Business is up at Naples Bay Resort, but new financing is needed to keep it going

— While business is up at Naples Bay Resort, paying the bills is getting tougher.

The resort – near Tin City in downtown Naples – isn't making enough money to cover all of its costs and an ongoing legal battle between well-known Naples developer Jack Antaramian and Fifth Third Bank is making it hard to find outside financing to keep the resort open and operating, he said.

"I have to get this Fifth Third situation cleared up. This is really bad," said Antaramian, a partner in the Naples Bay Resort project.

Fifth Third has sued Antaramian in Collier Circuit Court, alleging there was "intentional misrepresentation" related to a loan for the resort project, a claim he disputes. That cloud hanging over the project and other legal battles has discouraged new financing to cover budget shortfalls, Antaramian said.

So far, Antaramian has covered the shortfalls, totaling $1.2 million. He doesn't want to do it anymore. Antaramian has demanded his attorney fees based on what he says are unsupported claims in the lawsuit.

Attorneys for the bank couldn't immediately be reached for comment.

But in a recent court filing, the bank's attorneys, with Carlton Fields PA in Miami, accuse Antaramian of "grandstanding" and trying to "falsely manipulate the public's perception of Fifth Third's claims, given the significant media attention this case has garnered."

A court-appointed receiver, Gerard McHale, a forensic accountant based in Fort Myers, is overseeing the Naples Bay Resort project as it faces foreclosure. According to court documents, McHale will need up to $3.5 million to keep the property open, to maintain it and to manage it over the next year.

In the next few months, expenses include $450,000 in property taxes, $170,000 for insurance and $400,000 in association dues for condominium and hotel units that remain unsold. That's on top of the regular day-to-day operating expenses.

The adjacent retail shops and restaurants aren’t part of the resort or the foreclosure case. They aren’t in danger of closing and are nearly fully leased.

With the help of the management company, the receiver said he's got the resort in top shape.

Lexey Swall/Staff 
 Valet parkers wait in the portico at The Hotel at Naples Bay Resort on Thursday morning in Naples. The resort - near Tin City in downtown Naples - isn't making enough money to cover all of its costs and an ongoing legal battle between well-known Naples developer Jack Antaramian and Fifth Third Bank is making it hard to find outside financing to keep the resort open and operating, he said.

Photo by LEXEY SWALL

Lexey Swall/Staff Valet parkers wait in the portico at The Hotel at Naples Bay Resort on Thursday morning in Naples. The resort - near Tin City in downtown Naples - isn't making enough money to cover all of its costs and an ongoing legal battle between well-known Naples developer Jack Antaramian and Fifth Third Bank is making it hard to find outside financing to keep the resort open and operating, he said.

Lexey Swall/Staff 
Vacationers from England, Sarah Paynton, from right, Chris Dinenage, Laura Hotton and Will Paynton, rent kayaks from Boat Rentals at the shops near Naples Bay Resort on Thursday morning. The resort - near Tin City in downtown Naples - isn't making enough money to cover all of its costs and an ongoing legal battle between well-known Naples developer Jack Antaramian and Fifth Third Bank is making it hard to find outside financing to keep the resort open and operating, he said.
The shops aren't part of the legal fight and are nearly fully leased.

Photo by LEXEY SWALL

Lexey Swall/Staff Vacationers from England, Sarah Paynton, from right, Chris Dinenage, Laura Hotton and Will Paynton, rent kayaks from Boat Rentals at the shops near Naples Bay Resort on Thursday morning. The resort - near Tin City in downtown Naples - isn't making enough money to cover all of its costs and an ongoing legal battle between well-known Naples developer Jack Antaramian and Fifth Third Bank is making it hard to find outside financing to keep the resort open and operating, he said. The shops aren't part of the legal fight and are nearly fully leased.

"Our average daily rates are up significantly and the occupancy rates are up significantly," McHale said. "It's been a good year."

The resort is on the verge of breaking even and business is up 40 percent over a year ago, Antaramian said.

