OKW extension

[JimC]

Just received a promotional letter outlining the no interest and no payments until 3/1/09 offer. Requires 10% down and is available for loans of 2, 6 and 11 years (including the deferral year). There are two rate tiers -- one for electronic direct debit at 4.95%, 10.75% and 14.25% respectively; and a higher tier for pay by check at 5.95%, 11.75% and 15.25% respectively. Offer terminates 2/29/08 and is subject to underwriting review.

They are also upping the marketing effort outlining the "value" of the extension. Comparing the cost of a 250 point extension ($3,750) to the cost of a single week today in a studio ($1,883) and noting that your extension would buy 45 weeks of studios during adventure season. The piece also points out that in 2042 when the extension begins the likely savings over the then current rental rates are likely to be significant. Overall a nicely done piece.

Still doubt we will extend though. We can not use the extra years and would prefer any contract running 50 years from today to be at a newly constructed resort. If we do not we will receive a package with a deed for the extension period to be assigned back to DVD. We will also receive an OKW lithograph.

 

[BobH]

I received the same letter to extend my OKW membership. I will not be doing it either since I will be in my 90's (if I'm lucky) and my children will be in their 60's. I called DVC Guide, Nancy Barbee, to discuss the extension and the way Disney handled the whole issue. We had a cordial conversation and told her that a younger person might find it an attractive offer, but that I did not feel it was a good decision for my family. I also informed her that I was unhappy with the fact that DVC had stated that they would place a "lien" on members that failed to pay the special assesment or deed the ownership years back to DVC beyond 2042. Nancy Barbee said she knew nothing about a "lien" so I quoted the exact "lien" language to her from the "Notice of 2007 Special Meeting of the Board of Directors" that I received. I informed her that I would not have been as upset if Disney had more thoroughly explained the need to bring up the possibility of a lien. I suggested that if it was to comply with Florida Real Estate Regulations regarding Timeshares I would have understood. She then said that DVC had to ensure all members were contacted. I replied a certified letter to members that required a signature would have been a more cordial way to guarantee that no one was upset than a letter mentioning the possibility of a lien. She agreed to convey my dissatisfaction to the marketing people. I sugested she pass the message higher up the chain of authority.

 

[king974]

I also don't think it is worth the cost. I do not see the value of a re-sale gaining $15 dollars a point if I extend.

The letter makes me think that DVC has propably had a very poor response.

 

[RobDoc]

I'm glad your guide was willing to listen to your comments.

I made similar comments at the annual meeting. Jim Lewis and Leigh Ann Nieman couldn't recall any mention of a lien - even though Jim Lewis sent out the notice of the resolution and Leigh Ann is on the DVC Board and voted for the resolution. She eventually "recalled" the lien wording after some prodding by me at the meeting.

It's sure interesting how it was so important for DVC to include the legal mumbo-jumbo instead of just providing it's members with a friendly statement about what they were offering.

 

[BobH]

It is too bad that Disney feels that they have to resort to the typical marketing bs and even go so far as to think we are naive enough or stupid enough to believe their doubletalk regrading the "lien" wording.
For WebmasterDoc: Am I to understand that there is no longer any danger of having a lien placed on us if we do not reply to the offering by February 28th. We have certainly recieved no "official" notification from DVC that this is the case? I also emntioned to Nancy Barbee that DVC should consider reading the unoffical Disney boards and DVC could get a sense of how badly they had disillusioned many loyal members.

 

[RobDoc]

For WebmasterDoc: Am I to understand that there is no longer any danger of having a lien placed on us if we do not reply to the offering by February 28th. We have certainly recieved no "official" notification from DVC that this is the case? I also emntioned to Nancy Barbee that DVC should consider reading the unoffical Disney boards and DVC could get a sense of how badly they had disillusioned many loyal members.

