TAMPA — The Safety Harbor Resort and Spa has emerged from bankruptcy after a federal judge on Wednesday confirmed a financial restructuring plan for the waterfront landmark.
Now, the resort will have immediate access to a million dollars to pay its bills.
But during a hearing in Tampa Wednesday, Judge Michael G. Williamson delayed a final decision on the sale of up to 15 acres of the resort's property to the City of Safety Harbor until Sept. 7. The two parties are still trying to finalize an acceptable deal.
The city wants to use the property, which abuts Old Tampa Bay, for a park. The city's purchase would help the resort pay off its debts.
Steve Berman, the resort's bankruptcy attorney, said he is pleased with the results and now the spa "can get back to their business."
"Spa member rights, gift cards, wedding deposits and spa memberships are all preserved," Berman said. "No one has lost rights and they all survived the bankruptcy."
Last fall, the resort filed for Chapter 11 bankruptcy. With the resort's approved restructuring plan, its secured debt will be reduced from $30 million to about $17.8 million. Wells Fargo originally held the loan until it was sold to German American Capital Corp. According to the approved plan, the debt will be repaid over a five-year period.
"The most important thing for people to know is that we are not in bankruptcy," said William E. Touloumis, president of Olympia Development Group, which owns the 22-acre resort.
The resort is one of Florida's largest and oldest and is listed on the state's register of historic places. Known for the mineral springs that run beneath the property, the spa has been in Safety Harbor's downtown for 60 years.
"It's of grave importance to keep the spa alive in Safety Harbor and we are delighted that they can get out of bankruptcy," said Mayor Andy Steingold. "For decades, it's been a main staple in the city of Safety Harbor. Irrespective of these tough negotiations, we certainly want to see the spa succeed, just as we would any other business in the city."
The resort and the city have been haggling over an agreement that would allow the city to purchase up to 15 acres of land between the resort and the bay. The city sees it as an opportunity to acquire a waterfront recreation area for residents.
Berman told the judge that three issues are holding up the deal. There's a 1.5-acre commercial parcel on the southern end of the property that both the city and the resort want the independent ability to develop. In addition, resort owners want to build a wedding platform on Old Tampa Bay that the resort will have exclusive use of and there's some uncertainty surrounding a shared parking area.
Contact Demorris A. Lee at email@example.com and 727-445-4174