2013 Year in Review: Stories that shaped Longboat Key — The Colony, Cell Towers, Pension reform, Hilton, Planning with the ULI, Elections & more…

At the end of each year, Longboat Key News reviews the events and issues that shape the town and its future. Many events are ongoing and have been debated over several years and multiple commissions such as structural solutions to North End beach erosion, whether there should be a cell tower, as well as the ongoing Colony litigation. The following is a summary of the events that shaped the news in 2013 and will continue to inform the Key into 2014.


Colony legal battles heat up in court and Town Hall; bankruptcy judge promises January 2014 decision

Not only in 2013, but over the past several years, the town commission has grown increasingly frustrated with the lack of progress in the resolution of the legal conflicts between Colony Lender, The Colony Association of Unit Owners and Colony Founder Murf Klauber. These legal conflicts over what to do with the Colony Tennis Resort and who controls what portions, have consequently impeded its redevelopment.

In December there was still no resolution reached in the Colony bankruptcy hearings, but Judge Rodney May gave indication that he will be ready to rule in January 2014.

“This will not go on forever, and I will decide in January,” said May at the end of two days of testimony in which the Association of Colony Unit Owners asked May to approve a settlement agreement and reduce or “cram down” the $15 million owed to Colony Lender and the transfer of Colony Lender’s collateral to the Association.

If May agrees to that proposition, Colony Lender said in January it will immediately file an appeal of such a settlement, calling such a move a complete abomination of legal precedent and bankruptcy law.

Colony Lender had scheduled a sale of its assets for Dec. 6, but May at the end of the Dec. 4 hearing ordered a stay on the sale.

Part of the settlement agreement proposed by the Association of Unit Owners, is to pay Colony Founder Murf Klauber $3 million to act as a consultant in any future redevelopment of the resort. Klauber in turn, has agreed to not pursue the $25 million claim that he won on appeal against the Association. Judge May said he was troubled by that arrangement.

“One thing that bothers me is giving money that is expendable right away to Dr. Klauber. It seems to me, if Dr. Klauber is being paid as a consultant, then the thought should be to not pay him until the pie comes out of the oven…Colony Lender has been delayed and its assets are going to other sources,” said May.

Judge May has been urged by Colony Lender for several months to liquidate the assets and to stop treating the proceeding as a Chapter 11 reorganization, arguing that there is no ongoing business that is viable, simply an attempt to consolidate assets at their expense. May said that he saw his role as “helping to resolve issues on both sides of the room.”

In the settlement the Association has asked Judge May to approve, they receive the deeds to real estate the Colony Lender holds as collateral. The Association offered Judge May the tax assessor’s valuation as the price to be paid to Colony Lender over time.

Colony Lender attorney Michael Assaf, argued in court that the debtor (Klauber) in receiving money over the creditor (Colony Lender), violates bankruptcy law. Assaf also argued that the Judge cannot bind the unit owners in advance to a plan that does not put any specific dollar amount in place.

Assaf said that such a proposal by law requires a valuation hearing, and that the commitment of the unit owners would need to be voted on by the unit owners.

Judge May spoke of the uniqueness of the case in that the 18-acre property had ownership divided up with some interests liened, and then transferred and then further divided. May pointed out that Colony Lender paid $4.5 million to buy its collateral, but the note had a face value of far more, and that “It seems the price paid is a component.”

Assaf responded that case law says that what was paid for debt has no bearing on the right to a deficiency judgment. He added that the only right is the equity of redemption and payment in full.

Judge May responded that he was not sure how that affects restructuring debt in his bankruptcy courtroom and that there were some very detailed and exotic issues at play.

The attorney for Klauber’s bankruptcy entities, Michael Markham, argued in favor of the settlement and said that the “exotic nature of the settlement plan is due to the exotic nature of the case.”

Association of Unit Owners attorney Jeffrey Warren told Judge May that the court was considering a “classic cram down” and had to determine if it was fair and equitable.

