CORPUS CHRISTI, Texas — Port Royal Ocean Resort & Conference Center condo owners won a small victory in court Tuesday in their effort to restore the once high-end tourist staple to its former glory. Hurricane Harvey severely damaged the property along Highway 361 back in 2017.
A judge granted the condo owners, collectively known as Concerned Owners of Port Royal, a temporary restraining order against the resort's formal ownership board, called the Port Royal by the Sea Condominium Owners Association. The condo owners accuse the board of misusing insurance money and failing to repair the property.
"The Board of Directors has not selected a general contractor for any major repair or replacement project, has not taken any bids and does not plan to bring the improvements up to current code standards," the condo owners stated in their claim.
Formally, the condo owners accused the board of a breach of fiduciary duty, a breach of the declaration and bylaws and negligence, and requested the court appoint someone else to take over the design to fix up the property.
Judge David Klein granted the temporary restraining order, meaning the condo owners successfully proved they would suffer permanent and irreparable harm if it was not granted. But it does not mean they have won the overall case against the board.
The TRO stops the board from the following:
- billing owners;
- filing lien affidavits or notices;
- attempting to collect;
- claiming the debt is owed to any third party;
- using the assessment as collateral for a loan;
- listing it on any resale certificate;
- incurring any debt to finance the improvements to be covered by the assessment;
- entering into contracts to commence or complete the improvements; and,
- suspending any owner's right to vote or other rights or privileges of ownership due to non-payment.
Hurricane Harvey's Port Royal destruction
Prior to Hurricane Harvey, Port Royal was a well-known, high-end resort whose white buildings stood out against the backdrop of sand and grass that mostly inhabited the areas around Hwy. 361.
Built in 1984, It has five buildings with 210 units, which most owners rent out as a secondary source of income. It also has a restaurant and a meeting space.
But like most structures along Highway 361, Hurricane Harvey devastated the property in 2017, leaving it flooded and unsafe for months.
Six years later, Port Royal's most visible building still doesn't have a roof -- just one of the complaints stated in the filing.
Building 2 is still uninhabitable, the lawsuit states.
"Many of the other buildings still have not had their elevators replaced or roofs repaired."
The lawsuit alleges that condo owners have been charged $18.3 million to pay for assessments to fix the property, only for parts of the property to be fixed, and then trying to collect another $20 million for more repair "studies."
"The Board of Directors has an established track record of failing to use assessments for the purposes intended," the lawsuit states. "For instance, roof and window replacement assessments were redirected for other purposes, elevator assessments have been paid by the Owners for work which has not been completed and assessments were used to repay Board member loans and general operating costs."
The lawsuit states the Board collected $38.6 million in windstorm and business insurance. More than $3.3 million was deducted to cover debt to owners and banks.
