MADEIRA BEACH — A decade after announcing plans for a five-story parking garage and 40,000 square feet of restaurants and retail, John's Pass Village has been deeded over to the lender that filed for foreclosure in late 2010.
Hubbard Properties, which owned the retail complex, filed for bankruptcy protection in January 2011. The company and the seven siblings who comprise it were struggling after the tourist business weathered severe setbacks caused by the BP oil spill, bridge construction, a cold winter and the recession. It owed $22 million to Investors Warranty of America, a division of insurance giant Aegon, based in the Netherlands.
"We had worked out a plan that over time, the amount they loaned us would have been paid back. But they were looking at interest, penalties, attorneys' fees and that added another $8 million,'' said Patricia Hubbard, chief executive officer. "There was no plan we could put together that would work."
Even Bill Edwards, the local businessman who is investing $30 million to save BayWalk, stepped in with an offer to assume the mortgage.
"He was not willing to pay what (the lenders) were demanding, which was the 2005 value," Hubbard said. "He made them a reasonable offer and they refused. It was evident (the lender) wanted this property. They saw its value and its value coming back."
The addition to of the retail complex to the existing boardwalk was completed in 2008, just months before the recession hit. It was never fully leased and many tenants were forced to move out when their sales dropped drastically.
But the complex was buoyed by the recent openings of Hooter's and the Bubba Gump Shrimp Co. Another boost was the Pier Aquarium's decision to relocate to 13,000 square feet at John's Pass Village to open a new aquarium called Secrets of the Sea later this year.
But when the lender wouldn't negotiate with Edwards, a multimillionaire, Hubbard said she realized the long battle to hold on to the property that had been in her family for more than 40 years was over.
"We were too small against them. When we first went into bankruptcy it was like going to the emergency room. We were put on life support," she said. "It became obvious we weren't going to win this so at some point you have to call in hospice."
The Friendly Fisherman restaurant and Hubbard's Marina, which are owned by Hubbard family members, are still open and doing well, she said. But now they are simply tenants like all the other stores.
Looking back, Hubbard said the company felt it had to expand because it was being taxed on vacant land at a rate of the highest and best use.
"We couldn't afford to go as status quo. We had to do something so we decided to maximize the property," she said. "It's really easy now to say we shouldn't have built so much. If I knew there was going to be a worldwide recession, yes, I would have done things differently. But at the time we started construction that wasn't in the cards."
There is good news, however, for Secrets of the Sea. It has been challenged to find lending for the $5 million interior construction of the planned facility. Investor Warranty of America has said it will guarantee a loan for a little over $2 million, said the aquarium's director, Howard Rutherford.
"IWA is in full support of the aquarium moving to John's Pass Village," he said. "And we have a little over $2 million in pledges to date. We are looking at a fall or winter opening."
Hubbard, who helped bring the aquarium there, is pleased.
"When the aquarium gets open, John's Pass Village will be elevated to a new level," she said. "My son told me even though we don't own it anymore, he said, 'Mom, every time you come over the bridge and look at that property, you will know you did that.' ''
Times researcher Natalie Watson contributed to this report. Katherine Snow Smith can be reached at (727) 893-8785 or email@example.com.