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“The homeowners’ association had bought it out of receivership. It
was a long, sad story,” he says. “We traveled to St. Maarten and the
resort was in very bad repair; it’s hard to describe the magnitude of the
disarray. Basically, without a complete renovation of all the older units,
the resort was ultimately going to face bankruptcy as owners aban-
doned their memberships.” Unless something drastic was done,
Sutton says.
“Our initial restoration proposal carried a US$10 million price tag,”
he notes. “The air-conditioning system, as well as the roof, had to be
replaced immediately. The elevators worked only sporadically. The
electrical and water systems were virtually inoperative. Nothing had
been done on the property since 1994 or 1995.”
But the homeowners’ association, instead, “hired a gentleman
who had no experience, and we went back home and heard nothing
from them,” he relates. The results were predictable.
Fast-forward to August 1997. “They contacted us and said, ‘Please
come back.’ We signed a two-year contract to take over operations and
improve conditions. The board allocated US$3 million to renovations,
“just to keep things from falling apart,” he explains.
But the resort’s woes continued. “The association never had any
money, and they were fearful of raising maintenance fees. They weren’t
paying utility bills, and the HOA president was trying to do everything
himself,” Sutton explains.
“When our agreement came up for renewal, my staff urged me not to
sign. ‘Boss, you’re crazy, you’re out of your mind, it’s going to be a dis-
aster,’ they said. But the chairman of the HOA convinced me to stay.”
The Prime Rib of Properties
On his visits to St. Maarten over the years, Sutton noticed that on the
grounds of Pelican Resort Club was a large swath of highly desirable
beach property. “They had prime rib right there on the water,” he says,
but the land lay fallow.
Part of the reason is that the HOA governing board changed every
year, Sutton explains. Just as he was able to convince a sitting board to
develop the parcel, election time would roll around, and a new group
would take over, unaware of the site’s potential.
“It was a beautiful location, and we put in
an initial investment of US$500,000 in engi-
neering drawings, but then the next board
would decide to cancel.”
In 2005, the board finally decided to begin
construction of the Villas at Simpson Bay
Resort & Marina. “We built 83 new units, each
with two bedrooms, two baths, and a living and
dining room,” recalls Sutton. “The furniture and
finishes were of very high quality. They were
equivalent to units at Royal Resorts in Cancún.”
Mortgage Meltdown
Meanwhile, expenses were increasing for the
older resort, and, once again, the HOA board
was loath to up the maintenance fees to cover
the deficits. They asked Sutton to negotiate the
mortgage on the property, which he did, bringing
the interest down from 12 to 10 percent. A few months later, though,
they wanted another rate cut, at which point the lender balked.
“The association would run out of money in July or August of
each year, and move the date for billing the next year’s maintenance
fees back farther every year,” Sutton explains. “They were desperate
for cash and trying everything possible.”
The property was foreclosed and auctioned in December 2010.
“There were no bidders except the mortgage company, which pur-
chased the property and subsequently sold the resort, in January
2011, to the Simpson Bay Owner Company, a real estate investment
group from Hong Kong,” Sutton explains.
The name was changed to Simpson Bay Resort & Marina, and
Royal Resorts Caribbean was awarded a long-
term management contract for the renovation
project.
From Albatross to Osprey
With the Hong Kong developer in place,
Sutton began what will ultimately be a four-
year gut in 2012. But not before he fought to
gain support from the owners.
“Basically, without a complete renovation of
all the older units, the resort was going to face
bankruptcy as owners abandoned their mem-
berships,” Sutton says. “Interval International
had already given notice that the older units at
the resort would be removed from the exchange
network,” unless something was done, he adds.
That warning from Interval proved to be
important ammunition, he says, in convincing
the owners to invest in the renovation. “I
51
Developer:
Royal Resorts Caribbean
Location:
Simpson Bay, St. Maarten
Product:
Deeded fixed week, fixed unit
originally; points program now offered in the
Royal Resorts Caribbean Collection
Units:
342
Price:
Basic points package from US$5,000;
members may purchase unlimited points
Website:
royalresortscaribbean.com
Social Media Sites:
facebook.com/SimpsonBayResort
simpsonbayresortnews.com/
Simpson Bay Resort &
Marina
fast
facts
Richard Sutton: Veteran With a Vision
As commander of the U.S. Air Force Reserve Recruiting Group following the
Vietnam era, Richard Sutton knew a thing or two about marketing. That,
plus his desire to build a new career,
eventually led him to establish the first
purpose-built timeshare properties in
Mexico — and the third purpose-built
timeshare resorts in North America —
just as that land of breathtaking beaches
was on the cusp of becoming a major
tourist destination.
Sutton, who helped found the
Cancún timeshare association, ACLU-
VAQ and who won the ARDA Lifetime
Achievement award in 2014, freely
admits that back in 1975, “We had no
earthly idea what we were doing.” It
took two years for Sutton and his
investors to create their own concept of
timesharing. “Timeshare was a completely new concept,” he explains.
Even in those heady first days, sales agents were not allowed to pressure
prospects, and several were dismissed for doing so, Sutton says. ‘If you
have a good product, you don’t need to pressure anyone,” he explains.
Sutton founded Mexico’s first employee credit union and added educa-
tion to the benefits his staff enjoys. Employees have responded favorably:
Several salespeople have been with Royal Resorts for more than 20 years.
November 4, 2014, marked Sutton’s 81st birthday. “My wife, Julie, and
I are looking to slow down a bit now,” he says. “We’re training our staff to
take on more responsibility. They’ll be looking for new resorts to operate,
and we’ll certainly support them and help them do what they need to do.”
Richard Sutton, center, accepted the ARDA
Lifetime Achievement Award during the
association’s 2014 convention.