Southern Nevada’s golf courses are hitting the green

By Buck Wargo

Friday, Dec. 17, 2010 | 3 a.m.

The recession and real estate downturn have taken a toll on golf courses, but the Las Vegas Valley had its first sale since 2007 and more is on the way, according to a local broker.

The Silverstone Golf Club has been sold by its lender for $3.1 million.

Par 4 Golf Management, operators of the Badlands and Primm Valley Golf Club, acquired the 27-hole course from SPE MD Holdings, said Keith Cubba, a broker with Colliers International Las Vegas who represented the seller with Ken Arimitsu, a PMRG broker.

The course had been owned by Meadowbrook Spa before being turned back to the lender.

Cubba said the sale is evidence of demand for Las Vegas golf courses. The deal was closed less than 90 days after the listing agreement was executed, and other deals are being sought, he said.

Cubba said he expects to see two more sales by March and a couple of more in the months after that.

The golf course industry has suffered by not being able to meet its debt payments because play has been down for about a decade with changing demographics and curtailing of tax breaks for club memberships, he said.

Over the last five years, the number of golfers ages 9 to 17 has decreased by 23 percent despite the popularity of Tiger Woods, Cubba said. Tennis among that age group has increased by a similar amount, he said.

The interest in courses has risen because prices are 50 to 70 percent below a decade ago, Cubba said. Prices stopped increasing in 2001.

“Most of the loans written on golf courses operating today were nonrecourse loans, where they had the ability to walk away,” Cubba said.

Southern Nevada has about 50 courses and with a few exceptions, they’re not going anywhere and that makes it challenging to owners, Cubba said. What will be important to buyers is purchasing them at a price that makes them profitable, he said.

Despite play being down among Americans, Cubba said what makes Las Vegas golf attractive is that the game is growing in China, India and Korea and other developing countries, and those players will want to play in the U.S., Cubba said.

“There is always going to be a buyer for a golf course because it is Vegas. It is a tourist destination,” Cubba said. “The only leveler is that some of these courses let go will resell at prices to make them economically feasible to maintain and run.”

Yet to be announced is the results of an auction the Federal Deposit Insurance Corp. held in November for the Stallion Mountain Golf Club. The FDIC, which took over the property in August 2009, was set to auction the property in August, but pushed it to November.

Nothing is expected to be announced until a sale closes escrow.

Silverstone Golf Club is expected to be operated with public play and private membership.

Commission sets cap on fees

A state commission decided homeowners associations will be limited in what their collection companies can charge for late assessments and other fees and said they have the right to charge collection costs.

The Common Interest and Communities and Condominium Hotels Commission set a cap at $1,950 in response to complaints from investors, lenders and homeowners that collection companies were unfairly gouging them for thousands of dollars in some cases. The Nevada Legislature directed the commission to set collection costs for HOAs.

The cap was proposed earlier this year by collection companies. But many who opposed it said it should be lowered even further. They were also concerned about loopholes that would allow property owners to be charged even more.

The cap doesn’t apply to court costs and other hard fees.

Investors buying foreclosures have complained that the fees have been a burden and cut into the amount of money they could invest in the home to improve it.

The collection costs are on top of the nine months of delinquent fees that homeowner associations are charging on past-due assessments.

Investors argue state law limits associations to nine months, including the collection costs and have tried to fight the case in court and with the Financial Institutions Division, which regulates collection companies.

Financial Institutions Commissioner George Burns handed down an order in November that collection companies could only get nine months, including the assessments and not collection fees.

Collection companies obtained a temporary restraining order Dec. 3, and District Judge Susan Johnson issued a preliminary injunction Dec. 10.

Collection companies feared that Burns’ ruling could place them in jeopardy of revocation of their licenses.

On Dec. 8, the state commission ruled collection agencies can collect for the costs associated with recovering delinquent assessments on foreclosed homes in conflict with Burns’ ruling.

“The (Common Interest and Communities and Condominium Hotels Commission) CIC realizes there’s a cost of associated with collecting delinquent homeowners association assessments and that this financial impact should not be shifted to community associations and the paying homeowners residing in the community,” said Steven Parker, president of Red Rock Financial, a collection company associated with RMI Management.

Rutt Premsrirut, one of the investors whose suing homeowner associations and collection companies, called the fee cap “one-sided and unfair to struggling homeowners” who would have to pay it for an overdue assessment. They could be hit with more than $3,000 in collection fees on top of back due assessments, he said.

“They gave everything the HOA management and collection industry asked for and more,” Premsrirut said. “Not once did they try to examine costs line by line to determine what’s reasonable and fair to homeowners.”

Opponents also criticized commissioners for having conflicts of interest for ties with the HOA industry.

Kevin Wallace, president of RMI Management, said the decision was the right one and said his industry should get credit. It prevents any abuses, and investors know what to expect.

“You don’t hear banks agreeing to set a cap on their fees,” Wallace said.

Paul Terry, president of the Community Associations Institute, which represents management companies and other stakeholders, said CIC acted correctly.

“We think the fees are a reasonable approach to prevent abuse by a small number of providers.”

In other news

• Graybar Electric Co. has sold a 44,000-square-foot industrial building at 4780 Arville St. to Ataap Co. for $2.75 million. Pat Dillon and Dan Doherty of Colliers International represented Graybar. Drew Levy of Levy Commercial represented Ataap.

• PF Buffalo LLC sold 6.48 acres at Buffalo Drive and the Las Vegas Beltway to 7000 Teco Ave. LLC for $1.92 million for new headquarters of a Georgia company, U.S. Micro Corp.

The company recycles and resells computers and other office equipment and is building a $15 million plant. Once running in 2011, the company expects to employ 100 people. Colliers’ Pat Marsh represented the seller, and Xavier Wasiak of Grubb & Ellis represented the buyer.