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Date of Issue: January 25, 2007

GSR snubs Island real estate agencies

Financially strapped GSR Development LLC filed a motion with the federal bankruptcy court last week to allow it to retain RoseBay Real Estate as an "exclusive broker" for a number of its Island properties, apparently ignoring a proposal from at least one Island real estate company and failing to contact other major real estate players for a proposal.

According to the court documents, GSR chief restructuring manager Bill Maloney claimed he "interviewed a large number of major Realtors on Anna Maria Island" before selecting RoseBay.

Not so, said Frank Davis of Island Real Estate, one of the largest real estate companies on the Island. Davis said his office was never contacted to submit a marketing plan and strategy.

Likewise, Mike Norman of Mike Norman Real Estate said he was never contacted by Maloney, nor was Wagner Real Estate, according to manager Becky Smith.

Ron Travis of RE/MAX Gulfstream chimed in that his office was never contacted by Maloney or asked to submit a proposal.

Barry Gould of Island Vacation Properties, however, said he did submit a proposal, but rejected the counter-proposal offered him by Maloney. Gould declined to elaborate further.

Maloney also claimed in the court document that he "obtained and utilized advice and counsel from creditors," including Kent Davis and Paul Gallizzi.

That’s not entirely correct, said Gallizzi.

"Yes, he contacted me for advice, but he rejected my advice. I told him to spread the property listings around to a number of Island real estate agents," he said.

Kent Davis agreed that he spoke with Maloney and had recommended Gould, among other possible Island real estate agencies.

Maloney said that he reviewed each of the marketing plans submitted and he selected the RoseBay offer as the "highest and best plan" for GSR.

RoseBay said it would offer a "buy it now price," for any property if submitted by March 15. The bankruptcy court would have to approve any offer.

Further, said the motion, RoseBay would be entitled to a 6 percent commission on any sale, plus an additional 1 percent bonus commission for all properties with sales contracts submitted on or before March 15 that are subsequently court approved and closed.

As an added bonus, RoseBay would get a further 5 percent of any sale of more than 10 percent above GSR’s reserve price on any property.

Maloney and GSR believe that RoseBay is "imminently qualified to serve in this Chapter 11 case as an exclusive broker with respect to the specifice properties," and that retaining RoseBay "is in the best interest of the debtor [GSR], its estate, creditors and other interest holders."

The motion said that Maloney and GSR, through the "exercise of its business judgment" seek to retain RoseBay and asked the court to authorize employment of RoseBay to provide exclusive brokerage, listing and marketing services for the properties.

RoseBay said it would establish an office on Anna Maria to conduct open houses and sales of GSR properties. The company currently has no Island office, but maintains a branch in Sarasota and at 6318 Cortez Road W. in Bradenton.

Objections to the motion are likely to come from the creditors committee, according to one unsecured creditor who asked not to be identified.

The problem, said the creditor, who is also a real estate agent, is that GSR is asking prices far in excess of what the current real estate market will bear.

"I’ll bet they don’t sell one property by March 15 at those prices," he said.

As an example, he noted that GSR wants $895,000 for its canalfront home at 403 S. Bay Blvd. in Anna Maria.

"That’s an end-of-the-canal house with restricted access. It can only accommodate small boats. I can find a premium canalfront lot on the Island in a much better location for $625,000."

Attorney John Anthony, representing the creditors committee, has said previously he cannot comment on the GSR case unless authorized by the committee.

Island real estate agents, including Mike Norman, agreed that GSR’s prices seem to be high for the present real estate market.

The GSR properties to be listed in the motion and the list prices are:

  • 401 S. Bay Blvd., Anna Maria, $625,000.
  • 403 S. Bay Blvd., Anna Maria, $895,000.
  • 506 Bay Drive S., Bradenton Beach, $895,000.
  • 109 Fifth St. S. (A), Bradenton Beach, $825,000.
  • 109 Fifth St. S. (B), Bradenton Beach, $825,000.
  • Seventh Street South, Gardenia 1, Bradenton Beach, $925,000.
  • Seventh Street South, Gardenia 2, Bradenton Beach, $895,000.
  • 615 Key Royale Drive, Holmes Beach, $1.5 million.
  • 311 61st St., Holmes Beach, $499,000.
  • 312 60th St., (A), Holmes Beach, $725,000.
  • 312 60th St., (B), Holmes Beach, $725,000.

All of the properties except 403 S. Bay Blvd. in Anna Maria are either under construction or vacant lots. The property at 506 Bay Drive S. in Bradenton Beach is listed as a furnished model.

GSR’s Rosa del Mar condominium development vacant property at 2504 Gulf Drive N. in Bradenton Beach was not listed in the court documents, but the asking price is reportedly around $11 million. GSR had planned to develop condominiums on the site.

Judge May set a hearing date on the motion for Thursday, Jan. 25, at the federal courthouse at 801 N. Florida Ave. in Tampa.

RoseBay may have a GSR connection

In the motion submitted to the federal bankruptcy court by GSR attorney Stephen Leslie to have RoseBay Real Estate named as the exclusive listing agent for GSR, the motion claims that RoseBay "has no connections with the debtor [GSR]," or any creditors of the debtor or "any other party of interest." RoseBay claimed it is a "disinterested" party.

Records at the Manatee County Circuit Court might indicate some association between the two entities.

On April 5, 2006, RoseBay real estate agent Laurie Dellatorre filed a lawsuit for repeat violence against a woman named Daphne Alford.

One of the addresses listed for Alford in the court documents of that case is a Holmes Beach property on 52nd Street that at that time was owned by GSR principal Robert Byrne.

In addition, Dellatorre listed her emergency contact as Arlene Byrne, Robert Byrnes’ estranged wife.

Dellatorre is a former employee of GSR, according to Paul Gallizzi of Spectrum Management, a company involved with GSR in several Island real estate projects. Gallizzi is owed approximately $1.04 million by GSR.

According to an affidavit submitted with Leslie’s motion, Lynn Parker of RoseBay said that neither herself "nor any professional in RoseBay has served as an officer, director or employee of the debtor (GSR) within two years of the petition date."

Dellatorre said she was a GSR employee but left the company more than two years ago.

"I have nothing to hide about my employment with GSR. It wasn’t within the past two years," she said.