Short column here from the Indianapolis Star about some sort of restructuring at the Sagamore Club, a Nicklaus course in nearby Noblesville. I don't know much about the course, have never talked to a member, and learned little from this surprisingly uninformative piece, but apparently someone managed to do something to "save" it, or at least avert financial problems for the time being. I don't recall seeing the course mentioned much here, so I'd be interested if we've got anyone here who's played the course.
http://www.indystar.com/apps/pbcs.dll/article?AID=2009903220304 March 22, 2009
Nothing par about these golfers
Bill Kubly is an aw- shucks Badger from Wisconsin who runs a golf course development business out of Nebraska.
So he was a little taken aback by the standing ovation and hearty handshakes from a couple of hundred Hoosiers Wednesday night. Many were golfers who had given up five- and six-figure investments to save the Sagamore Club just east of Noblesville.
Kubly got the standing O because he worked all winter with homeowners, golfers, investors and the bank to save the club that features a Jack Nicklaus Signature course and expensive homes.
"We're stubborn. We don't like to give up," said Kubly, owner of Landscapes Unlimited, which built the course beginning in 2001. "What kept coming back to us was how great the members are."
How great? Founders who had invested $100,000 each exchanged their preferred shares for a tiny fraction in equity to help clean up the balance sheet. So did charter members, many of whom paid $40,000 each. The initial partners and the golf course operator similarly canceled liabilities, all of which erased more than $8 million.
Kubly's company wrote down $3 million and added $1.5 million as part of the deal that gave Salin Bank enough confidence to redo the mortgage. Landscapes also bought the last 73 of 330 home lots. That consolidation aligns the interests in a way that puts selling golf memberships on par with building houses.
That's why most of the people crowded into the clubhouse last week were smiling. "The easiest thing for them to do was just write a $3 million check and walk away," said Adam Grant, a scratch golfer who built a home just off the second fairway. "Everybody would have lost their investment, but who could have blamed them?"
Indeed. Indianapolis has a wealth of good golf courses, so keen competition for members meant Sagamore struggled to break even. The souring economy slowed homebuilding, and then in November the bank threatened to foreclose.
Instead of wilting under the pressure, eight people formed a nonprofit called Friends of Sagamore. When talks stalled, the group served as a conduit to restart negotiations.
It worked. Kubly expects to maintain the current 360 memberships, including 300 for golf. The max is 390. Now the club has time to build slowly toward that.
"We've been given an opportunity to make this club go," said Bob Ballard, a Friend of Sagamore whose house is near the first fairway. "We're going to make it go."
The season's first rounds will be played Tuesday. Everyone already knows the score.