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Condo-hotel sales trip up Hyatt Regency in Clearwater Beach

The Hyatt Regency Clearwater Beach Resort and Spa is facing several lawsuits from buyers of some of its condo-hotel suites.


The Hyatt Regency Clearwater Beach Resort and Spa is facing several lawsuits from buyers of some of its condo-hotel suites.

Six months ago, dozens of community leaders gathered to celebrate Clearwater Beach's new luxury resort, the centerpiece of the city's $30 million BeachWalk promenade.

Since then, hotel reps say the Hyatt Regency Clearwater Beach Resort and Spa has been a hit with vacationers.

But one part of the 250-suite resort's business has been lackluster: sales of suites as condo-hotel units.

Now, more people want out of their contracts to buy the units than have closed on them. At least seven lawsuits have been filed against the resort's owner, Crystal Beach Capital LLC, seeking to void eight condo contracts, including one of the resort's larger $2.97 million condo residences.

Crystal Beach, a subsidiary of NJR Development, has closed on five condo-hotel sales, county records show.

Most who filed suits say their contracts were breached because the developer took two years too long to complete the project.

NJR Development president Neil Rauenhorst said his team did its best in light of the complex project and tough economy.

"We tried to keep everybody fully informed as to our schedule, and we believe we have completed the project as quickly as possible, considering the construction requirements and also the challenge of the marketplace," he said.

The resort's suites are condo-hotels. That means people can buy them and stay up to 60 days a year. The rest of the year, the suites are rented to hotel guests and owners get a percentage of the revenue.

The 17-floor, 1 million-square-foot resort is part of the mixed-use Aqualea complex, which also has 18 condo residences.

Flat condo sales in this economy are not exactly a surprise. Fifty-five out of the 250 condo-hotel units are under contract, Rauenhorst said, a couple more than a year ago. At this time last year, Rauenhorst said he expected to sell all the units in three years.

"The sale of condo-hotel units is primarily impacted by buyer financing. When that loosens up I think we'll see some traction and probably some acceleration in our sales," Rauenhorst said.

As for those who are struggling to close or simply want out, he said, "We're trying to work with them to obtain financing or deal with other issues."

Those who filed lawsuits against Crystal Beach are also requesting the return of their deposits, ranging from about $115,000 to $1.2 million.

One litigant is a Pennsylvania real estate company whose officer, Raymond Sobieski, had previously provided a testimonial on the resort's sales website.

Several of the suits say that, according to purchase agreements, condominiums were supposed to be finished by Dec. 31, 2007, but the suites were not ready until about two years later. One woman who made that claim, Mary McKim of Kentucky, paid more than $900,000 in deposits on two condos, one of which was the $2.97 million residence.

In its response to her suit and others, Crystal Beach said that according to the agreement, the "outside date" in the contract is "only an estimate" and the seller is not obligated to finish by then.

In another case involving Todd and Irina Berger of Pinellas Park, Crystal Beach said "there was no obligation" to complete the condominium "by any date."

Jeffrey and Lori Mattox's suit says they were induced to pay their final deposit with claims the developer intended to begin construction by December 2006. But, the Palm Harbor couple's suit says, when they were asked to make their final deposit, Crystal Beach did not have construction financing in place.

The developer obtained more than $180 million in financing in August 2007, according to another unrelated case.

Closings on the condo-hotel units began four months after the resort opened. And that irks Manuel Rose, who said he was ready to buy in February after the resort opened.

His company filed suit in April. Rose, who paid a $123,150 deposit for a $615,750 condo suite, said he visited the resort in February and was told he couldn't close because the company hadn't yet filed certain documents with the state.

"They purposely used the place to make money during the peak season," Rose said.

Rauenhorst said closings weren't scheduled right away because his team was busy getting the hotel opened. They also had a large number of documents to submit after finishing construction of the building, he said.

In February, city leaders lauded Rauenhorst for pulling off the project, which finally became a reality after a decade and two previous owners.

Since then, occupancy is way ahead of projections, said Nancy Longstreth, the resort's director of sales and marketing.

"The resort "sold out pretty much the whole months of March and April," she said, and it continues to sell out most weekends.

"We've heard that we have had one of the strongest openings that Hyatt has ever experienced," Rauenhorst said. "I think that says a tremendous amount, the magnitude of success we've achieved in a most challenging economic environment."

Lorri Helfand can be reached at [email protected] or (727) 445-4155.

Condo-hotel sales trip up Hyatt Regency in Clearwater Beach 07/30/10 [Last modified: Friday, July 30, 2010 7:58pm]
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