No deal: Shadow Wood, Commons Club members at The Brooks call off agreement to purchase clubs
By LAURA LAYDEN Naples News
Members are calling off an agreement to buy the Shadow Wood and Commons clubs from the Bonita Bay Group for $8.3 million.
New demands from the developer have killed the deal, said David English, president of the Shadow Wood Country Club in Estero. On Sept. 8, Tim Boates, Bonita Bay Group’s restructuring officer, met with members to discuss the liability of deposits for resigned members.
The developer abruptly stopped honoring its 30-day policy to refund deposits to resigning members late last year. Based on that policy about $4 million is owed to members of both clubs who have either resigned or downgraded their memberships.
At this week’s meeting, Boates told the team handling the negotiations for members that the developer would not be willing to assume liabilities of more than $250,000 for deposits. That’s something members can’t and won’t accept, English said.
“The response from members at this point has been shock and dismay,” he said.
Bonita Bay Group confirmed Sept. 1 that it had reached an agreement in principle to sell the two clubs in The Brooks to their members.
In the agreement, English said his negotiating team understood that Bonita Bay Group would keep the liability of the deposits and that members would work with the developer to recruit members back to the two clubs. The hope was to cut the liability in half to about $2 million.
“The members were very excited and looking forward to taking over their club,” English said. “We were getting ready to mail out their new membership packets and ask them for money to join the new club.”
He said the new clubs would have no way of paying for membership refunds that could run in the millions.
“We would have to go out and borrow the money,” English said.
The written offers by members both contained a sentence that said the buyer would not assume the liability of existing requests for refunds and that the buyer would not be a party to any dispute that arises over them.
The new demands from the developer may be driven by the fact that outside buyers have emerged who have offered to pay more for the clubs and wipe the developer clean of any deposit liabilities, English said.
In a letter to Boates on Sept. 9, English informed Bonita Bay Group that members were withdrawing their offer to buy the clubs for legal, economic and ethical reasons. The offer was made Aug. 19.
“On ethical grounds, we cannot accept the controversy and disharmony among our members that would likely result from your new conditions,” English wrote.
In a fight to avoid bankruptcy, Bonita Bay Group has been looking to sell off all of its golf and other recreational clubs in five communities. The others are Bonita Bay, Verandah, TwinEagles and Mediterra.
No other agreements have been verified or announced by the developer.
In a statement, Boates said Bonita Bay Group is still “hopeful that a positive resolution can be reached” with club members in The Brooks.
“We have consistently communicated to members of the clubs and the advisory boards that any liability left behind from non-signing members would have to be minimal,” he said. “These kinds of negotiations are always difficult and emotional.”
Bonita Bay Group continues to negotiate with advisory boards at other communities.
Art Herman, a resident and club member at the Bonita Bay community, said it appears that the developer reneged on its deal, which continues to show its untrustworthiness.
“Frankly, swine flu is getting a better name than Bonita Bay Group,” he said.
He said negotiations continue between the developer and his community’s Turnover Committee. According to an update by the committee, a new offer was given to Bonita Bay Group last week that would get approval from 85 percent of members. But it would require the developer to keep the liability for resigned members.
The new offer expires Sept. 21. Meanwhile, Bonita Bay members are pursuing legal action over their lost deposits.
“If they find another buyer for Shadow Wood and/or Bonita Bay they better have deep pockets as there is a lot of liability to go with the purchase,” Herman said.
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