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Article
Courtesy of The News-Press
By DICK HOGAN
Published May
22, 2009
The Bonita Bay Group is selling the clubs in
its communities and the upscale development company will be run by an outside
consultant for the time being as it tries to stave off bankruptcy, officials
said Wednesday.
Kitty Green, president of the company, said she’ll resign shortly and when
she does, the company will be managed by Timothy Boates of RAS Management
Group LLC, a crisis management and turnaround firm based in Newport, R.I., and
Gurley, Ala.
Boates’ title will be “chief restructuring officer.”
Green succeeded Dennis Gilkey as company president in 2007.
Boates’ first order of business will be to sell off seven recreational clubs
in five communities: at Verandah in east Fort Myers, Twin Eagles in Collier
County, Bonita Bay in Bonita Springs, Shadow Wood in Estero and Mediterra in
Collier County. Another Bonita Bay community, Sandoval in Cape Coral, has no
club and is not affected.
Beyond the sale of the clubs, Green said once she leaves Boates “will have
control over what decisions have to be made” and will report to the
company’s board of directors.
Company executives hope his actions will avoid bankruptcy, Green said.
“We’re working hard to avoid that kind of an outcome,” she said.
Lenders, a consortium of banks led by KeyBank,
are concerned about Bonita Bay’s loan from a $120 million revolving line of
credit, Green said, but declined to say how much the company actually owes.
Adding to the company’s financial woes is the fact that the Lucas family,
which has been involved with Bonita Bay since its inception 25 years ago,
won’t be continuing to help fund the company, she said, although,
“they’re still committed to doing whatever they can do to preserve the
value of the communities.”
David Lucas, chairman of the board of Bonita Bay, could not be reached for
comment Wednesday.
One Verandah resident, avid golfer Bob Burmaster, 65, said Bonita Bay
officials have been talking to residents there for three or four weeks and
“basically at that time said everything depends on what happens with the
bank.”
Burmaster, a retired doctor who said he plays the course four or five times a
week, said he hasn’t heard anything about exactly what Bonita Bay will be
proposing, but that he’d prefer the golf course stay in the company’s
hands because it has the incentive to keep up the course to attract more
buyers to the community.
“If you turn it over to the members or sell to someone, you don’t know
what it’s going to be,” Burmaster said.
If the residents don’t want the clubs, there are investors who do if the
price is right, said Jack McCabe, a Deerfield Beach-based real estate
consultant who tracks the home markets in Florida.
And there may not be much sentiment in favor of buying by residents.
“One of the things we have found is that only about 12 percent of the
residents in a golf course community, unless there’s mandatory membership,
actually support the clubs,” ” McCabe said.
That’s all the more true in communities such as Verandah and Twin Eagles,
where a lot of units remain unsold so the cost of buying is spread among fewer
residents, McCabe said.
Clubs not purchased by residents likely will be picked up by investors, McCabe
said.
“I believe a lot of it’s going to be bought at 50 percent and more off the
prices paid in 2005,” when the housing boom was at its peak, he said. “A
bunch of this will be bought by the hedge funds.”
Could Bonita Bay have avoided this predicament?
That’s not easily answered, said Ken Plonski, owner of Partner Master
Planned Communications in Fort Myers. He’s a former vice president of public
relations and brand management at Bonita Bay’s one-time main local rival,
Bonita-based WCI Communities.
“It’s hard for me to tell what they might have done differently,”
Plonski said. “I think they’re a very good company. Their product and
their success in the past speaks to the quality of the company.”
Still, Bonita Bay — like many other developers — may have lost its way in
the boom, Plonski said.
“Many real estate companies down here got caught up in the frenzy of 2004
and 2005 and they kind of completely lost sight of the fact that real estate
can be a cyclical industry,” Plonski said.
WCI is in financial trouble itself, going through reorganization under Chapter
11 of the federal bankruptcy law.
The moral of the story, Plonski said, is that “everybody jumped onboard, not
just the builders themselves. Now we have to pay the price for that error.”
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