May 22, 2019

We are focused on Improving Owner Experience

Increasing Property Value

Reducing Operational Costsand Improving Revenue

Introduction

• The building is 44 years old• Time and the Elements have

taken their toll• Under funded Reserve Account• We experienced back to back

Hurricanes; the worse in over 100 years

Hurricane María

Hurricane María

Hurricane María

Insurance Projects to Complete

• Common Area HVAC• Roof Ventilation and Membrane• Parking Structure• Hallways and Landings• Exterior Structure & Painting• Employee Facilities• Men’s Changing Rooms• Telephone System Switchboard

and Units

• Installed over 95 state-of-the-art HD cameras throughout the building. 10-year warranty on equipment.

• Added Command Center allows eyes all over the Building secure entry for employees and vendors.

• There are issues/concerns like the Front Gate and, access points, parking garage and “blind zones”. This is an area of focus for management

• New Security Check Point• When Jade opens, they will contribute to the road

use and help pay for security. This will be discussed in detail later.

Challenges - SecuritySecurity is important to us,What are you doing to improve it?

Command Center

Challenges - Insurance

• Insurance Company has not paid out enough to repair the damage including full owners

• Insurance Company is not acting in good faith• We are pursuing the best path for better

payout• Time is limited by statue of limitations, must

act quickly• Law firm engaged and carrier advised council

vote required prior to dispersing final funds

I have submitted my claim and it has not been resolved, Why?

Insurance Timeline

Sept. 2017Hurricane Hits

Sept. 2019Statue of

Limitation

March2019

March2018

Sept.2018

Working Claim with Insurance Company

Submitted Claim on October 11, 2017 – Extended Claim to $9.8m on Nov. 14th, 2017Interim payment of $4.8m on December 21, 2017

June2018

Dec2018

Dec.2017

June2019

Final Claim – Submitted (Feb. 28th, 2019)Based on an assessment of the claim made

by a third party adjuster, and the legal analysis made a law firm, we expect to

receive under the supplemental claim that we filed with the insurance company

approximately $13.5M.

Claim

The Claim Submitted was within 30 days of the storm with no power and limited communication. Received interim payment within 60 days of storm. Once we started work, we found significantly more damage to the building and infrastructure and filled a supplemental claim. Ourinsurer dragged their feet, and with the statue of limitation fast approaching, we had to engage law firm to file suit.

$ 4,745,823.54Keith St. Clair

$ 1,576,786.47Assessment

$ 4,800,000.00Insurance

$ 11,122,610.01TOTAL

CAPEXThis slide represents the amount of funds that have been injected in to the building since Keith St. Clair assumed management . The $4.7m is from Keith St. Clair, ESJ Inc and affiliates at no cost to the membership. The Assessment of $1.5m represents what has been received from the Timeshare assessment billings. The Insurance amount represents the first payment from the Insurance Company for the initial claim.

Funds ReceivedINSURANCE FUNDS USES TO DATE

• Roof • Windows• Pool • Building exterior • Walkways • Generators and parts • Elevator Mechanical • Fuel• Landings • Food during storms• Hallways • Transportation• Roof (remediate) • Engineer Roof• Engineer Building • Lanais rooms & hallways• Engineer • Lanais roof

Assessment Update

Total Project $5,000,000ESJ, Inc. $2,000,000Owners Collected $1,576,786Owners Un-collected -$1,423,214Curent Bad Debt -$1,423,214

TIMESHARE ASSESSMENT SOURCES

Total Project $5,000,000FF&E $2,000,000Floors 17-11 $1,576,786Floors 11-1* $1,423,214*Represents bad debt

TIMESHARE ASSESSMENT USES

Original project was $5m, $3m to the members and $2m to the INC. The INC. Has funded their $2m with furniture, fixtures and electronics which are currently stored in Isla Verde. The $3m billed to the members, there is currently an amount of $1.4m that is uncollected. Construction has stopped on the lower floors until this amount is collected from the delinquent members or we receive the supplemental insurance proceeds.

Future Insurance Uses

PROJECTED INSURANCE CLAIM $13,500,000 $13,500,000

Priority of Distribution

New Deductible $1,200,000 $12,300,000

Full Owners Provision $600,000 $11,700,000

Roof $1,200,000 $10,500,000

Corridors $500,000 $10,000,000

Building Exterior $4,900,000 $5,100,000- Balconies, Paint, Concrete-rebar,

Windows, AC’s, Sealant, common areas

Fund Reserves (Deductible + ½ Ins.) $2,000,000 $3,100,000

Legal Reimburse $1,200,000 $1,900,000

Parking Garage $400,000 $1,400,000

INC and VO's $1,400,000 $0

RemainingBalance

*

Future Goals - Admin

• Better maintained facilities• Fair maintenance fees• Transparency with BOD

• Semi-Annual Meetings to over performance and approve management of ESJ

• Clarity on Rules and Regulations

• Beach Level Restaurant & Bar• Beach Level Restrooms• Beach Level Pool• In exchange for use of the land, the INC.

will pay the HOA increased rent.

REVENUE OPPORTUNITY #1:BEACH LEVEL RESTAURANT & BAR A Successful Business benefits all of us. For example: We are lacking F&B facilities to serve the Beach Front. The INC., if agreed by the council members, would invest over $1m in a new Beach Bar Restaurant located at the North side of the building. Currently there is rubble on that area that will be used for flooring if approved.

New Projects Increased Revenue to Members

New Projects Increased Revenue to Members

• Through the energy savings that this will provide the increased insurance premium could be offset within 4 years.

• We will be off-grid with full power. No Hurricane impact and significant increase in property value.

REVENUE OPPORTUNITY #2:ENERGY CO-GENERATION FOR ESJ,How to Fix our $560,000 problem?

The INC. is willing to invest $6.4m to provide full off-grid power to ESJ. The INC and KSC are prepared to pay that and provide the energy at a discount to our members.

The only increase members have seen in 4 years is the $560,000 increase in Insurance. It is our goal to eliminate this increase in 4 years by providing an energy solution that saves us that or more.

New Projects

• With the extra spots we will free spaces in the ESJ Tower for the benefit of Owners and Visitors.

• ESJ HOA will contract with Jade for a use fee for the road. Than revenue will be used to offset HOA costs at ESJ.

REVENUE OPPORTUNITY #3:JADE AND THE ACCESS ROADWhen Jade opens, their on-site parking will be more than is needed, since there are no residents and only hotel and timeshare guests.

Budget 2020

Comparative Budget by Year

• No increases in the past 5 years• Our strategy is to manage the budget with no increases and possible

decreases for the next 4 years through the revenue opportunities discussed in this presentation.

Thank You!