On Oct 23rd, the HKCA Board fired General Manager Fred Mayo. According to reports, he was informed of board's decision, allowed to pack his office, and then escorted off the premises. No reason was given the notice below which was sent two days later by the Board's President:
Dear Honua Kai Owners,
I am writing to inform you of a recent change in the management of the Honua Kai Condominium Association, Inc. Effective October 23, 2024, Fred Mayo is no longer serving as General Manager of our Association. The Board of Directors is actively engaged in the search for a new General Manager, and we do not anticipate a long recruitment or hiring process. Our goal is to have as smooth and efficient a transition as possible, while continuing to uphold the high standards of management that our community, resort, and staff deserve.
In the interim, I, along with several board members, will be on site to conduct daily meetings with the department heads and provide support to our staff. We are very fortunate to have an outstanding team whose dedication and expertise will ensure that daily operations continue seamlessly. We greatly appreciate their ongoing commitment to our community and are confident they will continue to manage Honua Kai with great care and attention during this transition period. We appreciate your patience and support as we navigate this transition.
Roshy Hafezi
President,
For those keeping track, Fred Mayo is the third GM to be fired and they are now looking to hire our 5th GM in 9 years. Under advice of attorney Anne Anderson, it's doubtful the Board will provide any further information leaving owners to speculate the reasons for this action. Like I've said before, this Board only tells owners what it wants them to know, not what they need or are entitled to know. Lacking any director who places his/her duty to owners above that to the board, we will never know.
Here’s what I do know - the Board has once again placed HKCA into a serious pickle due to its lack of leadership and it's entirely up to us as owners to get off this perpetual GM carousel since no one on the Board will!
Those of you who have read my Hokulani director candidacy and/or proxy solicitation letter know that I stand alone in demanding that the Honua Kai Resort not be run as glorified HOA but as the 5-star luxury destination resort it is meant to be. The frank truth is operating a 5-star resort requires 5-star management and personnel. It’s not a job for a volunteer 12-member board only one of whom has professional resort management experience.
Now that Honua Kai is no longer the new kid on the block, we absolutely require the expertise, skills, and leadership of a professional resort management company capable of taking the Honua Kai Resort to the next level of luxury and guest service which are required to be competitive with the very best on Maui.
Before the Board proceeds with hiring the next GM which it will inevitably fire a few years down the road, I believe owners are entitled to understand how this process actually works. As I was a director at the time that Fred Mayo was hired, I can share precisely what happened and why I believe the Board will make exactly the same mistakes again unless owners intervene at the upcoming HKCA Annual Meeting on Nov 15th.
After the unexpected resignation of former GM Ellsworth Kalawaia, HKCA President Stuart Mumm seized exclusive control over the hiring process and refused to involve or even solicit input from the rest of the Board except for a few officers he trusted. Unlike in past GM hirings when a professional search firm was retained, Pres Mumm took it entirely upon himself to recruit and interview candidates. Despite the fact that the most obviously qualified candidate, Assistant GM Jennifer Runyan, was already in house, Pres Mumm refused to offer her an interview for the position and gave her no consideration whatsoever. He instead had his sights exclusively on hiring Fred Mayo away from a neighboring resort. No other candidates were offered to the Board for consideration and only a few directors were allowed to interview him (I was not).
As a director representing hundreds of owners, I should have been informed of all GM candidates and allowed to interview and vet them as appropriate. Instead, the first I learned of Fred Mayo was at a Board meeting where the motion for his hiring was introduced. Even with the limited information I had about him from his resume, I asked serious questions about his qualifications which went entirely unanswered. My serious concerns were entirely disregarded and as such I went on the record as the only director to vote against hiring Fred Mayo as GM. Directors Tali, Wilde, and Kubiak all voted for his hiring and at that time were among his most ardent supporters, though apparently no longer.
Following this, the Board convened into executive session to decide on his compensation package. While I will not go into specifics, I will say that I cited a current compensation study which indicated resort GMs in Las Vegas make an average of $100K and pointed out the fact that Mr Mayo was already being compensated near the mean of Kaanapali GMs. While I felt a slight raise was in order, I was overruled by Pres Mumm and other directors who wanted to offer him a substantial raise such that his salary and bonuses would be over $200,000 which I felt was excessive and unmerited. Once again, my recommendations were ignored and overruled.
Less than 3 years later, this is yet another GM marriage that ends in an ugly divorce for HKCA. Board President Roshy Hafezi, a close protege of her predecessor Stuart Mumm, has already announced her intent to hire a a GM replacement in short order. Before we go down this road once again, ask yourself this question - what self-respecting well-qualified GM candidate will want to sign up for HKCA when the Board has fired 3 GMs in the last 9 years and is known to severely meddle in all aspects of resort operations and management? This would give pause to an interviewee knowing you have no real future or security working for this particular board of directors.
So where does this leave owners? I see two choices:
(1) We stay on the carousel by letting the Board hire yet another GM who they will undoubtedly fire in 2-3 years or
(2) We take action now to tell the Board to put the GM hiring on hold until this matter can be openly discussed by all owners at the 2024 HKCA Annual Meeting.
I believe it should be entirely up to owners whether HKCA continues to be run as a glorified HOA with a grossly overpaid GM micromanaged by a meddling Board, or whether we now go down an alternative path which gets us off this GM carousel once and for all and puts Honua Kai on a course for a more prosperous future.
So what is this alternative path? Instead of placing all of our eggs in a single GM basket, we instead hire a professional resort management firm with a proven record of successfully operating 4-5 star resorts which we aspire to be. This involves putting out a bid proposal and evaluating responses to see which ones merit further exploration. If none fit, then we can continue down the DIY path by hiring yet another GM but I firmly believe we will find better alternatives than this that provide the 5 star management and personnel we require to be successful at Honua Kai.
I actually suggested this to the Board 3 years ago but President Mumm shut it down without any serious consideration. Unfortunately I believe the Board will have the exact same reaction today because they care far more about total control than overall success. The Hokulani elections which have been entirely rigged to favor the reelection of the 3 incumbent directors is proof of this. They don't care about doing what's best for owners or even asking what they think, they only care about dictating policy as personally benefits them. The Luana AC is yet another clear example of this when the board votes to take legal action against the developer for a defect that in private units which affects maybe 5% of owners but a majority of residential board directors. They are obviously not doing what's right for owners, they are doing what's right personally for them.
With the severe challenges we face now and in the future with rapidly rising costs exacerbated by lower occupancy levels and room rates, it’s time for owners to grab the reins and steer Honua Kai towards future success. For this reason, I will be introducing a resolution at the HKCA Annual Meeting which will require the Board to solicit and evaluate resort management bid proposals before proceeding with the hiring of a GM. If you want off the carousel, then this is your best chance but only if you empower me to help you through your proxy.
Carl Hu
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