Cancelled trial dates open door for next stage of Colony case

A Circuit Court judge this week cleared a path to terminate the condominium association of the former Colony Beach & Tennis Resort, paving the way for a court proceeding in 2020 that will determine how unit owners might be compensated.

The scheduled Aug. 1-2 trial dates on Unicorp National Development's filing to close out the association were canceled, court records show, paving the way for the next step. CEO Chuck Whittall said the judge in the case asked Unicorp's legal team to prepare an order to terminate the association and file it with the court.

“I do not expect an auction.” – Chuck Whittall 

In April 2020, at least three options are possible for the judge to consider:

• The judge may set a price per unit with three or four different classes of units. Whittall would buy those units.
• The property could be carved up between those who claim responsibility for it. 
• A public auction for the property, in which anyone could bid.

Whittall said he hopes for the first option and doesn’t believe the judge will opt for a public auction.

“I do not expect an auction,” Whittall wrote in an email. “Out of all the unit owners Andy [Adams] is the only one who requests that. Many of the unit owners have elected to have a condo in the redevelopment and an auction would deprive them of that opportunity. I believe the judge will determine the most equitable solution is our agreement.”

Brett Henson, the attorney for Adams, who owns of 70-plus Colony units, wrote in an email that “Significant issues in the litigation – including disposition of the property if terminated, and whether the property will be physically divided or sold at auction – remain to be determined."

Dan Lobeck, an attorney for unit owners Carol and Sheldon Rabin, also sees the issue as one of equity. But his perspective differs from Whittall’s. He said Whittall is basically seeking to have the court turn the property over to Unicorp.

“I don’t think that’s going to happen,” Lobeck said. “[Statute] 718.118 says it has to be an equitable remedy, and we’ve cited a lot of case laws saying you don’t give somebody something that a statute calls for in equity, you have to follow the statute. And he can’t do that, so I think the judge is ultimately going to order a public sale, where the property goes to the highest bidder. And you may see a bidding war between Unicorp and Andy Adams.”

Colony Beach & Tennis Association President Jay R. Yablon said he hopes Adams and Whittall can come to an agreement before then.  He added that the judge’s termination decision is what the association had hoped for, especially without the expense and time that would have gone in to a trial.

“I think the judge is ultimately going to order a public sale, where the property goes to the highest bidder. And you may see a bidding war between Unicorp and Andy Adams.” – Dan Lobeck

Lobeck said he expects Whittall and Unicorp to fight for a credit bid based on prior development agreements if the judge goes the route of the public auction. Yablon said he hopes that is, indeed, the case.

“There could be a public auction, but I think there would need to be certain understandings in that auction,” Yablon said. “If a public auction was to occur, we would expect that the deal negotiated with Unicorp should become the minimum that is provided to members of the association.”

That deal would include three choices afforded to owners, according to Yablon: 1. To sell their units to Unicorp at a better price than what they were offered by other developers. 2. To not take that money but to simply retain in the new resort proposed by Unicorp a 30-day usage right. 3. For owners who can afford it, a discounted purchase for a condominium unit in the new development.

“If it were to go to public sale, that should be the opening bid which is required for anybody,” Yablon said.

A public auction is the most even-handed solution, according to Henson.

“An auction could potentially bring the highest value to the property, not just for our clients, but for all owners,” Henson wrote in an email. 

At first, Whittall tried to reach a threshold of condo owners to agree with his plan for redevelopment and to sell to Unicorp. But Adams owns about a third of the units, blocking that effort. Unicorp then filed to terminate under state statute. This meant they would have to both prove the condo properties have been substantially damaged, and the property was not repaired within a reasonable amount of time.

The judge didn’t feel the need to hear arguments on these points: The Colony was demolished in 2018. “There was some sort of fight over whether they could be rebuilt, but frankly under the codes, they couldn’t be rebuilt the way they were originally,” Lobeck said.

“To our knowledge, there’s never been a judicial termination in Florida.” – Alan Tannenbaum

A damages suit brought in December by the Rabins countersues the association for letting the property fall into disrepair to the point that it was torn down. Lobeck said nothing changes with that suit and it is ongoing.

Alan Tannenbaum, who represents the Rabins in the suit, said the case is on appeal, but the briefs have not been filed yet. He argued that termination of the association is not as black and white as it seems because it is a judicial termination rather than termination by the vote of condo owners.

In a termination by vote of condo owners, the association must still take care of its obligations, and before any money is given to the owners upon the sale of the property, the association’s obligations must be accounted for.

Tannenbaum said with judicial termination, the judge doesn’t have any criteria telling them how to conduct it.

“To our knowledge, there’s never been a judicial termination in Florida,” Tannenbaum said. “Probably the safest thing for him to do is to take all the due process requirements that are in the termination by owner vote portion [of the termination statute] and just use those.”

So the suit continues on, and the method of sale has yet to be determined. Amid the legal maneuvering, designs for the new St. Regis Hotel and Residences push forward.

“On a different note, the plans are moving along nicely and will be complete in a few months,” the email from Whittall read. “The condo floor plans are complete and with the marketing company being developed into brochures…Lastly the preliminary landscape and hardscape plan is complete. The architect did an amazing job. It will be beautiful. You all will love it.”

“An auction could potentially bring the highest value to the property, not just for our clients, but for all owners.” – Brett Henson