Las Vegas golf course taken over by FDIC to go on auction block

By Buck Wargo

Tuesday, July 27, 2010 | 4:39 p.m.

A Las Vegas golf course taken over last summer by the Federal Deposit Insurance Corp. when it seized Community Bank of Nevada will be auctioned off to the highest bidder.

The Stallion Mountain Golf Club, located 6.9 miles east of the Strip on East Flamingo Road, was closed in July 2008 when a group of investors who bought it in 2006 from developer Billy Walters for $24.5 million gave it back to the bank when they could no longer afford their debt service payments.

The FDIC took over the bank in August 2009 and has maintained the course to prepare it for public auction.

The course, originally known as the former Sunrise Country Club, was built by former PGA player Jim Colbert and was the site where PGA Tour pro Chip Beck shot a record-tying 59 in the 1991 Las Vegas Invitational.

The auction is set for Aug. 16 and will be done through sealed bids, said Keith Cubba, a broker with the Land & Investment Group at Colliers International Las Vegas. Once the bids are received, it will be whittled down to a group of finalists who will be asked to make their final offer, he said.

“Golf courses rarely trade hands in Nevada, and when they do, they are typically done as off-market deals that aren’t open to public bidding,” Cubba said.

The area had three courses at one time but Walters sold two of them to Pulte Homes in 2004 for home construction, Cubba said.

Today, Stallion Mountain, 5500 E. Flamingo Road, is situated within a 2,600-home gated community. The course features adjoining clubhouses totaling 37,500 square feet and 16-acre practice facility.

Community Bank of Nevada had the course on the market but didn’t sell it, even when it had an offer from a Las Vegas casino in June 2009, Cubba said.

The bank never placed a value on the course that was bought for $24.5 million. Cubba said it will sell for excess of $5 million but wouldn’t predict a final price.

Stallion Mountain has an advantage over most Las Vegas courses because it has a contract for water to pay 25 cents per 1,000 gallons, Cubba said. The average course pays $2 per 1,000 gallons, and it is not unusual for courses to use one million gallons a day, he said.

Cubba said he expected at least a half-dozen bids, including those from wealthy individuals who want their own course to institutional golf course owners, owner-operator groups, and entrepreneurial groups, he said.

“There is demand because Las Vegas has only 50 courses and people want to get in here,” Cubba said. “If you were purchasing a course at the height of the market and carrying debt, you are hurting right now. But if you purchase at the right number with low debt service and good operations, you can make money.”