TREASURE ISLAND — A project that would bring a hotel, restaurant and beach cabana resort to John's Pass is apparently now back on track after several months of legal wrangling.
Major redevelopment of about 10 acres owned by Rice Family Holdings had been on hold, pending resolution of a legal dispute between the Rices and a Midwest dentist who planned to invest millions in the project.
Last August, the city approved a site plan for a restaurant and cabana resort on the west side of Gulf Boulevard at John's Pass.
Shortly after, demolition of several older buildings on the east side of Gulf Boulevard triggered what city officials believed was a countdown toward a major redevelopment that would eventually include a major new hotel, a revamped marina and a tourist activity center.
But this month, the major investor, Dr. Robert A Baker, a dentist from Kalamazoo, Mich., and managing partner of B & R Investment Holdings, sued Rice Family Holdings, Gators on the Pass Inc., and John's Pass Marina Inc.
The doctor alleged that his contract to buy numerous properties from the Rice family was violated by "extensive accounting irregularities" and the failure to file accurate sales tax returns.
Last Monday, however, Jack Bodziak, project architect and spokesman for the development group, reported that the investor and the Rice family are nearing an agreement that would end the dispute and allow the project to move forward.
"There was some contention but I think it is finally straightening out," Bodziak said. "They have decided to kiss and make up."
The lawsuit also alleged the sellers improperly removed $20,000 worth of copper and aluminum from the property, that they contacted a third party agent for a major hotel chain in violation the terms of the agreement, and they failed to apply for a new liquor license.
Baker's company also wants to be reimbursed $125,000 used for Gators renovations.
The original contract called for the Rice property to be sold to Baker's company for $7.5-million, most of which would be used to assume several existing first mortgages. The Rice family would receive $2 million in cash and be granted a 25 percent ownership of the new development company.
The businesses involved in the sale included the Rock House, Gators on the Pass, John's Pass Marina, a gambling ship, the John's Pass Seafood building, and gas dock operations.
The sale was originally scheduled to close in August, and then was rescheduled to Oct. 15, but did not happen.
In early October, an attorney for the Rice family wrote to the agent for Baker questioning whether B & R Investment Holdings had the "capabilities or the financing" needed to close the deal.
Architect Bodziak said Monday that the matter is being resolved and that there were "management differences" between the two sides.
"Dr. Baker is putting millions into the project and he wants to control what is done. The Rices are having trouble adjusting to being minority partners," Bodziak said.
If the sale closes, the partnership's redevelopment plans include attracting a major hotel, extending and upgrading the boardwalk along the pass, creating new retail shops, recreational and tourist attractions, and establishing a land-based or permanently docked gambling facility if and when allowed by the state.
Bodziak said Baker plans to be in the area this week.
The project financing may close within the following two weeks, Bodziak said.
If the deal finally closes, Bodziak said, construction permits for the beachside Rock House Grille and Cabanas would be sought from the city. Construction could begin within two months.
When completed, the site at the southwest foot of the new John's Pass bridge would include a family-oriented beach restaurant and bar, a wading pool, water fountain, and 17 cabanas on the beach.
The 1-acre waterfront project is part of a proposed $15-million redevelopment of 9.5 acres flanking both sides of Gulf Boulevard.
Most recently, the first floor of the nearly 20-year-old Gators was completely renovated with new flooring and a granite-topped bar.
Plans call for Gators to be closed for several weeks to complete the renovations.
Meanwhile, a Synovus Bank foreclosure action that began in January against other Rice properties in the John's Pass area appears to be escalating.
On Oct. 26, Synovus filed for a final summary judgment for what it said is a $495,000 defaulted mortgage.