Eight units at the Colony Beach & Tennis Resort sold for a median price of $152,500 in 2007 — the year before the first lawsuit was filed in the dispute between unit owners and longtime owner Dr. Murray “Murf” Klauber.
The legal battles for the property have raged on for seven years. The property has been shuttered for four years.
Last week, Unicorp National Developments Inc. President Chuck Whittall made an offer to owners at the 237-unit in an Aug. 6 letter. Colony Beach & Tennis Association President Jay Yablon described it this way in an Aug. 9 email to unit owners: “not as an offer but as an ultimatum.”
Whittall envisions a five-star resort that will consist of a 160- to 175-room hotel, along with a couple hundred condo and tourist units for the property. In his letter, he urged owners to deed their units to the company and choose one of the following options:
• $20,000 cash;
• Seven free nights per year over a five-year period in a new five-star hotel that the letter states will have an average nightly rate of $1,000. (Whittall said the $1,000 rate would be a peak season price.)
• Purchase a tourist unit valued at $900,000 for a 10% discount, an option that would entitle the owner to 45% of rental income. Alternatively, Unicorp would consider allowing unit owners to use their units for the 30 days annually in which they had access when the resort was open for $150,000, according to the letter;
• Purchase a condominium unit at a 10% discount that will be valued between $1.7 million and several million dollars.
The letter also included this warning:
“You remain personally liable — for millions.”
Unicorp is making the offer because it has an agreement with Colony Lender LLC to purchase its assets at the resort.
Colony Lender previously purchased a 15% interest in the 2.3-acre recreational property plus purchased overdue bank notes on Klauber-owned properties from Bank of America for a rumored $4.5 million that’s never been confirmed. It received a judgment of more than $14.3 million in a foreclosure trial last September, which increased by several hundred thousand dollars as interest accrued each month.
It placed the winning bid of $15,200,001 last month in Sarasota County Court in July to become owner of another 80% interest in the 2.3 acres and 100% of the other properties it now owns. As a result, it now owns a 95% interest in the 2.3-acre recreational property that includes the swimming pool (longtime unit owner Andy Adams owns the remaining 5%), conference rooms, stores on the midrise, tennis courts, office space, a maintenance area, the flower shop and various tools and equipment; 100% of the restaurant complex; and Klauber’s former penthouse office.
Unicorp and Colony Lender, however, contend that their interest isn’t limited to Colony land and other real property. They contend that they are also owed damages from a 99-year recreations lease that has more than 60 years remaining — an amount the letter states could exceed $42,306,000 total or $181,571 per unit for accrued rent and future rent — a claim the Association vigorously denies.
Unicorp is also pursuing a $23 million judgment against unit owners that U.S. Bankruptcy Trustee William Maloney controls in the Klauber Partnership’s Chapter 7 liquidation case.
“While some may take that as a threat, I communicate that to you as reality. The standoff between warring factions that has allowed this once pristine resort property to decline to a state of absolute disrepair and become less than an afterthought in the vacation marketplace will not continue on my watch. However, a litigated approach is not our preferred approach,” Whittall wrote.
Each offer comes with the agreement that Unicorp will not seek liability from unit owners who agree to one of the options for a $23 million judgment against the Association that Unicorp is pursuing and a disputed recreational lease.
“It’s not an offer. It’s an ultimatum based on numerous false and misleading statements,” Yablon told the Longboat Observer Monday.
Whittall said Monday afternoon that at least one unit owner had expressed interest in taking the $20,000 cash.
“In the past, the units were habitable,” Whittall said. “Now, they’re more of a liability than a value. They can’t be lived in, have to be bulldozed and rebuilt. God forbid there’s a hurricane, and there’s no insurance on them.”
Yablon, however, accused Unicorp and Colony Lender of working to block any settlement among the parties.
“This is an attempted hostile takeover of the entire Colony,” he said. “It is an effort to perpetuate litigation at the Colony until everybody else gives up and walks away.”
Asked by the Longboat Observer what he would consider a fair offer to unit owners, Yablon said:
“Take a look at Manfred Welfonder’s proposal. That’s a very good starting point,” he said, referring to a plan offered by Welfonder’s Longboat Key-based MW Group.
Welfonder’s proposal includes options of a new, deeded shared ownership unit with 30-day access for unit owners at no cost to current owners; a whole ownership option at a discounted price of 35% to 50% below retail; or a buyout offer for current unit owners at the higher amount of $125 per square foot or appraised value.
Whittall, however, contends that MW Group does not have the financing to execute its plan.
Yablon also wrote in his email to unit owners that the Association, with its legal counsel, will have more to say about the situation next week, but accused Unicorp of spreading falsehoods.
“Clearly, the goal of Unicorp’s letter was not to be factual. The whole purpose was to bully and intimidate the owners, and to continue scaring away any other viable developer candidates, so Unicorp and Colony Lender can take over everything. Apparently, Unicorp does not know the resolve of the owners they are dealing with!” Yablon wrote.
Whittall, however, fired back in an Aug. 10 email to unit owners in which he criticized Yablon’s leadership.
“I ask you to reflect on the last several years at all the promises made and all the developers brought in front of you and ask yourself if you are better off and if representations made to you have come true by your management? If you are better off then quit reading. I am astounded to think that Jay remains your leader. In business if your leader fails you (and Jay has) then you replace him. That is the American way. He offers no solutions to you and no way out. We do,” Whittall wrote.
Whittall said the new hotel he envisions for the property could be called Hotel Armand or operate under a flag name, but won’t be known as the Colony.
“I think the Colony has too many bad stigmas attached to it,” he said. “It’s time for something new and fresh.”
Unicorp offered unit owners the following options and states that each would result in the following total monetary consideration to unit owners.
$20,000 cash $291,571
Seven-day stay for five years
at a $1,000-a-night resort $306,571
10% discount on a tourism unit $371,571 or more
10% discount on a condo unit $531,571 or more
Currently 2 Responses
- HUH....Who would pay $1,000 a nite? This whole mess would have been avoided if the original ownership deal wasn't so screwy. Problems will only occur again
- No matter who is right on the Colony offer, it is time to replace Jay Yablon, as he has led the Association to oblivion with the Association no closer to a workable solution today than where it was in 2006. A series of Yablon and cohort's sponsored developer's have come and gone with no real money put on the table to reach a workable solution with all parties involved. All Association owner's can look forward to is several more years of paying $6000 or more per unit to fund more litigation and for what?
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