Morgan Bentley spoke against the settlement agreement as the attorney representing the field interest who owns the right to recreation lease monies. Bentley said that his client is only to receive $75,000 while Dr. Klauber borrowed $14 million, it didn’t get paid and yet is getting $3 million as a consultant. He added that Andy Adams paid $350,000 for his five percent of the recreation lease and receives exactly that under the settlement. And all the lawyers are getting paid, but his client was not even asked, nor agreed, to the amount in the so-called settlement.

Town takes on Colony mess

This year, the Longboat Key Town Commission made several major decisions affecting The Colony including the allowance of the 237 units to remain grandfathered until at least April 30, 2014, and to schedule a formal nuisance property hearing on March 4, 2014 to determine what to do with the deteriorating structures.

The commission agreed with the Town Building Official’s opinion that the Colony is legally a “nuisance” under Town Code and subsequently the commission scheduled a hearing for March 4 that begins the process that leads to demolition.

Building Official Wayne Thorne told the commission that he found hundreds of items that led him to the official conclusion of the nuisance status including photographs depicting structural damage to wood, foundations, aluminum as well as disconnected awnings, air conditioning units and railings.

Town Manager Dave Bullock said the area is causing blight on the key and creating a negative effect on neighboring property values as well as safety issues in event of a windstorm with debris.

If at the March 4 nuisance property hearing the commission finds that The Colony is a Public Nuisance, they will create a resolution declaring The Colony such in its entirety or in part.

Town Attorney Dave Persson said the town was walking a legal “tightrope.”

Persson said, “You are trying to examine and determine the buildings as a nuisance on one hand and on the other taking one of the most dramatic moves government can take — depriving someone of the use of their property. There is liability on both sides of the issue.”

The Colony officially closed and ceased operations on Aug. 15, 2010. If the town had not granted an extension, the site will lose 134 units and revert to 6-unit per acre zoning, which the town says is all that is allowed.

Although the town maintains it can remove the historical units, Colony unit owners as well as other invested parties have stated that any decision by the town to strip its zoning will be challenged in court. The town down-zoned the property many years after The Colony opened in the late 1960s.


Town nixes Cell Towers

In November of 2013, the Longboat Key Town Commission reached consensus at a commission workshop that it does not want to see a cell tower built on Longboat Key, and directed the town manager and attorney to craft an ordinance to that effect.

The previously proposed ordinance stated that an applicant could seek a cell tower with a maximum height of up to 110 feet tall with a waiver for additional height. The ordinance posited a hierarchal approach to approval where an applicant would have to show that other “preferred” technologies that are less intrusive than a cell tower would not be feasible or would cause a “hardship.”

Consensus was reached with Commissioners Phill Younger, Jack Duncan, Pat Zunz, Terry Gans, and Mayor Jim Brown raising their hand in favor of creating an ordinance that would not allow cell towers. Commissioners Lynn Larson and David Brenner did not support the idea. Mayor Brown commented that he didn’t think anyone on the commission was not in favor of Longboat Key having the best telecommunication system.

Many ideas have been proposed over the past year, including Distributed Antenna Systems, Femtocell technology within the home, and cellular towers at Spanish Main, Longboat Island Chapel, and Anna Maria Island.


Pension liability capped

In 2013, the town’s pension plans for its Firefighter, Police and General Employees took many transformations. As of Oct. 12, two of the town’s three pension plans were frozen, and 29 Longboat Key firefighters are enrolled in the Florida Retirement System (FRS) pension plan. The changes occurred Oct. 1, at the beginning of the town’s new fiscal year. General employees have new 401(a) accounts that enable them to invest up to 16 percent of their salaries into the plan.

The town offered a similar plan to the Longboat Key Police Union, but a contract could not be reached during negotiations and the police union and the town are at impasse with the new contract. As FRS pension costs increase, police officers are reticent to take a pension option that could take more money out of their paychecks after the town’s cap is reached and officers have to pay for costs above the cap.

