Sawgrass Resort Linked to Tiger Woods Apology Files Bankruptcy

Owners of Florida’s Sawgrass Marriott Resort, the site of the U.S. PGA Tour’s Tournament Players Championship, sought bankruptcy protection from creditors including Goldman Sachs Group Inc.

Palm Coast, FL – March 2, 2010

By Dawn McCarty and Dara Doyle –
March 2 (Bloomberg)The owners of Florida’s Sawgrass Marriott Resort, the site of the U.S. PGA Tour’s Tournament Players Championship, sought bankruptcy protection from creditors including Goldman Sachs Group Inc.
RQB Resort LP listed assets and debt of as much as $500 million each in Chapter 11 documents filed yesterday in U.S. Bankruptcy Court in Jacksonville, Florida. RQB Development also sought protection. The resort is the home of the TPC Sawgrass golf club where Tiger Woods apologized on Feb. 19 for his marital infidelity.
The 508-room hotel resort has rights to 85 percent of starting times each day to the Players Stadium Course through 2089.
In July 2006, Goldman Sachs Commercial Mortgage Capital LP helped finance the $220.5 million purchase of the 65-acre resort in Ponte Vedra Beach by RBQ Resort and RBQ Development.
TPC Sawgrass, which didn’t file for bankruptcy, is the headquarters of the U.S. PGA Tour. Its Stadium Course, built to accommodate spectators, hosts the tour’s Players Championship, won last May by Sweden’s Henrik Stenson. The tournament has a $9.5 million purse.
Toby’s Commentary: Cash flow is the golf industry’s life blood. When cash flow declines, operators carrying high debt loads are the first to feel the pinch. The Winter 2010 issue of Links magazine cover story is titled "Fixing Florida: How to Save Golf." I was quoted in the article where I talked about the need for recapitalization. Now that tax losses to offset prior years’ profits can be carried back 5 years instead of just 2 years, many owners will realize that a "tax loss" represents their property’s highest and best use. New money will be able to buy in at bargain prices low enough for the new owners to make a profit at reduced revenue levels.

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4 replies
  1. Rick Vogel
    Rick Vogel says:

    Could you expand?

    Could you expand a bit on your remark concerning, "tax loss" as "highest and best use" or were you being sarcastic?
    As always your site is a "must read",
    current and informative
    Rick Vogel

  2. Toby
    Toby says:

    Reply to jennifer

    Ironically, yesterday someone accused me of being too optimistic.

    Yes, we are coming out of this thing. But coming out of it is a process, not an event. Part of the process requires a flushing out of distressed properties. The market cannot be healthy again until the downward price pressure of short sale and lender-owned properties is gone. Several large resorts and developers have entered Chapter 11. Some have already emerged as smaller, leaner, but more viable businesses. I think this is a positive. We can’t simply wish away the problem or wish a strong market into existence.

  3. Toby
    Toby says:

    Reply to Rick

    Note: I’m only a Realtor®; not an accountant. If the following statement is incorrect, I’m hoping a qualified individual will clarify with a comment.

    The recently passed extension of the first-time buyer credit contained a provision that allows business to use current losses to offset gains going back as many as 5 years. Before the bill, business with revenue exceeding $15M could carry losses back for only two years. Using losses to offset prior profits enables a business to effectively get a refund of taxes paid in the profit years to the extent that these profits are offset.

    A business holding a property with little likelihood of a decent return on investment in the near term (whether because of excessive debt retirement burden or because they just paid way too much for the property) may realize more immediate positive cash flow via a tax refund triggered by the loss carry back.

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