Monthly Archives: May 2009

Tierra del Sol Files Bankruptcy

Davenport, Florida…

A troubled developer in the Four Corners area near Walt Disney World, sued by British investors after the vacation homes for which they paid thousands weren’t built, has now sought protection from its creditors in bankruptcy court.

Tierra del Sol Resort Inc. filed a Chapter 11 petition this week in U.S. Bankruptcy Court in Orlando, seeking a chance to restructure so it can resume construction and pay off its debts. The company owes creditors a total of $184 million.

“The goal is to restart construction,” said bankruptcy lawyer Scott Shuker, who filed the petition for the Orlando-based resort company.

Construction ceased last summer at Tierra del Sol, a development that was supposed to total nearly 1,000 condominium units and town homes off U.S. Highway 27, just west of the ChampionsGate resort. The developer ran out of money.

Tierra del Sol officials last year blamed the cash shortfall on the housing slump, an expansion of the resort’s water park, and the costs of filing plan modifications with Polk County government.

Once construction restarts, Shuker said, the company would finish building the units and sell them to repay creditors. If it can secure a loan, the company intends to build the 100,000-square-foot clubhouse, with restaurants and shops, featured in its original plans. Shuker said the resort would be fully built in three to four years.

So far, only 96 town houses have been completed and prepared for occupancy. Of the 972 units planned for the site, 370 have purchase contracts but haven’t gone to closings.

The project’s first phase — five Mediterranean-style buildings with six floors and 1,200- to 1,500-square-foot condos — was initially to be ready by the summer of 2006. When it missed that deadline, Tierra del Sol started to send buyers letters asking for contract extensions — and more money to finish the construction.

“They started calling and trying to get me to sign another contract and pay double the price,” said Tom DeNapoli, who said he paid a $27,000 deposit for a four-bedroom town house supposed to be completed in 2005. He asked for his deposit back but never got it.

“It certainly negated any other investment opportunity I might have had,” said DeNapoli, 46, who lives in Easton, Mass.

If the project doesn’t get back on its feet, Shuker said, those who paid deposits will not get their money back.

David and Sandra Clayton of the Netherlands are among the would-be owners who reached a settlement with the company late last year after filing a lawsuit. They have received about $100,000 so far of $330,000 they’re owed, said their lawyer, Matt Firestone.

“It’s not good for my clients,” Firestone said of the bankruptcy filing. “As unsecured creditors, they stand to obtain little if any of these funds from the bankruptcy.”

The Chapter 11 filing protects the company for now from current and future lawsuits. Affiliated companies that are part of the bankruptcy filing include TDS Amenities Inc., TDS Clubhouse Inc., Tierra del Sol Owners Association Inc., Costa Blanca I Real Estate LLC, Costa Blanca II Real Estate LLC and Costa Blanca III Real Estate LLC.

If the homes eventually are built and sold at their listed prices, Tierra del Sol’s assets would total $188 million, Shuker said. The company’s largest creditors include banks, investment groups and numerous home buyers, many of whom paid deposits of more than $100,000. Many of those disappointed buyers are from the United Kingdom, where the company had heavily advertised the resort. The development also drew buyers from throughout the U.S. and Latin America, including Colombia and Venezuela.

Kennedy Funding of New York and Stanford Fund of California are owed $28 million each. Tierra del Sol Resort’s parent company, American Leisure Group, reportedly received loans from R.Allen Stanford, a Texas financier accused of an $8 billion fraud by federal regulators.

Tierra del Sol is actually a subsidiary of American Leisure Holdings Inc., which is owned by American Leisure Real Estate Group.

International Pow Wow Coming to Orlando in 2010

International Pow Wow, the U.S. travel-and-tourism industry’s primary trade show for foreign buyers, came and went last week in Miami Beach. For Orlando, it’s already time to focus on next year’s show.

Orlando will host Pow Wow 2010 and the 4,500 or so suppliers, wholesale buyers and travel writers that come with the show. It’s a tremendous opportunity for the region during what’s expected to be a critical year for tourism, as the nation hopes to be climbing out of recession by then.

As the host city, Orlando will have the home-court advantage when it comes to snagging a piece of the show’s action. The U.S. Travel Association, which organizes the event, estimates that Pow Wow generates more than $3.5 billion in travel deals, and the host city typically captures 10 percent of the show’s total bookings.

The show, organizers say, consists of three days of intensive, prescheduled business appointments involving more than 1,000 U.S. travel-and-tourism businesses and organizations and close to 1,500 travel buyers from more than 70 countries. In addition to dozens of individual appointments, a buyer is also wined and dined by attractions from the host city.

For Orlando, which last hosted the event in 2006, that means everyone from Walt Disney World to Mears Transportation to various local hotels get to strut their stuff in hopes of wowing wholesale-travel buyers with a firsthand experience.

“So much has changed since when we hosted it last,” said Danielle Courtenay, spokeswoman for the Orlando/Orange County Convention & Visitors Bureau. “It gives us an opportunity to make sure that the thinking and perception of Orlando is current.”

Among the new draws in Orlando by next spring: roller coasters introduced this year by both Sea World and Universal Orlando, Disney’s Toy Story Mania ride and American Idol Experience show, the five-star Waldorf Astoria hotel in Bonnet Creek, the 1,400-room Hilton Orlando, and a host of new dining and shopping options.

Also, Universal’s much-anticipated Harry Potter attraction is expected to be open no later than the summer of 2010.

Leslie Case, director of sales and marketing for Blue Man Productions, knows the value of having Pow Wow in town. Last year, when Las Vegas was the show’s host city, more than 3,000 Pow Wow delegates saw the local rendition of Blue Man Groupduring a special evening event.

“People get it much better when they have an opportunity to see the show,” Case said. “There are relationships that are established at events like this that last us for many years.”

Nickelodeon Family Suites also hopes to benefit from see-for-yourself marketing next year, too, by inviting promising leads for a familiarization stay. Jim Struna, the hotel’s director of marketing and revenue management, said the business is a regular at Pow Wow and projected that the show will account for 17 percent of the hotel’s business this year.

One big benefit of the show is that it allows domestic travel companies to pitch their product to international buyers in person, something that might be too costly to attempt if it involved flying overseas.

Orlando marketing representatives started building some buzz for Pow Wow 2010 at this year’s Miami Beach show. The visitors bureau set up a “smile campaign” at its booth and is posting delegates’ photos to a Pow Wow 2010 page on Facebook, the popular social-networking Web site. Also on the site: A video commercial for Orlando’s varied vacation attractions.

In addition to generating a local marketing blitz, the coming of Pow Wow usually sparks a citywide cleanup. Before this year’s event, Miami embarked on an intensive beautification campaign that included politeness reminders for taxi drivers. About 30 officials took a two-hour bus tour to inspect the streets Pow Wow delegates were most likely to see or use during their visit; the day’s journey produced an 83-item punch list of problems that were then assigned to 15 agencies or organizations.

“We like to say Pow Wow is the Super Bowl of our trade shows,” said Rolando Aedo, vice president of marketing for the Greater Miami Convention & Visitors Bureau. As this year’s host, Miami-Dade County was planning to spend about $2.3 million on Pow Wow, Aedo said.

By the time Pow Wow arrives in Orlando next May, local marketers are hoping the hundreds of travel buyers will be in the mood for doing business.

“This has been such an unpredictable year for travel,” said Courtenay, the visitors bureau spokeswoman. “Hopefully, by that time, we’ll have seen some turnaround.”