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Date of Issue: October 19, 2006

GSR auction sale stalled

gsr pic
Blazing trails
The deadline for GSR to clean up its Villa Rosa property or face code enforcement action by Anna Maria expired on Oct. 9, but city officials said GSR asked for an extension. By Monday, Oct. 16, the debris had been cleared, according to code enforcement officer Gerry Rathvon. This photo shows rubble left by GSR before clean up, along with the $2.5 million model home that NBA player Theo Ratliff of the Portland Trailblazers has a contract to purchase. Islander Photo: Rick Catlin

Anna Maria to GSR: No sale.

While financially strapped GSR Development LLC partners Robert Byrne and Steve Noriega might have thought that a proposed auction sale of each of GSR's 17 lots at its Villa Rosa property in Anna Maria would bring a desperately needed infusion of cash to the beleaguered company, Anna Maria City Attorney Jim Dye dashed those hopes last week with a dose of reality. Villa Rosa is still one big piece of property, not individual lots, he said.

In response to the auction sale motion filed in federal bankruptcy court by GSR attorney Richard Prosser, Dye said there's a slight problem. The city has never signed off on the final plat of the property.

"It poses a problem" for GSR, said Dye.

Technically, said Dye, GSR can "sell off chunks of Villa Rosa," but the individual buyers would be unable to get a building permit until each lot is platted.

To get the final plat - including individual lots - recorded, GSR needs to comply with several "minor" stipulations that the city placed on Villa Rosa when it gave approval on June 9, 2005. Those stipulations are still pending, noted Dye in a letter to Prosser last week, and until those problems are satisfied with the city, no building permits can be issued.

In addition, added Dye, Villa Rosa has been sitting vacant for more than a year. Any improvements done by GSR since site plan approval in 2002 may need "repairs or maintenance" and a city inspection.

Dye told Prosser it would be in everyone's best interest for GSR to complete the plat process, rather than attempt to split the property through an auction, forcing the individual owners try to plat the property.

Mayor SueLynn said she would meet with Prosser, Dye and Building Official Kevin Donovan this week to discuss what the city requires from GSR for the final plat.

Bankruptcy Judge Rodney May held an emergency meeting Oct. 12 to hear the auction sale motion, but has not yet rendered a decision. A number of major GSR creditors lodged objections to the proposed auction.

GSR received site-plan approval for Villa Rosa - its multi-million dollar gated community of luxury homes on South Bay Boulevard - in August 2002. At that time, Byrne and Noriega indicated a final plat would be ready within 12 months and construction on the project would begin soon after.

During the past four years, however, the only construction has been a model home, and National Basketball Association player Theo Ratliff of the Portland Trailblazers claims he has a contract to purchase that house and accompanying lot for $2.5 million. Sources involved with the construction of the model home say anywhere from $700,000 to $1 million in further improvements are needed before the city can issue a certificate of occupancy.

GSR's glorified Island empire crashed in July when the company filed for voluntary bankruptcy protection. At the time, GSR claimed it had $47 million in assets and just $33 million in liabilities, but was prevented from completing its various projects because of lawsuits and liens that have stalled financing.

The company also has a Bradenton Beach Gulffront condominium project - Rosa del Mar - and held a grand opening party in 2003 to announce the project, but no construction ever began at the site.

Included in the $33 million in liabilities against GSR are approximately $6 million in unsecured claims, many from Island residents who apparently have invested savings, retirement plans and other liquid assets with GSR.

GSR's reorganization plan and full financial statements are due in federal court by Nov. 13.