Two courses that fell victim to the burst of the real-estate bubble, River Valley Ranch and Lakota Canyon GC, are being acquired by new investors with different business plans for their operation.
Two golf courses in the Aspen, Colo. area are under new ownership, or about to be, reports the Aspen Daily News. The sale of River Valley Ranch (RVR) in Carbondale, Colo. was expected to close on August 6, Dale Rands of Snowmass Village, Colo., who was heading up the purchase, told the Daily News. A week earlier, it was announced that Warrior Acquisitions would be acquiring Lakota Canyon Golf Club in New Castle, Colo. which went into foreclosure proceedings with its lender, Alpine Bank, last year.
Rands and a group of investors went under contract last month to buy RVR from Crown Golf Properties, a Chicago-based company with ties to Steve Crown, a member of the Crown family that owns the Aspen Skiing Co. , the Daily News reported. The golf club was developed in 1997 as a joint venture between Hines Development Corp. and Crown Golf Properties.
Rands declined to reveal the purchase price of RVR, which eventually will be made public, but said it was acquired inexpensively. He is purchasing the golf course and related facilities only, not any of the surrounding real estate, the Daily News reported.
Rands will put a new management team in place at RVR, the Daily News reported, that will include Alden Richards and Dale Alvarez of Aspen Junior Golf, and Chris Norvell, proprietor at Epicurious Fine Food, who will manage the property’s restaurant.
Changes will be made during the off-season and the restaurant will be overhauled in the winter, Rands told the Daily News. “We are not going to make changes right away,” Rands said, who added that the course is in good shape, but the buildings and infrastructure need attention. “Our priority is that we are going to give it local attention.”
The deal for Lakota Canyon, which opened in 2004, is reportedly for around $2 million for the course and golf facilities, according to the Daily News. Bankruptcy documents filed in January show that Lakota Canyon Ranch Development LLC, which merged various LLCs together for Chapter 11 reorganization, owns the golf course, a recreation center, a commercial parcel and various residential lots and homes.
The debtor also owns residential properties in Aspen and Carbondale, the Daily News reported, with current value estimates for all of those properties totaling $9.4 million. Alpine Bank holds the deeds encumbering all of the properties and is securing a total indebtedness of about $20 million.
In March 2011, a receiver was appointed to oversee the operations of the golf course and recreation center, according to court documents. Real estate developer John Elmore II was involved in the Lakota development and has a 20-year history with Alpine.
Warrior, based in Irvine, Calif., was previously unknown until 2010, when it purchased six courses in two years. Warrior’s affiliated entities have invested nearly $50 million over the past few years in 13 golf properties, as well as commercial and residential interests, according to a statement from the company, the Daily News reported.
Warrior has been able to avoid the lending market, said Walter Bolen, the company’s Director of Investments. The company so far has targeted properties in the $1 million to $5 million range. “We are not in this for the short term,” said Brendan Flaherty, founder and CEO of Warrior, in a statement. “We feel that as long as we avoid leverage and loans while utilizing the array of assets we have available to us that other course owners don’t have, we should achieve a solid return as long as we stay the course.”
Prior to the onset of the recession in 2008, Elmore and his affiliated entities ranked among the top 10 percent of Alpine’s largest clients on the basis of aggregate loans, according to court documents, the Daily News reported. The properties securing the Lakota loan were thought to have a value of about $35 million at the time the notes were executed. The debtor now values the properties associated with the loan at less than $3 million.
Elmore testified in bankruptcy court as to the extraordinarily economic conditions faced by the real estate development industry when the recession hit, the Daily News reported. “What we’re seeing right now, there’s nothing that’s ever been close to this,” Elmore said, according to testimony cited in court documents. “There is no money available hardly for development. It’s just about impossible for most developers to borrow any money from anybody for any of the normal development purposes.
“This far exceeds anything we’ve ever seen before,” Elmore’s testimony continued. “This is, as Alan Greenspan described it, an economic tsunami. And it’s more so for the real estate business than any other industry I’m aware of.”
Rands, the purchaser of RVR, told the Daily News that he believes the economy has recovered from those days. “I think things are turning around,” he said. “The economy is much better today than it was in 2009.”