The police officers also declined to accept an offer before a mandated deadline that offered a 401(a) retirement plan that included a 3 percent pay increase and would have The firefighter’s pension plan has an 8 percent rate of investment return and the general employees’ pension plan has a 7.75 percent rate of return.
State officials are asserting that a 7 percent rate of return for both closed plans is more realistic and needs to be used moving forward. The commission also agreed this year to designate an additional $400,000 to the town’s pension reserve account to pay for the anticipated pension increase. The town’s millage increase will account for half of that cost, and the other half will be from the General Fund.


Hilton expansion makes way through Town Hall

The Planning and Zoning Board examined a site plan amendment for the Longboat Key Hilton Resort this year. The plan includes a request for 85 of the town’s pool of 250 tourism units as part of a $24 million renovation and expansion project.

Delray Beach-based Ocean Properties Ltd., owner of the Hilton and the Resort at Longboat Key Club, submitted a site plan application in September for the project. If the plan is approved, the Hilton will be the first applicant to take advantage of the 250 tourism units, which were approved in a referendum in 2008. The Hilton’s site plan application was submitted Sept. 4 and includes redeveloping existing Hilton buildings and the 102-rooms that currently sit on the site, in addition to the requested 85 of the town’s tourism units. The 85 units will be used in a new tower building on the property. If approved, the Hilton project may commence in the first or second quarter of 2014.


Planning Longboat Key’s future; the start of a new era

Urban Land Institute comes into town…

This year the town commission began a $125,000 project with the Urban Land Institute (ULI) for a one-week in depth evaluation of everything from development issues to future land use and planning, to whether the town needs a community center.

Approximately 150 Longboat Key residents, business owners and interested parties were included in an all-day interview session held by the Urban Land Institute.

The five-member ULI staff was composed of experts from across the country who specialize in assisting communities design their towns.

On Tuesday, Oct. 22, the ULI held all-day interviews at the Hilton where the panel members asked the 150 interested Longboaters for their take on the island’s issues and solutions. The ULI then sequestered themselves until Friday, Oct. 25 in Town Hall when they will hold a public meeting and give the results of their findings and lay out recommendations and conclusions. The group is expected to make a presentation as well as offer implementation strategies.

The ULI will then produce a comprehensive written report for the Town Commission.

Town Manager David Bullock said the implementation is up to the Town Commission, and that the direction the town takes could be many and varied. Bullock said it could entail land-use changes, transportation changes, zoning or any myriad of strategies. He added that there may be suggestions for the private sector as well.

The town commission formed the Urban Land Institute’s Implementation Advisory Committee in November. There were two formations of the group with the original committee consisting of Commissioners Jack Duncan and Pat Zunz, Planning and Zoning Board members Walter Hackett and George Symanski and Longboat Key citizens Tom Freiwald and Larry Grossman. Mayor Jim Brown proposed adding three additional citizens on the new committee, Roger Leibin, David Novak and Jered Whitehead.

Brown’s motion passed 4-3, with Brenner, Larson and Commissioner Terry Gans voting against. The ULI committee appointed Freiwald as chairman. Freiwald presented a hierarchy chart and showed how they would be implemented. He also presented an action summary, which allowed each member to rank the ULI recommendations in order of importance.


Election 2013

On March 12, 2013, Longboat Key voters decided the winners in the three contested seats up for election. It was an unusual year in that three out of the four seats up for election were contested. Commissioner Jack Duncan was the sole candidate who ran unopposed for his District 2 seat.

Incumbent Mayor Jim Brown beat resident Larry Grossman for the District 4 seat; At-Large incumbent Commissioner Phill Younger won against former Commissioner and Village resident Gene Jaleski; and Commissioner Terry Gans won against resident Irwin Pastor for the At-Large seat. Forty percent of registered Longboat Key voters turned out to vote this year, and in the Gans vs. Pastor race, the winner was decided by 27 votes. The six candidates raised approximately $70,000 for the election and participated in four different debates.





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