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Fourteen companies/investors — which includes six participants that either have local roots or businesses in the area — are in the running to either redevelop or teardown and rebuild the shuttered 41-year-old Colony Beach & Tennis Resort.
The Colony Beach & Tennis Resort Association Board sent a report March 8 to unit owners that revealed Colony unit owner Andy Adams and his AdamsMark LLC; local resort developer Larry Starr; Ocean Properties, Ltd. (owner of the Longboat Key Hilton Beachfront Resort, the Lido Beach Resort and Holiday Inn Lido Key); Sarasota-based MW Development & Investment Advisory; local commercial Realtor Stan Rutstein; and Sarasota-based Floridays Development Co. have all submitted proposals to restore the resort.
The eight other non-local companies and investors are Naples-based Coral Hospitality; New York-based Starwood Capital Group; Broomfield, Co.,-based Quintess; Harper Sibley; Stamford, Conn.,-based JHM LLC; Sonoma County, Calif.,-based Mayacama; The Koru Group; and Bob Understein and Greg McMurtrie.
The Colony Beach & Tennis Resort closed Aug. 15 after a U.S. Bankruptcy judged ruled to convert the Colony's Chapter 11 bankruptcy reorganization with its 232 units owners to a Chapter 7 liquidation.
Colony owner and Chairman Dr. Murray “Murf” Klauber and the unit owners had been entangled in a legal battle since 2007, when Klauber filed a lawsuit in Sarasota County alleging the unit owners owed $14.1 million in resort repair costs. The Colony Association filed for bankruptcy in November 2008; and Bank of America filed a foreclosure suit against Klauber and seven of his corporations in April 2009.
The Chapter 7 liquidation ruling gave the Colony Association Board of Directors (the unit owners) control of the majority of the 18-acre property.
Toronto-based Horwath HTL (Hotel, Tourism and Leisure) and its principal, Joel Rosen, who is acting as a strategic consultant for long-range planning of the resort's future, began reviewing proposals this year.
The report reveals that Rosen launched a process to identify prospective development/redevelopment partners and operators of prospective hotel companies.
Rosen said that he initially identified 42 companies or individuals that had significant experience in hotel/resort/fractional development and operations. Another eight companies showed an interest, which left Rosen to sift through 50 proposals.
Then, 17 interested parties were whittled down to eight renovation contenders. But an extended deadline to allow other parties time to submit proposals totaled 14 development contenders for the resort.
Several of the 14 parties, Rosen explained, are interested in acquiring a limited number of units at fair-market value as part of their ultimate proposal.
Adams, a former Colony board member, resigned from the board and submitted a proposal through AdamsMark LLC.
Missing from the list is a proposal from Colony Lender LLC representatives David Siegal and Randy Langley. Siegal and Langley are moving forward on foreclosure proceedings on $11 million in bank loans from Dr. Murray “Murf” Klauber that were purchased from Bank of America in March 2009.
When asked if a proposal was submitted, Siegal said, “I would think that we did that when we submitted our proposal months ago during the mediation process. I don't know what's going on there. Right now, I am just taking the posture of the bank that's foreclosing.”
In an e-mail sent to unit owners March 8, Colony Beach & Tennis Resort Association President Jay Yablon said the board “has been very pleasantly pleased with the large number of parties expressing serious, credible interest in the Colony, so much so that an earlier deadline of Feb. 25 has twice been extended by a week to accommodate this surge of interest.”
Yablon said that Rosen will develop a comparative analysis of all the preliminary proposals and will share the proposals and his analysis with the board and owners at a later date.
“This way, owners and the board (which also has not seen the detailed proposals yet) will get to see everything at once so that no one proposal is considered in a vacuum and all proposals can be balanced one against the another,” Yablon wrote in his e-mail.
The board and the unit owners, Yablon states, will determine which of these preliminary proponents will be asked to submit full detailed proposals that can then be further analyzed by the board. The unit owners will select the winning proposal, most likely by a 75% vote.
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