Old Key West different expiration dates....

[xdan0920]

So, as most of you well know, DVC offered a 15 year extension to the original OKW contracts in 2008. My DVC contract doesn't have the added 15 years, so it expires in 2042. My questions are....

What is DVCs plan in 2042 when all of a sudden a ton of contracts drop out?

Are they going to offer the extension again prior to that? Will they just try and sell 15 year contracts starting in 2042?

Will they continue to have staggered expiration dates for all time?

 

[jakeman]

So, as most of you well know, DVC offered a 15 year extension to the original OKW contracts in 2008. My DVC contract doesn't have the added 15 years, so it expires in 2042. My questions are....

What is DVCs plan in 2042 when all of a sudden a ton of contracts drop out?

Are they going to offer the extension again prior to that? Will they just try and sell 15 year contracts starting in 2042?

Will they continue to have staggered expiration dates for all time?

I would assume they will offer extension at some point, but it could be another 20 years before they really have to do anything I would think.

Or they will allow you the "opportunity to purchase" your contract back at the current market rate in 2042 ($1 billion a point for a 50+ year old resort).

 

[Hakunamatata]

I would think various end dates would make it really hard for Disney to ever decide to raze the place and start over from just dirt.

 

[xdan0920]

I would assume they will offer extension at some point, but it could be another 20 years before they really have to do anything I would think.

Or they will allow you the "opportunity to purchase" your contract back at the current market rate in 2042 ($1 billion a point for a 50+ year old resort).

I've always felt like they painted themselves into a corner here. If they couldn't get everyone to re-up for 15 years at $25 a point back then, what are they going to try and do for their (presumed) second offering?

And let's say folks still decline. Then what? How does the resort function once all those dues stop coming in?

 

[Hakunamatata]

I've always felt like they painted themselves into a corner here. If they couldn't get everyone to re-up for 15 years at $25 a point back then, what are they going to try and do for their (presumed) second offering?

And let's say folks still decline. Then what? How does the resort function once all those dues stop coming in?

My guess is they will phase down buildings or groups of buildings and run a skeleton crew, or they will be offering sweet deals for cash stays. They might also turn the place into CP housing?

 

[LAKid53]

My contract at BR expires in 2042. I'll probably be dust by then. But yeah, gonna be a real problem if I lose 200 points.

 

[Tiggerish]

Interesting questions. I didn't take the OKW extension, either. Because in 2042, I'll be 79 years old and with no offspring to bequeath ownership to, it didn't make sense. I wonder what percentage of OKW ownership didn't take them up on it.

 

[LAKid53]

Interesting questions. I didn't take the OKW extension, either. Because in 2042, I'll be 79 years old and with no offspring to bequeath ownership to, it didn't make sense. I wonder what percentage of OKW ownership didn't take them up on it.

I'll be 10 years older than you. Neither one of my parents lived past 80 and while my grandmother died at 92, she had Alzheimer's the last 7 years of her life. So it will be my daughter's problem if I can't extend the contract at BR.

 

[xdan0920]

My guess is they will phase down buildings or groups of buildings and run a skeleton crew, or they will be offering sweet deals for cash stays. They might also turn the place into CP housing?

HA! Can you imagine the backlash if they turned over Turtle Pond to the CP program. Pitchforks and torches wouldn't do it, it would be tactical nukes.

Interesting questions. I didn't take the OKW extension, either. Because in 2042, I'll be 79 years old and with no offspring to bequeath ownership to, it didn't make sense. I wonder what percentage of OKW ownership didn't take them up on it.

At the time it was offered my Nan still had the DVC in her name, she asked me if I wanted to take the extension since she knew the points were coming to me, at the time 2042 sounded a long ways away, so I declined. I do wish I would have done it though.

It doesn't seem like a huge portion of people took them up on it. Because, like yourself, you are of a certain age when you buy DVC typically. And when you do the math, it doesn't make sense. Enough bought to make this an issue going forward though, I would think.

 

[slappy magoo]

Has the percentage of contract extensions ever been publicly released?

My guess is they'll do a combo of two things - offer the rooms for cash, and offer "short term" vacation club memberships for what would have been the 15 year extension. Sure won't be $25 a point anymore. At the rate they increase prices, by 2042, new DVC memberships will be at least $300 a point (and I'm being conservative), and it at least seems like it outpaces inflation/cost of living so it's going to be harder for people to afford it. So for people of the 2040s who Just Aren't Sure If DVC Is Right For Them...a contract that expires in 15 years or less for "only" $60-70 a point might be a way to get a new generation hooked on their product.

 

[dreamfinder]

No one knows. I don't think I've ever seen a solid plan for what happens once points revert back to DVD. OKW will be different because of those 15 year extensions, and how the deeds were actually sold. If the deeds entitle you to a percentage of a certain unit, then they really can't close down some buildings and consolidate owners in the others without swapping deeds. (I can't recall if the deed states unit or not) I think that selling new deeds on a 50yo property will be a tough sell, especially considering what new points would be running at the time.

 

[xdan0920]

Has the percentage of contract extensions ever been publicly released?

