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BP Business Economic Loss Claim Appeal 2015-1166: “Condo-Hotel” is excluded as real estate developer


The following is an Appeal Panel Decision issued pursuant to Section 6 of the BP Deepwater Horizon Economic & Property Damages Settlement Agreement and the Rules Governing the BP Appeals Process. Links may have been added to assist the reader. The original decision may be found here, as well as a glossary of BP Settlement terms.

Claimant filed this appeal challenging the Claim’s Administrator’s decision to deny its BEL claim on three separate occasions, finding Claimant to be an excluded real estate developer.

Claimant maintains that it operates a “condo-hotel” in Bradenton, FL. It purchased the property in 2007 and extensively renovated it. Claimant argues that it has always operated the property as a hotel, that it has never sold nor offered any of the units for sale, and has never been a real estate developer.

There is considerable evidence to contradict those claims in the record. BP notes that Claimant sought to sell several of the units, listing them for sale from 2010-2012. Sarasota County issued Claimant a real estate developer’s license in January, 2010 at which time Claimant filed a Notice of Intended Conversion to convert the units to condominiums. While there is no evidence in the record that any units have sold, the claimant’s intent to sell them is quite clear.

Policy 468 defines real estate development as “any activities involved in the making of any material change in use of buildings or land, including renovation and re-leasing of existing buildings.” While an entity that meets this definition can still make a claim if it shows that it ceased all real estate development activity, such is not the case here. The policy also provides that any entity that in 2010 sold or held out for sale any real property developed by the entity has not “ceased real estate development activity.” It is noteworthy that, after BP raised these issues in its memorandum, Claimant filed no response though it had ample opportunity to do so.

Based upon a review of the record, the decision by the Claims Administrator to deny the claim was correct.

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