Birkdale Golf Club reopened Thursday, two days after state tax officials abruptly closed and locked the Huntersville facility for failing to pay taxes on time.
Trevor Johnson, a spokesman for the N.C. Department of Revenue, said the company paid its delinquent state taxes in full. Tax default judgments from March show the company owed $64,990 to the state.
“Birkdale has paid all the requisite taxes in full and has the keys to the facility,” said Johnson.
Cars jammed the parking lot at the club Thursday morning as golfers returned to the course, reported Observer news partner WCNC.
The episode highlights financial problems that have beset many golf clubs in recent years, as the recession took a toll on memberships and made players and companies less willing to pay.
Jeff Silverstein, owner of Birkdale and six other golf courses in and around Charlotte, has also been thrust into the spotlight. Media reports and legal documents show business troubles have followed Silverstein from Arizona and Texas to the Carolinas, as his golf courses struggled to pay bills on time and strained relationships with cities and communities where they operated.
And Birkdale Golf Club, along with its parent company, Carolina Trail Golf Partners, may still have legal and financial problems ahead. Birkdale is still facing federal lawsuits from a lender, PNC Equipment Finance, seeking to repossess $440,000 worth of equipment from Birkdale Golf Club and Skybrook Golf Club, another Carolina Trail property, as well as $391,294 worth of damages.
And public records show a $128,879 federal lien for unpaid taxes from the Internal Revenue Service. Mecklenburg County officials also said some of the other Carolina Trail courses owe local taxes.
Silverstein declined to talk with the Observer on Wednesday, but hinted that the decline in the golf industry could be to blame for his troubles.
“Every time I comment on it I just get skewered,” Silverstein said. “I just don’t see how it’s to my benefit to tell you about the disaster that’s pretty well documented in this industry.”
On Tuesday, he told the Observer the federal taxes had been paid but county records hadn’t reflected the change yet.
Yellow “no trespassing” signs were removed from the doors at Birkdale by Wednesday afternoon. A few employees and club members sat on the clubhouse’s back porch overlooking the 18th green.
Birkdale isn’t the only course in the Charlotte area that’s struggled to make payments in the past few years.
In 2010, Firethorne Country Club, a private course in Marvin, failed to make payments on millions in loans and ended up in court with its lender.
Last year, TPC Piper Glen defaulted on loan payments and landed in court, the Observer reported.
These types of money woes have plagued the golf industry since the economic downturn. Jack Nance, executive director of the Carolinas Golf Association, said the group’s 650-plus clubs lost nearly 30,000 members from 2009 to 2012.
Cedarwood Country Club, off Pineville-Matthews Road, cut its membership fee in half during the downturn, Maury Clodfelter, the club’s general manager, said.
Gene Roper, who manages four public golf courses in the Charlotte area, said golfers played 5,000-7,000 fewer rounds per year when the recession hit, and he’s only just seeing the number of golfers on the links return to pre-recession levels.
Golfers played 8.6 percent fewer rounds in April at North Carolina’s 556 courses than they did in the same month last year, according to the National Golf Foundation.
“Golf is in a challenging situation,” said Del Ratcliffe, head of the North Carolina Golf Course Owners Association. “It’s a leisure time activity, and people have to make choices.”
Troubles at other courses
Silverstein, who is based near San Diego, got his start in the golf business as a professional player, according to a 1987 Los Angeles Times profile of him and a business partner. They purchased one pro shop in Sylmar, California, for $10,000 in the late 1970s and were soon managing 15 public golf courses in the state.
He and his partner sold the company for more than $1.3 million to a Dallas firm, and stayed on as managers.
Silverstein told the Los Angeles Times how he aggressively stretched his cash flow to make ends meet. “If our bills were due in 90 days, we paid in 120 days. We changed vendors. We did everything we could,” he told the paper.
According to his LinkedIn profile, Silverstein then founded IRI Golf Group in 1991, and has owned or operated more than 120 public golf courses.
But trouble has cropped up in recent years. In Rockwall, Texas, the Shores Country Club drew neighbors’ ire when it fell into disrepair. In 2010, a city council meeting called to discuss IRI’s practices drew about 200 residents, according to the Dallas Morning News.
Rockwall, Texas, Assistant City Manager Brad Griggs said the city threatened legal action about poor course maintenance for at least four years before terminating the company’s lease of city-owned land that included part of the golf course.
The club went into bankruptcy in 2010, and was bought by new owners and reopened last year, according to reports.
“When it reopened, it reopened under a different name because they couldn’t get credit as The Shores Country Club,” Griggs said.
The Arizona Daily Star reported three IRI-owned clubs in Tucson were closed for part of last year after problems with unpaid water bills.
Some employees there reportedly complained about unpaid wages – which has also been a problem at Silverstein’s Charlotte courses. In January, the U.S. Department of Labor announced that Carolina Trail Golf Partners had paid $758,465 worth of back wages to employees after an investigation at Charlotte-area golf clubs.
On Tuesday, Silverstein insisted his payrolls are all up to date. But some golf employees told the Observer they’re still not getting paid on time.
Ryan Abbott, a junior at Appalachian State University, started working at the Birkdale course in high school. He’s home for the summer and clocks around 30 hours a week at the club.
He said he was surprised to find police officers guarding the doors when he showed up for work at 1 p.m. Tuesday. Afterwards, he said he went to cash his $525 in paychecks, but both bounced.
“It’s nice to make a little money over the summer,” he said. “I just hope I get paid.”
Assistant Mecklenburg County Manager Dena Diorio said Carolina Trail courses The Tradition, Highland Creek, Charlotte Golf Links, Skybrook and Birkdale courses owe a total of $54,895 in delinquent business property taxes, while Charlotte Golf Links and Skybrook owe a combined $137,714 in real estate taxes. She said the owner has promised to pay all the taxes by Aug. 20.
County attorney Marvin Bethune said the county owns the land at The Tradition golf course on Prosperity Church Road, and Silverstein’s company owns a ground lease to operate the golf course.
Mecklenburg nearly forced the company off of the ground lease earlier this year after multiple defaults. The problems included not paying rent, lapsed insurance, and course maintenance issues such as not enough sand in the bunkers and damaged irrigation systems, Bethune said.
Those problems have since been fixed, Bethune said, but Silverstein’s company is regularly paying its rent late. The county has been sending letters to ask for payment on a regular basis.
“They’ve been sort of consistently a month late, if not more,” Bethune said. “So far they’ve come through every time. It’s taken a lot of letters, though.”
WCNC-TV contributed to this report.
Portillo: 704-358-5041 On Twitter @ESPortillo
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