The Belleview Biltmore hotel – the owners want to foreclose on the mortgage to avoid having to pay heavy fines to the town of Belleair.
BELLEAIR – The town of Belleair will be going to court to fight the foreclosure of the mortgage on the Belleview Biltmore Hotel and associated properties.
The decision to fight the foreclosure was made at a meeting of the Commission behind closed doors on Oct. 30.
Town Attorney David Ottinger said he asked for the meeting to get guidance on how to proceed with the case.
“The town will be defending its rights,” he said following the meeting. “We will be looking for the possibility of a settlement.”
The town has 20 days to respond to the notice of foreclosure. Ottinger said the whole process is going to take some time.
There are many pages of legal jargon involved in the foreclosure but the simplest way to explain it is that the owners of the Belleview Biltmore Hotel, the Belleview Biltmore Golf Course and the Cabana Grill and Bar Restaurant and hotel are the same people who own the mortgage on the three properties, the Ades brothers of Miami. Thus the Ades brothers are foreclosing on themselves.
The purpose of the foreclosure would be to eliminate the more than $260,000 in fines, levied against the properties because the owners have done nothing to remedy the deteriorating state of the hotel.
There was a warning of the foreclosure at the Oct. 2 meeting of the Belleair Commission when attorneys Ray Allen and Lavinia Vaughn appeared on behalf of the Ades brothers and asked the Commission to drop the liens on the beach property and the golf course. They said if that happened then they would not foreclose on the properties, thus leaving the fines on the hotel in place.
If not, they said the foreclosure would in effect wipe out the fines and the town would get nothing. At that time the commissioners delayed discussion on the matter. Before the next meeting on Oct. 16 when they were scheduled to talk about it, the foreclosure notice had been filed.
Belleair Town Manager Micah Maxwell said he wasn’t surprised at the foreclosure notice.
“At the last meeting the commissioners had a lack of consensus. David (Ottinger) and I, had no feeling there was a unified direction so you can’t efficiently negotiate under that circumstance,” he said. “I suspect the owners felt that too and had to move forward.”
With court action now begun, the town was able to convene a meeting in the “shade,” a private meeting involving only the mayor, commissioners, the town manager, the town attorney and a court reporter. Florida’s Sunshine Law allows certain matters of litigation to be discussed in private so the commissioners can map out a legal strategy and advise Ottinger how to proceed. Once the lawsuit is over what happened behind those closed doors will be made public.
Repeated calls to attorneys Allen and Vaughn went unanswered, as did an email asking for comment about the foreclosure. But at the Oct. 2 meeting, Allen said his client likely would not accept a deal of paying half the fines and pledging no development on the golf course.
“The cost of foreclosure would probably be cheaper than paying half the fines,” he said. “And I could not recommend that they make any commitment regarding future development of the golf course.”
Once the foreclosure gets into the court there will be an auction on the courthouse steps to hear all bids for the property. The current owners will be able to bid the amount of the current mortgage, which Attorney Vaughn says is $26.8 million. It has been widely reported that the Ades brothers purchased the property for $8 million. That discrepancy will likely be one of the arguments raised during court proceedings.
Mayor Gary Katica is not happy about the whole affair. “I think it is a shame that they would come into town and not do anything to the hotel and be fined $250 dollars a day. The whole purpose of doing this is to get out of the fines,” he said. “I hope they come to their senses and come to meet with us and try to settle this instead of spending all that money on the lawyers to try to usurp their responsibility.”
Beneath all this is the owner’s application to demolish the hotel. They have set Dec. 31 as the deadline for someone to step forward and purchase the property or they will begin the demolition, assuming the permit is granted. That would make the foreclosure proceeding moot because Ottinger says it will not move quickly through the courts.
“It takes a while,” he said. “It is a lawsuit, it has to work its way through the docket of the court, and it could be a six month process.”
If it makes it that far and if the foreclosure is granted, Ottinger said the $250 a day fines will begin again.
“There has not been any compliance; if the lien is foreclosed out it will start fresh with the new owners.”