UPDATE: Colony decision expected next month

 

UPDATE: Colony decision expected next month

 

Date: April 26, 2010
by: Kurt Schultheis | City Editor

 
 

Colony Beach & Tennis Resort officials and witnesses testified in a Colony Chapter 11 reorganization bankruptcy hearing Monday in Tampa that converting the resort’s bankruptcy case from Chapter 11 reorganization to a Chapter 7 liquidation would be detrimental to Longboat Key.

Longboat Key Town Manager Bruce St. Denis explained to the court the town does not support the Colony Beach & Tennis Resort Association’s request to convert the bankruptcy case if it means the island loses the resort’s tourism units.

“It’s important for the town to promote tourism because residents of this island are tourists first,” St. Denis said. “We need a significant tourism aspect to get the businesses the island has through the year.”

St. Denis said a substantial loss of tourism units, which were converted to residential properties a few years ago when property values skyrocketed, has hurt the town’s tax collections.

St. Denis said in 2004 the town received $325,000 in tourist-development sales-tax revenues from the Colony and $410,000 from the resort in 2005.

“The Colony makes up about 40% of our tourist-development tax fees in Sarasota County alone, which are only paid to the town if people rent rooms on the island,” St. Denis said.

Association attorney Jeffrey Warren, however, questioned whether St. Denis should have been a witness for the resort.

“Isn’t it unusual for a town manager to get involved in a private dispute such as this?” Warren asked.

St. Denis explained the town is a creditor in the bankruptcy case for water utility services owed and that Colony President and General Manager Katie Moulton asked him to be present.

Warren suggested that if the hotel rooms were still in use, regardless of who was running the resort, the town wouldn’t have an issue.

St. Denis agreed.

“If the town continued to collect the tax and the situation at the resort is something similar to what exists now, it would be a wash for us,” St. Denis said.

Colony hotel Manager Yvonne Thompson also testified Monday, telling the court the 103 hotel rooms in operation are in good shape and that the hotel is “very busy.”

Upon cross-examination, Warren noted that Thompson has not been inside the hotel rooms that the Colony has closed.

Moulton was also brought back to the stand Monday to report that the month of April has been profitable for the resort. Moulton reported 1,100 room rentals this month at an average daily rate of $315. The resort, Moulton said, also has $320,000 worth of business on the books for the year and more than 500 rooms reserved in May.

Warren pointed out that the upcoming summer months for the resort are not usually profitable. Warren noted losses of about $200,000 in May and June 2007.

Moulton and Colony Chairman and owner Dr. Murray “Murf” Klauber testified they are working with 19 investors who have shown an interest in the resort grounds and have signed letters of intent to work with “a few” of those investors.

“All deals are contingent on this bankruptcy hearing,” Moulton said.

U.S. Bankruptcy Court Judge K. Rodney May told both parties he won’t rule on the conversion request until May 25.

For more information about the Colony bankruptcy hearings, pick up a copy of Thursday’s April 29 Longboat Observer.

Contact Kurt Schultheis at kschultheis@yourobserver.com.

 

SHARE
Login Register now

Currently 0 Responses

Login below to post a comment or click register.
Account E-Mail
Password
forgot password? click here
Speak Your Mind Below!


1970 Main Street, Sarasota, FL 34236 941-366-3468

Copyright 2014 The Observer Group Inc., All Rights Reserved