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Wednesday, January 25, 2012

Cliffs noteholders vote for bridge financing; clubs stay open

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        The first big step in the financial stabilization of The Cliffs Communities has been taken, with members of ClubCo, the group that loaned founder Jim Anthony $64 million to enhance and finish the golf communities’ impressive roster of amenities, voting to approve bridge financing that will benefit whichever of two bidders winds up owning The Cliffs amenities and unimproved real estate.  The temporary financing keeps The Cliffs golf clubs and other amenities open beyond this week.

        A Bluffton, SC, based development group led by John Reed and another developer, the Stokes Land Group out of Jacksonville, FL, are each vying to own The Cliffs unsold land and vaunted amenities.  After choosing one of the developers to take over the amenities, ClubCo, which inherited the amenities after Anthony could not make a second payment on the big loan, will declare bankruptcy, clearing the way for a local court to bless or amend a plan to turn the communities over to one of the two suitors.  Complicating the situation for the court is a lawsuit Anthony filed against Urbana, a development company to which Anthony previously sold undeveloped lots in an attempt to inject some desperately needed cash into his falling empire.  Stokes has indicated in the outline of their plan that they will work with Urbana.

         The Stokes group, under the name Arendale Holdings, has stepped in to assist other golf communities facing financial issues. For example, the group “provided substantially all of the capital” for the Currahee Club, an upscale community on Lake Hartwell in Georgia, where it is “now planning its turnaround,” according to a letter to Cliffs’ members from the Cliffs Member Advisory Group.  The letter cites another club in Colorado in which Stokes is involved.

        John Reed and his organization have developed upscale communities in Bluffton, just off Hilton Head Island that include Colleton River, Berkeley Hall and Belfair.  It is likely that Reed will counter with a revised offer.

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Larry Gavrich

This blog was conceived and is published by me, Larry Gavrich, a former corporate communications executive who founded HomeOnTheCourse, LLC, in 2005.  Our firm advises baby boomers and others seeking a lifestyle in which golf is a major component.  My wife Connie and I own a home in Connecticut (not on a golf course) and a condo at Pawleys Plantation in Pawleys Island, SC, on a Jack Nicklaus layout.  We began our search for our home on the course more than 15 years ago, and the challenges of the search inspired me to research golf communities and write objective reviews of them.