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Rubies-for-rooms plan hardly a gem

Hotel investors sue a Pinellas B&B owner over his curious choice of currency.

By SCOTT BARANCIK
Published August 30, 2006

Ruby slippers may have helped Dorothy get home, but a hefty stash of the precious gems didn't do Peter Plautz any good when he tried to get in on a $9.3-million hotel deal in Treasure Island. Now his hopes are pinned on a Pinellas County judge. Will the black-robed jurist have a heart and award him some green?

Plautz's woes are spelled out in a lawsuit filed against him last week.

Rick and Melissa Pierzchajlo, part of a Georgia investment group called Sunset Bay Properties, say they were guests at Plautz's Mansion House Bed & Breakfast in downtown St. Petersburg last fall.

While chatting with Plautz one day, the couple said, they confided that they were seeking to buy a local hotel. Plautz replied that he was a retired commercial real estate broker and offered to hook them up with a good local Realtor. On the couple's next trip here, the Realtor and Plautz took them to see a property.

Plautz, 65, wasn't just going along for the ride. He allegedly told Rick Pierzchajlo he wanted to invest in and manage the hotel, and that he had $1-million worth of rubies at his disposal. Months later, as the Georgia group prepared an offer on a former Best Western hotel at 11125 Gulf Blvd. along the Intracoastal, Pierzchajlo offered to let Plautz invest $500,000 in the deal, cash only. Plautz insisted on using the rubies and even took his case to the hotel's owner, to no avail.

Pierzchajlo and the other investors bought the 84-room inn, now under renovation, for $9.3-million in May. Last week, citing a threatening letter from Plautz's lawyer, they filed a pre-emptive suit against the bed-and-breakfast owner.

Plautz and his wife, Kathy, who came to St. Petersburg last year from the Milwaukee area, declined to be interviewed. But their Tampa lawyer, William Taylor IV of Macfarlane Ferguson, said the rubies - currently locked away in a bank vault, their origins undisclosed - weren't the problem.

Taylor said the Georgia investors had agreed not only to pay Plautz a fee for helping them find the Best Western but to let him join their venture. Neither happened. "But for Mr. Plautz, the property would not have been identified by this group," he said.

The rubies angle has been overblown, Taylor said, adding that Plautz intended to use the jewels chiefly as collateral for a loan, not as currency. Taylor said that Plautz was ready to discuss alternative financing options, but the Georgia developers didn't give him the chance.

Justin Dean, the St. Petersburg Realtor whom Plautz introduced to the investors, said he wasn't privy to negotiations between Plautz and the Georgians and therefore doesn't know what role rubies played in them, if any.

But Tony Amico Jr., the local developer and restaurateur who sold the low-rise hotel, offers an interesting perspective on the ruby row.

Amico's investment group had bought the Best Western for $5.4-million just months earlier. He said his partners planned to convert it into a condo-hotel, with each room owned by a different investor and a property manager handling the leasing. The Georgia investors told Amico they planned to finish what he had started.

Amico, who used to be in the jewelry business, said he does not recall Plautz's name. But he said he does remember "some guy that came in and said he wanted to trade me rubies for the hotel," and that the man owned a local bed and breakfast.

No sale, Amico told him.

"A boat or car, I might take in a trade. If Plautz would've had diamonds or gold, I might've been interested," Amico said. "There's not a problem liquidating diamonds. You can liquidate a million dollars of diamonds in New York in an afternoon.

"But don't try and sell rubies," he said. "They're not in every engagement ring. I could spend the whole rest of my life trying to get rid of several million dollars' worth of rubies."

Scott Barancik can be reached at barancik@sptimes.com or (727) 893-8751.

[Last modified August 29, 2006, 23:05:54]