An auction scheduled for February to seek bids for the high-end development club in Oklahoma City, Okla. was called off after Concert Golf purchased the second mortgage on the property and reached a settlement with its former owner, Herrington, Inc.
Newport Beach, Calif.-based Concert Golf Partners has purchased Gaillardia Golf & Country Club in Oklahoma City, Okla., in an all-cash deal that will rid the struggling club of its heavy debt load and cancel the need for a courthouse auction in February, The Oklahoman reported.
The auction was called off after Concert Golf Partners revealed that it had purchased a second mortgage on the property from First Liberty Bank and reached a settlement with Gaillardia’s former owner, the Arkansas-based private equity firm Herrington, Inc., The Oklahoman reported.
Concert Golf had already purchased the first mortgage on Gaillardia from Bank of the Ozarks last August.
Peter Nanula, Chairman of Concert Golf, declined to disclose the terms of the settlement, but said the company would almost immediately begin reinvesting in Gaillardia by making needed repairs at the clubhouse and updating its furnishings, The Oklahoman reported.
Repairing the clubhouse’s leaky roof, which was damaged a few years ago in a hailstorm, would be one of Concert Golf’s first priorities, he said.
“We have successfully recapitalized the country club,” Nanula said. “It’s always been a fabulous club. It was just wrongly capitalized. The club is now debt-free with a long-term, stable future.”
A group of Gaillardia members had been expected to bid against Concert Golf at the public auction next month. The Oklahoman’s attempts to reach Jeff McDougall, owner of the Oklahoma City-based JMA Energy Co. and one of the Gaillardia members leading the group considering a bid on the property, were unsuccessful.
A few professional golf course operating companies also had expressed casual interest in purchasing Gaillardia, Ford Price, Managing Partner of Price Edwards & Co., told The Oklahoman. Price Edwards has been acting as receiver for Gaillardia since last year, when Bank of the Ozarks and First Liberty Bank moved to begin foreclosure proceedings against former owner Herrington Inc.
There was no need to continue with the auction after Concert Golf bought out both mortgage holders on the property and reached settlement with Herrington, Price said.
“The goal of finding a long-term solution for the club has been accomplished,” Price said. “Concert is a well-thought-of owner and operator of these facilities.”
Concert Golf will take control of the country club in February, but the club’s staff and management will mostly stay the same, The Oklahoman reported.
The new ownership will try to ensure a smooth transition with few changes for the members, Nanula said. It remains unclear whether additional claims exist against Gaillardia or its owners.
Concert Golf is backed by a group of wealthy families seeking long-term investment opportunities, Nanula said.
In 2011, Concert Golf announced plans to buy up to $50 million in golf course assets, taking advantage of steep discounts on struggling country club properties after the recession.
The company has not taken on any debt for its golf course acquisitions, The Oklahoman reported, paying cash for the four private golf courses in Florida and one in the Washington, D.C. area that it has acquired.
Phil Herrington, President of Herrington Inc. which had owned Gaillardia since 2002 before the property fell into foreclosure, said he was pleased that the country club will be owned by a reputable operator, so that he can turn his focus to further residential development.
Herrington Inc. will continue its involvement with Gaillardia as the developer for new luxury homes in the gated community, The Oklahoman reported.
Plans are in the works to move forward with Promenade, a new master-planned neighborhood in Gaillardia that will include up to 7,500-sq. ft. homes with 25-foot ceilings that ring a central “Great Lawn” and connect with landscaped parks and nature preserves.
Herrington Inc has invested about $4 million in building the infrastructure, streets and stone privacy walls for Promenade, The Oklahoman reported.
“We have really focused on trying to solve the issues with the club before turning back attention to Promenade,” Herrington said. “I think in many ways this is a natural progression — to have owned it for a decade was an honor.”