My guess is they'll do a combo of two things - offer the rooms for cash, and offer "short term" vacation club memberships for what would have been the 15 year extension. Sure won't be $25 a point anymore. At the rate they increase prices, by 2042, new DVC memberships will be at least $300 a point (and I'm being conservative), and it at least seems like it outpaces inflation/cost of living so it's going to be harder for people to afford it. So for people of the 2040s who Just Aren't Sure If DVC Is Right For Them...a contract that expires in 15 years or less for "only" $60-70 a point might be a way to get a new generation hooked on their product.

I don't think so. I would absolutely love to know what percentage of folks bought that extension though. It could go a ways towards trying to figure out what DVC plans to do.

Your guess sounds reasonable enough, but I still don't see how they will sell enough of those mini-contracts to generate enough annual dues money. And then what? Double the dues for the people that did extend?

Such an interesting question.

I really think they aren't going to have a choice but to go back and offer the 15 year extension at approx the same price point. They have to get those points sold.

 

[xdan0920]

No one knows. I don't think I've ever seen a solid plan for what happens once points revert back to DVD. OKW will be different because of those 15 year extensions, and how the deeds were actually sold. If the deeds entitle you to a percentage of a certain unit, then they really can't close down some buildings and consolidate owners in the others without swapping deeds. (I can't recall if the deed states unit or not) I think that selling new deeds on a 50yo property will be a tough sell, especially considering what new points would be running at the time.

I think, the idea for the other non staggered resorts, would be, knock em down in 2057, and build a new one, and resell it. $$$$$ up the wazzoo that way. At OKW, I don't see how you could knock down half the resort in 2042 and expect the members who extended to not go nuts about that happening.

 

[Hakunamatata]

I don't think so. I would absolutely love to know what percentage of folks bought that extension though. It could go a ways towards trying to figure out what DVC plans to do.

Your guess sounds reasonable enough, but I still don't see how they will sell enough of those mini-contracts to generate enough annual dues money. And then what? Double the dues for the people that did extend?

Such an interesting question.

I really think they aren't going to have a choice but to go back and offer the 15 year extension at approx the same price point. They have to get those points sold.

If the contract reads that maintenance is the sole responsibility of the member owners then dues will become ridiculously expensive.

 

[nickys]

First off, paging @helenabear !

But I agree that no one knows what they will do. By the time the contracts expire, the resorts will be 60 years old. No matter how many refurbs they do, they will likely need a major update.

And as far as I know, the extension offer @ OKW was not a success. Very few extended. So that suggests they may not go down that route again. How do you deal with that? If you have say 20% who extend there has to be a resort there for them to stay at! What do you do with the rest? Hard to sell an out-dated resort "as new".

Edited to correct some awful typos

 

[anchorman314]

No one knows. I don't think I've ever seen a solid plan for what happens once points revert back to DVD. OKW will be different because of those 15 year extensions, and how the deeds were actually sold. If the deeds entitle you to a percentage of a certain unit, then they really can't close down some buildings and consolidate owners in the others without swapping deeds. (I can't recall if the deed states unit or not) I think that selling new deeds on a 50yo property will be a tough sell, especially considering what new points would be running at the time.

FWIW, my family's contract/deed at OKW does specify a particular unit #.

 

[correcaminos]

First off, paging @helenabear !

But I agree that no one knows what they will do. By the time the contracts expire, the resorts will be 60 years old. No matter how many refurbs they do, they will likely need a major update.

And as far as I know, the extension offer @ OKW was not a success. Very few extended. So that suggests they may not go down that route again. How do you deal with that? If you have say 20% who extend thee has to nbe a resort there for them to stay at! What do you do with the rest? Hard to sell an out-dated resort "as new".

Honestly I have nothing more to add to this other than no one knows.

First of all, the deal with OKW was not that you got an offer to extend as much as you got an offer to decline the extension. So if you signed a quitclaim deed (or the person you bought it from) your points expire in 2042 just like the other 2042 resorts. OKW technically now ends at 2057. That's how it is written up. So if you did not sign the quitclaim deed or you bought direct after the whole fiasco, you automatically get the 2057 end date, because that is how OKW is written up. That was their mistake with all of this. OKW will now go past the 2042 end date.

As for fees, those who have the 2042 agreement, they will not pay into some of the future fees for a while. The legality of stuff that I don't know/understand is can they say to the remainder "There are now only 1 million out of the original almost 7.7 million points so you change the percentage you pay" That I don't know about and I'm not sure everyone does know what will happen. Also as mentioned my contract mentions building 46 if I remember correctly. So you are tied to an actual building and we happen to be middle of the road with the number. My guess at OKW is that they will do a big refurbishment and resell to new people who will front that cost for them. Whether or not they offer a deal to previous owners, I won't guess.

I can guarantee this, they will not make the same mistake twice with the extension. If they offer anything it will be an opt IN not opt OUT as was previously done. They really screwed themselves with that. They also angered people. You cannot force people to agree to pay because Disney wants to change the terms - which they did. There were many who opted to do nothing and will ride it out in the end and see where it goes.

