HKR is ripping us off

HKR (Hong Kong Resorts company) is a typical HK property developer which, though listed on the HK stock exchange, is controlled by a single family, in this case the Cha family, which is lead by its 91 year old patriarch, Dr. Cha.

The Chas are a typical property business family in HK, wielding political as well as economic power. Dr Cha is well-connected on the mainland as he is a CCPPC member.

HKR is the owner and operator of Discovery Bay. Through their various subsidiaries, such as the transport company and commercial leasing, they make money from the operations of the community, and of course from the sale of new flats in the new "phases" that are built regularly.

We are not sure about the longterm return on equity that HKR delivers to its minority shareholders, but based on the inconsideration shown to their minority shareholders and stakeholders in DB itself (that is, the small owners, tenants and resident owners,) I would bet they manipulate the company and trample on minority shareholder rights as well. This is common practice in these typical family-run listed companies in HK. Caveat Emptor; invest at your peril.

HKR has run DB as it has pleased for years. According to our experience they dominate the Owner's Committees to ensure that whatever they wish is implemented, and they feel confident that they can do so without significant repercussions.

Their attitude is that with so many "short-termed" expat residents, and with so many owners being non-resident investors, and with most local resident-owners residing in newer phases, that there is no one who can, or will, rock the boat by protesting too loudly or forming any opposition group to their building plans.

As long as they don't threaten the steady rental income from the new crop of expat families moving here every year, few of the current owners will complain too loudly for the sake of either their tenants or themselves.

When an person buys a flat in DB they have to sign their rights away. DB is allowed to make an extensive renovation every 7 years and these are funded mostly by the owners, with only a small amount coming from a residual fund.

Now that real estate values have recovered somewhat, HKR wants to rush through several new phases and extensive renovations in order to increase their profit margins on sales of flats.

This is good for HKR and speculators, but not as much for other owners, and even less for tenants. But since so many residents in the older phases are expat families that leave within 1-3 years, HKR is not concerned about the immediate impact of renovations, as this group has no power or voice within the HK community.

In the last 6 years we have had Siena building, external renovations on several phases, the renovation of the residents Club and of course, our personal favorite (not!) in demonstrating the greed and incompetence of the company: the Plaza renovation.

Everyone in DB knows the stupidity associated with the Plaza renovation: the jagged tiles, the noise, the massive disruption, the loss of our restaurants and lifestyle for almost a year. I think most people have figured out that this renovation was mainly to increase HKR's commercial leasing revenues, primarily from new restaurants, as the economy picks up. "C With an E" and Jaspa's restaurants proved to HKR that upscale western restaurants could work here. Our prediction is that with the re-opening of the plaza and the subsequent large numbers of new commercial units, there will soon be more new restaurants than the community can support, each paying high rents, and within 2-3 years many will close only to be replaced by low-quality, local "kitchen"-type places. This is what occurred in the 90's, when there was little western food available, and 'local' places were of low quality.

The economic value of the Plaza renovation to HKR is obvious, but it would be interesting to know the extent of what HKR gains from the Beach Village renovation.

Anyway, we are pretty sure that THEY are benefiting while we are paying the price, and we know THAT is a rip-off.

Effects of Beach Village renovation

Here are some things that have happened to us and our neighbors in Beach Village, D.B. since the beginning of this useless renovation:

Bamboo scaffolding:
This, and the accompanying green construction netting, went up across the entire phase at the about the same time. For months this ugly contraption has hindered access to balconies, blocked views, rendered doors and windows inoperable, and also provides easier access to HK’s notorious “cat-burglars” and peeping toms.

Construction workers:
The contractor’s workers that are swarming all over our apartments are very dirty and loud. They have been peeing under (and on) our buildings, and there have been several reports of them "peeping" in our wives and daughters bedroom windows and bathrooms. The whole area is littered with their cigarette buts and construction debris.

Unlike other construction sites in more-advanced cities, these workers were not provided with on-site, convenient portable toilets, and as such the workers have been urinating right under our buildings in the open cellar crawl-spaces underneath each Beach Village building.

Take a look for yourself: simply go into one of these areas under our buildings, (where we all store our kid’s bikes and sometimes baby strollers) and you will immediately notice the strong smell of urine. We have also noticed the smell of urine on sheltered ledges and balconies around the top floors of our units. The workers are likely too tired to bother climbing down the scaffolding and simply pee on the building when they are working near the top.

You might have noticed that the first thing that was installed were boards over the open crawl-spaces at the bottom of our buildings, these have become little ‘clubhouses’ for the workers in which they take naps, urinate and eat, and at night dry out and store their clothes and equipment. As small enclosures like these afford the opportunity for sexual assaults and rapes, we think that women and girls are at risk as a result of these areas.

