BY RYAN SCHUSTER, Californian staff writere-mail: email@example.com
The city of Wasco has rid itself of some $14 million in debt after a foreclosure auction Tuesday sold Wasco Valley Rose Golf Course to a Bay Area real estate developer.
"It's such a relief to have that cloud removed," said City Manager Larry Pennell. "The city has been unable to make debt service payments."
The bond debt has saddled the city since the city-owned course opened in 1991. At one point the city even contemplated filing for bankruptcy to rid itself of the debt.
"We're just pleased it's no longer a headache; it's no longer a problem for us," said Wasco Councilman Larry Pearson. "It took the city off the hook."
As part of an agreement reached between the city and the buyer, Joe Wu of San Jose-based Northern California Universal Enterprises, the course will remain open to the public and its fees will stay in line with the county's public courses for the next five years.
A representative of Wu said the new owner plans to build housing and shopping development near the course, and that he will not curtail public access to the course even after the five-year agreement ends.
"The golf course will remain open to the public for the foreseeable future," said Modesto-based Darrell Souza, an adviser with the Sperry Van Ness commercial real estate brokerage firm, speaking on Wu's behalf. Wu, a real estate developer who builds mostly residential projects throughout the northern portion of California, was unavailable for comment.
"Mr. Wu is not a golf course developer," Souza said. "His intent is to build a very nice community that includes golf, housing and its own retail facilities."
Souza said the 155-acre course's greens fees will stay the same.
After years of negotiation with the city, the bondholders agreed to drop more than $5 million in accrued penalties for missed payments and reduced the amount due from the initial $8.9 million public improvement bond to the sale price of $2.65 million, Pennell said.
Wu outbid Terry Moreland of Bakersfield by $25,000, Pennell said. Souza, acting on Wu's behalf, was allowed a four-hour continuance to give him time to transfer into a deposit check some of the $2.6 million Wu had in escrow with the city from a purchase agreement to buy the course.
Moreland couldn't be reached for comment Wednesday. Pennell wouldn't comment on any potential challenge of the sale by Moreland, but Souza said he didn't expect a legal challenge. "Foreclosure sales are pretty absolute," Souza said.
Pennell said control of the course is expected to be turned over to Wu in the next week and a half.
Souza said the course's roughly 35 employees will keep their jobs under the new ownership.
Robert Cruz, a pro shop assistant at the course, said he is relieved a sale has finally been completed. "With all this, it's been more of a headache than anything," he said.
Former Wasco Valley Rose head professional Joe Haggerty has left for a similar position at Seven Oaks Country Club. Cody Rose is the acting pro at Wasco Valley Rose, Cruz said.
But Pennell said he hopes local golfers "will enjoy seamless golfing activity" after the ownership change.
Pennell, for one, is glad to finally be rid of the golf course's financial burden. He remembers meeting with bondholders over the course's debt his first week on the job with the city 12 years ago.
He said even when the course had good years and showed a profit over its operating costs, it was still not paying off the interest on the bonds.
"The golf course revenue stream was never sufficient to make debt payments," Pennell said.
New owner Wu has budgeted for losses in the immediate future, Souza said.
Souza said improvements such as making the course greener, resurfacing the parking lot and remodeling the clubhouse are expected.
"It's a five- to 10-year plan," Souza said.