It is common knowledge to people who follow the NEOH golf business that Cherokee Hills Golf Course in Brunswick — home to the Coppertop clubhouse — was taken over by new owners at the start of this season.
But the story behind the financial story posted Monday by Crain’s Cleveland Business sports writer Kevin Kleps — “Valley City Golf Course Has New Owners” (subscription required) — outlines an unbelievable series of choices and decisions not made public before.
The biggest bomb-shell: previous owner Mark Haddad had not made a mortgage payment in over three years to lender Fifth Third Bank after having taken a loan of $3M+ to make clubhouse and course renovations in 2002.
Stating that the course brought in $1.7M to $1.8M per season, Haddad claimed that the lender was partly at fault. “The course wasn’t losing money. If I would have had reasonable payments, I could have made the payment,” he said.
Haddad blamed the declining value of the course property from the 2008 financial crisis as the reason why he couldn’t refinance the notes. He said a 2002 appraisal put the course value at $5.7M. He assumed he still had a property value of at least $4M going into recent loan dealings. Then the bank’s latest appraisal came in at $1.4M, making a refinancing unworkable.
But perhaps the biggest factor in the bank’s reluctance to refinance was that Haddad made no payments to them whatsoever in over 36 months, even though he was current with other vendors and had actually invested additional money in the building and golf course.
Haddad tried a Chapter 11 filing last September to reorganize and save his stake, but the court tossed that filing in January. That’s when Haddad gave up. The liens wound their way through the hands of various lenders, eventually bought up by Brunswick businessman Greg Clement. He and his wife also own Mapleside Farms, a sprawling apple orchard and event center.
Subscribers can read the full Crains story here >. It’s a doozy…