Las Vegas Sun

March 28, 2024

Plot thickens in maneuvering for Las Vegas Country Club

Months before Steve Wynn made an offer to buy the Las Vegas Country Club last week, two separate plans emerged from developers to either buy or develop country club property, country club members and bidders say.

Also, another bid, at least the fifth recently for the property, is emerging. A major development group is expected to present an offer to the club board by the end of the week that is higher than Wynn's bid, according a source familiar with the offer. The group made a previous proposal to the board to develop a high-rise residential project on frontage property along Joe W. Brown Drive. The deal would allow equity members to become joint venture partners in the project, according to the source, who declined to be named.

About two months ago, Las Vegas golf course developer Billy Walters made an offer to buy out equity members for $20,000 per membership. The offer included a promise that Walters would not develop on the course and would continue to manage it as a private club. Members also would be granted the right to golf on any one of Walters' four other regional golf courses if the Las Vegas Country Club course was shut down or out of service for any reason.

Walters said he was approached by several members who were "disenchanted" with the country club's board of directors and had complained of mismanagement. The board, Walters said, rejected the offer without letting members view it first and then issued a letter to members saying the offer was unsatisfactory.

"The people who approached us didn't want to leave the club," he said. "Money didn't mean anything to them. They're homeowners and long-term members."

Walters said he was advised to approach the board with the offer rather than approach members directly, which Wynn is attempting to do. He said he isn't planning a counteroffer in the wake of Wynn's bid.

"They obviously didn't want their members to know about the details of the offer," Walters said. "That would be like the management of Mandalay (Resort Group) getting an offer of $80 per share when their stock was trading at $40 and not telling shareholders about it."

Besides the Wynn and Walters offers, a third plan was discussed a few months ago with some board members involving the development of high-rise condominiums on several acres of mostly vacant land along Joe W. Brown Drive and adjacent to the golf course, according to members familiar with the proposal.

According to a zoning change filed with the county March 31, those plans called for building two residential towers of 125 units each. Those plans have been put on hold pending changes to those plans, according to county planners. Country club members familiar with those plans said they were put on hold after members learned of the plans and complained about development along the golf course. Representatives for the contact company for the project, SB Architects in San Francisco, could not be reached for comment by press time.

Las Vegas Country Club General Manager Dale Telford said Tuesday he was not aware of any other offers besides Wynn's. He declined to comment on that offer. Telford could not be reached for further comment on Walters' offer or the condo project.

Wynn's company, Wynn Resorts Ltd., last week made an offer to buy out equity members' memberships for $50,000 each. The course would become public with the sale and operate under a daily fee program for at least two years, Wynn's company announced Monday. Former members would be offered discounts on annual memberships.

The board of directors received an offer letter from Wynn on Monday and is reviewing the bid.

In a letter from the country club board of directors to members Tuesday, the board characterized Wynn's unsolicited offer as "hostile" because the board was not given an opportunity to evaluate it beforehand.

"Until such time as your board has an opportunity to analyze the offer and make a recommendation, you are advised not to sign and return the irrevocable proxy" contained in Wynn's solicitation to members, the letter read. The board has retained legal counsel to analyze the offer on behalf of members, it said.

"If you sign and return this document, you are giving away your right to evaluate and vote on the Wynn Resorts' proposal and you will not have any opportunity to change your mind at a later date," the letter continued. Some information in the Wynn offer isn't accurate, it said.

"Although we intend to approach this matter with open minds, we must advise you that the last appraisal of the real estate owned by our club, calculated on the basis of an operating fee golf club for play, was dramatically higher than the Wynn Resorts' proposal," the letter said.

Wednesday, a fourth bid emerged. A group of investors called BBX Equities Group Inc. issued a press release saying it would offer $80,000 for each membership. The company said it intends to build condominium units on the course. Country club members would be allowed to play golf for free for three years after the units are complete, the group said. The company's managing director Scott Ervin is a candidate for state Assembly and is the chief executive of a local penny stock company involved in medical products.

Telford said he wasn't aware of the company and hadn't seen an offer from BBX as of Tuesday.

Members in 1998 rejected an offer by Hilton Hotels Corp. to buy each equity membership for about $82,500. Then-owner of the Las Vegas Hilton across the street from the country club, Hilton Hotels wanted to own the course as an amentity for resort guests. The Hilton offer amounted to about $20 million more than Wynn's current bid. At the time, a majority of members said they preferred having a private club membership and didn't care about the money.

Just over half of the members rejected the deal, "a close vote," according to one member who wanted to sell to Hilton.

For the right price, members would be amenable to sell, especially since many are getting old and some memberships are held by widows who don't golf anyway, according to the member, who declined to be named.

Wynn Resorts spokeswoman Denise Randazzo said the response to the offer so far has been mixed, with "some very strong supporters and some who don't want to sell."

Walters said his offer is lower than the other public bids because he would have guaranteed that the property forever remain a golf course rather than become a higher-yielding development. Country club memberships, which aren't issued but can be resold, have recently sold for about $14,000 each, Walters said. After a $10,000 transfer fee assessed by the country club, members would receive only about $4,000 per membership, he said. Country club management also has been offering to buy back social memberships, which don't include golfing rights, for about $2,500, he added.

Members who declined to be named said Wynn's offer could be low considering the future development potential of the course as well as valuable water rights that could be transferred to his nearby Wynn Las Vegas megaresort.

Wynn could use the country club as a golf course for resort guests and therefore have more land for development at the former Desert Inn site, which consists of more than 100 acres of land adjacent to his upcoming Wynn Las Vegas megaresort, members said.

Randazzo said Wynn has "no future development plans" for the country club site, which would be used to handle the expected overflow of guests from the second hotel tower planned for Wynn Las Vegas.

"We strictly want the golf course," she said.

The Desert Inn site has 985 acre feet of certified water rights, which is "all the water we need to take care of our golf course and landscaping," she said. "We're not short of water at Wynn Las Vegas."

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