Cliffs Communities Developer Admits Tiger Woods Course on Indefinite Hold
A loan from members provided needed money but construction progress is tied to real estate sales. Only 3% of Cliffs at High Carolina lots have been sold and only one home completed.
Palm Coast, FL – May 10, 2011 – Tigers first and only golf Tiger Woods course design project in the United States is stalled. Announced in August 2007, the Cliffs at High Carolina course project kicked off with an opulent sales launch in late 2008, offering building lots from $500 thousand to $3 million. To date, only 40 lots have been sold. There is only one completed home.The course was originally planned to open this year.
Cliffs Communities was not immune to the precipitous decline in the luxury retirement/second home market. The previously reliable cash machine, real estate sales, simply stopped working, unfortunately at the same time Tiger’s image was suffering.
To ensure completion of his planned amenities, Cliffs’ developer went to his members for additional financing. It was hoped that the resulting $60 million loan would assure completion of the High Carolina course, but strings were attached. Construction expenditures would be tied to real estate sales. Sales have not revived.
Early this year, Anthony told the Ashville Citizen-Times that course construction would resume on the 3,000-acre project in mid April. More recently, in an interview with Charlotte NC’s WCNC-TV, Anthony admitted that construction was truly halted. "I’m not a very patient person and certainly we’re working to get the construction back up in the summer and move ahead," said Anthony said. "I think frustration is a proper term."
Read Larry Gavrich’s comments on Jim Anthony’s marketing acumen.
Anthony successfully developed The Cliffs, with eight amenity-packed communities in the mountains of western Carolinas. But the depth and length of the Great Recession has exposed a flaw underlying the development model of luxury golf community projects so popular during the 90s and early 00s. The strategy relies on the concept of ever increasing real estate values. It has neither a provision for economic downturns nor a viable exit strategy. When the cash flow engine stalls, developers can no longer afford to underwrite the expensive amenities used to attract buyers and support high land values.
The industry is rife with examples of failed or struggling luxury golf and skiing communities; Tamarack, Lake Las Vegas, Yellowstone Club, Reynolds Plantation, along with several Bobby Ginn and Crescent Resources developments.
Construction was begun on two other golf Tiger Woods-designed golf courses, one in Mexico and one in Dubai. Even with High Carolina’s questionable future, it stands a better chance of completion than Tiger’s other two courses.
And then there’s Tiger
The association with such a scanalous, person downgrades the project to a point where many do not want to go.
If Arnold Palmer were to come in as a principal investor replacing cat man,it might have a chance. All be it at a much lower market value which is par for the course.
8 Amenity Packed Communities
Toby,
You mention "8 amenity packed communities" in your article about the Cliffs. In fact there are four with completed amenities (Glassy, Valley, Vineyards and Walnut Cove), with four other communities in various stages of amenity completion (The Falls is awaiting a wellness center and marina). Two of the newest communities, Mountain Park and High Carolina, do not have any amenities completed at this time.
Woods Course on Hold
I commend Jim Anthony and his management team for the decision to delay further construction of the Tiger Woods Course near Asheville, NC, as well as delaying the completion of other amenities in his existing communities, for the time being. There’s no question this is a time for fiscal restraint; a time for battening down the hatches and riding out this mother of all storms that has impacted every amenity developer’s ability to sell property, almost at any price. The Cliffs have done an admirable job in delaying CapX, operating costs, and managing cash flow. Even during these difficult times their clubhouses and recreation facilities are first rate. The majority of their members are very happy with their lifestyles and support The Cliffs financially and otherwise. Prospective owners are impressed and continued to buy property throughout the real estate downturn. As a property owner I support a developer who makes decisions on capital spending that are market driven, not one who foolishly spends, turning a blind eye to today’s realities. Keep up the great work, Cliffs. There’s no place my family would rather be.