Members only: Two golf clubs at The Brooks bought from Bonita Bay Group
Courtesy of Naples Daily News
After nearly two months of negotiating and many more months of strain, some residents of a Bonita Bay Group community are jumping for joy.
Boards of the Shadow Wood Country Club and The Commons Club at The Brooks agreed to buy from Bonita Bay Group both clubs for $8.3 million and waive the company’s responsibility for refunding original club membership deposits, according to Shadow Wood’s blog.
Bonita Bay Group and its banks agreed to the transaction, the blog said, and the boards expect the transition will be completed in a couple of weeks.
“Wow. This is great news. This is terrific,” said member and resident Mike Kozlow laughing. Kozlow, who had not gotten word of the agreement when a reporter called, later confirmed receiving the same information in an e-mail from the board.
Bonita Bay Group’s restructuring officer, Tim Boates, declined to comment Wednesday, said Jennifer Laderer, the company’s marketing director.
The Bonita Springs-based development company has been trying to sell off its clubs as it tries to steer clear of bankruptcy facing about $100 million in debt.
Earlier this month, the company rejected Shadow Wood’s counter offer to purchase its clubs, which include three golf courses, a restaurant and fitness facilities. The cash purchase announced Wednesday will be about $2.7 million less than Bonita Bay Group’s initial offer.
Club members faced troubles when, in November, Bonita Bay Group canceled its 30-day deposit refundability policy for members who resign from their clubs. The move came as the economy tanked, members resigned and unexpected millions of dollars of deposit refunds flowed out the doors.
It’s estimated that Bonita Bay Group collected about $225 million from it’s approximately 8,000 members in seven clubs at Verandah, Bonita Bay, Mediterra, Shadow Wood and Twin Eagles communities. Deposits ran as high as about $186,000.
The company had initially attempted to negotiate new membership policies with individual communities but eventually said it would not refund deposits.
Boates said in a letter dated Aug. 12 that clubs would be closed after Sept. 30 if they weren’t sold either to respective clubs’ members or third parties.
News that the two sides reached an agreement was welcomed even though members are losing millions already paid to the company.
“I communicate with about 40 or 50 people throughout the community and it’s almost unanimous amongst the people that I’m talking to that they wanted to get this deal done,” Kozlow said.
Two comments on the blog thanked the club board members.
Jeff Johnson wrote: “Congratulations to the Member Board. Tying the negotiations for SWCC to the Commons Club was a very smart move. We need both for a return to “paradise.” Given the circumstances, I think this is a terrific outcome.”
Chris Steinmetz said: “The deal brings with it great relief especially after Boates’ ultimatum yesterday. I hope the SWCC and CC experience helps other clubs with their negotiations. Congratulations to our representative boards and thanks for your hard work. Looking forward to another season.”
Kozlow said the Shadow Wood deal was reached because the two sides weren’t far apart. Not so for the other clubs, he said, who likely will not ride Shadow Wood’s good fortunes to a solution.
The Shadow Wood deal’s details are still being worked out. Attorneys for both boards are drafting the purchase agreement and waiver and the bylaws and membership plans are also under review, the blog said.
Members of the current clubs will be able to join the new clubs for a price. A so-called conversion fee will be charged — $500 for a social membership and $5,000 for a golf membership and others in between.
Members who want to join the new clubs will have to release Bonita Bay Group’s affiliate Long Bay Partners from liability for any deposits owed to the members. The blog states that members who did have a refundable deposit who join the new club will be eligible for a partial refund, although the blog is not specific about refunds. Members who do not join the new club will be on their own to pursue refunds from Long Bay Partners.
The deal has not sweetened the sour taste left by company management, Kozlow said.
“I hope (Bonita Bay Group board chairman) Dave Lucas still gets his,” he said. “I hope the Attorney General gets him. I hope the FBI gets him. That being said, it’s more important that we have our club.”
The Attorney General’s office launched a civil investigation into Bonita Bay Group on allegations the company was operating a Ponzi scheme related to its membership deposit refunds.
Kozlow said the $8.3 million price tag is worth having the clubs whose dire fate had cast a shadow over life in the community.
“The people have been so upset that the mood has not been good,” he said. “I’m a realtor and I can’t comfortably make a sale or show property here because people want to know what’s going on with the club. That’s all we talk about.”
Now, he said, the members have to get busy running the club.
“This is just the best news in the world,” Kozlow exclaimed, saying “I’ll buy (the board members) a drink if they’re at the club tonight.”
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