|

Court weighs how to determine ‘true value’ of Colony property

STEVE REID
Editor & Publisher
sreid@lbknews.com

What is the value of 17.2 acres situated on Longboat Key and boasting one of the best Gulf-front beaches in Florida?

That is a question rattling around Sarasota Circuit Judge Hunter Carroll’s courtroom wherein Unicorp President Chuck Whittall hopes to gain final and complete ownership of the former Colony Beach & Tennis Resort.

Whittall has presented the court with a path leading to this end. It is embodied in a plan that includes terminating the nearly 50-year-old Colony Condominium Association and paying an amount defined in his proposal.

The Association of Colony Unit Owners, which is still the controlling entity representing more than 100 owners and about 240 units, is officially on board and has voted in majority in support of Whittall’s plan. A majority has signed a contract in which each unit owner will receive north of $145,000 with a premium paid for both water view and waterfront units.

The rub, and why the entire matter is in court the first Thursday of every month for the foreseeable future, is that Whittall could not obtain the 75 percent vote or more of the unit owners in support of his plan.

The main reason is Andy Adams who owns more than 70 units — the most of any single individual or entity and therefore can control or block the outcome depending on which side of the courtroom one is viewing the imbroglio.

Simply said, Whittall and Adams could not come to terms with Whittall allegedly at one point offering about $22.5 million to Adams for his block of units and Adams reportedly wanting closer to $30 million.

Adams made clear in court last week that he wants the entire property to go to a public auction and his argument is that is the only way to determine fair market value.

The court is bound to provide “equitable relief” under state law, but that relief can be interpreted and implemented with wide discretion by the Judge.

Whittall has argued his attorneys and implied that the situation is far more complex than simply auctioning off the assets as might be the norm in a bankruptcy proceeding.

In the case of the Colony, Whittall owns about 2.3 acres of land outright that is scattered in several parcels throughout the overall property. These were referred to in court last week as the “donut holes” that are not part of any consideration by the court except for the fact that the town says the property is considered and must be developed as part of an integral whole.

The attorney for Adams told the judge where he wanted to see the proceedings head: “I don’t think I’ve ever seen an appraisal of this property. I wonder what is it worth? The plaintiff is not offering what my client sees is fair market value.”

Another attorney opposed to Whittall said, “We may be surprised what the value of that property is.”

The attorney for the Association of Unit Owners, which is aligned with Unicorp in this matter, said there were really no material facts in dispute, just disagreement in how to proceed.

“We can agree, I believe, there needs to be a termination of the condominium agreement and we believe we can move forward with a partition of the ownership. The court can appoint a special magistrate to decide if the agreement with Unicorp my clients (unit Owners) have agreed to is appropriate or whether we should have a private sale. If you don’t do anything, the property lays vacant, the public is harmed, and nothing goes anywhere,” said Association of Unit Owners’ attorney Jeffrey Warren.

Part of the dilemma, according to Judge Carroll, is that if he terminates the Association, how will claims that exist against the Association be paid if they are successful in other court proceedings?

“A concern I have is if I turn the spigot off for the Association’s ability to raise money from owners am I not prejudging those folks who have claims against the Association?” said Carroll.

Association attorney Jeff Warren said part of his client’s belief is that a summary judgment would contain a limitation of claims that can be made.

“Repairs and maintenance was unique in the Colony; it was under the Partnership’s (Murf Klauber) control.”

Warren added that the opponents acquired the vast majority of their units before the Colony closed and he questioned the validity of damage claims.

The attorney for Adams said that Warren was acting like there were no issues with any of the facts and that it was so simple that there could be a judgment next week and everybody could just move on.

The Judge then asked if each attorney present thought that mediation would be helpful. Attorney Dan Lobeck said he did not see any purpose in proceeding with mediation when he said the Association that should advocate for all Unit Owners was not for his client.

“What’s to be mediated?” asked Lobeck.

Judge Carroll said that if there was an iron-clad contract between the owners and Unicorp it can always be amended if the two sides agree.

After the attorney for Unicorp showed the Judge an ownership map revealing the donut holes that were owned by Unicorp within the property, the Judge asked if he could keep the large map.

The opposing attorneys objected, and the Judge let that issue go.

Adams’ attorney said his understanding is the outparcels owned by Whittall are a rite of first refusal for the Unit Owners if the development plan does not move forward.

“It may all become one again,” said Adams’ attorney.

The Judge ordered that the parties must attend mediation on or before July 3 of this year. He said that mediation would not slow the progress made in his courtroom and, “if nothing else, the mediation may narrow the field.”

Tags: , , , , , , , , , ,

Longboat Key News

1 Response for “Court weighs how to determine ‘true value’ of Colony property”

  1. Blake Fleetwood says:

    Of course the individual condo owners own the land collectively.

    Established law in any bankruptcy is that you auction off the assets and devide the proceeds to the various owners and claimants.

    This is the only fair way to determine the value of an asset.

    The land is worth what someone will pay for it.

Leave a Reply