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Resolution grows near for Longboat’s Colony meltdown

STEVE REID
Editor & Publisher
sreid@lbknews.com

When Unicorp President Chuck Whittall set foot on the Colony Beach & Tennis Resort property seven and a half years ago, the world was decidedly different.

How will ownership of the once-iconic Colony Beach & Tennis Resort’s 237 units be consolidated? Circuit Court Judge Hunter Carroll will decide next April.

The Colony had ceased operating for three years and the boarded up carcass of the once world-famous tennis resort was the subject of what then seemed like an endless river of litigation.

Whittall entered the fray determined to win over the Association of Unit Owners and become the true heir to the property. But the task ahead was monumental.

Not only were there other competing interested developers, the Unit Owners could not agree on numerous fundamental issues.

Additionally, Andy Adams, who helped instigate the unraveling of the Colony Resort, was quickly amassing units at a discounted price.

Adding to this backdrop, Colony Lender, headed by Randy Langley and David Siegal, bought 2.3 acres of property at auction that was once controlled by Murf Klauber and consisted of the restaurant and commercial buildings as well as the pool and spa.

Adding to the pressure was the fact that the town of Longboat Key wanted nothing more than to quickly see a resolution to not only the ownership issues, but also to the increasingly dilapidated state of the resort that in the commission’s eyes posed a threat to public health, safety and welfare.

Fast forward to today, and Whittall has not only gained approval from the Town of Longboat Key to build a 166-room St. Regis Hotel and 78 condominiums, but he has won nearly every court battle and is closing in on his final goal.

First, he convinced the vast majority of unit owners to agree to his redevelopment plan and they signed a contract in which they will be compensated more than $140,000 for each original Colony unit and they will be paid an additional premium for what were water view and waterfront units.

Whittall also succeeded in demolishing the former Colony and clearing the site, which was ordered by the Town of Longboat Key after the town found the buildings had deteriorated into a dangerous condition.

Perhaps most importantly, Whittall has succeeded in his most recent court battle with a Judge agreeing last July that the Colony Condominium Association will be dissolved. That court ruling, is foundational to the next, and likely final act, of how the ownership interests will be sold and thereby consolidated. That next court hearing will take place in April 2020 in front of Judge Hunter Carroll.

The nexus of the opposition to Klauber, the Town’s approval of Whittall’s redevelopment plan, the demolition and Whittall’s initiative to terminate the condominium association has been Andy Adams. Adams owns more former Colony units than anyone else – about 35 percent of the original 237 units. Adams and Whittall have not been able to come to terms. At one point, Whittall offered north of $21 million for Adams’ units and that was not enough to close the deal.

For Whittall, Adams  missed a moment in time. Now that the property is cleared, the development order has been approved and he is on the cusp of a final consolidation hearing, Whittall believes Adams will likely receive $10-$12 million.

“I believe Adams is a ‘die on the sword’ kind of guy. The problem is the handwriting is clearly painted on the wall and this will come to a finish very soon. He tried to dismiss the Judge and that did not work. He appealed that decision and the Circuit Court did not agree. He did not win in his fight against the termination, he fought the town’s approval and the demolition,” said Whittall.

Now that the Judge has decided and ordered that the former Colony Association is to be terminated, the decision in April 2020 is what is the appropriate method.

Whittall will likely argue and assert that fair market value can best be determined through the agreement he has with the vast majority of the Unit Owners, essentially serving as ‘comps’ for a sale.

Alternately, the Judge could order all of the units go to auction with the highest bidder for the totality of units claiming ownership. That method inures an advantage to Whittall. Whittall has a Specific Performance clause in his contract to purchase with the majority of the unit owners and he said he will simply buy them out prior to the auction. That act would immediately give Whittall a total of 158 units, more than doubling his leverage in the sale.

Any outside entity with ample liquidity could enter the auction and purchase the units and more than 15 acres that go with them. But that act, or if Adams is the highest bidder, still leaves Whittall with the 2.3 acres he owns outright. The 2.3 acres is spread throughout the property and once comprised the commercial buildings. This would further complicate any consolidation attempt by anyone other than Whittall.

 

Whittall’s state of affairs

Last Spring, Whittall was granted approval by the town to build a sales center on the site. There has been no construction because Whittall said Florida State Law will not allow contracts on future condominiums until ownership is consolidated. You simply can’t sell what you do not completely own.

Whittall said he spent two days finishing up his agreement in New York with a lender who is part of the financing of the future $600 million St. Regis project. The other main focus for his company has been completing the plans for the project and all the while working throughout the country and especially in Florida on other projects.

Whittall’s company Unicorp is building 350 apartments and 100,000 square feet of retail space off of Fruitville Road in Sarasota on what is called ‘Lakewood Ranch Extension.’

His company also has $200 million in mixed use projects in Troy, Michigan and the company is building Ritz Carlton residences in Orlando. Unicorp has also just closed on a $50 million land purchase near Disney, bought the Fashion Square Mall in Orlando and closed on two transactions with Walt Disney World.

“We have a couple billion dollars worth of work going on that will keep us busy for at least three years,” said Whittall.

But for Whittall, his time and investment has made the Colony redevelopment project somewhat personal.

“We are not looking to flip this property. My plan is to make the largest investment ever made on Longboat Key,” Whittall said.

If all goes as planned, redeveloping the Colony will be another accomplishment for the entrepreneur who began his Colony undertaking in his early 40s and will likely be in his early 50s by the time it is completed.

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