HOA Nut House

Resort management, condo association at odds over expenses

By SARA KENNEDY, skennedy@bradenton.com

A judge is expected to decide soon whether emergency action is needed to keep The Colony Beach & Tennis Resort operating.

The management of the resort and its condo association have been involved in an acrimonious dispute that has threatened to close the beachside resort, a fixture on Longboat Key for decades.

The dispute pits resort owners against an association representing 237 condo owners. The resort is a condo-hotel in which each owner uses his unit for 30 days, and then the resort rents units to hotel guests the remainder of the year.

Part of the dispute revolves around $12 million in hurricane damage from 2004 and 2005 that will require extensive repairs, said Katherine Klauber Moulton, the resort's president and general manager. Another question is who should pay close to $2 million in annual maintenance expenses, she said.

"Unfortunately, it has affected our ability to attract business; our occupancy is sliding," said Moulton.

"There is definitely a possibility of closing down," she said, but emphasized that while awaiting the judge's decision, resort officials are hoping to negotiate a settlement that would halt the court case.

"The last thing any of us want to see is the closing of an operation with such a historical significance in our community and the resort industry in general," said Moulton. "We are doing everything possible to prevent the closing."

However, an attorney for the Colony Beach and Tennis Club Condominium Association, Inc. disagreed.

"Ms. Moulton has in the past talked about going out of business, and they haven't gone out of business," said Randolph Smith, the condo association's attorney. "It's not as if they've got an imminent problem."

The resort, with about 250 employees, has a payroll in excess of $7 million, she said.

Founded in the 1950s, the resort at 1620 Gulf of Mexico Drive sits on 18 acres. In 1969, Moulton's father, Dr. Murray Klauber, took it over and rebuilt it. It now has two restaurants, 21 tennis courts, a fitness center, spa and pool.

Meanwhile, the parties also disagree about who is responsible for paying annual expenses of between $1.5 million and $2 million, with the resort arguing condo owners are responsible, and the condo association equally vehement that the resort should pay.

The resort has asked the judge to order the association to immediately pay in excess of $900,000 in maintenance costs. The condo association opposes the motion, Smith said.

"Testimony in this case has already demonstrated that serious questions exist regarding the propriety of the . . . (resort's) financial transactions and controls," said a document filed by the condo association.

It also contends Klauber, a general partner in a limited partnership affiliated with the resort, has been "borrowing" money from the resort and owes $2.1 million.

"The association's position is 'Hey, if the general partner and his businesses paid back what they owe, we wouldn't be having this conversation,' " said Smith.

Sara Kennedy, Herald business reporter, can be reached at (941) 748-0411, ext. 4500.

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