RMA2020

AGENDA

•Primer on Players, the history and the legal landscape

Understanding RMA2020Understanding RMA2020Understanding RMA2020Understanding RMA2020

•Professional representation and developing consensus among homeowners

•A call to action

•Misconceptions, misinformation and points of disagreement

•The value of long term certainty

Creating A Path ForwardCreating A Path ForwardCreating A Path ForwardCreating A Path Forward

•Alignment of vested interests and value added to date

BMR’s Rental Management RecordBMR’s Rental Management RecordBMR’s Rental Management RecordBMR’s Rental Management Record

UNDERSTANDING RMA 2020

THE PLAYERS

•Responsible for hallways, parking garages, mechanical systems, exterior features and

grounds

•Governed by the Ontario Condominium Act. Direction and oversight is provided by a Condo

Board made up of owner-volunteers

Condo Corporation: Property Condo Corporation: Property Condo Corporation: Property Condo Corporation: Property Manager Manager Manager Manager and Condo Boardand Condo Boardand Condo Boardand Condo Board

•As a requirement of the Condo Declaration and Zoning, every owner is party to a Rental

Management Agreement (RMA), implemented by the Rental Manager.

•The current RMA expires in November 16, 2020

Rental Rental Rental Rental ManagerManagerManagerManager: Blue Mountain Resorts : Blue Mountain Resorts : Blue Mountain Resorts : Blue Mountain Resorts

•A regular user of your village unit, subsidising the costs of ownership with rental income?

•An investor expecting ROI from rental income?

•An investor expecting ROI from equity growth?

Unit Owners: Who are you? Unit Owners: Who are you? Unit Owners: Who are you? Unit Owners: Who are you?

THE HISTORY

With village agreements in place in

1999, GG opens 2001, WL opens

2002, SAB opens 2003

$119M invested by homeowners,

unit sales are strong with $/ft2

prices increasing each year

Recession in 2007 significantly

revalues condo-hotel units at ~25%

below original sales price.

56% of unit owners have purchased

since 2007

Since 2001, BMR invests over $125M

in ski facilities, conference center

and summer attractions, driving

average occupancy from 45% to 63%

annually

THE LEGAL LANDSCAPE

On Title

Municipal

Provincial BMVA ACT

Official

Plan

Condo Discovery

Condo Declaration

Zoning

and Bylaws

RMA

LEGAL LANDSCAPE –PROVINCIAL/MUNICIPALProvincial Blue Mountain Village Association Act,1999Provincial Securities Act exemption

Municipal Official Plan:• Designates the Blue Mountain Village Core as the primary commercial

center for the surrounding area

Municipal Zoning and Bylaws: • Taxation based on residential, not commercial tax rates• Defines a VCRU different from a CRU or STA. • VCRUs cannot be a principle residence• Limits owner occupancy to 10 days per month, 120 days annually• Limits owner rental opt-out to 20% of units.• Obligates a complex be party to a single rental management program

LEGAL LANDSCAPE – ON TITLE

Condominium Disclosure and Declaration• Consistent with the zoning and definition of a VCRU• Limits owner occupancy to 120 days annually. • Limits owner rental opt-out to 20% of units on a FCFS basis.• Defines the owners proportionate share of common elements and revenue• Defines the relationship with and obligations to the VA• Defines the relationship among GG, SAB and WL• Obligates the complex be party to a management program• Defines the Rental Management Unit and exclusive use common elements

RMA• Consistent with zoning and Condo Declarations• Binds each owner to the Rental Manager

CREATING A PATH FORWARD

PROFESSIONAL REPRESENTATION

An RMA2020 committee representing three building needs to be established soonsoonsoonsoon to:

• Develop a scope of work, terms of reference and an RFP• Select and task a qualified hospitality industry consultant

The consultant should be tasked with:• Establishing realistic and representative homeowner goals and objectives• Securing legal advice as required• Negotiating a new RMA• If required, identifying and evaluating qualified third party rental managers • If required, tendering an RFP• Making a recommendation to the committee

The RMA2020 committee must then:• developed 67% (or 80%) consensus among unit owners in each of the

three buildings• Secure an affirmative vote

DEVELOPING CONSENSUS

• 67%67%67%67% A supermajority, representing 67% of units in all three

buildings, is required to hire or terminate a Rental Manager

• 80%80%80%80% A super-duper majority, representing 80% of units in all three

buildings, is required to amend the condominium declarations.

