Attorney disputes association's claim

A Sarasota attorney representing an owner of The Colony Beach & Tennis Resort’s 12 tennis courts is disputing a claim by the resort’s condominium association that a unit owner’s newly acquired 5% stake in the recreational property will clear up a major zoning issue with the town.

Attorney Morgan Bentley, who represents tennis court co-tenant Carolyn Field, sent a letter to Planning, Zoning and Building Director Monica Simpson and town attorney David Persson Jan. 10 explaining that if the Colony Beach & Tennis Resort Association acquires the 5% interest in the courts that Colony unit owner Andy Adams bought from previous owner William Merrill, the 237-unit owners would not have the rights to use the tennis courts.

Bentley explains in his letter that unit owners previously had rights to the tennis courts and swimming pool because its association held a long-term lease with recreational property owners Merrill, Field and longtime Colony owner Dr. Murray “Murf” Klauber, under his corporation Colony Beach Inc. The unit owners paid $650,000 annually as per the lease.

“The association rejected those leases in bankruptcy, leaving it with no recreational facilities,” Bentley wrote. “In order to get those three acres back, it will need another lease (or purchase) of the properties. If the association believes that the joint owners of three acres (will) allow a 5% owner to use 100% of the three acres, they are misinformed.”

Klauber has an 80% undivided interest in the tennis courts, Field has a 15% undivided interest, and Adams now holds the 5% undivided interest he bought from Merrill in December for $350,000.
Klauber told the Longboat Observer he agrees with Bentley’s assessment.

“I completely disagree with the association’s stance on this issue,” Klauber said.

Bentley said that a 5% owner of three acres of property would amount to that owner owning .15 acres, or 6,450 square feet.

“I am guessing that 6,450 square feet doesn’t satisfy the recreation or open-space requirements,” Bentley wrote, explaining that the unit owners technically wouldn’t even own one tennis court, which is 7,200 square feet.

Town zoning laws mandate that property zoned for a tourism use, such as the Colony, must provide recreational amenities available to resort guests, such as the 12 tennis courts in the middle of the property.

Colony Beach & Tennis Resort Association President Jay Yablon, who is out of the country until Jan. 20 and couldn’t be reached for comment on this issue, has stated previously that an undivided interest in the property means unit owners would have as much right to the property as the other co-owners.

“I am pleased to report that rather than challenge the validity of the zoning concerns at this time, the association has acquired the immediate right to use parcels comprising many of the recreational amenities, which should eliminate or moot any zoning concerns precluding the Colony from re-opening,” Yablon wrote in a Jan. 5 letter to Simpson.

The association signed an agreement with Adams in December giving the association an exclusive option to purchase that 5% undivided interest. Yablon told Simpson in his letter that the association will purchase that interest once the town confirms that the acquisition resolves the issue of recreational amenities.

But Bentley maintains state law mandates that 100% of the unit owners must approve a purchase of a portion of the property, which is unlikely considering Klauber owns multiple units.

“To say that you can buy (a) 5% (interest), use the courts and pay nothing turns the entire historic arrangement upside down,” Bentley wrote.

If Persson submits a recommendation later this week, as expected, clarifying whether the zoning issue has been remedied, the association then hopes to ask unit owners for funds to fix up the buildings in the short-term, while a long-term renovation goal is solidified.

“It’s our intention to get people back in there as quickly as possible,” Yablon told the Longboat Observer last week.

The resort, Yablon said, will begin renovations to some buildings onsite that its Sarasota-based engineering firm, Karins Engineering, has deemed as safety issues, if the town attorney’s opinion is made in the association’s favor.

Persson responded to Yablon in a letter also dated Jan. 5.

“Restoration of the use of the (recreation) property by the unit owners, invitees and guests will avoid the prohibition in the town’s Comprehensive Plan for increasing a non-conformity and, thus, if true, resolve the known zoning concerns,” Persson said.

Persson requested an opinion by Tampa-based Colony Association attorney Donald Hemke, of Carlton Fields.

Hemke confirmed his assessment in a nine-page opinion.

“With the safety and zoning issues being resolved, the Colony plans to re-open units and resume operations very shortly,” Henke wrote in a Jan. 5 letter. “I would hope the town would agree that the Colony may be re-opened immediately, subject to any inspections of individual units or buildings. Re-opening the Colony immediately is the necessary first step to restoring and revitalizing the resort.”
Although the Colony would re-open to unit owners, it would not be open to the general public until a renovation plan is agreed upon with unit owners and its consultants.

CHART
To view a pie chart displaying ownership of three acres of recreational land that sit in the
middle of The Colony Beach & Tennis Resort, click here.

FORECLOSURE SCHEDULED
Longboat Key resident David Siegal, one of the partners of Colony Lender LLC, told the Longboat Observer last week that he and his partner, Longboat Key businessman Randy Langley, are moving foreclosure proceedings forward on $11 million bank loans that were purchased from Bank of America in March 2009 from Dr. Murray “Murf” Klauber.

Siegal said he can’t allow any more time to go by without pursuing a foreclosure action on the bank loans his company owns.

A hearing is scheduled Monday, Jan. 24 in Sarasota County Clerk of the Court to calculate the exact amount due on the loans.

Once a judge sets the amount due, an online foreclosure sale will be set in Sarasota County.

Contact Kurt Schultheis at [email protected]