Print

Email story

Comment

Email editor

Golf resort searches for new owner

Golf Trust of America hopes financial advisers can help sell the Westin Innisbrook, though the number of courses nationwide exceeds demand.

By CANDACE RONDEAUX
Published April 30, 2005

PALM HARBOR - The owners of the Westin Innisbrook Golf Resort have hired an investment bank to help dig the golf course operator out of the hole.

A Golf Trust of America official said this week that the company has turned to Houlihan Lokey Howard and Zukin, a California investment bank and financial advisory service, to help sell the financially troubled Palm Harbor golf resort and several other golf courses.

"They're identifying people that might be interested in buying the resort," said Keith Wilt, vice president of GTA-IB, the Golf Trust subsidiary that runs the Westin Innisbrook.

Golf Trust has paid Houlihan Lokey a $100,000 fee and agreed to pay the investment bank a commission of at least $1-million for the sale of its remaining properties. As part of the arrangement, Houlihan Lokey recently sent out a prospectus enticing some 400 potential buyers to take a look at the nearly 900-acre property off U.S. 19, Wilt said. Several potential buyers have toured the resort and expressed interest in the Westin Innisbrook, he added. But Wilt declined to give further details about the potential buyers, citing confidentiality agreements signed by interested parties.

Based in South Carolina, Golf Trust took over the Westin Innisbrook in July 2004 after the resort's previous owner, Golf Host Inc., had difficulty paying back roughly $102-million in debts. At the time, the companies placed the resort's value at about $44.2-million. But Golf Trust has since reduced Westin Innisbrook's value to $39.2-million, according to documents filed with the U.S. Securities and Exchange Commission in March.

The lower price could make the property more attractive to potential buyers. But the economic downturn that followed the Sept. 11 terrorist attacks has made for a tight golf real estate market. The nation's supply of golf courses currently outstrips the demand for them. Last year, about 150 golf courses opened in the United States. There are a little more than 16,000 golf courses in the country, nearly 1,100 of which are in Florida, according to the National Golf Foundation.

In 2002, the golf industry shrank by 3 percent; it contracted another 1.5 percent in 2003. The corresponding dip in the estimated number of rounds played in recent years has exerted pressure on golf resorts like Westin to offer more competitive pricing, according to a 2004 state of the industry report issued by the foundation.

"Some markets are definitely oversupplied and that's causing pressure," said foundation research director Jim Kass. "Some of that pressure was created by real estate-related courses that came in, built and that used golf as amenity. Once the houses are sold they leave and then you've got an oversupply of courses."

About 10 percent of the nation's resort/real estate resort golf courses are located in Florida, according to foundation figures. Golf Trust's SEC filings give an indication of the extent of the pressure that type of market saturation is exerting on the Palm Harbor resort. The company reported a $3.4-million operating loss for the 2004 fiscal year. That's a little more than $1-million reported in 2003.

Faced with a post-Sept. 11 slump in the resort market, Golf Trust began selling its courses in 2001. In addition to the Westin Innisbrook, the company now is trying to unload all seven of its remaining golf courses, which are located in Florida, South Carolina and New Mexico.

So far, Golf Trust hasn't found any takers for Innisbrook, Wilt said. But he said it was too early to make predictions and he's confident Houlihan Lokey would help facilitate the best deal possible.

"I think the market has improved," he said. "The market has turned around for these kinds of properties."

Times researcher Kitty Bennett contributed to this report. Candace Rondeaux can be reached at 727 771-4307 or rondeaux@sptimes.com

[Last modified April 30, 2005, 00:51:14]