• 15% 15% 15% 15% An owners meeting may be called at the request of 15% of units

In our experience:• Achieving consensus among homeowners will not be easy • Achieving consensus among the three buildings will not be easy• The committee's work will be complicated, expensive and probably

thwarted if the goals and objectives are too broad and require changes in declarations and zoning

• The committee's work will be long, expensive and probably thwarted if points of disagreement end in legal challenges

CALL TO ACTION

Hold your representatives accountable for: • Constructive collaborationcollaborationcollaborationcollaboration among the three buildings• Advocating realistic realistic realistic realistic and representative goalsrepresentative goalsrepresentative goalsrepresentative goals• Setting a pace of progress pace of progress pace of progress pace of progress that gets you to the finish line• Communication and Communication and Communication and Communication and transparencytransparencytransparencytransparency

You can put your representatives on record. Ask each one: • What are your goals personally and for the membership• What specifically do you want to achieve• How are you representative of all owners• How will you get along with members that disagree with you• Are you a consensus builder or a pot stirrer. Give me an example• Characterize your relationship with the three Condo Corporations• Characterize your relationship with the current Rental Manager

MISCONCEPTIONS AND MISINFORMATION AND POINT OF DISAGREEMENT BMR monitors a number of public forums including AGMs, Condo Central and the GG Homeowners Facebook page. In addition BMR hosts various events homeowner meetings and social events including this one. Further, we deal directly and regularly with the three Condominium Corporations on operational matters. As we approach 2020 we are growing alarmed at the lack of progress, disparate factions, radical ideas and in some cases, open hostility directed toward BMR. • The Condo Board can replace the rental manager• This investment doesn’t make money• BMR will not negotiate the terms of the RMA• I can make more money renting privately• After 2020 there is no requirement to purchase the Rental Management

Unit• Airbnb is awesome!• I can do what I want if I leave the rental pool

THE VALUE OF CERTAINTY

The RMA is rooted in declarations, municipal planning and provincial acts. This is the foundation on which your investment is secure and part of the basis for future investments by Village stakeholders.• Under Alterra ownership BMR will continue to invest and grow its three

business pillars, namely winter ski, summer attractions and spring fall conference. We are very optimistic for the future. Our vested interests, through the RMA, are currently directly aligned with yours. Investors value certainty

• Guests of the Village and Blue Mountain do not distinguish among owners. There is strength in providing seamless packaged high quality experiences. Guests value consistent standards

• BMR enters into contracts with some conference groups more than a year in advance. We are currently contingency planning around the potential for Rental Management disruptions. Meeting planners demand certainty

• BMR is actively investing in emerging markets that are integral to our medium term strategy. One of the biggest opportunities is wholesale lodging.

BMR’S RENTAL MANAGEMENT RECORD

HOW BMR ADDS VALUE TO YOUR INVESTMENT

• $125M in new investments in ski, conference and attractions have driven occupancy from 45% to 64% in 16 years

• Conference sales and service sales have increased group room nights to 79,000 of 238,000 total. Last year, groups accounted for 48% of the GG occupancy

• Housekeeping has met the challenge of regional labour shortages by recruiting nationally and internationally, successfully securing foreign workers, managing 200 staff housing beds

• Advocating for homeowner issues at municipal meetings• Providing a qualified security service• Supplying and maintaining IT infrastructure including PBX phone switch,

online sales capacity, state of the art reservations systems

QUESTIONS