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Date of Issue: July 08, 2009

Villa Rosa: Who's on first?

With the Anna Maria City Commission scheduled to hold a shade meeting July 9 over a lawsuit regarding the now-defunct Villa Rosa project, the mayor is wondering if the property will ever come out of bankruptcy and developed into a viable part of the community.

“It’s our largest parcel of undeveloped land, but it’s tied up in major litigation,” Mayor Fran Barford said.

That includes the current lawsuit by Horizon Bank, which involves the original plat, a right-of-way, and who may actually own one of the parcels at the property, she indicated. Other defendants in the suit are Manatee County, several property owners adjacent to Villa Rosa and Bon Eau Enterprises LLC of Sarasota, the company that now claims ownership of the majority of the Villa Rosa property.

“It’s not clear [who owns the property]. Someone has to step up and figure this thing out,” Barford said.

The mayor said she would like to see a project built on the site that would be compatible with the city and residents.

“We don’t want to tell anybody exactly what it should look like, but something that fits the city would be nice,” she said.

But it could be some time before the ownership issue and former owner GSR Development LLC’s federal bankruptcy case is settled.

GSR and principals Robert Byrne and Steve Noriega purchased the vacant Villa Rosa land on South Bay Boulevard in early 2002 and in July of that year presented a site plan to the city calling for a gated community of 16-18 canalfront homes.

At that time, the city did not have site-plan review procedures established by ordinance and GSR was able — under threat of a lawsuit against the city — to gain approval from the city commission for the project that included a deed-restricted, gated community.

As Island real estate values boomed between 2003 and 2005, however, city officials envisioned a tax base of multi-million dollar homes that would generate a considerable amount of tax revenue, not to mention the permit fees on the homes.

It was not to be.

Byrne and Noriega were able to start up a model home at the site, and at one time, had a contract with NBA player Theo Ratliff to purchase the house upon completion.

But Byrne and Noriega ran into financial difficulties and either sold, or borrowed — depending upon one’s legal view — $8 million from Bon Eau LLC, using the Villa Rosa property as collateral.

GSR was unable to pay back the Bon Eau mortgage/loan, along with a number of other mortgages the company had obtained, and the company went into federal bankruptcy in July 2006. At that time, the company listed assets of $45.3 million against just $33.4 million in debts.

Byrne and Noriega claimed they were unable to develop Villa Rosa, or the Rosa del Mar condominiums in Bradenton Beach, because GSR minority partner Ed Furfey of New Jersey filed a lawsuit against GSR over the Bon Eau loan/mortgage.

In bankruptcy court, Byrne and Noriega eventually gave up all interest in GSR and ownership of the Villa Rosa project passed to Bon Eau.

Byrne went into personal bankruptcy in late 2007 and moved to Chicago. Last year, he told the bankruptcy court he had only $500 for his expenses.

 Several Island residents have claims against Byrne for money invested with GSR that was backed by a personal guarantee from Byrne. At one time, Byrne claimed he had a net worth of $33 million.

The GSR model home was put on the market for $2.2 million in 2007 and eventually sold for a negotiated price. However, a contractor who worked on the house estimated it needed another $800,000 in construction work before it would become eligible for a certificate of occupancy.

The bankruptcy case, however, is still ongoing.

Until the case is resolved, it’s unlikely that any Villa Rosa owner or outside development company would be interested in a project.

Mike Coleman of Pine Avenue Restoration LLC, said his company had looked at the property last year, but declined to get involved.

“We just didn’t think it would fit with our program of developing projects that fit with the ambiance and architectural style of Pine Avenue,” he said.

“It was my understanding that [Bon Eau Enterprises] was going to proceed with the project,” Coleman added.

Efforts to reach Bon Eau Enterprises for comment were unsuccessful.

According to Anna Maria building official Bob Welch, the site plan for Villa Rosa is technically still valid, regardless of ownership.

If a new Villa Rosa project is presented that strays from the approved footprint, it would require submission of an amended site plan that would have to meet the city’s new requirements, he said.