DUNEDIN — The developers of a $30-million project on Main Street are being sued by their bank for defaulting on nearly $5.7-million in loans.

Developers Jim Egnew, Richard Gehring and Bill Kimpton are considering their options, including selling.

After they missed interest payments due in July, August and September for loans on the Marina project at 200 Main St., Synovus Bank of Tampa Bay filed a suit in Pinellas County against them for the entire amount — nearly $5.7-million — plus interest and attorney's fees.

In a contentious City Commission meeting in late July, Gehring and Kimpton said condos in the Marina project were not selling.

After spending more than $2-million of their own money and taking out loans for millions more, the two developers and their partner, Jim Egnew, were struggling. They asked commissioners to give them relief from a proposal that would set time limits for starting construction on approved site plans.

"This could be the nail in our coffin," Gehring said in July.

That night, commissioners didn't know but the developers had already missed interest payments due earlier that month.

"That's what I couldn't say then," Kimpton, 61, a real estate lawyer, said Tuesday. "I knew that we needed to succeed in some way, but our economy seems to be spiralling in the wrong direction."

Kimpton said they had lined up the money to meet interest payments with a second lender, but then a German bank bought the lender and refused to honor their loan. "We had relied on them to fund us well into 2009 and they failed us," he said.

He liquidated as many assets as he could to make payments, Kimpton said, but eventually ran out of funds. The developers are discussing the situation with their attorneys and looking at a possible sale.

In 2004 and 2005, according to figures on the property appraiser's Web site, they paid about $3.7-million for the old Victoria Lodge, the aging Bay Palms motel and the Sun Blest Apartments at Victoria Drive and Main Street. The partners invested in an extensive renovation of the 1903 house and in demolishing the others.

"We're not abandoning our plans for the current site," Kimpton said. "But we are also open to whatever other opportunities might be available for the site."

"Whatever happens, it's an extremely important property for the future of Dunedin and some good use will come for the site," Kimpton said.

When told about the suit Tuesday, Mayor Bob Hackworth was not surprised. He had heard about the hotel.

"It's disappointing that it's struggling, but it's not the only one," he said. "We've got a sea of that in Pinellas County."

"It's a gorgeous piece of property, a signature location for our downtown waterfront redevelopment efforts," he said. "I'm hopeful that it gets back on track with something that works in our economy."

Theresa Blackwell can be reached at tblackwell@sptimes.com or (727) 445-4170.