Tobiano's Opener: The ambitious resort is in receivership, but continues to operate.
News broke late yesterday that Tobiano, the award-winning golf course resort and real estate development outside of Kamloops, BC, has entered receivership, pushed, it would seem, by Bank of Montreal while owing $26-million in debt (source: Kamloops This Week):
Word of the resort’s financial woes broke on Monday, June 13, after the real-estate side of the resort and golf course were ordered into receivership by the B.C. Supreme Court on June 9.
Pagebrook Inc. and Kamlands Holdings Ltd., which are both companies owned by Grenier, owe the Bank of Montreal debts totaling roughly $26 million.
The Bowra Group, which also took control of the troubled Mission Hill development in Kamloops last year, has been appointed receiver of Tobiano.
Grenier wouldn’t speculate on his future with the resort, but told KTW he was proud of what the development has accomplished — especially the golf course — in the three years since it opened.
“I think it’s the finest resort project in Western Canada,” he said, specifically noting the hard work done by employees at the development.
I’ve long been fond of Tobiano, Tom McBroom’s fine golf course set on a stunning piece of property that winds its way through the real estate development. My review of the course, from the year after it opened, can be found here. Rumors of a receivership had dogged the resort for some time, and it discussion of the resort’s future swirled after Miles Mortensen, who ran the club’s golf operations, left earlier this year to take a job in Winnipeg.
None of this means the course won’t be open. It is now in the hands of an operating company while the receivership process is worked through:
Despite the financial turmoil, it’s expected to be business as usual for the golf course and residents living at Tobiano.
Douglas Chivers, a representative with the Bowra Group, said the company intends to continue to operate the resort and golf course.
“It’s in no way shut down,” he said.
Though Chivers couldn’t give specific details on the future of Tobiano, noting the process is still in its early stages, he said the receiver could sell the resort to a new owner as a whole or sell individual lots.
“There’s a lot of options and possibilities,” he said.
Of course that wouldn’t be good for the golf course, which was always envisioned as a lure for real estate. Could it work as a stand alone product without the backing of the real estate and additional dollars to cover any losses? Hard to say — but it would be tough.
One thing is clear — the folks in Kamloops are anxious to keep Tobiano open:
Tourism Kamloops CEO Lee Morris was surprised to learn the resort was in financial trouble, but is pleased to hear the golf course will remain open.
She said Tobiano is very important to the overall golf product in Kamloops, noting the resort has been a factor in getting consumers to come to the area.
“I think it really helped take us to the next level as a golf destination,” she said.
A bestselling author and award-winning columnist, Robert Thompson has been writing about business and sports, and particularly golf, for almost two decades. His reporting and commentary on golf has appeared in 
Sadly this is not likely the last story like this we will read over the coming weeks & months
Tobiano is a magnificent golf course. Absolutely wonderful test of golf. I’ve driven several hundred kilometers just to play it.
Sad situation at Tobiano. I was hoping a CPGA event would help elevate their status, but alas, the tournament went to Rivershore instead. Makes me wonder how Sagebrush is doing financially. Deeper pockets?
Yes, this is very sad news for Tobiano and Mike Grenier
Sagebrush is a 180 degree different animal than Tobiano, Predator Ridge, Bear Mountain or any other conventional real estate golf course development for that matter. Sagebrush is a pure private golf course development with a bit of real estate. The primary distinguishing difference of our Company’s business model is that Sagebrush is not burdened with any commercial debt.
In our experience, debt is debt, whether commercial or private. If the debt holder calls it in, for whatever reason, it becomes a problem. What we see is often the private club operations have a better chance of survival because well-heeled members will step up and take over debt because of a personal desire to see ‘their’ club survive. Often the financial obligations of these operations, while still considerable, are much smaller than the real estate / golf developments, that require very significant capital to keep the flow of infrastructure/home-building/course maintenance/community maintenance, going smoothly. Commercial lenders are more keen to get on board with developments that include the real estate component because they see cash flow from home sales as more desirable than cash flow from membership sales and some public green fees. In this market however, the developers still must be very well capitalized in their own right before commercial lenders will talk to them. Most of the large successful developers in Canada are capable of funding their developments on their own, but will seek out commercial lending so as to not put their own capital at risk.
Some of the private club initiation fees will cause people to roll their eyes, but the fact is the cost of servicing the debt and maintaining the operations on a private golf club are significant, and if there is no cash flow from real estate sales, that puts extreme pressure on the membership sales and public fees to meet the financial obligations. When you look at a detailed history of many of the great private courses in North America, there is often a period when a wealthy member or a group of wealthy members stepped in and saved the club.
That’s good news Zoke. Haven’t played it yet, but heard nothing but good things about Sagebrush.
Doesn’t surprise me at all. Great course but not enough traffic in that neck of the woods.