The irony of it all!

Childhood is a short but important time to learn the values of honesty, integrity, loyalty and friendship. Throughout these years, those of us fortunate to have great parents also learned the hard lessons of taking responsibility for one’s actions. Mothers and fathers alike remind their children that they may not like the consequences related to an action, but the hallmark of adulthood is owning up to one’s errors and being prepared to face consequences.

At the last bi-annual meeting it was commented, “we should all act like big boys and girls” and recognize that the numbers provided by Boyne Realty prior to purchase, were simply projections, not guarantees. This is a very astute statement that alludes to the fact that we each should have acted responsibly by doing our own homework and asking good questions. I guess those of us who also were shown artist renderings of a Bavarian Village should have also completed our homework to somehow learn that it would never come to fruition.

Putting that aside, I must admit the irony of the comment when it is placed into a very similar context. During the meeting Stephen Kircher was kind enough to share with us various graphs that displayed favorable figures depicting that the MGL Association pays the lowest management fee per square foot in comparison to other Boyne managed properties. When I questioned Stephen about the source for this information he became extremely agitated and deflected his anger on me by accusing me of “always coming up with conspiracy theories about Boyne.”

So in this sense I am left scratching my head wondering when it is appropriate to ask questions. Having great childhood rearing I will take fault for not visiting the local city and development planning committee to confirm the validity (or faultiness) of the information shared by Boyne Realty. One thing I will not concede to, is taking facts and figures provided by Boyne at face value. Similar to any due diligence that is completed prior to purchase I will continue to question the validity and accuracy of data and information provided by Boyne.

Subject: Truth, fiction or fear mongering

During the course of events on Saturday the exit committee made its report to the membership. As part of the report the committee chairman, Brian Donahue, mentioned that there is pending litigation surrounding the sale of units at the Mountain Grand Lodge. The litigation stems from allegations of violations of the Securities and Exchange Act. Due to the fact that it is pending litigation, few details were available for discussion. However some interesting comments and speculations were made.

Stephen Kircher wanted to ensure that there was no merit to the allegations, and that the case would not succeed. While his dismissive reassurances were appreciated by some others suggested that we wait for all the information to be presented before jumping to conclusions. It was suggested by members of the Exit Committee that all owners take a few moments to research condo-tels and the manner in which they are sold as well as the securities and exchange act violations surrounding the sale of condo-tels throughout the nation.

Mr. Kircher further went on to speculate that it could be the downfall of Boyne and Mountain Grand Lodge. While the doomsday prophecy is interesting to consider one would have to ponder the chain of events that would have to happen for the prophecy to come true. One conclusion could be that the legal fees surrounding the litigation would be so overwhelming to Boyne that it would drive them into financial ruin. Another conclusion might be that Boyne would be found guilty because they did violate the securities act and in turn would have to pay the damages awarded by the court, which would financially ruin Boyne. So realistically, Mr. Kircher is saying that Boyne’s capital and cash flow is so limited that it does not have the resources to defend itself against what he perceives are false allegations, which is poor management or poor performance on their part, and leaves one to question their management capabilities. The other potential interpretation of this message is that they are guilty and cannot afford to payout the penalties.

A step back from the doomsday prophecy is the realm of neutral and negative consequences. The negative consequences stemming from the side of real-estate is that litigation may prevent someone from trying to sell their unit. A couple points to consider,

a) There are 17 units for sale right now, 9 of which are foreclosures. So the realistic probability of anyone selling a unit that is not a foreclosure is very slim.
b) The litigation to the best of my knowledge is not on or against the property itself so much as to the actions, misrepresentations and omissions of the parties involved in selling the units. Hence the litigation would be against persons and entities, not against the property itself thus, not creating any encumbrances on the property regarding sale transactions.

An observation from one of the members of the audience was that litigation would only serve the lawyers presenting the case. This theory might have one believe that in the face of adversity, disenfranchisement or in violations of federal law, one is better doing nothing than engaging in legal recourse. I must respectfully disagree.

To be fair, it should be noted that legal recourse is used as a last resort, as it has been in this case. The history of the association, its members, committees and Board of Directors to resolve issues and inequities in good faith and to avoid litigation have not succeeded in the past. Therefore it stands to reason that a natural progression of impasses of negotiations would lead to litigation.

Under current conditions, as an owner, Boyne would prefer that we do nothing out of fear of an implosion of Boyne and the loss of our investment. (9 investors already have lost their investment) Others would have you do nothing, to the thought that nothing can be done. I believe in the philosophy, who dares wins!

Live Streaming Video of Association Meeting

Good Afternoon fellow,

In preparation for the upcoming Association Meeting on May 2, 2009, I have set up a channel on UStream that will facilitate the LIVE broadcast of the meeting. For those that are not able to attend the meeting in person, please make the necessary arrangements to attend remotely. The meeting is scheduled to begin at 9:00 a.m. but I will begin the broadcast at 8:30 a.m. to assist individuals with any technical issues they may be experiencing.

For additional details, click on http://groups.google.com/group/mgloa/web/live-streaming-video-of-association-meeting?hl=en - or copy & paste it into your browser's address bar if that doesn't work.

Mountain Grand Lodge Update

This is not new news if your an owner with a valid mailing address but just more of a remainder for the May 2nd association meeting.

Dear Fellow MGL Owners,

Your Board of Directors just had our first quarterly meeting since our memorable annual meeting in November. Randy Frykberg has stepped down as President so that I, Gary Bloodworth, can be your new President. Thank you, Randy, for your fine efforts over the last 4 years.

I would also like to thank Cindy Johnson, our newest member, for the great job she is doing. I can’t forget our friends Dan Aitken and Steve Rice also.

I will try to keep you updated quarterly as notable issues are developing. I’d like to do this by email to keep our costs down, so if you haven’t updated Customer Services with your current email address, please do so.

We have worked hard on the budget for 2009 and with Boyne’s help have kept this year’s increase to only 1.7%. Boyne has agreed to drop their management fee of 13% (which was $178,000 in 2007) to a flat $120,000 this year. It will be adjusted by the CPI in the future. See the enclosed copy of the budget for your unit amounts.

More good news, our negotiations on your behalf with Dan Bolle, the Tax Assessor, have paid off. He has been extremely cooperative and understanding. Everyone’s taxes should be going down. The slope-side unit assessments will go down by a smaller amount than the parking lot side units. In the past, all similar units were assessed the same even though slope-side units sold for more and generate higher rental income and more nights rented. Your actual assessment notices should mailed by the end of February. I’m still working on an even larger reduction for quarter-share owners, who I think are assessed too high.

Mark your calendars for a May 2nd Special Meeting at 9:00a.m. Many important issues including an update from the Exit Committee will be discussed.