Resort attorney Matt Norfolk told state Judge Martin Auffredou that Manning’s decision has put the proposed 90-room, four story hotel on Saranac Lake’s Lake Flower “at risk.” He also questioned what Manning has to gain by terminating the contract, unless he plans to sell his motel to someone else.

Manning’s lawyer, Jim Brooks, said his client was within his rights when he ended the deal. He said Manning is frustrated with the repeated extensions the developers have asked for and questioned their wherewithal and willingness to complete the resort project.

Manning terminated his contract May 1 after Saranac Lake Resort LLC failed to close on the sale of the property, after previously granting the developers three extensions. The resort is now suing Manning to try to keep its contract with him, and the hotel project, alive.

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This photo illustration shows what the Lake Flower Resort and Spa is expected to look like on the site of three motels in Saranac Lake, as seen from across Lake Flower. (Image provided by Saranac Lake Resort LLC)

Injunction sought

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Norfolk spoke first, asking Auffredou to issue a preliminary injunction that would prevent Manning from selling his motel property while the lawsuit is pending.

Norfolk said Manning had no right to terminate the contract because he was “not able and ready” to close. The attorney said Manning didn’t have clear title, had furniture and other property in the motel and didn’t give his client “reasonable access” to inspect the property before closing. The resort has since hired a consultant who has completed a lengthy environmental inspection report that’s been filed with the court.

In response, Brooks produced a document from Essex County Clerk Joe Provoncha that he said shows Manning has clear title. As for Manning’s property being left in the motel, Brooks said there’s no condition in the contract that requires the removal of property. In fact, he noted, it says the resort agrees to buy the property in “as is” condition.

Referring to the environmental inspection report, Brooks said it names several old gas stations nearby that may have had underground tanks that could have leaked onto the motel property, but he said the report doesn’t name any environmental hazards on Manning’s property.

Brooks also said there’s nothing in Manning’s contract with Saranac Lake Resort that requires an environmental inspection, although the judge noted that the contract allows the developer to inspect the property prior to closing.

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“Irreparable harm”

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In support of his request for a preliminary junction, Norfolk said he had to prove “irreparable harm” to his client if the motel was sold to someone else.

To help make his case, he introduced a pair of Enterprise articles as exhibits. One was from May 22, when Brooks told the newspaper “the deal is done” and that his client could now sell his property to someone else. In the other, dated May 24, Manning said he talked to Hotel Saranac owner Fred Roedel about him potentially buying the motel, although Roedel has said he’s not interested.

“There is danger of irreparable injury if there’s not an injunction in place,” Norfolk said. “There’s the risk that the seller could go to someone else and try to sell the property.”

Brooks didn’t dispute his comments or Manning’s in the articles but he said they are irrelevant. He said there’s nothing wrong with his client telling Roedel or anyone else the property might be for sale.

Norfolk noted that Manning and the other motel owners have been paid a non-refundable $5,000 a month since they signed with the resort, which adds up to $270,000. Saranac Lake Resort LLC has also paid hundreds of thousands of dollars to develop the project and get it approved by the village and the state Adirondack Park Agency, Norfolk said.

“There’s a lot of time, commitment and money that’s gone into this resort, and if there’s not an injunction, it goes back to the threat of losing all this,” he said.

Norfolk also said the other motel owners and the village as a whole would suffer if the project doesn’t move forward. He said he doesn’t know why Manning didn’t extend his contract. Now the Lake Side Motel is closed, and Manning isn’t getting the $5,000 a month.

“To me, he’s in a worse position,” Norfolk said. “I understand Mr. Manning is tired of it, but I think it’s not fair play, looking back at how much he’s received in this, to take this unreasonable position and not work with us to get the contract back in place and extend it a reasonable time so we can try to close.”

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Delay tactics?

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Brooks said the $5,000 payments aren’t a windfall for Manning. He noted that his client stopped taking reservations because he expected to close several times, but the resort developers instead asked for extensions.

“That happened here three times, and he cooperated three times,” Brooks said. “Now we’re down to this summer. He had no bookings because we were going to close on May 1. What do we get? ‘We need a further extension.'”

Brooks repeatedly questioned Saranac Lake Resort’s ability to bring the project to fruition. He claimed the resort didn’t close on May 1 because it didn’t have the money to pay the motel owners, describing the company as a Delaware-based LLC with “no assets.” Brooks speculated that the developers want to delay because they’re trying to market the resort to someone else, though he offered no proof for this claim.

“They’ve had these permits for months now,” he said. “Why don’t they, if they are bona fide, start buying these properties and get going on their project? What are they waiting for? They’re trying to market this to somebody else, and then they’ll walk.”

The judge noted that he doesn’t have anything in court papers indicating that’s what the resort would do, calling Brooks’ remarks “supposition.”

Norfolk said all three motel owners were repeatedly told to stay open and keep taking reservations. Manning’s decision to shut down and terminate his contract was “self-created,” Norfolk said.

“I don’t understand why he did that,” he said. “It makes no sense to me. We told them all to keep going, keep working. We were hoping to wrap up Sept. 1 at the latest.”

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Decision soon

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After nearly three hours of argument, Auffredou said he would review the submitted court papers and the attorneys’ comments.

“I intend to get a decision out on this very quickly,” he said.