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Tuesday, March 14, 2023 - 7 pm

Letter from Nate Allen, President of the Kahlua Board of Directors

Update on Status of Hurricane Ian Damage:


Before getting into some “heavy” details, the Board wants to say a special “THANK YOU” to the over 90% of owners who have shown their faith in us, and in the process, by paying their 2023 maintenance fees.  Your commitment to Kahlua is recognized and appreciated.


We know everyone is anxious to learn more about where we stand with respect to the damages caused by Hurricane Ian and where we stand with respect to the future of Kahlua Beach Club.  As you are all aware, the damages were substantial, not only at KBC, but everywhere on Fort Myers Beach and its neighboring communities to the north.  The hurricane caused significant problems for many homeowners,  condo owners, timeshare properties and businesses alike.  We have learned first-hand that while there is an abundance of contractors soliciting their help, there is a shortage of qualified / reliable contractors.  Sorting through them to pick a group capable of performing quality (and reliable) work has been a long and onerous task.  However, as you know, the Board has hired an architect and a professional construction project manager to assist us with the process of recruiting and selecting qualified subcontractors.  We are confident in the Architect and project manager we selected and they have been valuable resources to us in this process.   Despite the naysayers who don’t fully understand the complexities we are dealing with in this process, we have been diligent in moving this process along, and with the help of our staff and professional advisors, including our insurance broker who has been invaluable, we have tried to ensure that we receive the most valuable advice and guidance, realizing that there are many stages and issues to navigate through before we authorize any restoration work on the property.


As previously communicated, we have already completed a significant amount of clean-up and mitigation work to protect the property.  Virtually all debris has been moved off-site, including most recently some soft goods that were removed from the units because they were finally affected by the lack of power/ventilation etc.  


The biggest obstacle that we continue to face is finalizing the plans to fix the balcony structures on the first and second floor.   We recently received two bids, but given the costs associated with both proposals, we are attempting to get a 3rd bid.  So, we await that additional bid and hope it will provide a more economically suitable option for us. 


On a positive note, we recently received preliminary assessment reports from the insurance companies.  We have also received “advances” from both our property/wind and flood carriers for a total of nearly $1,000,000.  


According to the “property/wind” insurer’s assessment, some damage is insured and some is not.  So, once again, we must rely on our professional advisors (our broker, our architect and our project/construction manager) to help us navigate through the various offers and coverage limitations.  Once we receive all of the insurance company’s final assessments, we must then begin the process of finding the qualified and reliable contractors needed  in order to secure bids for the work that is required.   Of course, before commencing any such work, we will need to be under the local ordinance regarding 50% of the property value in order to rebuild/restore the ground floor units, community room and office.   Provided that happens, we will also then need to vote on it.  So far, the proposed estimates are all over the board, in part due to a lack of contractors/subcontractors capable or willing to perform the work.   Nevertheless, this process is well underway and hopefully, we will have enough information very soon to analyze and determine what our next steps can be.  Our project manager and architect are VERY aware of the Town of Ft Myers rules and regulations with respect to these code requirements and have assured us they are working diligently to keep us under the 50% rule.   Unfortunately, this takes time though and we don’t have enough information yet to know if or how the rule will be an issue for us.


As for the “flood” coverage (provided by FEMA),  that report was, in our opinion, insufficient.   So, we responded with an extremely thorough and all encompassing “supplementary report” performed by our staff (thanks John).  John’s professional background has been absolutely invaluable to us.  As a side note, to those who are wondering why we continued to retain staff throughout this process, this is a great example as to why we wanted to do that.  They have all been instrumental along the way.  The flood insurer’s representative has accepted John’s supplemental report and has submitted it to the carrier for additional consideration to our claim.  It is ESSENTIAL that we keep in mind that the FEMA policy for “flood” provides coverage ONLY FOR THE BUILDINGS (main structure and maintenance building) and a limited amount of contents.  We knew well before Hurricane Ian struck that our “flood insurance” would not cover any of our amenities, including the pool, pool deck, hot tub, shuffle board courts, tiki huts etc.  We simply could not obtain coverage for these items due to our proximity to the Gulf.  So, these items will have to be repaired/replaced from other sources of funds.


We continue to ask for your patience throughout this process.  As we continue to move forward, be rest assured that our staff (Debbie, LeAnn and John) and the Board continue to work diligently to conduct site visits, secure bids, push contractors, communicate with our insurance brokers and city officials, supplement our loan application, and physically perform work at Kahlua to minimize our costs to contractors.   We will continue to do everything within our power and control to ensure that Kahlua Beach Club stays on a positive track toward recovery.


Nate Allen


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