Yes, at the meeting Leigh Ann finally stated that the lien would be an absolute last resort - BUT - it will be used for those who fail to respond. DVC will make a concerted effort to contact any members who have not responded to the letters being sent. The February deadline will only affect those accepting the offer - on March 1, 2008 the cost per point reportedly will rise to $25 per point. Time will tell if they rigidly stick to that date for the discount. As far as I could tell, no members will have a lien on their account on February 29 for failing to decline the "offer". However, I sincerely hope that DVC sends the declination documents in a timely fashion to those who have already declined. I returned my notice back in September and have yet to hear anything. At the annual meeting they suggested that those documents will be sent in late January or February.

In response to a direct question, they did state that declining members will be able to sign the documents at the sales center when they are at WDW - although I was told I could not when I asked in October while at OKW. Stay tuned.

 

[BobH]

I wish I had remembered to ask about the documents. I have not replied yet.
BobH

 

[disnefile]

I was at the annual meeting and I feel Jim Lewis did a great job on the presentation and Disney is not resorting to Tactics as suggested. I feel that if you don't trust DVC then sell. DVC holds its value more than any timeshare and you can thank Disney for that. Only a truly lazy peron will not do the 5 minutes to handle the situation. For all those that dont extend you are throwing money out the window. If you cant see that then its a costly mistake.

This is my opinion on this whole matter. Those that want to accuse Disney of all sorts of hidden agendas on this extention are just not knowledgable about real estate law.

 

[Chuck S]

For all those that dont extend you are throwing money out the window. If you cant see that then its a costly mistake.

Please, elaborate on your thoughts.

I just decided not to extend, as I'll be 83 in Jan 2042, and have no children or close relatives...now I may get a few more years out of it, but I'll be 98 in January 2057, so I don't know if there is much value to me in extending. I don't foresee selling the contract.

But I'd like your perspective...maybe there is something I'm just not seeing. And the one year free financing is a decent offer.

 

[rogerram]

I am curious why this needs to be extended with about 35 years left on the contract. Why the rush? If someone wants to extend 10 years from now, wouldn't it be enough time for any legal documents and problems to be taken care of? It sounds like it is a way to grab more money now and hold a gun to your head, do it now or you can't later, you'll be sorry,etc. I am also curious that if some do extend and others do not, then what would happen to the points of the ones that decline to extend for 2042 to 2057? Do they use them for general reservations and make it more difficult for the members to get what they want ? i can't see them selling another membership that would be a 15 years limited use. Just a few thing I wondered about.

 

[Chuck S]

I am curious why this needs to be extended with about 35 years left on the contract. Why the rush? If someone wants to extend 10 years from now, wouldn't it be enough time for any legal documents and problems to be taken care of? It sounds like it is a way to grab more money now and hold a gun to your head, do it now or you can't later, you'll be sorry,etc. I am also curious that if some do extend and others do not, then what would happen to the points of the ones that decline to extend for 2042 to 2057? Do they use them for general reservations and make it more difficult for the members to get what they want ? i can't see them selling another membership that would be a 15 years limited use. Just a few thing I wondered about.

No matter who extends and who doesn't, it should have no impact on room availability to remaining members. It is the same at new resorts, where Disney owns and rents the finished rooms until those rooms are declared into "DVC Inventory" and points are sold. Whatever the percentage of ownership not returned to Disney is, that percentage of rooms will be available to DVC members, the remainder will be cash reservations.

I can also sort of see DVC points in "rushing" us to an extension decision. OKW is the first DVC resort to be offered the extenson. If it is not well received by OKW owners early, for whatever reason, the other 2042 resorts likely won't negotiate a lease extension.

 

[JimC]

I was at the annual meeting and I feel Jim Lewis did a great job on the presentation and Disney is not resorting to Tactics as suggested. I feel that if you don't trust DVC then sell. DVC holds its value more than any timeshare and you can thank Disney for that. Only a truly lazy peron will not do the 5 minutes to handle the situation. For all those that dont extend you are throwing money out the window. If you cant see that then its a costly mistake.

This is my opinion on this whole matter. Those that want to accuse Disney of all sorts of hidden agendas on this extention are just not knowledgable about real estate law.

