Tidemark seeks court approval for further credit
Embattled Tidemark Partners LLC, developers of the Tidemark hotel and condominium project in Holmes Beach, has asked the federal bankruptcy court in Tampa to approve a $130,000 loan from Southstar Development Partners of Coral Gables to allow the company to continue operating for the next three months.
Tidemark, which filed for bankruptcy in federal court Jan. 8, said that without the financing, the company "will have no funds to operate its business, thus depriving [it] of the opportunity to reorganize" and emerge from bankruptcy.
Additionally, Tidemark said it will lose "valuable permitting rights associated with the Tidemark property, which will markedly reduce its value."
Tidemark has already reported debts totaling just under $5.2 million in its bankruptcy petition, including $950,000 in unsecured claims.
In its long-range budget plan submitted to the court, Southstar said it would pay off the $5.2 million and provide construction financing to build the entire project.
But if approved, the Southstar loan won't come cheap.
The preliminary "rescue" loan would be at 12 percent annual interest rate, and Tidemark would also have to pay for Southstar's attorney fees and expenses, plus a 1 percent commitment fee. That would bring the total amount close to $140,000.
Tidemark asked the court for an immediate ruling on the financing petition, claiming "there is insufficient time for a full hearing before [Tidemark] must use the post-petition financing."
Without the money immediately, said Tidemark, "there will be a direct and immediate adverse impact on the continuing operation of the business and on the value of its business."
Tidemark claims it needs the money for "ordinary business operations." A review of the proposed three-month budget for the borrowed funds shows that Tidemark managing partner Nick Easterling would receive $35,000 in salary over the three-month financing period.
Two other staff members would receive $7,500 each in salary during this time, bringing the total amount in salaries to be paid from the borrowed money to $50,000, or 38 percent of the loan.
Easterling said that a proposed refinancing deal from first mortgage holder Brasota Mortgage would not include construction financing, while Southstar can "bring everything to the table to complete the project.
"We can get everyone paid off at the end of three months" with the Southstar financing plan, he said.
The bankruptcy court was to hear the Tidemark petition yesterday, April 13.
Southstar Development Partners would be the latest in a string of potential saviors of the troubled property that have fallen by the wayside.
In September 2003, Easterling said he had a deal with the Parliament Group of Dallas to become partners in the resort.
Following the collapse of those negotiations, Easterling had Dallas-based EFO Holdings real estate lined up to inject some much-need cash, but that deal also fell through.
Once in bankruptcy court, third-mortgage holder Cypress Lending of Vero Beach offered Easterling a refinancing package that, at the time, would have put them ahead of Brasota Mortgage in the mortgage pecking order.
That deal, however, was turned down by Easterling after Brasota Mortgage purchased the first mortgage on the property from Regions Bank to move past Cypress Lending. Brasota then offered Easterling its own refinancing program to complete the project.
The Holmes Beach City Commission approved the 40-unit, $20 million Tidemark condo/hotel/marina project in August 2001.