The Pellucid Perspective - February 2011 - (Page 8)

COURSES FOR SALE Reynolds Plantation courses on the market By Jim Dunlap S lowing real estate sales and an expiring line of credit have led Linger Longer Development Company to put their six Reynolds Plantation golf courses on the market. Linger Longer and the Reynolds family are currently exploring three principal avenues for disposing of the six courses to help raise $45 million toward a total of $105 million in cash and pledges required by lender Bank of America to extend the company’s approximately $175 million line of credit from B of A that has expired. The additional $60 million has been pledged by the Reynolds Family Trust in the form of undeveloped land which is owned by the family. The three alternatives currently in play are a sale to a private ownership group which is reportedly an existing golf course ownership company, purchase by a group of high net worth Reynolds Plantation property owners, and a purchase by the Reynolds Plantation Property Owners Association at large. Sources familiar with the situation have indicated that the CONDITIONED FOR SUCCESS. The golf landscape in America has changed. In a market overcrowded with golf courses and little prospect for demand to grow significantly, today’s course owners and operators are experiencing extreme competitive pressure in nearly every aspect of their business. Never before has there been more reason to work smarter and more efficiently—or more reason to partner with ValleyCrest Golf Course Maintenance. As the national leader in golf course maintenance contracting, we’re a trusted steward of all manner of golf properties throughout America. 24151 Ventura Boulevard Calabasas, CA 91302 (888) 406-GOLF Comprehensive Golf Course Maintenance initial offer from the golf course ownership entity was deemed to be too low, leading to the exploration of other buyer alternatives by Linger Longer. The company did not reveal the identity of the golf course ownership group in question, but there is some speculation that Canongate Golf and parent company Sequoia Golf Group, which has a strong presence in the Georgia market already, could be a likely candidate. Canongate already operates 23 clubs including 27 courses in Georgia, primarily in close proximity to the Atlanta market. Assuming that one of those three buyer alternatives puts together an acceptable offer, it will need to be done quickly. Bank of America, which bought out the other lenders involved in the previous line of credit, has given Linger Longer an end of April deadline to secure the additional $45 million in cash to add to the Reynolds pledge of $60 million in land. The previous line of credit reportedly expired at the end of 2010. In addition to the six courses and clubs, Linger Longer is hoping to sell a number of other assets within the Reynolds Plantation developments, including marinas, the Lake Club, tennis facilities and other amenities and infrastructure. Presumably, those additional revenues would be used to make up the balance of the $45 million necessary to reach the $105 million figure required to extend the line of credit for an additional three years. It is said to be unlikely that the sale of the six courses alone would generate anywhere near the $45 million total in today’s golf course market. The impending sale of the Reynolds Plantation courses is the latest in a series of sales or foreclosures of trophy properties and real estate or hospitality related assets in the golf industry. It was recently announced that Grand Wailea Resort & Spa on Maui, Doral Golf Resort & Spa in Miami, La Quinta Resort & Club and PGA West in La Quinta, Calif., The Arizona Biltmore Hotel & Spa in Phoenix and the Claremont Resort & Spa in Berkeley, Calif., have all declared bankruptcy after lenders seized them from owner Morgan Stanley’s real estate funds. The lenders, which include Paulson & Co., one of the world’s larger hedge funds, have indicated that they will retain the properties through reorganization, in anticipation of an uptick in travel and leisure spending at some unspecified time in the future. Another Georgia development, Sea Island and its courses, sold late last year to an ownership group including Oaktree Capital of Los Angeles and Avenue Capital of New York after the original developers declared bankruptcy in August 2010. Up the coast in Myrtle Beach, Century Golf Partners purchased The Legends, a five-course portfolio of Myrtle Beach area courses formerly owned by a group led by Peter Ueberroth. Century Golf Partners had previously been managing the courses for the Ueberroth group. n February 2011 8 The Pellucid PersPecTive

Table of Contents for the Digital Edition of The Pellucid Perspective - February 2011

The Pellucid Perspective - February 2011
Is Groupon Good for Golf: The Sequel
Solving the Professional Payment Predicament
Jan 2011 YtD Weather Impact, Dec 2010 YtD Utilization
Reynolds Plantation Courses on the Market
Atlanta, GA Core Business Statistical Area (CBSA)
Alternative Golf? Or an Affirmation of How Many of Us Play Already?
Custom Clubfitting in 2011: A Solution but Not a Cure
Pap-Agony for Phoenix Muni
Show Time - Again

The Pellucid Perspective - February 2011