Eighteen months ago I took a couple of flights to Vancouver Island to meet with Jack Nicklaus and discuss
the $600-million Wyndansea project, a high-end gof development on the west side of the island near Ucluelet. I wrote a Q&A with Jack stemming from my interview there that was published in Score Golf (some quotes can be found here). Wyndansea was certainly a remarkable location — the golf setting was breathtaking, like Cypress Point with rocky outcroppings rising above the raging sea. Nicklaus’ project was to be the Jack Nicklaus Golf Club of Canada, one of an exclusive number of courses Jack was putting his name to. The project was extremely ambitious and golf insiders raised issues with the project from the start, especially since it was so remote and difficult to ge to.
Two nights ago I was working on a feature about remote golf courses in Canada and stumbled across some interesting information: one of Wyndansea’s lenders were foreclosing on a $24 million loan. The owners of the resort development now have six months to sort the whole issue out.
Here’s what one report said:
Foreclosure proceedings have begun on the first mortgage for the Wyndansea Oceanfront Golf Resort, under development in Ucluelet.
On Monday, a B.C. Supreme Court judge in Nanaimo gave Marine Drive Properties, the project developer, six months to redeem the mortgage by paying $23,978,532.09 to the mortgage holders.
The order is the first step towards foreclosure of a mortgage. If Marine Drive is unable to pay the redemption amount by the end of the six-month term, the court can order the sale of the property.
A first mortgage is the primary lien against a property and takes priority over all other liens and mortgages against it.
The Wyndansea is a master-developed community currently being built in Ucluelet. One of the project’s main features is a golf course designed by Jack Nicklaus.
Stephen Duke, spokesperson for Marine Drive Properties, said the court order was “not bad news”.
In a press release, the company said they are working on restructuring the projects financing.
“The Nanaimo court has granted us six months to redeem one of our mortgages after the lender was unable to fund construction cost overruns and called in its loan,” said Elke Loof-Koehler, CEO of Marine Drive Properties.
“I am confident we now have time to complete the task, and fully expect to stay on schedule at Wyndansea. The company’s assets are more than sufficient to secure the required capital.”
The story of the potential foreclosure can be found here.
Mr. Duke makes the situation sound positive, so I contacted him, as well as Scott Tolley from Nicklaus’ office, about what was going on. Tolley said the project was “moving along,” and much of the golf course had been cleared last year when I was there. Assuming they didn’t run into problems, much of it should have been finished by now, though the story on the foreclosure says work is “stalled.”
Stephen Duke didn’t sound so positive:
We have been feeling the affects of tightened credit and real estate slow down – no doubt. We had plans to have launched sales of our condo-hotel suites by now; however, we are saving this for better market timing.
The golf course runs along that same critical path. We are cautiously optimistic about resuming our schedule later next year. While interest in the project is measurable at our on-site presentation center and online registrations, there is little buying anywhere in recreational markets in BC right now.
“Same critical path?” Doesn’t exactly sound positive.
His comments on the status of recreational market also are a concern — especially given that many of the golf developments in BC (ie Tower Ranch, Tobiano, The Rise, Sagebrush, etc.) have some degree of real estate attached to them. There are also rumblings that a couple of the developments in BC are in financial distress given the credit crunch.