Reno has lost several golf courses over the last few years. The Crystal Peak 9 hole course in Verdi is now brown (and a really ugly story). D’Andrea brown. Northgate is now the Dave Aiazzi State Dog Walk Park, double brown! I forget the name of the public course that used to part of RNO, but it has been closed for airport expansion. Rosewood Lakes is still green, but about to undergo major “renovation” to accommodate the Southeast Connector road project.
Lakeridge Golf Course sold out of bankruptcy last week for $5.5M, having last sold for $8.35M in 2006 in a less than arms length transaction. Heritage Bank held a $5.5 1st and a $500K 2nd loan on the course, so this was a better than expected outcome for them, though they took back $1,925,000 in paper on the deal. Lakeridge has a 7300 SF clubhouse, and a stable membership.
Somersett Golf and Country Club (SGCC) is proposing a sale and lease back arrangement with the Somersett Owners Association (SOA). For a proposed $2.75M, SOA will buy the land and let SGCC run it as a private club as long as they can. The proceeds of the sale will allow SGCC to bolster their reserve fund and construct a (minimal) clubhouse. Or not – the equity members could just close the course and split the proceeds for about $26,000 each, though the personalities involved make me believe this is not the intent. For SOA members, this looks like a great deal. They will have the same access to SGCC amenities they have now, but at half the cost to SOA. If SGCC fails, SOA can run it as a golf course or let it revert to natural open space or groomed open space or a combination, but they will not be able to develop the golf course into housing. All in all, this seems like a win-win for all the parties involved. The price appears to be the current market value of the water rights plus the irrigation and pumping infrastructure – the land is free.
ArrowCreek on the other hand, is the Jahi McMath of country clubs. For sale for $4.75M, it has not found any takers. Washoe County just posted a Delinquent Special Assessment Sale notice – they are $208K behind in their special assessments, and will be “sold” to anyone who comes up with the $1.1M in remaining principal/interest/fees. If you “bought” Arrowcreek at the sale, the current owners could redeem the property by paying the total assessments and paying you 1% per month for your time, which is pretty nice return. To actually take title free and clear, you would have to come current on their delinquent property taxes and water/sewer liens – $975,382 as of the last update (a Property Tax Lien Sale will be coming up shortly and will be in 1st position). I cannot imagine any scenario where ArrowCreek County Club can survive in its current form. None of the lien holders have deep enough pocket to pay off the immediate debts to the County and to absorb the negative cash flow the club is generating. Brown out one or both courses? Their mixed use zoning already allows for some development.
Golf courses in the desert, what a jenius (sic) idea. They may not be the brightest idea for your retirement portfolio, but ArrowCreek is low hanging fruit that you developer types should take a look at. The prospect of Section 8 housing down the 12th hole fairway elicits a wry grin from this blogger!