The 147-acre, Pittsburgh club was placed into receivership in January due to debts of more than $1.4 million owed to PNC Financial Services, but that debt was purchased by Zokaites Properties LP in June, and it has been working to arrange a sale since. Whether a new buyer will pursue the property as a new development, continue operation as a club, or something else, has yet to be determined.
Churchill Valley Country Club in Pittsburgh is set to be auctioned off on July 29, the Pittsburgh Business Times reported.
The 147-acre club will go to auction in the Court of Common Pleas of Allegheny County by Judge Christine Ward, at which the judge will be “entertaining all offers and confirm a sale to the highest and best bidder,” according to a classified ad announcing the auction in the Pittsburgh Legal Journal on July 9.
Yet while the club was placed into receivership in January due to debts of more than $1.4 million owed to the mortgage-holder PNC Financial Services Group Inc., it is Wexford, Pa.-based Zokaites Properties LP, owned by Frank Zokaites, that stands to be paid the proceeds from the auction, the Business Times reported.
Zokaites bought out PNC’s debt for $1.2 million, said Michael Von Lehman, a financial consultant for Meridian Group, the court-appointed receiver of the club’s debts, who put PNC’s total balance at $1.9 million, the Business Times reported.
Zokaites Properties bought PNC’s debt early in June and has been working to arrange a sale since. Von Lehman acknowledged that a private party jumping in and buying the debt from a bank isn’t typical. Usually, a property will be auctioned through a sheriff’s sale process with the mortgage-holding bank looming in the background to make the process a formality by taking ownership itself if no bids are higher than the bank’s debt, the Business Times reported.
“[Zokaites is] basically doing a sheriff’s sale through the receivership court,” said Von Lehman.
With an auction scheduled, Von Lehman noted that Zokaites didn’t give the impression of wanting to develop the property and instead is going to test the market through the auction. Whether a new buyer will pursue the property as a new development, continue operation as a club, or something else, has yet to be determined, the Business Times reported.
“It’s rare that somebody comes in and just says this is an under-valued asset right now and there’s equity to be had,” said Von Lehman. “Normally, you wouldn’t see that.”
A call to the lawyer representing Zokaites was not immediately returned, the Business Times reported.
Meridian explored various options for the Churchill Valley property, including finding ways to keep it as a club and selling it off to housing developers. Von Lehman pointed out that a winning bid would probably need to climb above $1.5 million for the deal to work for Zokaites. There are $300,000 in real estate taxes to consider on a property Von Lehman pointed out was facing a now-delayed reassessment that would put the assessed value at $4.5 million, the Business Times reported.
First established in 1931, Churchill Valley Country Club flourished for years thanks in part to the large presence of nearby Westinghouse Electric Company and a thriving banquet business that operated out of an 80,000-sq. ft. facility on the club’s property. Yet membership that once topped 1,000 slumped to about 200 in recent years and the club, like many middle-tier operations, has struggled, the Business Times reported.
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