Three high-profile golf properties in the
Snell & Wilmer LLP attorney Craig Williams is the trustee handling
“There could be 10 to 20 golf courses on the edge. The number of rounds is declining. Revenues are down, but expenses don’t go down,” Williams said.
The
Williams said negotiations are continuing between the parties to resolve the future of the private golf course, which is surrounded by million-dollar homes. Many, but not all private courses are owned and operated by a homeowners association.
Home buyers in golf communities need to know what their rights are if a neighboring golf club ends up in foreclosure, he added.
Williams, who represents Deere Credit in the
“A golf course needs to have a receiver appointed — someone who can be there on a day-to-day basis to keep the course in good condition. This is very high-touch, specialized stuff,” Williams said.
Jeff Woolson, senior vice president of golf and resort properties for CB Richard Ellis, said he expects to see more golf properties headed for auction.
“Half of the listings we have right now are foreclosures. Golf properties are in trouble all over the country,” Woolson said.
To compound problems, the three companies best-known for writing loans on golf courses — General Electric Co., Textron Inc. and Capmark Financial Group — have stopped doing so.
“Local banks aren’t lending even if it is a good, healthy club. We’re down to seller financing,” Woolson said.
Although he’s seen a lot of problems with golf courses, especially those in master-planned communities on the fringes of metropolitan areas, the foreclosure involving the Wigwam and Biltmore courses raised his eyebrows.
“I’m a little shocked,” Woolson said.
In the case of the Biltmore courses, used by many guests of the Arizona Biltmore, Woolson suggested it would be a good idea for the hotelier to buy them.
Hilton Hotels, owner of the Biltmore, would not comment on the foreclosures.
The historic Wigwam is owned by Kabuto, though it has been operated by Starwood Hotels and Resorts. The operating agreement will expire May 31 and will not be renewed, a Starwood spokesperson said.
Robyn Nordin Stowell, an attorney with
“It’s a very unique property, and the community is dependent on it,” Stowell said. “At the right price, I can see someone operate it at least partially as a historic property and still have a viable strategy to repurpose part of it.”
Williams agreed that someone who could line up financing would benefit from distressed golf course purchases.
“It will be a tremendous opportunity for somebody to acquire these assets at a very reduced price and reposition them. It’s going to happen, but maybe not this year yet,” he said.
Get Connected
Snell & Wilmer LLP: www.swlaw.com
CB Richard Ellis: www.cbre.com
Holme Roberts & Owen LLP: www.hro.com