Convention center hotel deal could be falling apart

A 12-acre parcel near the Bradenton Area Convention Center needed for a proposed new 250-room Sheraton hotel is no longer available for sale to anyone associated with the project, according to an attorney for the current landowner.

Pinzon LLC, the current property owner, entered into an agreement to sell the land for $4.9 million to Teitelbaum Developers US LLC, managed by Tourist Development Council board member and Anna Maria Island hotelier David Teitelbaum.

Teitelbaum then planned to sell the land for $8 million to the Palmetto Community Redevelopment Agency for use by the hotel.

However, Teitelbaum and his financial partners never put down a deposit of $225,000, and the deal fell through.

Pinzon attorney Ryan Snyder took Teitelbaum’s LLC to court and received a judgment for the deposit amount on June 9, according to court documents.

Snyder said his client is now pursuing other parties interested in the property who are not associated with the hotel project.

“I don’t know where the city and county is with these guys, but I wanted to throw up a big red flag,” Snyder said. “Even after we got the judgment, my client was like, ‘Hey what do we need to get the deal done.’ I’ve seen a few county officials sing the praises of this developer and I’m concerned that do these folks know what is going on?”

Anthony DeRusso, director of project development for hotel developer Improvement Network Development Partners, could not be reached late Thursday. A representative from one of Teitelbaum’s hotels said he was out of the country on vacation and could not be reached.

Mayor Shirley Groover Bryant said the last time Palmetto officials heard from DeRusso was on Aug. 8, when he told the city commission the 12 acres was no longer under contract.

DeRusso did not reveal why the contract was lost or that there was a lawsuit to the commission, but he did promise to get a new deal closed by Oct. 1.

Bryant learned of the lawsuit and judgment from the Bradenton Herald on Thursday.

“My understanding is that they were still trying to move forward,” Bryant said. “No one knew anything about this lawsuit. They made a comment that they were still negotiating and something had expired, but nothing about a lawsuit. It’s disappointing, and I’m just shocked that something like this could have happened without us knowing.”

Bryant said she hopes the project can be salvaged, but that isn’t likely, according to Snyder who said his client will not deal with DeRusso.

In that August meeting in Palmetto, DeRusso indicated it was the current landowner who was the problem. But Snyder said: “My client made every attempt known to man to get this done. But at this time, my client has thrown up his hands. Enough is enough. It’s been one broken promise after another.”

Like Bryant, Palmetto CRA Director Jeff Burton said he was unaware before Thursday of potential trouble with the deal to acquire the land needed for the hotel. Under the earlier proposed deal, the CRA would collect the property taxes paid by the hotel’s owner.

“The CRA is ready to go and we have come to a point of our having our bond issued,” Burton said. “But we are at a standstill waiting for the parties to this deal to tell us to move forward.”

When asked if the developer has met any of the promised deadlines, Burton said, “No.”

Construction was initially supposed to start Sept. 1, but DeRusso said costs were rising while hitting a “hole in capital stock.”

Burton said nothing has progressed on the CRA’s end of the deal because there has been no direction.

Snyder said the developer has ceased communications altogether.

In an email to the city, Snyder said it appears the city and the county are expending “time, money and resources for the proposed development of a convention center hotel. ... My client is concerned that the city and county are unknowingly wasting its time with this endeavor and wanted to alert you to its dealing (or lack thereof) with the developer.”

If there is a problem with the deal, Burton said it hasn’t come from Palmetto or the county.

“Manatee County has done a very good job of stepping up and saying, ‘Hey, we are going to do this,’” Burton said. “The city has been the one negotiating this deal and they have stepped it up as well. Everybody is just waiting for the developer.”

This story was originally published September 28, 2017 at 5:01 PM with the headline "Convention center hotel deal could be falling apart."