City Plans to Take Over Mystic Creek GC

The city of Dearborn is taking steps to repossess the Milford, Mich., property because the current owner, Total Golf Inc., has fallen behind by $142,000 on lease payments and is even asking to delay payments until 2015. The council will move forward with a counter-proposal that would require the company to turn over the golf course and all assets on November 1 for a sum of $900,000.

The city of Dearborn, Mich., plans to resume ownership of Mystic Creek Golf Club in Milford, Mich., after the current owner, Total Golf Inc., has fallen $142,000 behind on lease payments with no intention to pay until 2015, the Dearborn (Mich.) Patch reported.

Total Golf CEO Jim Dewling made a request to the city for a three-year suspension on his lease payments. He would then resume payment of previous rent and make ongoing payments, Patch reported.

Dearborn City Council voted to move forward with a counter-proposal that would require Total Golf to turn over the golf course and all assets to the city on November 1 for a sum of $900,000.

The city noted that in addition to falling behind on lease payments, Dewling had taken out a $5 million loan from Fifth-Third Bank through Total Golf, then sold that loan to an investor, Midwest Capital Advisors (MCA), Patch reported.

“He’s paying our rent with money from Fifth-Third,” Mayor Jack O’Reilly said to council at a meeting earlier this month. “We’re not looking at a realistic business model here.”

In September, O’Reilly added, Dewling vowed to walk away from the course if he did not receive assistance from the city, Patch reported.

“If he did what he threatened to do … if we wanted to try to get anything back, we’d have to sue,” O’Reilly added.

Under the new agreement, the $900,000 paid to MCA would be less anything Dewling owes. The city would assume payments on new maintenance equipment and golf carts recently purchased for the course. That fee would be used to pay past-due real estate and personal property taxes, Patch reported.

City officials agreed that the immediate costs were outweighed by the long-term benefits, including the assumption of all previously booked events at the facility, furniture, equipment, staff, liquor license and business contacts.

“We’re basically getting a 27-hole championship course … for $900,000,” Council President Tom Tafelski said Tuesday. “We’re rewarding bad behavior in some respects, but if we’re going to spend money on attorneys’ fees and we know he’s not collectable, I think it’s probably a good move.”

Councilman Brian O’Donnell added that though the course is a valuable asset, it’s not the direction the city is looking to go, Patch reported.

“The alternative is going to be a bad scene, but at the end of the day, I don’t want to be stuck running a golf course,” O’Donnell said. “That’s not our mission.”

Corporation Counsel Debra Walling said that repossession of the property is the best move, given the circumstances, Patch reported.

“The smooth transition at whatever price you agree to would be preferable to the hostile takeover,” she said.

Finance Director Jim O’Connor said the city can expect to turn a profit with the course within six years, Patch reported.

Tags: brian o’donnell Dearborn mich. debra walling fifth-third bank jack o’reilly jim dewling jim o’connor Midwest capital advisors milford mich. mystic creek golf club tom tafelski total golf inc.