Some information regarding Acacia Country Club.....
Fate of Acacia Country Club in Lyndhurst in court's hands
Posted by Michelle Jarboe/Plain Dealer Reporter February 21, 2009 16:46PM
The lawyers, accountants and developers who golf at Acacia Country Club might have lost control of the club's future.
Instead, a court-appointed receiver and a judge could decide to sell the club's land, influencing the fate of a rare undeveloped site at an affluent and densely populated suburban crossroads.
A sale would mean an unceremonious end for an 83-year-old private golf club that once hosted big-name players and boasted influential members, before falling on years of declining fortunes and litigation.
Lawyer Michael Murman, appointed last month as the club's receiver, is trying to sort through the mess surrounding Acacia. The club's board is challenging Murman's role, which gives him power over Acacia's expenses, operations and land. But that hasn't stopped Murman from making a huge decision: to solicit sealed bids, due in mid-April, from developers who want to buy the 160-acre property near the Beachwood Place and Legacy Village shopping centers.
If the bid process occurs and a developer bites, it won't be the club's 160 or so members who vote to accept or reject the deal. That responsibility would fall to the courts -- something that frustrates shareholders who are hanging on, hoping to eke out a profit and let Acacia die with dignity.
"To me, all a receiver does is accelerate the timeline and potentially force a sale in a difficult economic period," said Tom Rudibaugh, a club member who sits on Acacia's board.
A vote to sell
Acacia's shareholders voted last summer to dissolve the club and sell the property. The club's roster has dwindled. Shareholders are paying double dues. And the lawsuits -- related to disputes between one frustrated shareholder and the club's board -- keep piling up. Selling the club's property would allow Acacia to pay off its debts and split any leftover cash among shareholders.
Brokerage firm Grubb & Ellis began marketing the property in early January. Club members say a few potential buyers have been circling, despite the depressed real estate market, the recession and the legal cloud hanging over the property. Possible uses for the land include anything from another golf club to a large development, featuring a hotel, apartments, senior housing, offices and shops.
Some of those prospects worry neighbors who don't want to see green space give way to more buildings and bustle. But the city of Lyndhurst has long anticipated homes and stores could replace the golf course. Late last year, the city approved a zoning change that makes way for a mixed-use project there without a public vote.
"We'd like to see a development that would be good for Lyndhurst, as far as income is concerned, increasing our tax base without having any kind of negative impact on the surrounding residential property," said Thomas Kunz, the city's building commissioner.
Normally, Acacia couldn't be sold without the approval of members holding two-thirds of the club's shares. Murman's appointment -- the result of a shareholder lawsuit against Acacia -- wrests that power from the shareholders and puts it in the hands of two people: the receiver who makes a recommendation, and the judge who approves or rejects it.
Murman doesn't believe his role will result in a sale of the club for a pittance. And he expects that Acacia's members will be able to weigh in, even if a judge ultimately decides on the sale. Developers might be quicker to offer bids, he said, when they're facing a receiver and a judge instead of a room full of country club shareholders.
"My understanding is that there are multiple qualified buyers, people who have access to the money, who are interested," Murman said last week. "But there's some real reluctance to commit in an environment where there are 120-some decision-makers."
Knee deep in litigation
Most Acacia members contacted for this story were unwilling to talk or declined to be identified in the newspaper. But court documents and other records provide a glimpse into the club's decline and the possibilities that lie ahead.
A landslide of litigation has almost buried Acacia since the club sold 17.9 acres in the northeast corner of the property in 2005. Developer Joseph Aveni, a club member and onetime director, paid $4 million for the land and began building luxury homes. The club used the sale proceeds to build a new clubhouse, an effort to attract new members and prove that, despite persistent sale rumors, Acacia wasn't going anywhere.
The effort flopped. New blood failed to materialize. Aging shareholders retired. Competition from other east-side country clubs made a revival nearly impossible. And members had to dig deeper into their pockets to keep the club running.
In 2006, a group of members sued to compel the club to disclose financial records. A year later, member Leonard Carr sued the club, alleging mismanagement by the board. In particular, he challenged the amount of land Aveni bought -- club members had voted to sell 16 acres, not 17.9 acres -- and additional land the club turned over for a buffer between the golf course and Aveni's project.
The board fought back against Carr. Aveni accused Carr of defamation, then claimed the club's board should reverse the land sale and return his money. Elements of each case are still moving through Cuyahoga County Common Pleas or appellate courts.
Common Pleas Judge Nancy Margaret Russo, who has presided over many Acacia hearings, said she could not comment on pending cases. But she expressed frustration during a hearing Feb. 5 in one of the Acacia lawsuits.
"I'm well familiar with what's going on in Acacia, and it's very disturbing to me how law is being practiced in this case," Russo told a group of lawyers. "People have lost sight of everything with their emotions, I'm tired of getting letters; I'm tired of getting faxes. You're lawyers. I want pleadings. I don't want name calling; I don't want accusations, I don't want things of, you know, running to me because you can't get along."
Late last month, Acacia's shareholders tried to move forward by voting, retroactively and by a vast majority, to approve the board's handling of the Aveni land sale. It's unclear whether that vote will affect any of the litigation.
Aveni did not respond to an interview request. Carr declined to comment publicly, saying that "the lawsuits speak for themselves."
Club member Rudibaugh attributed the turmoil at the club to a small group of members. He said he's baffled that the arguments over Acacia have reached the point where the golf club could be sold through the courts.
"I'm dumbfounded," he said. "I don't understand how we got to this point."