DUNEDIN — The bank that loaned developer George Rahdert millions to restore the waterfront Fenway hotel has filed to foreclose on the property.
RBC Bank filed a lawsuit Friday alleging that Rahdert and two of his companies have yet to repay $8.1 million in loans, including nearly $700,000 in interest.
The suit is only the latest hurdle in Rahdert's bid to revamp the Jazz Age hotel as a high-class resort on the Dunedin coast. Since buying the property in 2006, Rahdert, who represents the St. Petersburg Times on First Amendment and business issues, has contended with neighbors protesting an expansion and former city officials delaying redevelopment.
Last year, a deal to sell the property to self-declared hotel magnate Robert Masson collapsed, sending "the project into a tailspin," Rahdert said. In August, Rahdert stopped payments on the bank loans and development costs, according to the lawsuit and a lien filed against him. In November, Rahdert sued Masson, though Masson, who claimed a connection to a California wine empire, has yet to be found or served with paperwork.
The bank named 1 AVS LLC, a company created by Rahdert to manage the restoration, and Virtual Realty Construction Co., registered by Rahdert in 1998, as defendants in the foreclosure. The documents show that Rahdert's companies were given a $6.4 million mortgage in 2006 and $1 million in predevelopment costs in 2007.
RBC Bank's representative, James W. Carpenter of Angelo & Banta, P.A., in Fort Lauderdale, declined to comment on the litigation.
Also named in the suit is Clearwater-based Gulf Coast Consulting, though only because a lien filed by the firm against Rahdert in December is subordinate to RBC's larger loan. Co-owner Robert Pergolizzi said the firm worked until October at the Fenway and now seeks payment for more than $15,000 of civil engineering work.
"His bank's foreclosure on his mortgage will seriously impact our ability to get paid," Pergolizzi said. "He owes them $8 million. He owes us $15,000. Where do you think that puts us?"
Rahdert told Dunedin officials and the Times of the foreclosure suit on Monday, saying that the revelation could amount to "friendly fire." It could also provide a silver lining, he said, by advertising his need for a purchase bid or new financing.
"This event will in one sense clarify matters because it will create a greater sense of time urgency, of getting things done," Rahdert said. "Giving the opportunity, some publicity is always a positive to potential development."
Rahdert said a Times report in December about his difficulties in developing the property and the Fenway's more than $90,000 of still-unpaid taxes yielded a couple of promising prospects, though he declined to share details.
Matthew Campbell, Dunedin's assistant director of planning and development, shared his optimism about the 6.4 acres at 453 Edgewater Drive.
"When one door closes, another one always opens," said Campbell, adding that three local law offices and developers have expressed interest in the property. "I'd imagine any savvy developer is waiting to see what happens."
Drew Harwell can be reached at firstname.lastname@example.org or (727) 445-4170.