Killearn Country Club owner, Barton Tuck, through his company Resort Club Properties, has secured a $1.8 million loan from a bank in Cairo, Georgia using the “Killearn Country Club and Inn” as collateral.
The loan was recorded with Leon Clerk of the Court on October 31, 2014 and can be viewed here.
Why is this noteworthy?
Mr. Tuck has made news lately by proposing that the North nine holes of the golf course be closed and sold for redevelopment to raise money to help the club, which he says is struggling financially.
How does a struggling golf club secure a $1.8 million loan? That is a question that is sure to be asked by those who oppose Tuck’s plan.
It appears the transaction will add credibility to claims by some that Mr. Tuck is not being upfront about the financial condition of the club and therefore affecting the options available to “save” the club.
However, answers maybe coming soon.
A lawsuit filed by Claire Duchemin, who lives on the North course, in circuit court claims that Mr. Tuck must offer to sell the club to members before closing any part of the golf course. Her argument is based on the restrictive covenants placed on the property in 1981.
Tallahassee Reports has learned that discovery in this case will include a request for documents used to secure the $1.8 million loan.
The club is not the property. The club is a temporary use for the land. Mr. Tuck’s land.
When you say “probably” this and “probably” that you are looking for ways to ease your mind and justify your faith.
I cannot say for certain how “the movie” will turn out, but I can say for sure that Mr. Tuck is keeping his options for the future open while asking other stakeholders to give up their leverage now.
For example, KCC members have been led to believe that, if they give up their leverage under the existing 27-hole covenant that extends to 2021, then (and only then) they will get a new protective covenant for the remaining 18 holes that will extend for a much longer period.
But it’s all in the details as to how protective that new covenant would actually be, if it happens at all. Many millions of dollars in value would be on the table in a circumstance in which KCC members would have zero negotiating leverage.
No, I can’t predict exactly how that “movie” would turn out. But I have a pretty good idea.
It came out in court today that Mr. Tuck actually invested money into the club with this loan. He refinanced a previous loan where the principal was significantly more and he paid the difference at closing. People need to not jump to conclusions without all the facts.
I was in the courtroom today too.
If you’ll recall, the original justification for why he had to sell off the North Course to improve the club facilities was that he could not get financing in the current market and had no other source of funds.
So why not keep the previous financing and put the money he evidently had available into the facilities right now?
Why wait years until (at best case) he fights his way through land use and zoning proceedings and THEN sells the land (allegedly)? And then, supposedly, improves the facilities.
You say he put the money “into the club”. He put the money into his own land.
It’s amazing to me how otherwise sophisticated people forget every lesson of basic American capitalism in favor of blind faith.
It does help you sleep at night. For the time being.
Once again, you are jumping to conclusions. Who knows why Mr. Tuck did what he did? Probably only Mr. Tuck and his partners. Maybe he lowered his interest rate from 8-10% down to 5-6%? Whatever reason it happened, I guarantee the monthly debt service payment is significantly less at $1.8m than it was before the refinance. Especially since I would imagine the years were extended back from what was remaining on the original loan.
Yes, he originally said he couldn’t get financing, which is probably why he had to bring money to closing to do the refinance. The bank probably wouldn’t give him the full amount.
As far as your question as to why he just didn’t put the cash into the club? Any person with basic money sense can tell you that from a monthly cash flow basis, the business/club will be in a much better position moving forward.
The last thing which you forget is the “club” is the property.
Try not to think you know what happens in the movie, by watching the opening credits.