Colony owners announce renovation strategy
Editor & Publisher
At the metaphorical 11th hour — less than a week before the Town Commission debates the fate of the unit count at the Colony Beach and Tennis Resort — the Colony Association of Unit Owners board voted last week to work with Andy Adams and Naples-based Coral Hospitality to renovate the shuttered Longboat Key resort.
In a single-page press release (go to www.lbknews.com to view the entire image), the Association has announced a plan to re-open units to the minimal standards that were in place when the resort ended operations in August 2010, and has stated that it “has no intention of abandoning the resort.”
This announcement by the Association was made Aug. 30, days before the critical request is considered by the Longboat Key Commission on Sept. 4 to extend the grandfathering of the resort’s 237 tourism units.
As it stands today, the grandfathering of the tourism use is set to expire at the end of this year, and the number of legal units at the Colony will be reduced from 237 to about 100.
The Commission in March, when it extended the grandfathering to Dec. 31 of this year, demanded that it see redevelopment immanent and significant progress made.
Prior to the press release, the grounds for extension were based on the complexity of resolving the many court challenges and appeals. In fact, legal constraints alone are a justifiable reason for the Commission to extend the grandfathered status.
Some neighboring unit owners at the Aquarius condominium have recently opposed the extension, saying that something needs to be done sooner than later and that little progress has been made. The public hearing on whether to grant the extension will occur on Sept. 4 at 7 p.m. in Town Hall.
Association President Jay Yablon wrote on Thursday that it will cost roughly $40 million to renovate the resort and will be financed by a combination of Adams’ affiliates and unit owners.
Since the closing of the Colony, Adams has bought up units and now owns the largest percentage of the resort reportedly with more than 50 units under his control.
Who’s on board?
Other than Adams and the unit owners, two other owner-interests, Colony Lender, LLC (owned by Randy Langley and David Siegal) and Dr. Murray ‘Murf’ Klauber, are being addressed according to Yablon. That being said, Yablon has not secured a settlement or a contract to date with either party.
Yablon characterized those efforts this way:
“The Association has reached out to Murf Klauber, his family, the bankruptcy trustee, and Colony Lender, LLC to try to put the legal disputes behind us, we are hopeful that we will have a settlement in the coming days without which we will be forced to proceed without these valuable players. We are prepared to make concerted efforts to reach agreement with all stakeholders,” said Yablon.
According to Klauber, he was not contacted nor discussed at all the agreement reached with Andy Adams. The same is true of Colony Lender’s David Siegal.
Siegal said Colony Lender simply wants to be paid for the loan it secured at this point and has no plans to be part of a redevelopment under this latest scenario.
Klauber wrote Longboat Key News, “The recent announcement by The Colony’s Board that an agreement has been reached with a developer and financial partner is noteworthy, however we have not been privy to the details of the plans or the terms of the memorandum of understanding that has been executed. As a result of being unfamiliar with the outline being proposed for the future of The Colony or of any settlement proposal being offered to our companies for damages they have incurred, I am unable to offer support or criticism.”
Currently, all parties involved are still waiting for Bankruptcy Judge Rodney May to give his final ruling based on the instructions of U.S. Court of Appeals Judge Steven Merryday, who sided with former Colony Chairman Murf Klauber and the general partnership in a ruling last Spring and ordered May to rule within the confines of his legal instruction and ruling.
In short, Merryday opined that Klauber was damaged and the Association must either restore management control of the Colony units and more than $7 million in damages to Klauber and the General Partner, or pay the General Partner (Klauber) more than $25 million in damages. May has yet to give a final order.
To grant the extension, or not
The arguments to extend the grandfathering include avoiding the loss of value in the property if the unit count is reduced from 270 to 100.
Also, supporters of the extension cite that residents voted to enhance tourism on the key in a referendum vote allowing 250 additional tourism units a few years ago. That vote was predicated on an operating Colony Resort and the loss of units would undermine that intent.
Additionally, the Town could face being drawn into a legal tangle if it appears to assert the provision capriciously or arbitrarily when it has stated the Town’s goal is to reopen the resort and the parties could argue that it cannot reopen due to “legal constraints.”
Furthermore, if the Town takes away the grandfathering, the outcome could be that the unit owners attempt to reopen in an ad hoc manner and qualify as a resort.
Then they can close again and re-trigger the clock to preserve the units. Those in favor of grandfathering say such machinations will be detrimental and costly.
Those who are opposed to extending the grandfathering say conditions have so deteriorated at the resort that rats and other vermin pose health and sanitary risks as well as the possibility of squatters and vagrants entering the property.
They also wonder why the Town should continue a benefit to the owners who they see as committed to their own self-interests with little hope of resolution.
Klauber, who no longer lives at the Colony as of last week said, “It pains me that so much battling has occurred, the enormous costs of those actions have been forced on all interested parties, the closure of a grand and renowned business has resulted, and ultimately my wife and I have been forced to abandon my home of 40 years due to a failure by the unit owners to maintain the common areas of the property.
I will again express my eagerness and readiness to enter into next week’s meeting with the representatives of the newly appointed negotiation team that has taken over for the Board. I am familiar with the members of this team and respect their experience and knowledge of business, real estate, law and, frankly their common sense, and am hopeful that this is our most conclusive meeting of this type.”
The discussion will be held at 7 p.m. on Sept. 4 in Town Hall.