Colony developers show their hands

 

Colony developers show their hands

 

Date: May 7, 2014
by: Kurt Schultheis | Managing Editor

 
 

With an estate auction for 2.3 acres of Colony Beach & Tennis Resort property looming Friday morning, U.S. Bankruptcy Chapter 7 Trustee William Maloney has received two offers to buy longtime Colony Beach & Tennis Resort owner Dr. Murray “Murf” Klauber’s bankrupt estate.

Orlando-based Unicorp National Development Inc. President Charles Whittall submitted an offer for an undisclosed sum to purchase the estate, which includes a $23 million judgment ruling against Colony unit owners.

That judgment includes the losses and damages to Klauber’s management entity, known as the Partnership, which is in Chapter 7 bankruptcy for the Colony Beach & Tennis Resort Association’s failure to pay for assessments and repairs to the resort.

Unicorp, a large retail, mixed-use and drug store developer, has also developed resort projects such as the Wyndham Hotel Orlando.

Whittall told the Longboat Observer he expects to purchase Colony Lender LLC principals David Siegal and Randy Langley’s stake in the resort at an auction scheduled for 9 a.m. Friday.

“We have a contract to purchase Colony Lender’s collateral, we expect to buy the estate and the judgment and we intend to redevelop the Colony as a five-star-plus resort,” Whittall said. “We’ve made a very good offer to buy the trust position and believe it’s being highly entertained.”

Whittall has plans to use the judgment to force existing unit owners to pay their bills and infuse money into the dilapidated resort.

“I think the association, which I have been dealing with for more than a year now, has an unrealistic approach and doesn’t believe they are responsible for payments outstanding,” Whittall said. “We believe that way of thinking is incorrect and is built on hopes and dreams.”

Whittall said he believes Unicorp can get control of the entire property, although he warns it’s at least a two-year process of working out the details before a shovel can hit the ground at 1620 Gulf of Mexico Drive.

“There’s going to be a lot of minutia to go through,” Whittall said.

“Some people will go down kicking and screaming, but that’s what happens why you have messy situations like this.”

Colony Lender Principal David Siegal said he expects Unicorp to be awarded the winning auction bid Friday for approximately $16 million in past due bank loans, although he said he expects no one to actually bid that amount.

Siegal said he is certain though that by 10 a.m. Friday, Colony Lender won’t be a part of the Colony process any longer.

“We have no interest in it,” Siegal said. “We’ve said all along we want to get paid and we’ve brought two developers forward now with checkbooks that can fix the Colony. I expect Unicorp will be the one to purchase our interests.”

The association, meanwhile, is making a pitch for the Chapter 7 trustee’s estate along with the help of Longboat Key-based MW Development Group principal Manfred Welfonder; Sarasota Ritz-Carlton and Concession Golf Club & Residence developer Kevin Daves; and Sigmund Levy, one of the main developers responsible for the Four Seasons luxury hotel chain, among other projects.

Both Welfonder and Daves confirmed for the Longboat Observer Tuesday that Maloney received an offer from their group for the estate Monday afternoon, which he’s also considering.

If the association receives the estate, along with the judgment, it would come along with a development team that doesn’t plan on coming after unit owners for past due assessments and unpaid bills.

The association’s alliance, meanwhile, also includes Colony Beach & Tennis Resort unit owner and developer Andy Adams, who distributed his own proposal for redevelopment April 30 that calls for redeveloping the Colony property without the 3 acres of property owned by Colony Lender.

Adams, who owns 61 of the property’s 237 units, said his Breakpointe LLC company “decided it should re-engage in the development of a 15-acre redevelopment plan,” according to his memo.

Adams’ proposal states it’s time to move forward with a three-step effort to revitalize the resort that uses only the 15 acres of property that’s currently controlled by the association.

“After many fruitless attempts, it appears that such a settlement is highly unlikely to occur,” states the proposal. “It’s difficult to envision that a global settlement regarding all the Colony property will occur in the short term.”

Phase one of Adams’ proposal calls for opening 37 beach units by Dec. 26.

Colony Association President Jay Yablon also expressed a willingness to redevelop the Colony without the 3-acre donut in the middle of the property.

“The association, the Adams interest, Mr. Levy, Mr. Daves and MW Development Group are all hopeful that whomever comes into the possession of the 80% of the 2.3 acres will work cooperatively with the other owners at the Colony,” Yablon said. “If they don’t, while far from our first choice, we would be prepared to pursue a 15-acre development until cooperation is forthcoming.”

Whittall and Siegal, though, don’t think a redevelopment plan will happen without that 2.3 acres of property.

“The Town Commission has gone on record saying they won’t approve a 15-acre development, both because it leaves the property carved up and they have the leverage to compel an 18-acre development,” Siegal said.

Siegal also notes the owners of the property in the middle of the resort also have a parking easement that exists over the entire Colony site.

“It would open up a brand new litigation case for years and no condo could be sold because you don’t know if you have a good title or not because of that parking easement,” Siegal said. “The key is to settle the issues and develop the entire site.”

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!

Classifieds

YourObserver
Subscribe to our eNewsletters
1970 Main Street, Sarasota, FL 34236 941-366-3468

Copyright 2014 The Observer Group Inc., All Rights Reserved