I'm in that camp accidentally. My guide lost our paperwork. We had to get it notarized and everything and sent it in properly. It's gone. No record of us signing the quitclaim deed. So technically we have a 2057 date since that is when OKW ends, but we didn't pay. I sort of want to see how things shake out in the next decade or so with it.

 

[nickys]

Honestly I have nothing more to add to this other than no one knows.

First of all, the deal with OKW was not that you got an offer to extend as much as you got an offer to decline the extension. So if you signed a quitclaim deed (or the person you bought it from) your points expire in 2042 just like the other 2042 resorts. OKW technically now ends at 2057. That's how it is written up. So if you did not sign the quitclaim deed or you bought direct after the whole fiasco, you automatically get the 2057 end date, because that is how OKW is written up. That was their mistake with all of this. OKW will now go past the 2042 end date.

As for fees, those who have the 2042 agreement, they will not pay into some of the future fees for a while. The legality of stuff that I don't know/understand is can they say to the remainder "There are now only 1 million out of the original almost 7.7 million points so you change the percentage you pay" That I don't know about and I'm not sure everyone does know what will happen. Also as mentioned my contract mentions building 46 if I remember correctly. So you are tied to an actual building and we happen to be middle of the road with the number. My guess at OKW is that they will do a big refurbishment and resell to new people who will front that cost for them. Whether or not they offer a deal to previous owners, I won't guess.

I can guarantee this, they will not make the same mistake twice with the extension. If they offer anything it will be an opt IN not opt OUT as was previously done. They really screwed themselves with that. They also angered people. You cannot force people to agree to pay because Disney wants to change the terms - which they did. There were many who opted to do nothing and will ride it out in the end and see where it goes.

I'm in that camp accidentally. My guide lost our paperwork. We had to get it notarized and everything and sent it in properly. It's gone. No record of us signing the quitclaim deed. So technically we have a 2057 date since that is when OKW ends, but we didn't pay. I sort of want to see how things shake out in the next decade or so with it.

I knew it had been a mess, just didn't know exactly why!

I knew you would know. Thanks

 

[correcaminos]

I knew it had been a mess, just didn't know exactly why!

I knew you would know. Thanks

Glad to help with it. Ufnortunately, it affected us personally. Or fortunately maybe. At this point in our lives we're much more likely to pay that $25 per point. Seems like a bargain compare to the prices now LOL

 

[slappy magoo]

OK, so here are my wild-eyed predictions, such as they are, grain of salt, all that crap...

After 2042, Disney will assume the responsibility for the maintenance fees for the points it now owns. They won't try to pass it off to the remaining owners and I don't think legally they could. Just because fewer people own points overall as of 2043, that doesn't mean those that own suddenly own more. If DVC at that point controls 85% of the points, they assume 85% of the maintenance fees.

But unlike DVC members, they won't be beholden to the rule that you can't use points as a money making venture. After all, had they never offered the extension, then once they had control of 100% of the points, they could choose to make it a regular "cash" resort, couldn't they? Someone please let me know if I'm wrong. As I often say, it won't even be the first time I'm wrong today, let alone ever.

Now here's theory #1 - Old Key West becomes the DVC equivalent of the promotional offer other timeshare companies inundate your spam box with (or your fax if you still have one because you're a lawyer and/or old ) When guests book a week anywhere else, they'll get an offer to extend their trip for an extra 3 nights at a studio OKW for "only" $X. What that price will be will depend on what rooms in deluxe or DVC resorts go for at that point in the future. And you'll be able to upgrade to 1BR/2BR/Grand Villas based on availability. But it'll only be for 3 nights. AND it will be contingent on the adults sitting in on a pitch for whatever the newest DVC resort will be, but maybe you'll get freebies like those extra days on your park tickets, or tix for the waterparks or fastpasses etc.

Meanwhile, if it's at all legal, DVC will go to the remaining owners, those who extended, and entice them to relinquish the remaining ownership in their points so they can raze and rebuild, much like a developer offering above market value to homes on a block he'd like to convert into a condo or something. If they don't offer the $25per point back, maybe offer a partial buy back and a swap for other DVC points they have in stock, even if they expire before 2057.

If they can't do that, then you'll see a disproportionate amount on overbooking at the Values and Mods so they can give guests a "complimentary upgrade" to OKW. Or they'll do that anyway until they're in a position to raze and rebuild. After all, as much as they'd like to profit from the rooms, as long as they break even with the maintenance fees they'll have to shell out to themselves, they're not that much worse off than they would be anyway if it remained a DVC resort as it currently is. And if booking All-Star resorts at 120% occupancy so they can take the overspill and move them into larger digs and shift that money for the rooms, "on paper" to OKW, it all balances out.

The only potential downside is if guests start to get the impression, earned or not, that OKW is a pit because it's so old. Even keeping up with the maintenance might not salvage the rep that it's an old resort. But at that point many of the resorts we know and maybe love will be even older, so who knows if that will be an issue. There will be complaints about location, but is it really that much worse off than most of the Values? You're still a boat ride to Disney Springs.

So that's my take on it. I wouldn't bet money it, but that's because I'm a DVC member and therefore, cash-poor