First Riviera ROFR

[havoc315]

I will also note that DAS restrictions plus moving from free to paid VQ is also an effective increase in capacity, because fewer people are in two places at once.

DAS was a temporary issue. Was DAS restricting capacity in 1995?

 

[Cfabar1]

I think one thing that some people are overlooking is the tax benefits that Disney achieves with new construction vs. flipping contracts. It is why I am convinced the 2042 resorts will go through complete gut rehabs or more likely tear down and rebuilds when 2042 comes. Not all at once, but staggered over several years. Disney won't pass up a chance to make a few bucks flipping contracts every now and then, but it will never be part of DVC's regular business model.

Can you explain this further for those of us who don't work in the tax/real estate space?

 

[Brianstl]

Can you explain this further for those of us who don't work in the tax/real estate space?

The construction costs can be deducted and the new buildings can be depreciated over the years to reduce the amount of income tax Disney owes.

 

[Mouseforward]

The construction costs can be deducted and the new buildings can be depreciated over the years to reduce the amount of income tax Disney owes.

Isn't it an issue that they have the additional layer of the ground lease from WDW to DVD and that is the only profit the building cost can offset?

DVD can't take the building cost off since they lease

 

[Brianstl]

Isn't it an issue that they have the additional layer of the ground lease from WDW to DVD and that is the only profit the building cost can offset?

DVD can't take the building cost off since they lease

On land you lease, but don’t own…..

You capitalize the construction costs and then depreciate those costs over 15 years for tax purposes

 

[Brian Noble]

DAS was a temporary issue. Was DAS restricting capacity in 1995?

You aren’t discussing. You are arguing to be right from a fixed position. Have fun with that.

 

[Mouseforward]

On land you lease, but don’t own…..

You capitalize the construction costs and then depreciate those costs over 15 years for tax purposes

But is DVD doing the construction or WDW? I thought only Aulani was DVD'd construction.

 

[Brianstl]

But is DVD doing the construction or WDW? I thought only Aulani was DVD'd construction.

I’m not sure what division is paying the cost of construction, but it doesn’t matter. Whatever division is paying for the new construction provides a tax benefits to the TWDC that the expense of buying contracts through ROFR doesn’t.