The developer who turned a decrepit waterfront eyesore into a glamorous resort said Friday that by the end of the month he'll walk away from his investment and let the bank take it over.
Frederick E. Guest II, who breathed new life into what is now the Stouffer Vinoy Resort after a string of other developers failed, estimated his own losses in the vicinity of $20-million to $30-million, which he described as "a charitable contribution to downtown."
Guest said he is "diligently working out a peaceable, friendly transfer" with Barclays Bank, which last summer foreclosed, charging that Guest and his business partners owed more than $800,000 in back mortgage payments and almost $6.3-million in penalties.
Barclays could not be reached for comment.
The developer said he expected the agreement to be completed by the end of the month. At that point, he said, Barclays will own the hotel. He will have no involvement in the resort, where a downstairs bar bears his name and where employees gave him a standing ovation when the long-closed hotel reopened in July 1992 after a $93-million remodeling.
Barclays "has been in virtual control for the last six months," Guest said. The resort is managed by Ramada International. Mike Stange, the hotel's general manager, could not be reached for comment.
Guest has attributed the hotel's money troubles to the slow economy. The cost of construction and restoration ate up much of the reserves the owners hoped to use to tide the hotel through its expected lean start-up period.
Stange, who became the resort's general manager in November, said then that the hotel needed to boost its occupancy rate from about 50 percent to 65 percent, a figure industry experts have said is normally needed to turn a profit.
"I didn't personally default on the hotel loan, nor did any of the partners," Guest said Friday. His Vinoy Development Corp. consists of Guest, Craig McLaughlin and L. Bert Stephens.
Once the resort reopened, he said, the loan was against the hotel as an operating company, "not guaranteed by yours truly" or anyone else, Guest said. "I have met my obligation by building the hotel."
Also Friday, Guest announced that he has received a commitment letter from Barnett Bank that will allow him to break ground later this spring on the luxury condos he plans beside the resort.
The commitment is for a loan in the range of "$10- to $12-million," Guest said. He declined to be more specific. The entire project has a price tag of about $20-million, he said.
The loan commitment "is still one step away from a loan," Guest said. He said he has 45 to 60 days to supply Barnett with documents before a closing takes place.
"That could mean we would start construction somewhere near the end of April to mid-May, I would guess at this point," Guest said. Occupancy of the 39 luxury condos, the Vinoy Villas, would be in April 1995. He intends to live in one of the condominiums overlooking the resort he developed.
Holder Construction of Atlanta will build the condos, which range in price from $300,000 to $1-million.
Donald Carson, senior vice president and manager of real estate for Barnett Bank of Pinellas County, confirmed the step, saying, "It's pretty apparent since we issued the commitment letter that we feel strongly, it adds a lot to downtown. We feel the community needs something like this and is looking forward to it."
Carson said the foreclosure "is really not a problem . . . we don't have specific details on any of that. . . . We haven't found out (Guest) hasn't paid any bills. We know that he's a good risk."
The hotel and the condos are "entirely different," Guest said. "Hotels are notoriously risky." While nothing is riskless, he said, more than half the condos are already sold, and the building itself collateralizes the loan.
During the 1980s, when Guest was negotiating to remodel the Vinoy, city officials feared his real priority was the condos, and required that he delay work on them until the hotel was half done. But the poor economy of recent years slowed the condo development anyway.
Originally, Guest hoped to break ground in the fall of 1992, a few months after the Vinoy reopened. In December of that year, he was predicting a groundbreaking the following spring, and later predicted a fall 1993 start.