Colony trial averted with deal for 75 units

A deal to buy 75 units of the former Colony Beach & Tennis Club is settled, heading off a civil trial next week and further clearing a path for Unicorp National Developments Corp. to market and build a proposed hotel and condominium complex on Longboat Key.

Unicorp CEO Chuck Whittall wouldn’t disclose the terms of the April 30 settlement, citing a confidentiality agreement. Brett Henson of Shumaker, Loop and Kendrick LLP, one of the attorneys representing unit owner Andy Adams, would not discuss terms either, citing the same agreement. Public records of the transfers show a total price of more than $15 million, broken into three mortgages.

“A lot,’’ Whittall said when asked what the final sales price was for Adams’ units, acknowledging that ultimately he’ll have spent in the neighborhood of $80 million on the property and demolition before work has even begun on the 166 rooms and 78 condominiums of the proposed St. Regis Hotel and Residences.

 “I think every unit owner, including Mr. Adams, have all been fairly compensated, and I don't think we've ended up at a discount on this deal,’’ he said. “I think we're going to be probably closer to market rate, which is fine by me.”

Henson said the team representing Adams "worked hard to settle the case.''

Public records show three plaintiffs in the litigation agreed to three separate 12-month mortgages with Unicorp Acquisitions LLC II totaling $15.25 million: $14,183,333.33 for 70 units with Adams listed as the mortgage holder; $546,667.67 for two units with Dotty Adams listed as the mortgage holder and $520,000 for three units, with the mortgage holder listed as Andrea A. Brown as a trustee for ACG Team Trust. 

The unit average of $203,000 compares with the final four unit sales in 2019, when three each sold for $170,851.68, according to public records and the fourth for $370,851.68. The 

Whittall, who now owns 115 of the former resort’s 237 units, is under contract to buy the remainder.  He said he hopes to close those sales and begin marketing and selling St. Regis units by the day after Thanksgiving, complete with a planned on-site sales office, if economic conditions brought on by the COVID-19 pandemic allow.

"The contracts are in full force and effect,'' Whittall said. "I need the world to return to a little bit of normality. So whether we close on those units in 90 days or 180 days, I think they understand we're going down the path to bring it to conclusion.''

The agreement between Unicorp and Adams took place following more than two years of litigation initiated by the Orlando developer’s request for a judicial termination of the former resort’s condominium association.  That issue, which was considered Phase 1 of the proceedings, was decided last summer when Circuit Judge Hunter Carroll ruled the association could be dissolved judicially, rather than by a more conventional vote of its members.

The association membership could never reach the required 95% approval margin for dissolution because of the number of units – and votes – controlled by Adams.  Adams and a group of other owners originally argued against the dissolution. The August 2019 ruling marked the first time that a court has ordered the termination of a condominium association in Florida. 

By late 2019,  deals between Unicorp Acquisitions and  Yeno Mon Inc., New Colony LLC and Sheldon and Carol Rabin for four units were announced as those owners dropped out of the lawsuit.

The Phase 2 trial, which was set to begin on May 11, was expected to build on the Phase 1 decision and determine how the remainder of the units not owned by Unicorp or under contract would be sold. 

Unicorp sought a court decision requiring a direct sale. Adams sought a public auction and possible division of the property. Numerous town officials, present and former, 

 “He had one business goal,’’ Whittall said. “I had a different business goal and we were able to meet in between them. He's a business guy and I respect that. I'm a business guy. And eventually we came to resolution.”

According to court documents, the two parties agreed to undisclosed terms  “on or about Feb. 21.’’ Unicorp paid a deposit on Feb. 24 leading up to the planned simultaneous closing on all 75 units in Bradenton on March 31.

But the transfer didnt't happen. Unicorp attorneys at the time claimed the global pandemic and its effect on life and business in Florida made it impossible to close the sale on time and sought a new date “after the pandemic has been lifted and the foregoing disruptions have subsided,’’ court documents said. Lawyers for Adams sought damages and a forfeiture of the deposit.

Both sides entered court-ordered mediation April 27, which led to the settlement. 

Unicorp in March of 2018 gained town approval  to develop a St. Regis branded hotel and condo complex at the 18 acre site at 1620 Gulf of Mexico Drive, a parcel that has been empty since the last building was demolished in November, 2018.

In February, 2019, town commissioners approved a series of development-rule changes that would allow Unicorp to build a temporary sales office on the property. In an interview, Whittall said he hopes to press ahead with sales and marketing late this year, provided the economy and real estate market rebound from the effects of the COVID-19 pandemic.

 “I've pushed the pause button on sales, which includes the sale center,’’ he said. “Until that's resolved, we wouldn't try to go out and sell it. ‘’

Longboat Key Mayor Ken Schneier said the town was closely following the outcome.

"Not that there's much more we can do there, but that's a big, big deal for the town," Schneier said. "It's been estimated that once the St. Regis is up and running, the way it has been explained, that should translate into between $1 million and $1.5 million per year in revenue for the town through the various sources, property taxes and what have you."