Condo Declaration
RMA
LEGAL LANDSCAPE – PROVINCIAL/MUNICIPAL Provincial Blue Mountain Village Association Act,1999 Provincial Securities Act exemption Municipal Official Plan: • Designates the Blue Mountain Village Core as the primary commercial center for the surrounding area Municipal Zoning and Bylaws: • Taxation based on residential, not commercial tax rates • Defines a VCRU different from a CRU or STA. • VCRUs cannot be a principle residence • Limits owner occupancy to 10 days per month, 120 days annually • Limits owner rental opt-out to 20% of units. • Obligates a complex be party to a single rental management program
LEGAL LANDSCAPE – ON TITLE Condominium Disclosure and Declaration • Consistent with the zoning and definition of a VCRU • Limits owner occupancy to 120 days annually. • Limits owner rental opt-out to 20% of units on a FCFS basis. • Defines the owners proportionate share of common elements and revenue • Defines the relationship with and obligations to the VA • Defines the relationship among GG, SAB and WL • Obligates the complex be party to a management program • Defines the Rental Management Unit and exclusive use common elements RMA • Consistent with zoning and Condo Declarations • Binds each owner to the Rental Manager
CREATING A PATH
FORWARD
PROFESSIONAL REPRESENTATION An RMA2020 committee representing three building needs to be established soon to: • Develop a scope of work, terms of reference and an RFP • Select and task a qualified hospitality industry consultant The consultant should be tasked with: • Establishing realistic and representative homeowner goals and objectives • Securing legal advice as required • Negotiating a new RMA • If required, identifying and evaluating qualified third party rental managers • If required, tendering an RFP • Making a recommendation to the committee The RMA2020 committee must then: • developed 67% (or 80%) consensus among unit owners in each of the three buildings • Secure an affirmative vote
DEVELOPING CONSENSUS • 67% A supermajority, representing 67% of units in all three buildings, is required to hire or terminate a Rental Manager • 80% A super-duper majority, representing 80% of units in all three buildings, is required to amend the condominium declarations. • 15% An owners meeting may be called at the request of 15% of units Inour experience: • Achieving consensus among homeowners will not be easy • Achieving consensus among the three buildings will not be easy • The committee's work will be complicated, expensive and probably thwarted if the goals and objectives are too broad and require changes in declarations and zoning • The committee's work will be long, expensive and probably thwarted if points of disagreement end in legal challenges
CALL TO ACTION Hold your representatives accountable for: • Constructive collaboration among the three buildings • Advocating realistic and representative goals • Setting a pace of progress that gets you to the finish line • Communication and transparency You can put your representatives on record. Ask each one: • What are your goals personally and for the membership • What specifically do you want to achieve • How are you representative of all owners • How will you get along with members that disagree with you • Are you a consensus builder or a pot stirrer. Give me an example • Characterize your relationship with the three Condo Corporations • Characterize your relationship with the current Rental Manager
MISCONCEPTIONS AND MISINFORMATION AND POINT OF DISAGREEMENT BMR monitors a number of public forums including AGMs, Condo Central and the GG Homeowners Facebook page. In addition BMR hosts various events homeowner meetings and social events including this one. Further, we deal directly and regularly with the three Condominium Corporations on operational matters. As we approach 2020 we are growing alarmed at the lack of progress, disparate factions, radical ideas and in some cases, open hostility directed toward BMR. • The Condo Board can replace the rental manager • This investment doesn’t make money • BMR will not negotiate the terms of the RMA • I can make more money renting privately • After 2020 there is no requirement to purchase the Rental Management Unit • Airbnb is awesome! • I can do what I want if I leave the rental pool
THE VALUE OF CERTAINTY The RMA is rooted in declarations, municipal planning and provincial acts. This is the foundation on which your investment is secure and part of the basis for future investments by Village stakeholders. • Under Alterra ownership BMR will continue to invest and grow its three business pillars, namely winter ski, summer attractions and spring fall conference. We are very optimistic for the future. Our vested interests, through the RMA, are currently directly aligned with yours. Investors value certainty • Guests of the Village and Blue Mountain do not distinguish among owners. There is strength in providing seamless packaged high quality experiences. Guests value consistent standards • BMR enters into contracts with some conference groups more than a year in advance. We are currently contingency planning around the potential for Rental Management disruptions. Meeting planners demand certainty • BMR is actively investing in emerging markets that are integral to our medium term strategy. One of the biggest opportunities is wholesale lodging.
BMR’S RENTAL MANAGEMENT RECORD
HOW BMR ADDS VALUE TO YOUR INVESTMENT • $125M in new investments in ski, conference and attractions have driven occupancy from 45% to 64% in 16 years • Conference sales and service sales have increased group room nights to 79,000 of 238,000 total. Last year, groups accounted for 48% of the GG occupancy • Housekeeping has met the challenge of regional labour shortages by recruiting nationally and internationally, successfully securing foreign workers, managing 200 staff housing beds • Advocating for homeowner issues at municipal meetings • Providing a qualified security service • Supplying and maintaining IT infrastructure including PBX phone switch, online sales capacity, state of the art reservations systems
QUESTIONS
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