Lake Wales commissioners recently voted 4-1 to send an official “notice of default” to the owner of the Walesbilt Hotel regarding contract breaches related to the site’s redevelopment agreement.
The action came during the board’s regularly scheduled meeting on March 16, with extensive discussion among city leaders during a commission workshop on March 10.
The hotel is currently owned by Ray Brown, under the business name Dixie-Walesbilt LLC. The agreement was first signed over 11 years ago, but officials say there hasn’t been any appreciable work done on the site in many months.
None is anticipated in the near future either, according to City Manager James Slaton.
“Currently, the city has no active building permits, building permit applications, or plans under review related to redevelopment of the Grand Hotel,” Slaton said. “Additionally, no outstanding code enforcement violations or fines exist related to the Grand Hotel.”
A notice of default would give Brown up to 45 days to correct alleged violations of the agreement, as outlined by attorney Kevin Ashley, who the city hired to review the 69-page document and subsequent work done at the site.
“As indicated in Mr. Ashley’s letter of opinion, Dixie-Walesbilt, LLC has committed multiple, material breaches of the original redevelopment agreement and a factual basis for bringing a lawsuit against Dixie-Walesbilt appears to be solid,” Slaton said.
Deputy Mayor Robin Gibson said the time had arrived to initiate action, and that the decision to do so was about enforcing the terms of a legal contract.
Slaton and some commissioners indicated they have had personal discussions with Brown in recent months.
“He hasn’t asked us for anything at least since I’ve been in my current position,” Slaton noted.
Mayor Eugene Fultz also expressed frustration and supported sending the official notice.
“For at least seven of my eight years, I’ve talked with, I’ve worked with, I’ve walked with Ray Brown,” Fultz said. “We’ve seen several companies come out of Tampa — at least two — that wanted to invest, and he flatly refused them. He wants to do it his way, or nothing at all.”
The redevelopment agreement was first executed on Feb. 2, 2010. On July 5, 2011, the Lake Wales Community Redevelopment Agency conveyed title to the hotel to Dixie-Walesbilt, LLC.
The original agreement obligated Dixie-Walesbilt to complete a number of projects connected to the site, within 30 months of construction commencement, including requirements to redevelop the hotel's exterior in as close a rendition as possible to its original historic appearance; to construct, market, own, and lease approximately 17,800 gross square feet of commercial retail space on the hotel's ground floor; to construct a health club in the hotel up to 5,000-square-feet in size; to construct up to 40 residential units within the hotel; and to construct on-site hotel parking of at least 240 parking spaces.
It also called for $50,000 for sidewalk and street improvements and $30,000 to go to the Lake Wales Historical Society.
“Since the execution of the redevelopment agreement, none of agreement obligations 2 - 7 have been completed,” Ashley wrote. “Dixie-Walesbilt's failure to perform its commitments under the agreement have deprived the CRA and the city of the benefits they sought and bargained for.”
Commissioner Al Goldstein also said it was time to take action.
“I think this letter gives Mr. Brown the ability to answer within 45 days instead of just sitting back and waiting and waiting and waiting,’ Goldstein said. “I talked to him just the other day and I think he’s ready to do something. I don’t know who, what or where, but this might help him.
“If we don’t send a letter, it’s just pushing it back and it might be another 10 or 12 years.”
Terrye Howell, the city’s longest serving commissioner, asked Brown if the conditions of the original contract could be met in the next 45 days.
“It’s just the notice. What the notice will do is urge him to take some action,” Galloway said. “Then the decision will be made whether or not to proceed with an action for breach of contract to take the property back. The question of what’s next will come back to this body. You’re going to see it again. If there’s some justification for an extension of time I think it would come after that.”
Commissioner Curtis Gibson said he remained hopeful that some resolution other than a legal one might be possible, and cast the lone no vote.
“I know what we do need is we need that building developed,” Gibson said. “I’ve had many conversations with Mr. Brown about getting it done. That building will definitely be a mover for downtown. But I ask the same question, do we sit across the table with the same energy of trying to work with Mr. Brown on coming to a resolution of getting that building fixed?”
To learn more about the public improvements downtown and throughout the city, visit www.lakewalesfl.gov/projects.