In foreclosure, Sedona Golf Resort Golf Course goes on the public auction block on the steps of the Yavapai County Courthouse in Prescott at 11 a.m. on Friday, Oct. 1.
Listed in the Notice of Trustee’s Sale are 14 parcels in the Village of Oak Creek.
The parcels include the club house property on Ridge Trail Drive and the whole of the 6,646-yard golf course — more than 120 acres stretching from State Route 179 and Ridge Trail Drive to the edge of the Coconino National Forest.
The original principal balance of the golf resort’s property is listed at $6.5 million, according to the notice.
The beneficiary of the sale is Pacific Life Insurance Co., which took ownership in early August from SunCor Development Co., the real estate subsidiary of Pinnacle West Capital Corp. Pacific Life owns seven golf courses in Arizona.
Since early 2009, SunCor sold most of its $400 million in housing developments and golf courses throughout the Southwest to help reduce its burden on its parent company and focus on commercial properties. SunCor officials said they planned to hold onto about $70 million in property.
Since the sell-off, SunCor reportedly reduced its debt from $175 million in April 2009 to just over $90 million by April of this year.
Troon Golf, a professional golf course management company, ran Sedona Golf Resort’s day-to-day operations from March until Aug. 31. Pacific Life then replaced Troon with OB Sports, a golf course management company based in Scottsdale, according Phil Green, OB Sports president.
OB Sports operates more than 30 golf courses around the United States. If no one bids on Sedona Golf Resort and Pacific Life buys the property outright, OB Sports would likely remain as the management company, Green said.
Folks & O’Conner, the Phoenix-based law firm handling the trustee sale, declined to comment.
The U.S. golf industry has suffered from declining revenues due to the worldwide economic crisis that began in mid-2008, with 92 private clubs closing in 2008 and 2009, according to Executive Golfer magazine.
Over the next seven years, Executive Golfer estimates 9 to 12 percent of private golf clubs will fail nationwide, reducing the number by nearly 400 clubs. About 90 percent of private golf communities that opened in the last five years are suffering from financial difficulties.
Sedona Golf Resort is the third golf course in the Verde Valley to suffer major financial trouble in the last year.
Seven Canyons Golf Resort
On May 27, Seven Canyons Golf Resort’s parent company, Sedona Development Partners, filed for bankruptcy to restructure its finances and take advantage of protection from its creditors.
Sedona Development Partners’ primary lender, Specialty Financial Corp., was scheduled to foreclose on Seven Canyons in bankruptcy court on May 28.
Seven Canyons Golf Resort and Sedona Development Partners are owned by Scottsdale-based Cavan Real Estate Investments.
Seven Canyons’ future plans are dependent on the bankruptcy court’s decision of Sedona Development Partners reorganization plan, officials said in early June.
Beaver Creek Golf Resort
Beaver Creek Golf Course, in the Lake Montezuma and Rimrock area north of Camp Verde, went out of business last fall.
Developers Ron Schabatka and Seth Williams have been trying to build a 137-condo development along the former course.
However, the closure of the golf course has put a damper on selling condo units. The developers had hedged their bets on condo sales to secure $1.3 million in financial assures so the Yavapai County Board of Supervisors would approve the project.
The catch-22 leaves the developers unable to begin construction until they have plan approval, which they can’t win until they can prove sufficient financial backing, which they can’t secure until they can build units.
In the ensuing stall, the residents of the Rimrock and Lake Montezuma areas are left with a vacant golf course.
The county can’t revoke approval because some of the units have been sold to third parties. In mid-August, the board voted to give the developers six more months to secure funding.
ILX Resorts
Verde Valley golf courses are not alone in major financial failings.
In March 2009, ILX Resorts, one of the largest private employers in the Verde Valley, filed for Chapter 11 bankruptcy protection.
ILX Resorts owns several resorts in the Southwest, including Los Abrigados Resort & Spa and The Inn at Los Abrigados, both in Sedona, and Premiere Vacation Club at Bell Rock in the Village of Oak Creek.
A bankruptcy judge approved ILX’s sale July 23 to ILX Acquisitions Inc., a temporary holding company of Diamond Resorts, one of the largest time-share and vacation resort companies in the United States.
Among its 150 resorts in Asia, Australia, the Caribbean, Europe and North America, Diamond owns The Ridge on Sedona Golf Resort in the Village of Oak Creek and Sedona Summit in Sedona.
