Our island is in turmoil at the moment, both economically and politically, and many traditional markets are seriously challenged.
The ESJ community is also challenged and what is going on is sad and not to the benefit of any of us. This is the time for our community to come together to discuss rationally a strategy for the future that we all want and deserve.
Our single biggest economic challenge at the moment is the insurance renewal. As you know, our historical carrier Chubb paid us less than 25% of our hurricane claim which has resulted in the restoration of the building being stalled.
As a follow-up to the updates you have received on the insurance, we secured a two-week extension, for which ESJ Towers Inc. paid $127,000 on behalf of the community as the HOA does not have sufficient funds. The extension runs out this Friday, July 26th. Under the bylaws, the HOA has the responsibility to insure the building for no less than 80% of the replacement value. We have an obligation to our full owners, vacation owners, vacation club members and the community and cannot let this slip beyond Friday.
This has not been an easy task as the insurance market is incredibly restricted now and beachfront properties are especially difficult to place. We understand that there are still some beachfront condominiums which have been unable to secure insurance at all. In our particular case, the insurance market has been further confused by multiple groups seeking the same coverage.
Regardless, we have now secured a replacement policy with AIG. However, due to the issues listed, the premium increase is approximately over 80% taking the annual cost to more than $2 million. We are aggressively negotiating that offer but have limited options.
We will be calling an EGM to review and ratify, but would also draw your attention to the owners meeting we held to present the insurance on May 22nd, 2019 and the report provided by HUB. Both are available on the web site. We will also be forwarding a report on the current status of a claim with Chubb for your information.
In order to meet this insurance obligation, we would ask that everybody who has outstanding maintenance fees or assessments get those payments made immediately. We are in the process of automating owner payments through a new RDP portal. Effective from September 1st all owners will be able to make payments online and automated. This should help us significantly in the collection of funds, but please make your payments as soon as possible.
We are at a moment of crisis and must come together. I met with Channa Cohen on Friday to suggest that we work together for the betterment of the community goals that we all subscribe to. We are also working with the owner group to endeavor to secure a more competitively priced policy.
It’s time to come together.
ESJ Towers, Inc.