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Longboat Key Wednesday, Jul. 1, 2009 8 years ago

Colony defaults on property taxes

by: Kurt Schultheis Senior Editor

The Colony Beach & Tennis Resort is delinquent on its 2008 tax bills for four parcels of resort land and six condominium units, totaling $155,994.96 in unpaid taxes and delinquent charges that are owed by the end of the month.

Because 2008 property taxes were not paid on the parcels by the April 30 deadline, investment companies were given to chance to purchase the tax certificates for the property.

But, The Colony Beach & Tennis Resort is not in danger of losing the parcels via means of delinquent property taxes for at least another two years.

Sarasota County Deputy Tax Collector Liz Klaber told The Longboat Observer that two investors bought the certificates, essentially paying the taxes for the resort, in an online certificate sale held June 1.

Tri-State Funding, a Sarasota-based limited partnership, purchased nine out of the 10 certificates, and Oklahoma City-based SDH Investments purchased the other certificate.

Neither company could be reached for comment.

Klaber said it’s a win-win for both the investor and the taxpayer.

“It’s good for the taxpayer because it’s like getting a loan,” Klaber said. “They have gained time, almost two years from date of delinquency, in fact, before the property becomes at risk and an investor can force the property to sale.”

And it’s a good deal for investors, because they bid as low as a quarter of 1% a year for the certificates.

“If a certificate holder is earning 1.5% per month on their investments, they don’t mind holding onto the certificate for awhile until the taxpayer pays their debt,” Klaber said.

But if the taxpayer doesn’t pay its delinquent 2008 property taxes by April 1, 2011, the certificate holder will most likely want to get out of its low-interest rate, Klaber said, and force the property to sale.

The only way the Colony can stop properties from heading to the auction block is by paying all of the taxes it owes on the property and all interest that accrues.

The certificate holder of the property would receive a check from the county once the tax collector’s office receives the past due amount from the Colony.

Katie Klauber Moulton, president and general manager of the Colony, confirmed the delinquent property taxes and said she is aware the resort has two years to pay the taxes.

The delinquent parcels, according to the Sarasota County Property Appraiser’s Office, include four parcels of recreational grounds.

The other delinquent taxes are listed as Colony Chairman and owner Dr. Murray “Murf” Klauber’s restaurant and bar, health spa, pro shop, men’s shop, food and beverage unit and condominium Unit G.

The delinquent taxes follow on the heels of Bank of America’s foreclosure suit against Klauber and seven of his resort corporations, alleging they have defaulted on three loans with the outstanding amount totaling $8.02 million.

Moulton said the foreclosure suit is a direct result of the Colony’s legal dispute with the board of directors of the Colony Beach & Tennis Club Association Inc., the homeowners association for 232 residential unit owners at the Colony.

The two sides are arguing in federal bankruptcy court over whether the association must pay up to $14 million in overdue maintenance costs to the Colony, funds Moulton says have been due since at least 2006.

A bankruptcy judge is not expected to make a ruling in that lawsuit until late July or early August.
The foreclosure suit, Moulton said, is not affecting the day-to-day operations of the Colony, which is gearing up for its annual Fourth of July festivities and fireworks this weekend.


Parcel description   
                        Assessed value                      Taxes due as of June 30
Parcel A — 5,600 square feet           $512,000                                 $8,278.35
Parcel B — 31,350 square feet         $1,407,000                              $22,723.74
Parcel C — 31,350 square feet         $1,242,000                               $20,060.59
Parcel D — 31,350 square feet         $1,294,000                               $20,899.87
Unit A — restaurant and bar              $3,735,000                               $60,297.79
Unit B — health spa                           $256,000                                  $4,146.51
Unit C — pro shop                             $425,000                                  $6,874.21
Unit E — food and beverage             $395,000                                  $6,389.99
Unit F — men’s shop                         $316,000                                  $5,114.90
Unit G — condominium                     $74,000                                    $1,209.01
Total delinquent taxes    $155,994.96
                                                                       Source: Sarasota County Property Appraiser’s Office and Tax Collector’s Office


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