The owners of the Belleview Mido want to sell the 100-year-old hotel in Belleair to an Atlanta company for $16-million by the end of this month.
The owners, a group of Japanese investors, have been in default on the mortgage for three years and say they will lose the property to foreclosure unless a federal magistrate clears the way for the sale to Bask Development Co.
An attorney for the owners was in U.S. District Court in Tampa on Thursday fighting a lawsuit by Jon Kerr, a Connecticut businessman who claims the owners backed out of a contract to sell him the hotel for $19-million.
The Mido owners contend that Kerr had a letter of intent, not a contract, and that he didn't follow through on the requirements outlined in the letter.
Kerr said he was surprised to learn in court Thursday that Bask's contract was for less than his contract. He said he still will buy the property for $19-million and he doesn't understand why the hotel's owners won't sell to him.
When questioned under oath, Kerr testified that if he had 30 days, "more than likely I can come up with the $19-million."
Tim Johnson, a Clearwater attorney whose firm represents the Mido's owners, said that the owners doubted Kerr's credibility and that they are now bound by the contract with Bask.
Johnson's partner, F. Wallace Pope Jr., said that the Japanese company that holds the mortgage has agreed to take $8.3-million to settle $40-million in outstanding debt, including interest and penalties, but that the deal is good only until the end of the month.
He said the owners will suffer "catastrophic" losses if they aren't allowed to close with Bask by the end of the month.
Magistrate Judge Thomas McCoun said he would issue a decision in the case today.
Bask is headed by Atlanta businessman Salim Jetha. He signed a confidentiality agreement with the Mido owners, and his attorney in Jacksonville, Teresa M. Kenney, will say only that he is experienced in the hotel industry and that he will operate the Mido "in a first-class manner."
Jetha could not be reached for comment Thursday.
The Japanese investors, headed by Hideo Kurosawa, paid $27.5-million for the property in 1990. Their business consultant, Barney L. Phillips, said the financial problems stemmed from the owners paying too much for the property at a time when real estate prices were high.
The hotel, which is on the National Register of Historic Places, needs $1-million in renovation. One-fourth of its rooms can't be occupied, Phillips said. The owners also owe $1.3-million in back property taxes.