However, Antaramian said he doesn't want to loan any more money to the project as he focuses on fighting the Fifth Third lawsuit, which he describes as baseless. His partners don't want to put any more money in the project either, he said.

"There's nothing that says I'm obligated to fund it, but I have done it," Antaramian said.

The new financing the receiver is searching for would pay Antaramian back and make up for shortages to cover future expenses over the next year, McHale said. "For all practical purposes, it's a super priority loan, which takes precedence over any other debt, other than government obligations, such as taxes," he said.

McHale agrees the ongoing litigation is making it harder to find other financing. Antaramian also is in legal battles with his former partners and the project's contractor, Manhattan Construction (Florida).

Fifth Third's lawsuit alleges that Antaramian falsely represented that the collateral offered up for its $4 million loan – the clubhouse property – had no claims or liens on it by other creditors and it wasn't threatened by any. The bank argues it made the loan based on that promise and that it should have the first claim to the property and the first right to foreclose on it because the loan is in default. Antaramian disputes that claim and there's a deposition by Thomas MacIvor that he says backs him up.

In his deposition, MacIvor, a corporate representative for Knightsbridge Partners, the owner of the clubhouse property, said that the collateral pledged included Knightbridge’s accounts and other business assets, "except real property."

In a phone interview Wednesday, however, MacIvor said, "I did not testify that the property was not encumbered by Fifth Third’s lien. I always felt that Fifth Third has the first lien on the property."

In his deposition, MacIvor said that in the loan agreement with Fifth Third, there wasn’t a representation that there were no mortgages on the clubhouse property. When asked by Antaramian’s attorney if there was anything in the closing agreement that wasn’t "100 percent true," MacIvor said there wasn’t.

MacIvor also said that a summary of the closing costs didn't show any of the money going to Antaramian. At one point, Fifth Third had alleged that Antaramian pocketed $2.4 million from the loan, which he described as outrageous.

In an earlier complaint, Fifth Third also accused Antaramian of fraud, but then removed that word from its lawsuit after he threatened to sue them, saying it was clear in their own closing documents that their allegations were false.

Antaramian questions why he's the only one targeted by the bank, when there were three other partners in the project, who also were guarantors on the loan.

The other partners in the project were Fred Pezeshkan, president and CEO of Manhattan Construction (Florida), a general contractor in Naples, and foreign investors Iraj Zand and Raymond Sehayek.

The Fifth Third loan, made in December 2008, helped pay for the project's operations during difficult times, Antaramian said.

He said he's determined to keep the resort and club operating.

"The resort is not going to close because it will get funded, but the point is why is Fifth Third making the process more difficult? It's hard enough to operate in this world today, without the disruption of Fifth Third Bank," Antaramian said.

Closure is not an option the receiver is even considering. "This is not something where you just go in and turn the lights off," McHale said. "This just has to keep rolling ... I will get funding."

Last year, Regions Bank, a lead lender, foreclosed on the Naples Bay Resort project, including the club property, after Antaramian and his partners defaulted on a $36 million mortgage.

Antaramian later stepped into the shoes of the bank, buying the note for about $8.7 million.

He's now foreclosing on the property and is going after his partners, saying they made personal guarantees to repay the Regions loan.One consideration is to pledge unsold residential condominiums as collateral to encourage new financing, but Antaramian said he doesn't think that will be necessary. There are 11 of them and he would have to release them from his mortgage.

The foreclosure trial is scheduled for June 2012, but it could be moved to an even later date.

"It's not easy. I certainly wish the litigation weren't going on. I wish the foreclosure was over and we could move forward," McHale said.

__ Connect with Laura Layden at www.naplesnews.com/staff/laura_layden.

© 2011 marconews.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Comments » 2

Company144 writes:

I walk that property everyday and I see no improvement in customers? The rooms are all dark and with the exception of BoneFish Grill, the place is dead. The other side where the grand pool is could be busy? It's a beautiful piece of property, it needs a National Chain to own and run it.

marco826 writes:

Yeah. Motel 8

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