Oct. 19--An emergency loan of $410,000 was approved Thursday for Sandy Lake Towers, the bankrupt resort off International Drive in south Orlando. 
 

The hotel has been hemorrhaging money, losing about $100,000 a month. Last month, occupancy was at 10.5 percent, according to records.  The emergency loan is to be used for payroll, taxes, insurance, electricity and other operating expenses.  A hearing will be held in U.S. Bankruptcy Court in Orlando on Nov. 26 on a $3.2 million loan to refurbish and operate one tower and to maintain the unfinished second tower.

Sandy Lake Towers 6145 Carrier Drive Orlando, FL

The development, which was started in 1991, is notorious for its snail-like construction pace. The city issued a certificate of occupancy on one tower in October 1999. The second tower still is unfinished. 

Developer Sergio Naya of Brazil apparently authorized construction as he raised money to pay for the work. 

The ownership entity, Sandy Lake Towers Inc., filed for reorganization under Chapter 11 of the bankruptcy code in August. 

Naya is a controversial person in Brazil. In 1998, his 22-story Palace II apartment building in Rio de Janeiro collapsed, killing eight people. Naya has denied accusations that faulty construction caused the collapse. 

Orlando building officials have said the local towers -- easily identified by their bright pink color -- are built to code. Their concern has been the slowness of the project. The latest building permit, issued in March, expired Sept. 10. 

In its bankruptcy petition, Sandy Lake Towers listed the property value between $30 million and $35 million. Debts total about $20 million. 

Thursday's hearing had the odd twist of dueling lenders, vying to lend on the bankrupt property. Arbor Commercial Mortgage LLC of New York is battling Cypress Lending Group Ltd. over the right to make the loans. 

If a property's value is sufficient to reasonably protect a first lien holder's interest, the court can move another lender into that position. 

Arbor's attorney Roy Kobert said his client relinquished its first lien position on the $410,000 emergency loan, but will fight to retain first position on the $3.2 million loan. 

He will try to prove to the court that there isn't sufficient value in the property to protect Arbor's interest if it isn't in first lien position. Arbor is owed about $16 million. 

Attorney Bradley M. Saxton, representing the debtor, said Cypress Lending Group is interested in making additional loans to make the property a success. 

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(c) 2001. Distributed by Knight Ridder/Tribune Business News.