The Carolina coastal golf community development organization led by John Reed may be going up-country, according to a letter emailed to club members at The Cliffs Communities earlier this week. If negotiations are successful, Reed will manage the lush roster of amenities and own the unsold real estate in the multi-community development. Reed would engage Troon Golf to manage the golf clubs and is pledging to partner with local home builders and focus on constructing houses in the 2,500 to 4,000 square foot range, somewhat smaller than many Cliffs dwellers built before the recession.
“The ClubCo Board has advised that they are now focused on attempting to reach agreement with Reed Development and its unnamed investment fund partner,” the letter indicated, adding that ClubCo had tabled negotiations with two other suitors.
Cliffs founder Jim Anthony owes $64 million to club members and millions more on his real estate holdings. ClubCo, which operates the golf courses, and Cliffs Communities Inc., which controls the real estate, would
“Reed is currently proposing a vesting of old initiation fees over five years, with less than full repayment,” according to the letter, adding that “Noteholders would receive a higher percentage payout and faster vesting than non-Noteholders.” Although vesting rules were not spelled out in the letter, the implication is that everyone will get back less than promised originally, and those who risked their capital in loaning Anthony the money will get it back at a faster rate than others.
On its face, the Reed proposal is good news for Cliffs residents and club members. Developers, even the good ones, are often targets for criticism by residents of their communities. But Mr. Reed has managed to
Noteholders will meet on Wednesday at Furman University in Greenville, SC, to discuss the Reed proposal. The following day, all members will meet for an update on the fast evolving situation at The Cliffs. Stay tuned.