Aspen Lakes Golf Course in bankruptcy auction

            Another well-known Central Oregon distressed business is preparing for sale as it works through bankruptcy for the second time since 2011, a situation similar to the region’s only daily newspaper and its parent company.

            The family-held limited liability companies that control Aspen Lakes Golf Course and other properties have received federal bankruptcy court approval to auction the course and related facilities as well as other adjacent land that has been promoted for a destination resort several miles east of Sisters. https://www.aspenlakes.com/

            The recent approval comes after the LLCs--controlled by the Cyrus family-- filed for Chapter 11 bankruptcy in June of 2018, a move that gives troubled businesses temporary protection from creditors and a chance to reorganize debt and operations. Also in Chapter 11 proceedings for the second time since 2011 is Western Communications, parent of the Bend Bulletin and six sister publications.

            The Aspen Lakes bankruptcy filing followed foreclosure action by the companies’ largest secured creditor, GT Capital of Sioux Falls, SD, which took over a  $3.5 million originally issued in 2006 and held by Spokane-based lender AmericaWestBank, a successor to PremierWestBank. GT Capital, which also holds a $427,000 loan to a Cyrus family LLC,  became the lender of record in 2014 and filed the forclosure in April, about two months before the bankruptcy filing by the Cyrus companies.

            Among defendants in the foreclosure are Wildhorse Meadows, LLC; Aspen Lakes Golf Course, LLC; construction and utility LLCs related to the Cyrus family interests: and various individual members of the family.

            As of the June 2018 Chapter 11 filing date, the Aspen Lakes LLC reported total assets of $1,123,315 and liabilities of $6,971,501. Of the liabilities, $4,901,141 was to GT Captial, secured by the golf course. John Deere Financial service also held a $5,125 interest.            

            Other creditors included those with “priority” unsecured claims of about $80,000 and $1,985,849.. Of the unsecured nonpriority claims was $1,356,680 from Wildhorse Meadows LLC.  The IRS was listed as a priority unsecured creditor, with claims of about $58,000 in June of 2018, but no tax lien against assets had been filed by mid-March of 2019.

            A New York auction broker, Keen-Summit Capital Partners, working with golf brokers Fairway Advisors, have announced a planned auction deadline of May 28 for bids on the golf course and other related properties.The auction is set for June 4.

            Among the properties are the 18-hole golf course, clubhouse and other property on approximately 390 acres; a 340 acre parcel with potential destination resort development; and other smaller properties including one of nearly 120 acres zoned for a surface mining operation.

            The golf course and related property include the course, opened in 2007, and a 35,000 square foot building housing a 300 seat restaurant, offices and meeting or event space with capacity for 500 attendees.

            The auction announcement includes a note that a “stalking horse” bid would be welcome. In that situation the seller could accept a bid before the auction deadline, which would then theoretically set a minium price and conditions for any other bids.

            If the seller accepts another higher bid, or one with more favorable conditions, the stalking horse buyer is entitled to compensation in the form of a breakup fee and a percentage of its early bid price.

            Detailed information regarding the auction pricing and conditions is only available for interested parties who sign a nondisclosure agreement. 
            Valuing golf courses can be complex. One back-of-the-napkin approach is to assign a per hole price assuming quality, location and other factors. Another method involves computing the replacement cost, by imputing a land value then estimating cost to build a comparable course and facilities.
            A third method, the income approach, computes the value based on net income and a capitalization rate, such as 7%. For example if a course netted $200,000 in an average of maybe three previous years, the value might be placed at $2.857 million.

            The most prominent recent sale of a regional golf course property was in 2018, when Tampa, FL based investor Kiran Patel paid a price recorded at $12 million for Eagle Crest Resort. That sale included two 18-hole golf courses, lodging and restaurant facilities and about 80 development lots.

            Several years earlier a LLC related to the Suniver Resort and Crosswater golf communities paid a recorded $7.25 million for approximately 600 acres south of the existing Caldera Springs golf resort, a Sunriver holding. That land south of Vandevert Road has access to Caldera’s existing waste treatment and other infrastructure and is anticipated for expansion to include nearly 500 homes and lodging units.

            In the Seattle area a golf property developed by the late Microsoft co-founder Paul Allen with two 18-hole and a 9-hole family course and two clubhouses sold in 2019 for a reported $11.3 million.

Could that be? 118 year record broken and still a drought

            It might appear that record breaking bountiful snows of late February and early March, setting a 118 year high mark, should have pulled the Descutes basin out of a severe drought.

            Not so, according to the latest US Drought Monitor report for Oregon.

            As of the report dated March 5, all of the county was still in “severe drought” conditions, except for a sliver in the extreme western part along the Cascade crest.

            However, the latest report was a dramatic improvement from the one dated January 15 when nearly the entire county was in “extreme” drought and the small area in the Cascades was classified as severe.

            The impact of the current snowpack increase thus far has had little significant impact on regional reservoirs, which rely on Spring runoff to recharge after depletion during the previous irrigation years. Of the six major reservoirs in the Upper Deschutes and Crooked River watersheds, all except the smallest, Haystack near Culver, remained well below levels at this time last year. 
    As of March 12, the snowpack at Three Creeks Snotel monitorin station - at an elevation of 5,698 feet -- was 60 inches, or 120% of the median. 

    

NIMBY-YIMBY debate not over after approval of westside apartment project

            The latest episode in the drama revolving around construction of a 170-unit apartment complex on Bend’s westside has concluded with opponents none too happy with a hearing officer’s decision.

            In a nearly 90-page decision hearing officer Will Van Vactor has stuck closely to the city’s zoning and comprehensive plan guidlines by approving Evergreen Housing Development Group of Seattle’s plans for a site along Shevlin Road across from the new watersports park at the Colorado Avenue bridge on the Deschutes River.

            One of the more vocal opponents of the project is a local resident who was quoted by The Bend Bulletin as saying an appeal will be forthcoming.

            Under city regulations the opponents may appeal the decision to the city council, or go directly to the Oregon Land Use Board of Appeals.

            Neighborhing residents and others have argued that the project would cast shadows on the park and increase traffic and parking problems. Among the opponents is Bill Smith, developer of the Old Mill District mixed-used project upstream from the park.

            The conroversy has distilled arguments from what some have called “not-in-my-backyard” or NIMBY factions and YIMBYs, who say yes to increased density with multi-family projects to ease Bend’s affordable housing crunch and prevent additional urban sprawl.

            Within the past few years the State of Oregon has approved Bend’s state-mandated urban growth bounday plan with the objective of encouraging more dense development of infill bare land already within the city limits.

            In his decision, the hearing officer turned down Evergreen’s application for an additional 5-foot height variance for the four-story building, which a developer representative said would not adversely affect the company’s plans.

            The apartment complex had earlier been approved as an administrate decision by Bend planning staff in that it met current comprehensive plan and zoning standards. But the city took the unusual step of going to the hearing process after complaints by opponents.