Beachside Tennis VillasLong Range Planning Committee

Owner Update-January 2013

Objectively evaluate our property in the marketplaceOwnersReal Estate CompaniesRental Companies

Consider Future Options to: Maintain market competitiveness Maximize recreational enjoyment for

owners & guests Maximize property values and rental return

LONG RANGE PLANNINGWHY?

Recommend common property upgrades –to achieve objectives

Offer specific preliminary design proposals

Provide budgets and funding strategy to complete the projects.

LRP COMMITTEECHARTER

Compared BSTV to 7 other comparable properties in Palmetto Dunes, Leamington and Shelter Cove

All properties were similar in :Complex size (# of units) Unit size 6 of 7 on ocean All considered resort quality Significant percentage (# of units) in the rental

market.

Compared properties in 17 categories

AMENITIES SURVEY-Completed in March 2012

BSTV- excellent quality of facilities and maintenance

All other properties have:heated poolshot tubschildren’s pool area upgraded pool area with landscaped lounging decks, Man-made shaded areas /structuresUpgraded entrance areas for inviting and to protect

guests from inclement weather.Owner storage

AMENITIES SURVEY-Observations

1. Deck Enhancement a) New viewing and lounging deckb) Replace current wooden deck surfacec) New fence d) New pool furniture

2. Pool Heating & Equipment Efficiency UpgradeHeat the pool from early March to June and from early October through Thanksgiving

3. Tropical Landscape Upgrade , Path & Amenities (Linear Park)

Along the inside of dunes with swings, hammocks, fire pit and new tropical landscaping

4. General and Bicycle Storage Building 5. Enhance Main Entrances of both buildings

5 PROPOSED PROJECTS

$1000 TO $1200/UNIT/YEARFOR 3 YEARS ONLY

FOR EVERYTHING!

THAT IS LESS THAN $100/MO

HOW MUCH WILL THIS COST?

• Increased rental rates • 1 to 3 weeks additional rental weeks

• Increased property values

• Maximum personal enjoyment for owners, family and guests:• Amenities to enjoy(lounging, fire pit, hammocks, etc)• Take advantage of our setting and view• Added recreational time (shoulder season)

WHAT’S THE PAYBACK?

Hot Tub-cost, maintenance , controls

Children’s Pool-New ADA Regs, impractical , costs

Shade pavilions-umbrellas are cheaper and more flexible

Beach walks- Sea Pines limitations, cost, maintenance

What’s Not Recommended? Why?

#1 Deck Enhancements

Maintain BSTV as a premier competitive property on Hilton Head

Maximize: Rental revenue Resale value Owner enjoyment .

Raised Additional deck space for lounging near the pool with 30+ added lounging

Opportunity to enjoy the spectacular panoramic views of the beach and of the sunset.

Facelift of current pool features

Additional Amenities and spaces to congregate.

#1 Deck Enhancement-Benefits

Anticipated Costs – $125,000 New Deck-$65,000 Resurface old wooden deck-$15,000 New Fence- $20,000 Replace Existing Pool furniture-$10,000 New Deck Furniture-$5,000 Contingency - $10,000

A capital reserve of $45,000 has already been allocated to fund maintenance of some of these items in the next 3 years.

Net Additional cost of this project is $80,000 ($125,000 - $45,000).

#1 - Deck Enhancement -Costs

Extend the swimming season and owner/guest enjoyment by 4 months.

Significantly improve efficiency & reduce operating costs

Increase opportunity and enjoyment for owners, families and guests

Maintain competitiveness with other properties

Increase rental rates and rental return through added bookings

Compensate for the loss of the heated pool at the Plantation Club

#2 – POOL HEATING AND EQUIPMENT EFFICIENCY UPGRADES-WHY?

60% to 65% of the units are on the rental market.

Extensive surveys of rental management data: In the spring and fall our rental occupancy is 50%. Comparable properties with heated pools are 65%+ Every rental company contacted agreed that this feature would

allow increased year round rental rates AND 2-3 additional rental weeks in shoulder season

Every rental management company surveyed said this was the #1 enhancement to improve rental revenues and keep up with the competition.

Improved competitive position increases market value

#2 – POOL HEATING AND EQUIPMENT EFFICIENCY UPGRADES-

Economic Justification

Anticipated Project Costs - $55,000 New heat pumps - $35,000 Improve the Efficiency of the current system - $15,000 Contingency - $5,000

Capital Reserve set-aside of $18,000 in the next 4 years to upgrade the equipment reduces the Net Additional Cost to $37,000

More efficient system is expected to reduce current annual energy costs by $3,000-$3600 per year.

Additional costs for pool maintenance and heating is only about $8,000 per year. Net added cost is only about $5000 per year.

On a per villa basis – Investment costs are only $680. Annual added operating costs ~ $50.

#2 – POOL HEATING AND EQUIPMENT UPGRADES-Costs

#3 LANDSCAPE, PATHWAY, LINEAR PARK & AMENITIES

Anticipated Costs - $45,000Swings and deck structures-$5000Re-landscaping, hammocks and fire pit-$35,000Contingency - $5,000

Capital reserve set aside of $15,000 for landscape refurbishment reduces Net Added Cost to $30,000

Provides more common space to relax and a place for families to enjoy “s’mores” after dinner, looking out over the dunes to the beach

Connects the pool with the dune crossing points.

#3- LANDSCAPE UPGRADE-COSTS AND BENEFITS

#4 – BICYCLE AND GENERAL STORAGE BUILDING

Anticipated Costs – $40,000

Added between pool house and parking lot on east side of building

Space for approximately 30 bikes

Added space for small lockable bins above bikes-approximately 3 foot wide X 6 foot high in front and 6 foot deep.

Bike and general storage could be rented by owners to cover construction and maintenance costs for the building. $75 /year/bike & $250/year for storage pays building in 9 years

#4 – BICYCLE AND GENERAL STORAGE BUILDING

#5 – ENHANCE BUILDING ENTRANCES

2012 10-31 over head photo beach and pool area - zoomed view.jpg.lnk

Preliminary design concept with front structure and awning covered walk to building

Added architectural design work needed to assure maximum attractiveness to entrance and consider lobby features.

Provides attractive and clear entry point for both buildings.

Gives covered access to each building from the parking lot.

Anticipated costs - $50,000

#5 – ENHANCE BUILDING ENTRANCES

Project #1 – Deck enhancement – $125,000 Project #2 –Pool Heating & Upgrade – $55,000 Project #3 – Landscape/Linear Park – $45,000

Subtotal $225,000 Less: Maintenance funding $78,000 Subtotal Net Cost $147,000

Project #4 – General Storage – $40,000 Project #5 – Enhance Main Entrances - $50,000

Subtotal Net Cost $90,000

All 5 projects – total cost of $315,000

Total net additional cost to owners- $237,000

SUMMARY OF COSTS

Finance project over 3 years

Assessment on owners for 3 years

Complete Projects 1 thru 3 in Winter 2013

Complete Projects 4 & 5 in 2014

Average anticipated assessment -$1000-$1200 per year for 3 years (Less Than $100/mo)

PROPOSED FINANCING PLAN

Power Point proposal on www.beachsidetennisvillas.net

Presentation to Owners Meeting in March

2013 Winter/Spring-Gather Owners feedback

Summer 2013 Refine plans and implementation strategy.

WHAT’S NEEDED NEXT?