I also am curious as to your perspective. There are many of us who are not accusing Disney of anything. We understand that this is a business decision for them and a value decision for the members. But if you are too old to use the extra years and have no family member who wants it, then it comes down to a resale value/marketability issue. I have not yet heard a convincing argument on that one either way, but the general direction of the discussion has not been supportive.

Now if Disney said we want to use the money for a major renovation of the resort, then I would feel very different and take the extra years as being much better than a special assessment. But that is not what Disney has said.

 

[dianeschlicht]

I was at the annual meeting and I feel Jim Lewis did a great job on the presentation and Disney is not resorting to Tactics as suggested. I feel that if you don't trust DVC then sell. DVC holds its value more than any timeshare and you can thank Disney for that. Only a truly lazy peron will not do the 5 minutes to handle the situation. For all those that dont extend you are throwing money out the window. If you cant see that then its a costly mistake.

This is my opinion on this whole matter. Those that want to accuse Disney of all sorts of hidden agendas on this extention are just not knowledgable about real estate law.

I don't agree with your opinion. I will be 95 (should I be so lucky to live that long) in 2042, and my "kids" (who are childless) will be in their mid 60's. I see no reason to spend nearly $6000 NOW for something that doesn't even go into effect for another 35 years. There is no way anyone is going to convince me that my points would be worth $6000 more on the resale marked with those 15 years added either. I don't see any way this is any kind of a winning situation for me.

 

[simzac]

For all those that dont extend you are throwing money out the window. If you cant see that then its a costly mistake.

Are you sure you didn't mean to say "For all those that do extend you are throwing money out the window" How can I be throwing money out the window by not extending.

 

[Off-The-Deep-End]

Hi all!

I have been reading with much interest the pros and cons posted about the OKW extension. Many financial analysises of future value and so on, that I really don't understand. Here is a simple argument someone else posted, that seems to make sense to me, please tell me if my KISS assumptions are correct:

Mythical 100 point contract.



OKW extension is $15.00 X 100 points or $1,500.00. Over 15 years you 'get' 1,500 'extended' DVC points total.

or $1,500.00 for current AKV at $96.00 per point is 15.62 DVC points (round up to 16 DVC points in a current 50 year AKC contract) (I know you can't buy 16 point contracts, just using simple math).

16 DVC points X 50 years is 240 DVC points over the life of the contract.

So for $1,500.00 I can get 6.25 times as many points (1,500-OKW EXT/240-AKV NEW).

Seems like a better total value for my $1,500.00, despite being 35 years away.



So what am I missing?

TIA!

 

[king974]

I For all those that dont extend you are throwing money out the window. If you cant see that then its a costly mistake.

Please tell me what the "costly mistake" is? Do you have any facts and numbers to back-up your claim?

 

[tvwalsh]

I hope all the costly mistakes I make have their effects after I die!

 

[5infam]

Been away from the DVC boards for a long time, as I was focusing on my DCL Thanksgiving trip (it was awesome BTW). This is the first I heard of this extension - are they doing this just for OKW, and why not the other resorts?

 

[JimC]

Been away from the DVC boards for a long time, as I was focusing on my DCL Thanksgiving trip (it was awesome BTW). This is the first I heard of this extension - are they doing this just for OKW, and why not the other resorts?

Just OKW for now.

Could be any number of reasons for only offering it on OKW -- the other 2042 resorts abut regular resorts and could be absorbed if not extended; OKW is oldest DVC; possible concern that the value of OKW contracts may begin to decline with SSR as a standalone DVC for competition, DVC testing the concept; quick revenue hit to meet a business goal; funding for a major OKW refurbishment that they did not want to use a special assessment to complete....

 

[sjdisneywedding]

so for everyone not extending....

would you have bought the extra 15 years up front if it was offered?

say you had the choice between 50 years at $60($1.20 pp)
or $65 years at $75($1.15 pp)

which would you have chosen?
I bet many would have taken the 65 years regardless of what their age is going to be in 2042.