Could the end of litigation surrounding the shuttered iconic hospitality landmark on Longboat Key, The Colony Beach & Tennis Resort, be near?
The Colony Beach & Tennis Resort Association's board was scheduled to hold a telephone meeting March 2 that could lead to that closure. The topic of the call: Negotiating a development agreement with Unicorp National Development that will “end all remaining litigation and finally put us on a firm path to redeveloping the Colony” if unit owners approve it, according to an email association President Jay Yablon sent to Colony unit owners Feb. 26.
Unicorp President Chuck Whittall's offer includes a settlement of litigation between the association, Unicorp and Colony Lender LLC, which owns a 95% interest in a 2.3-acre recreational property at the 237-unit resort.
Whittall's Orlando-based company seeks to build 360 units — 180 condos and 180 hotel rooms — a project he estimates will cost nearly $1 billion to complete. Unicorp is under contract to purchase Colony Lender's resort assets.
The Colony board has been negotiating with Unicorp President Chuck Whittall since December, when it considered a proposal from both Whittall and a second proposal from Manfred Welfonder, principal of Longboat Key-based MW Development Group and Naples-based The Lutgert Cos.
In 2014, Whittall sent demand letters to unit owners warning them they could face liabilities of more than $42.3 million stemming from a long-disputed lease of the recreational property and offering $20,000 per unit and a waiver of liability. Colony Lender then sued unit owners for $5.1 million for unpaid rent and real estate taxes going back to October 2008.
U.S. Bankruptcy Judge K. Rodney May sanctioned both Unicorp and Colony Lender in April 2015, after ruling that their actions violated an automatic bankruptcy stay.
The Unicorp/Colony Lender chapter is just one of many in a battle surrounding the resort that stretches back more than a decade.
The original dispute arose in 2004, when longtime Colony owner Murray “Murf” Klauber and unit owners became ensnared in a disagreement over who was responsible for $14.1 million in repairs. Klauber sued the association in Sarasota County court in 2007. A series of bankruptcy filings led to the resort's closure in 2010.