Colony unit owners aim for May 1 deadline

Unit owners who attended the Colony Beach & Tennis Resort Association’s annual meeting voted on a nonbinding resolution directing the board to move forward with a plan to develop 15 of the resort’s 18 acres, if a settlement between the parties isn’t reached by May 1, according to Association Board President Jay Yablon.

“I’m not going to be optimistic or pessimistic,” Yablon said of what will happen over the next month. “We’re just going to work on it.”

Katie Moulton, the longtime president/general manager of the Colony and daughter of owner Dr. Murray “Murf” Klauber, declined to comment on the direction, saying that the proceedings of the meeting were confidential.

The legal issues surrounding the property are so complex that in December, Town Attorney David Persson told the Longboat Key Town Commission:

“If I were a law professor and I was teaching land-use law and I wanted to flunk all my students, I would give this as the example, because there is no right answer.”

The resort closed in August 2010, approximately four-and-a-half years into a legal dispute between the Association and Klauber, when U.S. Bankruptcy Judge K. Rodney May converted the Colony Chapter 11 bankruptcy reorganization to Chapter 7, giving unit owners complete control over their units. Klauber and his entities retained ownership of approximately three acres within the property at the time of the ruling.
Then, in October, U.S. District Judge Steven D. Merryday ruled in favor of Klauber, ordering a bankruptcy court to decide whether the Colony Beach & Tennis Association should return possession of units to the partnership that ran the Colony and recommend receive damages of $7,751,470 or recommend an award of $20,646,312 for the partnership with no return of units.

In December, Yablon and representatives of the board’s development partner, Club Holdings Ventures LLC, vowed to move forward, even if it meant developing around three acres owned by entities controlled by Klauber if they couldn’t reach an agreement.

The commission warned the feuding parties last month that they could lose the property’s tourism use if an agreement isn’t worked out by Dec. 31 — the deadline commissioners set last year as part of an extension of the town’s tourism abandonment requirement. If the 237-unit property lost its tourism use, future development could be limited to six units per acre.