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Can Colony property be divided? Court to hold key trial in January

STEVE REID
Editor & Publisher
sreid@lbknews.com

Several critical issues swirled through Sarasota Judge Hunter Carroll’s courtroom as the opposing parties in the ongoing Colony saga clashed Friday.

The hearing started on a positive note for Unicorp President Chuck Whittall who has gained approval by the Town of Longboat Key to build a St. Regis Hotel and Condominiums on the 17.2-acre site.

Whittall’s attorneys said that three of the four parties that have until now been opposed to Whittall’s plan, have now agreed to sell their units to the Orlando-based developer. That leaves Andy Adams, who owns 74 of the 244 historic Colony units, as the only obstacle for Whitttall.

Both Whittall and Adams do agree on one key point and that is that the Colony condominium needs to be dissolved and the units sold in an equitable manner. The Judge also agreed with that sentiment over the summer, and ordered the termination of the Condominium. But the main battle is how to compel the sale and at what valuation.

Adams, through his attorneys, said repeatedly that there should be a public auction wherein the highest bidder ends up with the property.

“We are the ones trying to move forward. We can put it for sale and let the market set the value. Why go through the exercise of creating a partition methodology when we have a tried and true statute,” said the attorney for Adams at the hearing.

Adams wants the public auction as opposed to Whittall, who is seeking for the court to implement his partition plan and a private sale.

Whittall’s attorney has argued that on its face an auction makes sense, but that in the case of the Colony, there are clear impediments that cloud such a simple approach.

One impediment is the assertion made by the Town of Longboat Key Attorney Maggie Mooney that for the purposes of redevelopment the Colony is considered an integral piece of property. The fact that Whittall owns outright about three acres that once housed the restaurant, spa and other commercial activities precludes any proposal that would divide the property

In short, if former Colony units go to auction and Adams or another entity is the highest bidder, redevelopment would be precluded without Whittall’s acreage.

“If a sale or resolution leaves divided ownership of the property, years of further litigation could ensue,” said Whittall’s attorney.

Attorney Jeffrey Warren, who represents the Colony Association of Unit Owners, told the Judge that the question is whether there mighth be a better offer than simply a public auction.

Judge Carroll shot back: “How do a measure a ‘better method?’ Why not make the agreement the floor and then go to bid? Why is it more complicated than that?”

‘The agreement’ refers to Whittall’s existing contract to purchase the former Colony units. Whittall has agreed to pay $140,000 plus a premium for former water view and waterfront units to every owner except Adams.

Adams and Whittall have been unable to come to an agreement on price and that is what has propelled the situation.

Warren replied to the Judge by saying that there is no way to divide the property.

During a break in the courtroom session, Adams told Whittall that it needs to go to auction.

Whittall countered that the property cannot be redeveloped if ownership is divided.

Longboat Key Mayor George Spoll, who was in the audience, said it could be subdivided.

“No: I have a letter from the Town Attorney saying it cannot,” said Whittall.

Spoll said, “That was an interpretation.”

After the break, the attorney for Adams said that if the Judge wants to simply go with Whittall’s proposal, then that proposal needs to be legally looked at. He said his party was for a public sale..

After this discussion, Judge Carroll proposed what he calls a Phase Alpha trial in January to “see if the property is divisible. That trial is scheduled for January 26 and January 27 of 2020.

The Judge said he believed all parties agree.

The attorney for Adams said he didn’t know if he could be ready by January for a trial due to all the legal discovery that must be performed. To this, Association of Colony Unit Owners President Jay Yablon whispered, “Stalling….”

The attorney for Adams snapped back, “I’m not stalling; I resent that …I have lost my train of thoughth.”

Through the looking glass

Whittall and Adams have been battling for more than seven years and the Colony Resort itself has been closed for almost a decade.

The Colony operated during the gilded age of tennis and former Chairman Murf Klauber fashioned the Gulf front resort into an international sensation. Over the years, celebrities, tennis stars, artists and even former Vice President Al Gore and former President George W. Bush vacationed at the resort.

Klauber managed the operation and sold the units to mainly friends and investors who were allowed to stay one month at the resort and Klauber would rent their unit for the rest of the year. This arrangement lasted more than four decades and served as Longboat Key’s largest incubator of Longboat Key residents who first discovered the island through staying at the Colony.

Adams and Klauber clashed over ownership issues and Adams eventually became President of the Board of Directors.

It was when Klauber assessed owners for deferred maintenance that the eventually meltdown of the Colony began.

The owners accused Klauber of mismanaging funds and refused to pay assesments, which Klauber was entitled to make under the agreement governing the resort management.

Although Klauber was vindicated in court and won on appeal, it was too late to salvage the resort.

After years of searching for a redevelopment proposal, the Association of Unit Owners and its board of directors chose Unicorp.

Adams did not go along with Whittall’s contract and their inability to come to terms is what leads us to the current state of affairs.

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3 Responses for “Can Colony property be divided? Court to hold key trial in January”

  1. Sunny Gravy says:

    There are lots of potential customers on Longboat for an assisted living-nursing home.

  2. Who’s on first says:

    Does Andy Adams subscribe to the Gordon Gecko school of business – Greed is Good? Maybe the judge will force him to the table to take an offer, but I seriously doubt it.

  3. Bob Haley says:

    Has Andy Adams ever submitted any kind of development plan, or is he planning on building a nursing home?

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