Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, July 15, 1993 TAG: 9307150042
SECTION: SPORTS PAGE: B3 EDITION: STATE
SOURCE: Associated Press
DATELINE: DALLAS LENGTH: Medium
Four bidders won the six clubs for $404.2 million, but one group assigned away its interest in a club immediately after the auction ended. The total dropped to $395.4 million because two buyers took advantage of a cash discount, the RTC said.
The agency was delighted with the price brought by the glamorous properties. Although the spreads originally cost $708 million, the RTC assessed their investment value at more like $366 million.
"We're extremely - that's an understatement - happy with the results," said Lamar Kelly, senior vice president for asset sales and management for the Resolution Trust Corp. "These are some of the premiere courses in the country."
The three-hour auction drew more than 30 bidding groups who became enmeshed in layers of strategy.
After bidders fought over the individual properties in the first round, only one group offered a bid on all six properties, although several had expressed interest in doing so before the auction.
Morgan Stanley Real Estate Fund L.P. offered $395 million, but the individual bidders triumphed in a third and final round when some raised their bids and Morgan Stanley wouldn't.
After the auction ended, KSL Recreation Group Ltd., which won the three most expensive courses, assigned its interest in Kiawah Island resort near Charleston, S.C., to the second-place bidder. The AMF Cos. of Richmond, Va., which bid as Virginia Investment Trusts, will pay the $45.1 million in cash, the RTC said. AMF also owns the Ben Hogan Co. golf club manufacturer.
"Our bid on Kiawah was part of our bid strategy to be successful," KSL chairman Mike Shannon said. "We became good friends during the bidding process."
KSL, based in Vail, Colo., already owns the Fairways Group of golf courses that includes Countryside in Roanoke. The group is backed by Kohlberg Kravis Roberts & Co. of New York.
KSL made the winning bids of $140 million for PGA West and $136.4 million for La Quinta Golf & Tennis Resort, both in La Quinta, Calif.
Dallas' ClubCorp won Mission Hills in Rancho Mirage, Calif., for $35.6 million. Palm Beach Polo and Country Club in West Palm Beach, Fla., went to Tri-State Group Inc. for $27.1 million. And Morgan Stanley, in partnership with Westcorp, will get the Carmel Valley Ranch near Carmel, Calif., for $20 million.
Club members also bid on their own home links, but without success. A group of PGA West's members and homeowners came in second to KSL.
"It's easier when you're bidding with someone else's money than when you're bidding with your own money," said Jim Gilstrap, head of the PGA West members association.
The six resorts, totaling 8,000 acres, have played host to more than 70 golf tournaments. The properties also include prime equestrian facilities, tennis courts, resort hotels, villa rentals and land for residential or commercial development.
Memo: ***CORRECTION***