GolfCommunityReviews received a copy of CMAG’s January 17 newsletter that detailed 50 questions and comments submitted by members.
Much of the input to CMAG centered on the differences in status
Cliffs residents in touch with us over the last couple of months saw this potential for conflict among members. The proposal by Bluffton, SC, developer John Reed to purchase the undeveloped land and amenities at The Cliffs, including six completed golf courses and one near completion, indicates the members who loaned the money would be repaid their initiation deposits on a faster schedule than those who did not join the group of member lenders, known as ClubCo.
“I am not in favor of having the Noteholders benefit from an accelerated vesting schedule,” wrote one member. “This was an investment risk [lending the money to Anthony] they chose to take, and any exposure should not be mitigated at the expense of non-Noteholder dues paying members.”
“How is it that the representatives of the Noteholders have acted like gatekeepers throughout the process?” asked another member, presumably not a Noteholder. “For any plan to succeed, it needs approval of 50% of the Noteholders, but more like 90% of all members, given the need for them to rejoin the club.” The Reed proposal calls for Troon Golf to manage the existing golf clubs as well as the Gary Player designed golf course at Mountain Park, which the Reed group expects to finish next year if the deal goes through, after being blessed by a bankruptcy court.
Another member summed up the potential fallout from the schism between the two classes of members.
“ From an equity standpoint,” he wrote, “all members should be treated the same, regardless of note or non-Noteholder status. If this does not occur, I suspect a significant number of non Noteholders may be so upset that they will not rejoin.”
John Reed, who built three upscale communities just off Hilton Head, has a reputation as a savvy businessman and politician. And like a good politician, he will surely have a solid count of the “votes” before he commits million of dollars to The Cliffs.