The Colony Beach and Tennis Resort on Florida’s Longboat Key announced this week that the resort will close on Sunday, September 27, 2009. Water and power will be shut off to the 237 condo hotel units, the pool will be closed, housekeeping will cease, tennis courts will be inaccessible, and there will be no front desk service or maintenance services. The only exception will be the resort’s restaurant and a few units owned by members of the Klauber family, which took over the resort from original developers in 1972.
Each of the units were originally sold as fractional ownership, with owners buying a 1/12 share that allowed them to use the units for 30 days each year. Time not used by owners was placed in a pool and rented to the general public by the resort management company, which was paid a management fee by the condominium association. Over the years, the management company spent millions of dollars to maintain and restore the facilities of the resort. In better times, the firm apparently absorbed these costs. When the economy stalled, the management firm began seeking reimbursement for repairs and maintenance from the condominium association, eventually filing a lawsuit to recover as much as $12 million. In response, the association countersued for $10 million and filed bankruptcy, claiming that the management company never sought the authorization from the association for any repairs. A recent court decision upheld the condo association’s claim, forcing the management company’s decision to cease operations.
Further complicating the issue, Bank of America filed a foreclosure lawsuit against the Colony earlier this year, claiming that management entity was in default on about $8 million in loans. According to the lawsuit, the loans were collateralized by the resort’s amenities, including the tennis shop and courts; restaurant, pool; swimming pool; Monkey Room bar; two hotel penthouse units owned by the Klauber family; all leases, rents and profits from recreational operations; and all rental, sale and reservation agreements. Additionally, tax warrants from the Florida Department of Revenue total more than $200,000.
Although the condominium association will likely be able to turn the power and water back on for each individual unit, owners will no longer have access to the amenities other than the restaurant, which will continue to operate and provide catering services for weddings and banquets. It remains to be seen how the condominium association will handle maintenance of the units, given their impending bankruptcy.
Since Monday, nearby Longboat Key Club has been receiving referrals for future reservations from the Colony. The Colony Beach and Tennis Resort is located on Longboat Key in Sarasota Florida.
Photo credit: Colony Beach and Tennis Resort
Article by Barbara Weibel at Hole In The Donut Travels