When Cliffs Communities residents and club members loaned developer Jim Anthony more than $60 million to complete the amenities he had promised, including Tiger Woods’ first American golf course design, they made sure the money would be spent wisely.  The loan agreement between Anthony and the lender group, self-named ClubCo, includes a clause that calls for a reduction in spending if real estate sales and cash flow fall short of certain levels.

        According to a letter sent to ClubCo members earlier this month, parts

of which a Cliffs member has shared with Golf Community Reviews, spending has been deferred for most amenities other than the almost finished clubhouse and Gary Player golf course at Mountain Park.  The stoppage includes the golf course, maintenance facility and clubhouse at High Carolina, site of the Tiger Woods golf course, as well as a wellness center, spa and restaurant at The Cliffs at Keowee Springs.  Some renovations and expansion of amenities at the other Cliffs communities have also been halted, but according to the Cliffs member who shared the contents of the letter with us, “in the grand scheme of things, nothing major.”

        The Mountain Park course and clubhouse are set to open in the fall of 2011.  Player moved his U.S. golf design operations to The Cliffs and purchased a large home there.  The Tiger Woods course is a couple of years from completion and, let’s face it, does not have the same cachet it had before a certain fateful Thanksgiving night 13 months ago. (Anthony and Woods announced the High Carolina plans the summer before the star’s car crash and revelations of serial adultery.)  High Carolina was “an unnecessary addition to the Cliffs formula,” according to our reader, and “…the debt raised may accelerate a split off of High Carolina, something I view as inevitable, and hopefully before it destroys value [in] the rest of the Cliffs.”

        “Six courses to play is perfectly adequate,” he added, echoing what we have heard from other Cliffs members who play their home course most of the time, other nearby Cliffs courses occasionally, and the ones an hour away rarely.  The three courses on Lake Keowee (Vineyard, Falls and Springs) are less than 20 minutes from each other, and those closer to Greenville, SC (Glassy, Valley, and Mountain Park when completed) are less than 30 minutes from each other.  The “outlier” is The Cliffs at Walnut Cove, a challenging Jack Nicklaus course, which appears to be self-sustaining given the lure of nearby Asheville, NC.

Cliffs developer Jim Anthony and the group of residents who loaned him $60 million have suspended work on most of the communities' unfinished amenities, including the Tiger Woods golf course at High Carolina.  Pictured is an established equestrian center at The Cliffs at Keowee.

 

        During my first visit to The Cliffs in 2006, I marveled at the high-end amenities that included equestrian centers, wellness centers, expansive clubhouses, nature trails (with on-staff naturalists) and plans for even more.  I wondered out loud to a friend how such spending could be sustained, even from the sales of home sites in the high-six figures.  Of course, an ascendant housing market coupled with a huge and well-to-do baby boomer cohort caused many buyers not to think twice about subsidizing amenities they might never use.  (Quick, think of all the golfing equestrians you know!)  Then credit default swaps exerted their gravitational pull on the housing market and all those baby boomers’ plans.  The Cliffs is not alone among high-end golf communities with cash flow issues.

         Developers who pushed an all-amenities-to-all-people business model have had a sobering few years.  Although he certainly could be accused of overreaching, The Cliffs’ Jim Anthony is no Bobby Ginn; Cliffs properties may have lost some significant value in the last three years, but their owners still speak of Anthony in reverential terms (the opposite of how Ginn owners feel about their bankrupt developer).  They want Anthony’s vision to triumph as much as they want their investments to hold.  In an ironic way, the economy may have done Anthony and The Cliffs a favor.  The members who loaned Anthony the $60 million will act as a governor on his loftier -– and expensive –- dreams.

        This new financial partnership among owners and developer, as well as spending to match cash flow, could very well become a model for other upscale golf communities that got way ahead of themselves.

The golf at all six Cliffs courses is undeniably excellent, which makes some members wonder if the Tiger Woods course, which will follow a new Gary Player course, is necessary.

On a late summer afternoon, the sun over the Blue Ridge Mountains casts some long shadows across the Blue Ridge Shadows golf course in Front Royal, VA.

 

        Unplanned rounds of golf on unknown golf courses sometimes turn out to be the most interesting.  It’s one thing to visit and play a new golf course based on the reviews of others, but there is something especially exhilarating about stumbling across a good one on your own and being able to tell others about it.

        In September, I checked into a Holiday Inn in Front Royal, VA, on my way to visit a few golf communities in Virginia.  I noticed there was a golf course next door to the hotel.  After checking into my room on the 6^th floor and looking out the window to a well-contoured green below that was surrounded by water and sand, I grabbed my camera and decided to give it a go before the sun went down.

        I had never heard of Blue Ridge Shadows, an upscale public facility whose course was designed by the respected Tom Clark -– he’s the Clark in the Ault-Clark golf design shop.  Blue Ridge Shadows won’t win many awards for subtlety, at least not the first time you play it.  It features blind tee shots to banked fairways, some unseen trouble just off the fairways (woods, severe drop offs, rocks) and a few greenside water hazards that can bring out the worst in whoever is responsible for pin-position placements.  Nevertheless, a few holes were memorable, if maddening.  I won’t forget the opening hole, for example, a short par four that requires a drive over a hill, with a large pond off the fairway to the left.  I struck what I thought was a perfect drive over the middle of the hill but came to find my ball at rest at the leftmost edge of the fairway, just six yards from the water.  Since the pond extended to the very front left edge of the green, with the pin on the bottom level of the green just over the water, the proper play was to the right front edge of the green.  If I had not hit the shot I wanted to, I might not remember the hole quite as fondly as I do.  I wound up missing a 10-foot birdie putt, but was ecstatic with par.

        Blue Ridge Shadows opened for play in 2007, and anyone with just a passing understanding of recent economic history knows what happened the following year.  Just five months after it opened, the golf club filed for Chapter 11 bankruptcy reorganization, something of a preemptive move since its assets were a few million more than its liabilities.  It emerged from those proceedings but it was with no surprise that I came to find out this week that the club is up for sale, listed at just under $5 million (that includes the 4,500 square foot clubhouse, which sits on the highest peak on the golf course).  It is a fine layout in a nice location -– a couple of miles north of I-66 and just six miles from I-81, a major north/south route -– and you have to believe that some arrangement can be made between the hotel, which was clean, efficient and a bargain at under $90 for the night, and the golf course to generate some nice golf packages (the young lady at the hotel told me there was no such arrangement).

        The $5 million asking price for Blue Ridge Shadows in the current market seems a little steep.  By comparison, the outstanding Federal Club course outside Richmond sold a year ago for just over $2 million.  Golf Property Analysts has the Blue Ridge Shadows listing and indicates the golf course is on a 200-acre plot of land, a nice sized property that might eventually accommodate additional real estate (I saw a few nice homes around the edges of the course).  Here’s hoping that some investor is attracted to Blue Ridge Shadows.  The golf course is the best in the immediate area and a nice distraction for players traveling west on I-66 from Washington, D.C. and south on I-81 from the population centers in the northeast.

Sight unseen:  From the teebox at Blue Ridge Shadows' first hole (top), the play appears to be straight down the middle on the dogleg left hole.  But once the ball disappears over the hill, it bounces hard left, near the water that guards the front edge of the green.