Metacomet CC - GREAT READ

[BirdieBirdieX]

Sad state of affairs and the demise of Metacomet. One of the best Ross tracks around.

https://www.golfdigest.com/story/brad-faxon-saved-his-childhood-club-members-are-now-suing-him-for-fraud-the-curious-case-of-metacomet-golf-club?mbid=social_facebook&fbclid=IwAR3KK-w6_IGj-2QLnw-suR1DR0jhdIqyjRpJIXEt2L6RxC6-USNhJTlJBvA

[Hawkeye77]

Above taken from existing thread about two down.

[Hawkeye77]

This new article is pretty good, thanks for posting.

One very interesting fact and pretty telling is the now reported information about what happened just before closing documents were finalized and executed. The buying group wanted the clause removed about keeping the property intact as a golf course and the seller agreed. Potentially very fatal move.

Will be interesting to see how this develops and what more comes out in terms of actual facts, but boy the seller stepped in it on that one -- pretty obvious all bets were off the minute that is proposed and the seller agrees to make that change. Couldn't be a bigger red flag.

Obviously "everybody" probably wasn't in the know at that point, but the club's authorized representatives would have had to authorize the changes to the agreement (i.e., buyer and seller made the decisions, don't go blaming the lawyers, lol).

But, $2 million in debt and back taxes and on the verge of tax sale and foreclosure or bankruptcy -- hard to complain about the outcome the membership managed to force upon the club through the years. Hate to see courses close, but sometimes they just aren't viable. Looks like an awesome track.

 

[farmer]

It's sad that the course is going away, but for investors to make this club healthy, they were going to have to think of it as an expensive hobby. Just guessing, but the members are aging out, and it has been underfunded by those members for years. The course needed to be premium priced in an area that would not support that level.

[BirdieBirdieX]

Sounds like the members wanted to keep it a “good ole boys club” and had little interest in opening up the facility to newbies. Unfortunately for them, that’s not how it works anymore. The private joints that don’t allow in the “new money” or some public play will always go under, especially in a financial climate like Rhode Island. You have a seasonal facility, in an area that is still recovering from 2007 with limited ability to generate additional income by way of condos, etc.

 

Writing was on the wall. Can’t blame this on Faxon, more of blame should be placed on the prior boards and membership.

[raynorfan1]

The key stat in the whole article is that there were 230 members. You can't run a club in the Northeast at the level that they wanted to with 230 members. It doesn't come close to penciling out.

But to me, there are two different but related issues here:

(1) was the club - particularly the club as the members knew it - doomed? This is an obvious "yes".

(2) did Brad Faxon et. al. swindle the members by convincing them that they could/would make it work, sell at a discount, and flip for profit? Not quite as obvious...but looks like also yes.

[Hawkeye77]

They could have flipped it and made more money without trying to run it and incurring all the expenses. Everything they sank money into will probably be torn down and/or ripped out - new purchaser didn’t make an offer based on value of anything other than the land and demolition costs, IMO. So bait and switch is a nice label but the hard facts don’t support it yet - see what happens when more comes to light about those charges.

[medicoreMAgolfer]

Given current market positions, I wonder if the deal will actually close. Would imagine the contract they signed with the buyers has some material out clause - and will coronavirus give them an out (or at least a chance to take some price off the table that they’re paying Faxon, et.al.?)

[Hawkeye77]

Highly doubtful the agreement will let the buyer out because of coronavirus, of all the contingencies that may be in there, that isn't likely, lol. Probably a complete "as is" and good title and maybe some environmental things required in that state, if any apply. At the price the buyer is paying even an appraisal is irrelevant.

[raynorfan1]

I’m sure there’s a financing contingency, and that would certainly be up in the air right now.

[Hawkeye77]

Not certainly by any means, but possibly.

If the deal falls through it won't preserve the golf course.

[farmer]

If the members win this "you lying SOB's" lawsuit, then what? The membership cannot sustain this course. The only long term hope is to double the membership and fees.

[Hawkeye77]

LOL, yep.

Pretty convenient to holler "foul" after the debt is gone, taxes paid off, clubhouse issues addressed --- and can't really put them back in the position they were before. Just some guys with $$$ trying to interfere with the current sale, IMO. Even the members weren't playing last year, that's why they had to let all those public spots come open. I assume much of the debt was to avoid large $$ assessments to the members, hoping things would just get better, but come on, you are on life support if you aren't paying property taxes.

Seems on a larger scale what happens to smaller clubs in other places and it is a bit sobering.

[gjc985]

anyone know what were the yearly dues and original initiation? How did they not even have a waitlist with only 230 members? Did they allow public events/tournaments on Monday’s that could have been revenue generators? What about renting out the club house? So may questions I’d love to know the answer to.

[Lark]

How could the buyers have not realized at the time of purchase that they would be losing substantial money until the condos or other development were completed? Unless they thought they could operate with small losses by opening up for private play until the condos were developed, but that seems like bad planning.