Security:
There have been reports of peeping into windows and some break-ins. You should be aware that in 2000-2001 when there were external renovations on Headland buildings, there was a series of break-ins, as many as 35, that were perpetrated by workmen, returning to the site at night, and using their intimate knowledge of the buildings to break in and commit robbery. DB management tried to cover up the extent of the crimes then (the police ultimately insisted on posting notices) and we suspect that this is the case now. Previous break-ins have often been AFTER the renovation work has been completed, so it is possible, that for the Beach Village residents, the worse has yet to come.

Safety:
How would you like to come home and find a dead or injured man in your courtyard? Tough to explain to the kids that in HK there is little regard for poorly paid construction workers safety, and thus the blood on your floor. This has happened at least once that we are aware of, but likely there have been more instances of worker injury, breakage and accidents. Again, DB management has tired to ‘hush’ it up and won’t release figures or information on this. we know there have been instances of personal injury and pet injury to residents as well, not to mention damage to property. Our balconies are littered with rubbish and dirt, and there are smears of new plaster across balcony floors, rails, windows and walls. The insides of our units are very dusty from the internal blasting, which kicks up large amounts of dust in the hallways, which then bleeds into our homes.

Noise:
In HK it is acceptable to make as much noise as possible when constructing or renovating. This means that hand-held pneumatic jackhammers are being used to “hack off’ the concrete and tiles on the walls and floors. Since the buildings are made of formed concrete, the vibrations and devastatingly loud noise generated by these machines reverberates throughout the entire building. As you all know it is almost impossible to live and function in the apartment when this is occurring, and it is very stressful for our families, helpers and pets.

Several residents have also reported that the loudest and most disruptive work is being done on the weekends, on Saturday, with often little or none being done on weekdays during school and office hours, when most residents would be out. Why this is so is completely baffling. In a luxurious, resort styled community like DB, with mostly families and high-earning professionals, why would HKR/DB Management allow this to occur?

The answer is, that as residents WE HAVE NO RIGHTS, and even owners have little influence. As such the developer/management allows the contractor to carryout the work in the most cost-effective way for the sake of the contractor’s profits.

NOTE THAT HKR/MANAGEMENT HAS NOW GIVE THE CONTRACTOR PERMISSION TO WORK ON SUNDAYS AND HOLIDAYS BECAUSE THEY ARE BEHIND SCHEDULE, AND THE CONTRACTOR IS FINED HK$15,000/DAY OVER SCHEDULE.

Perhaps this money should be coming directly to the residents as compensation for our pain and suffering.

Destruction of community lawns, shrubs and garden areas :
You will have noticed the devastation to the gardens and lawns around Beach Village. I pay a lot of rent and undertake a long commute everyday so that my family and I can live in a peaceful, green environment, but this construction has ruined that.

General Inconveniences:
With workers scurrying around the unit many of us have taken to keeping our blinds and drapes closed. We have in effect been living in the dark for many months now.

Those of us with balconies have not been able to use them for all the debirs and dust left behind.

There has been an increase of bird droppings and insect infestation related to the scaffolding and construction debris. Rats have been spotted in the piles of debris outside the buildings.

The real reason for the Beach Village renovation

WHAT SHOULD WE HACK OFF TODAY BOSS?

OH HELL, LET'S JUST HACK IT ALL OFF!

Here is the “inside information” on DB's Beach Village "renovation" :

Under the control of the Cha family, HK Resorts, the developer that owns DB, have in recent years been heavily promoting sales of new phases Siena and now Chianti. You have probably noticed the crowds of visitors, prospective buyers, who have been enticed to visit DB on the weekends. As one of DB’s first phases of flats, Beach Village was becoming noticeably worn and since it boarders the beach and the plaza, it is the first area that visitors experience upon arriving.

HKR had became concerned that the run-down appearance of Beach Village was negatively affecting their sales of their new phases, Siena and Chianti, and so forced this “renovation” on the owners committee, which they control through their proxies.

A much more extensive renovation than just a simple “coat of paint” was pushed through, despite the already significant disruption of the Plaza renovation and the fact that there has already been a tremendous amount of internal renovations in Beach Village as a result of its age and poor quality construction.

It is not clear as to why it was deemed necessary for large portions of the walls to be hacked off, or why the entire internal hallways needed to be stripped of concrete with even the tiles being taken up. There was no visible wearing of the concrete and specious reasons were given in the Village Owners Committee meetings.

There is wide-spread suspicion that HKR is in some way connected to the contractor, and that though the majority of this renovation is unnecessary, as it is funded by the owners, and the tenants and residents have no say, it is worth doing for the developer as it helps to maintain the value of the new phases being built and sold; also it creates revenues to the contractor(s) and suppliers who are likely owned, controlled or owed something for somekind of recipricol deal with HKR or the Cha family.