Palm Coast, FL – December 31, 2009 – Two golf course communities once owned by Ginn-LA (Bobby Ginn and financial partner Lubert Adler) were sold at a bankruptcy auction this year. The developer owned assets of the two communities, along with those of two other Ginn communities, had been pledged as collateral for a $675 million non-recourse loan brokered by Credit Suisse. Ginn-LA defaulted on the loan leading to a Chapter 7 bankruptcy at Tesoro, in Port St. Lucie and Quail West, near Naples. Both communities seem to be better off as a result.
Quail West Development was the successful bidder at the bankruptcy auction picking up 262 residential building lots, a sales center, two Arthur Hills-designed golf courses, and a 70,000 square foot clubhouse for a reported $13.5 million. Ginn had recently spent millions upgrading the clubhouse. Quail West Development is owned by a few Quail West residents and the principals of a construction company already active in the community.
Effective January 1, the developer will turn over the golf club assets to the Quail West Foundation, which will take over the club while the developer concentrates on property sales and development. The club will be debt free. Outside memberships will be available.
West Coast Investors, headed by Glenn Straub, owner of the Palm Beach Polo Club, paid less than $11 million for the Tesoro assets, including 353 building lots, one golf course, a magnificent clubhouse, some commercially zoned land, and a lease on a second course. I visited Tesoro yesterday. New construction was absent because builders are not able to compete with prices of existing distressed properties, but sales are definitely picking up. Both golf courses and the 120,000 square foot clubhouse are open. The developer is making a statement of his commitment by subsidizing the club's operation costs. Common areas are meticulously kept.
Straub also has regained the second golf course. Prior to the Credit Suisse loan, Ginn-LA had transferred the Palmer course to Bobby Ginn, who then took out a mortgage from Textron, then leased the course back to the club. A third party picked up the mortgage from Textron, but Straub settled with the third party and now owns the Palmer course as well. The golf course transfer to Bobby Ginn is similar to one at Bella Collina, where the golf course, clubhouse, and land designated for the un-built sports center and equestrian facility were transferred to Bobby. He subsequently took out a $10 million mortgage on those assets from Textron.
One Tesoro property owner told me he was very concerned last year when the bankruptcy was announced, but now thinks that the community is much better off than before.
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