seeming pillar of strength among the battered leisure residential golf market has announced it is being forced to sell its renowned amenities. Reynolds Plantation, under the name Linger Longer Development Company, is facing a large paydown of its credit line in April. Already, the founding family of Mercer and Jamie Reynolds have pledged $60 million of their own assets but they must come up with another $45 million in order to renew their credit line for three more years. Therefore, Reynolds has announced it will sell its seven golf courses in rural Georgia as well as a long roster of other amenities that made it a popular vacation- and retirement-home destination especially for upper-income bracket residents of Atlanta. We learned of the Reynolds announcement today from Toby Tobin, publisher of the Florida-based real estate blog GoToby.com
, who had received a copy of a letter from Chairman Mercer Reynolds to property owners announcing the news.
Possible purchasers for the Reynolds amenities, according to the letter, are Reynolds property owners –- either the property owners association or a smaller group of owners –- and a third-party buyer whom the company says has already tendered an offer.
''With this downturn we found ourselves in the position of having acquired more real estate, and debt, for Reynolds Plantation than
Rumors about a possible bankruptcy began circulating at Reynolds Plantation, according to reports.
is supported by recent demand,'' Mercer Reynolds wrote. He added that only their holdings in the Lake Oconee, GA, region are affected, including the golf community Achasta in Dahlonega. That would imply that their Carolinas golf communities such as Laurelmor and Cobblestone Park, which they had picked up in the disassembling of the Bobby Ginn empire, are not affected because ownership is under a different name (a partnership with Lubert-Adler).
One could assume that, in the wake of last year’s loan of $60 million by Cliffs Communities owners to its developer, Reynolds might have engaged in some quiet negotiations with their own residents before going public with such shattering news. Reports are that rumors about bankruptcy circulating through the community in recent weeks may have forced the owners to make a declaration of a different sort. That is too bad; now that blood is in the water, the sharks will be looking for bargains.
Although we have not visited Reynolds yet, we know people who have, and they were favorably impressed –- some were wowed –- by the golf courses and community. The seven golf courses include designs by Pete Dye, Jack Nicklaus, Tom Fazio and Rees Jones. As with golf communities like The Cliffs and Balsam Mountain Preserve, which worked through their own financial difficulties, give Reynolds a little time to settle down and for the news to work its way into property pricing there. We will keep an eye on who winds up with the family jewels, and at what cost.