My View: The 'terminators' attack the Colony Resort

 

My View: The 'terminators' attack the Colony Resort

 

Date: April 3, 2013
by: Blake Fleetwood | Guest writer

 
 

A group of Colony Beach & Tennis Resort Association board members are advocating the teardown of the Colony instead of renovating the existing units. It’s not the way to go.

The plans require the owners to sign away their deeds and terminate the condominium association. And yet, the developers haven’t told us what the unit owners will get or when they will get it.

If the owners fall for that, I’ve got a bridge to sell you in New York.

There are basically two groups of owners left at the Colony: Those who are disgusted by the mess of the last three years and want to get out at any price; and those who want to stay at the Colony, where we and our families have enjoyed the beach at this wonderful resort for decades.

The developer-termination plans by Vanguard Land LLC and JHM Group are vague and unspecific on key deal points.

For those who want to get out: When will they get their money?

The developers talk about the end of the “approval period” or other unspecific time or contingency, but the reality is, if they really have the money and confidence in the project, they should buy them out now. This is what “condo terminators” usually do.

Otherwise, it may be three to five years before the project really gets going and any owner sees any money.
Meanwhile, the owners will have to pay nearly $35,000 in dues and taxes for nothing. And insultingly, if the project ever happens, the developers want to give us puny “go-away” money starting at $59,000 for an oceanside condo?

For those of us who want to continue to own condos at the Colony, the developers won’t tell us how much it will cost to continue as deed owners.

They say they will give us a small credit and then we will be allowed to buy back at “market prices.”
I’ll bet the market prices they are projecting are somewhere between $500,000 and $900,000. The developers know the prices they are counting on, but they won’t tell us.

Could they be hiding something? Nah.

Which current owner is going to want to shell out this kind of money, $500,000, and only be able to stay for one month? A timeshare at best. Now we are allowed to stay for 30 days at Christmas, 30 days at Easter and 30 days in the summer, or more, if we want.

The problem with the developer plans is they cost too much and will take too long. There are plenty of issues, which are bound to slow it up, that need to be resolved:

1) The first obstacle is the “real vote” on a termination plan. The current straw poll is meaningless. The developers don’t have the votes. Our condo documents say that termination vote must be by 100% of the owners.

Even if the lawyers get around that, Florida statutes (718.117, page 52) say a vote of 80% is required for termination, 190 “yes” votes out of 237 owners. And that a 10% “no” vote will kill a plan, which means the terminators will need 90% of the votes.

Andy Adams and other members of the board have, or control, nearly 30% of the units and have voted against the terminator-developers in the past. If 100% of the owners do not agree on a termination plan, lawsuits will tie any plans for years.

2) Another huge unknown is the uncertainty of lawsuits with Murf Klauber and Colony Lender. Everybody has been trying to get this resolved for five years. What makes anybody think the current developers will have any more success? If Colony Lender thinks a rich developer is involved, these guys are going to hold out for the moon, which is what has happened.

3) How long will it take the developers to raise $100 million or more for a new resort?

4) How long will the development and approval of a new site plan take? If past projects are any guide, this might be another couple years with lawsuits by anti-growth elements in the town who will surely object to increased density and new high-rise buildings.

5) Obtaining permission from the town to add a new high-rise hotel and 115 extra units at that residential location will not be easy. This, too, will take years and court fights to resolve.

It seems likely that all these contingencies are open ended.

Fortunately, there is another solution for the Colony: renovation.

One example for the Colony might be The Dolphin Towers in Sarasota, which was closed for three years after a floor collapsed. Charlotte Ryan, the condo president, was told by developers that they had to tear down the 35-year-old building.

But Ryan didn’t listen to the chorus and courageously obtained other opinions. Five engineers said it could be restored, and the Dolphin Towers is now under construction. Many of the original owners will be moving back in soon at a cost of 20% new construction. Owners who want sell are getting good prices.

We should be so lucky.

The problems at the Colony are mostly cosmetic, according to David Karins Engineering, Mark Hawks of Hawks Nest Construction and other construction firms. Karins and Hawks have given us firm bids to renovate the Colony condos to the standard they were 10 years ago for $32,000 per unit.

Andy Adams, who built a $1 billion company focusing on residential construction and who owns roughly 50 Colony units, favors renovation because it will provide the best and fastest return on investment for the owners.

The suggestion that the Colony can’t be renovated is foolish and shortsighted. Dozens of the best resorts in Florida are over 50 years old and have been renovated gloriously, maintaining a historic old-Florida style. 
In six months to a year, significant areas of the Colony can be completely restored, and many owners and tourists can be back on the beach as before. Owners who still want to get out could then sell for $200,000-plus once the renovations start.  

Why should we spend $500,000 to get back our own units for 30 days when we can fix them up for $32,000 and control the condos for our own and tourist use for 365 days?

Blake Fleetwood was formerly on the staff of The New York Times and has written for The New York Times Magazine, New York Daily News, The Wall Street Journal, USA Today, Village Voice, Atlantic and the Washington Monthly. He is a member of the Colony Beach & Tennis Resort Association board.

 

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