The company has submitted two different plans for the Galveston project, he says, each of varying size and both in violation of the city's master development plan outlining a proposed density of four units per acre. Smutny believes the company has been playing fast and loose with numbers on units and acreage in an effort to circumvent zoning restrictions.
Opponents of the project cite more potential project problems: Time-share ventures in Galveston have had a history of going sour, returning far less than the original economic stimulus promised by developers.
There also is no current plan for the company's beachfront property. Neighbors believe a time-share development in that area would destroy the value of the single-family homes that dot the area. And more fears are voiced about the effect of the development on the wetlands in the area. Those are intended to be protected from the runoff of pesticides and other chemicals from the proposed golf course that will border the project's bayside boundary.
Coupled with that are all the nagging problems of the company's past, and current problems with consumer-protection groups in Texas. "How can we trust their numbers?" Smutny asks rhetorically.
So far, they've met with some success. Silverleaf has redesigned its planned development, and the group's suit against the city is in abeyance as the new plan is scrutinized. But Smutny and his neighbors won't be satisfied by any modifications. They want Silverleaf to go away, and take its condos somewhere else.
Silverleaf had been planning on getting started on its multimillion-dollar project this summer, but had to put their plans on hold when the good people of Kahala Beach began raising hell at local planning commission meetings.
For his part, Franks played up the economic rewards, focusing on a fountain of cash worth millions every year in new economic activity -- welcome money in a town that has been struggling for years. And despite the opposition, Franks says he'll break ground this fall and get started on selling more time shares soon after.
While they may not like to call it time share anymore, the rules of the game are remarkably unchanged: Get them in and sell them hard until they sign up for a deal that will cost almost $15,000, paid out over three to five years, after the deal is inflated with a 14.5 percent interest rate that the sales people manage to avoid mentioning.
What they like to do is focus on what a wonderful company Silverleaf is. "It's debt-free," says Seve, "strong, wealthy and traded on the New York Stock Exchange."
Not quite.
In March, the company completed a subordinated note program to raise $75 million in financing from investors, a common debt vehicle outlined in the company's SEC forms. But there's no doubt the company does just fine, as Seve assures us. In Silverleaf's last quarterly report, it lists $31 million in revenue, $3.2 million in income, courtesy of 61,000 time-share owners.
The main hall at Piney Shores is packed with major prize-winners and prospective time-share owners. This is the end of our 90 informal minutes, and that morning more than 150 people had turned out for their prizes; couples, families with kids, a middle-class crowd typically dressed in crisply laundered weekend apparel.
This is a great deal, we're told. It all gets down to simple math. Seve has his crib sheet ready, titled "Vacation planner." Buy an RV, he says, why, you're talking $50,000 to $200,000.
"How much did you spend on your last vacation?" he asks. After some finagling, we figure that my last week on the road cost $1,300.
Why, in ten years, that's $13,000, and $39,000 in 20 years, says Seve, running fast now. And with inflation running at 5 percent per year, that's 100 percent on top of that -- $78,000.
Aside from the bad math, inflation has been running under 5 percent for years now, a fact that creates a puzzled look on Seve's face. "Four and a half million people have joined the program; we know you'll love it," he says.
Then someone started ringing the bell. The noisy hall falls silent and three sales people take to the floor. Three couples had just joined. One was planning their tenth wedding anniversary at a Silverleaf resort. "Join me in a big round of applause!" one exclaims, as the room erupts with cheers and clapping.
The excitement is all part of the pitch, but Seve's face crumples a little more when he hears that my answer is no. But that doesn't end the session. A minute later his supervisor is at the table, pushing the financial sense of vacation ownership. Is there something we don't understand?
A second and final "evaluator" hits the table with the same result. That's when my wife and I are sent away to collect our major prize. First, we're ushered into a waiting room, our papers stuffed into a full box. We are invited to take a seat with about 25 other major prize-winners, one more glum than the rest.
"This is just a waste of an entire day," says one father, head in hands and staring at the floor. Time starts dragging.
"This is punishment for not buying in," says a young man. Fifty minutes later, in an effort to speed up the exodus, a group of us are called into the back office. We receive an apology for the wait and get, en masse, our major prize.
My prize? Well, mine and everyone's prize was second place. Ten free day-passes for a party of four at any Silverleaf facilities. Does that include an overnight stay? I ask.
No. But we could use the pool.
I'd won big.
