Colony Lender LLC now owns 95% of a 2.3-acre recreational property at the center of the shuttered Colony Beach & Tennis Resort through an agreement with Orlando-based Unicorp National Development Inc.
But Colony Lender and Unicorp want to own 100% of the 2.3-acre property — and both parties could seek the additional 5% in Sarasota County Court.
Colony Lender previously owned a 15% interest in the recreational property. But its stake in the property increased to 95% following a July 14 auction in Sarasota County Court in which it won a bid for another 80% interest in the 2.3-acre property, plus 100% ownership of the restaurant complex and the former penthouse office of longtime Colony owner Dr. Murray “Murf” Klauber.
When it bid on the property, Colony Lender already had an agreement in place with Unicorp to sell its resort assets.
Andy Adams owns the remaining 5% of the recreational property; he also owns approximately 27% of the Colony’s 237 units.
Unicorp President Chuck Whittall told the Longboat Observer Monday he intends to approach Adams to purchase the remaining 5% and Adams’ units.
“We bought the foreclosed pieces, and now we would like to work with Adams to buy his remaining 5% interest and Adams’ entire interest in the Colony,” Whittall said. “My attorneys are discussing the issue and we would like to negotiate with Mr. Adams on this soon in a friendly manner.”
Although the sale price of Adams’ units needs to be negotiated, Whittall and Colony Lender principal David Siegal said Adams’ remaining 5% interest in the recreational property can be acquired in Sarasota County Court if they can’t reach an amicable agreement with Adams.
“When people own real estate together and have no written agreement, they are just co-tenants, but Florida law has a partition mechanism to allow them to go their separate ways and not be tied together forever,” Siegal said.
Siegal said when land can’t be divided equally, a partition action can force parties to bid on the property in question.
“One of the parties will bid higher and acquire the property,” Siegal said.
The bid would be based on the percentage of property owned. Colony Lender has a 19-1 majority stake in the recreational property compared with Adams’ interest. So, for example, if Colony Lender bid $1 million for Adams’ 5% interest in a partition auction, Adams would have to counter bid with a $19 million bid to acquire Colony Lender’s 95% interest.
Adams paid $350,000 for the 5% interest, and Siegal said Adams would likely rather be bought out through the partition process than come up with millions to acquire the entire interest.
When asked to comment last week, Adams said: “I understand that they’ve made the comment they can force a suit and bring about a partition statement. It’s another chance for them to have a bite at the apple.”
A week ago, Whittall said his company is willing to pay to acquire additional assets.
“Our plans are to remove the eyesore and build something the town of Longboat Key can be proud of,” Whittall said.
Whittall said his company is in the process of designing a five-star resort that will consist of a 160- to 175-room hotel, along with a couple hundred condo and tourist units.
He said Unicorp will engage unit owners but said he does not believe they will be able to block development of the 2.3 acres. He plans to submit pre-application materials to the town within 60 days without seeking unit owner approval.
Asked if Adams is willing to acquire more assets and develop the Colony, Adams said: “We’re interested in anything that will get the unit owners back in as quickly as possible. We’re exploring all possibilities.”
February 2010 — Colony Lender LLC, managed by developer/entrepreneur Randy Langley and businessman/attorney David Siegal, purchased overdue loans on key Klauber Colony properties from Bank of America for an undisclosed amount.
September 2013 — Colony Lender LLC won a foreclosure judgment of more than $13 million in Sarasota County court, more than three years after the resort closed.
Feb. 26, 2014 — U.S. Bankruptcy Judge K. Rodney May converted the Colony Beach & Tennis Resort Partnership bankruptcy case from Chapter 11 reorganization to a Chapter 7 liquidation, allowing Colony Lender LLC, the case’s largest creditor, to hold an auction for assets, including the 2.3-acre property.
July 14, 2014 — Colony Lender LLC, through an agreement with Unicorp National Development Inc., paid $15,200,001 for an 80% interest in the 2.3-acre property, plus 100% ownership of the restaurant complex and the former penthouse office of longtime Colony owner Dr. Murray “Murf” Klauber.
Contact Kurt Schultheis at [email protected]