A judge has appointed a receiver for golf club TPC Piper Glen after its lenders told the court the club defaulted on loan payments and is insolvent.
Court records also show the club could one day be sold at foreclosure.
General Electric Capital Corp., one of the club’s lenders, last week asked Mecklenburg County Superior Court to appoint a receiver for the south Charlotte golf club, saying “there is substantial risk that Borrower will misappropriate excess profits from the Property.”
GE Capital also said “the Borrower is insolvent,” according to documents filed Sept. 20.
A growing number of golf clubs around the country have struggled financially as memberships have fallen and people play fewer rounds of golf. Golf clubs also suffered as the real estate market fizzled and new homes sat unsold.
Real estate magnate and developer Donald Trump earlier this bought The Point Lake and Golf Club near Lake Norman. Some club members have said the club was financially sound, but one of Trump’s major selling points was his pledge to pump millions into renovations and improve aging facilities.
Two years ago, Firethorne Country Club in Union County was sued by a financial institution that claimed the club was out of money.
As the economy and real estate markets reset, golf-industry observers expect more clubs to file for bankruptcy, be sold in foreclosure auctions, or close altogether.
Compounding the problem, many newer courses are saddled with debt they’re struggling to repay, experts say.
TPC Piper Glen is owned by Heritage Golf Group of San Diego.
The club’s owner borrowed money in July 2007 from GE Capital and Heritage TPC Mezz Holdings, LLC, documents say.
The loans included a $3.8 million note owned by GE and a $2.1 million note owned by Heritage TPC Mezz. Filings show those loans are part of a larger loan transaction with an overall principal of $32.5 million.
GE Capital says in filings that the club failed to make an interest payment, a principal amortization payment and a tax and insurance escrow reserve payment that were due June 1.
Two weeks later, GE Capital notified the club that it was in default because of the missed payments and that the borrower owed roughly $19.3 million, documents say.
A superior court judge on Sept. 21 appointed Jon Whittemore of Serenoa Receiver, LLC, as receiver for the property, saying the receiver could “take care of, operate, preserve, maintain, and care for the Property, and if approved by GE Capital in writing, to sell all or portions of the Property from time to time.”
Calls to Whittemore, Piper Glen, Heritage Golf Group and GE Capital’s attorney were not returned Friday.
Located off N.C. 51 and Rea Road in south Mecklenburg near the Interstate 485 interchange, the club features an Arnold Palmer-designed, par-72, 6,853-yard course plus a clubhouse and swim and tennis facilities.
The private golf club, known as Tournament Players Club at Piper Glen, was bought in 2007 by Heritage, a California-based company led by former PGA Tour player Bob Husband.
Before the recent real estate bust, high-end golf and country clubs sprang up around the Charlotte region, often at the center of exclusive golf communities, and membership swelled to capacity. But as the real estate bubble deflated and the finance crisis pummeled the region, membership at many clubs began to fall.
Some golf courses’ troubles can also be blamed on a societal shift, experts have said.
Young, wealthy professional men, for example, no longer have time to follow a round of golf with a two-hour dinner at the club. They don’t always want to wear collared shirts or leave their cell phones in the car.