Hollywood lakes gc

Dealerz

I'm a former member of Hollywood lakes and I just read on their website that they had a member meeting where they started accepting "confidential pledges" from members- is that what I think it is or can a current member elaborate?

ForeRight

Depends on what you think it is?

TheDoc

Dealerz wrote: »

I'm a former member of Hollywood lakes and I just read on their website that they had a member meeting where they started accepting "confidential pledges" from members- is that what I think it is or can a current member elaborate?

Don't want to go into too much details as it's not my place, but it's something that is going on in alot of golf clubs and has to do with debt write down.

What did you think it was?

Dealerz

TheDoc wrote: »

Don't want to go into too much details as it's not my place, but it's something that is going on in alot of golf clubs and has to do with debt write down.

What did you think it was?

For a minute there I thought it was a money grab... Phew.
I really do hope that the clubhouse that was built is not a noose around the golf clubs neck.

Dealerz

Hollywood lakes in receivership from yesterday

Oilbeefhooked!

Is this true, havent heard anything else about it??
Was looking at memberships there last year!!

The Neon Knight

Dealerz wrote: »

Hollywood lakes in receivership from yesterday

completely untrue. love to know where you got your info from.

Dealerz

Don't shoot the messenger!!
It's on this account!
@irishgolfclubs via a current member

Northcodub

Completely untrue to say Hollywood Lakes in receivership.
If you dont agree check web (solocheck.ie, duedil etc) all updated daily.
Rumours are killing this country

charlieIRL

I'm going to shut down this thread until evidence of receivership is sent to me

charlieIRL

Thread reopened.

golfwallah

Pity to see it, but an advert for sale of the course and buildings appeared in the Irish Times last week on 25th September 2013.

You can view the ad on:
http://www.dtzsf.com/Details.aspx?OpportunityID=16064

Maybe the members have organised to buy the land & buildings back (and good luck to them), but with so many alternatives around in a shrinking membership market, it's a difficult call at this stage!

Dealerz

The members are raising funds themselves to purchase the land and club house with additional finance from banks too.
My point is similar to yours in that there are just too many courses in such a relatively small area of north co Dublin.

Even if they are successfull I would assume there would be drastic operational changes as well as an increase in yearly subs... Why would a "mobile" existing member be bothered?

John Divney

Dealerz wrote: »

The members are raising funds themselves to purchase the land and club house with additional finance from banks too.
My point is similar to yours in that there are just too many courses in such a relatively small area of north co Dublin.

Even if they are successfull I would assume there would be drastic operational changes as well as an increase in yearly subs... Why would a "mobile" existing member be bothered?

They said if they were succesful in the bid, that subs would come down drastically.. They appear to have a lot of cash in an account, so a loan and a bit of organisation , etc, they might be ok. Probably need a good winter.

golfwallah

John Divney wrote: »

They said if they were succesful in the bid, that subs would come down drastically.. They appear to have a lot of cash in an account, so a loan and a bit of organisation , etc, they might be ok. Probably need a good winter.

That’s expecting a lot from “if, would, appear, might and probably” in 2 sentences before the work required to raise the cash from members and secure another bank loan.

And do you seriously expect other clubs in the area to stand about doing nothing, if Hollywood Lakes drastically reduces its subs?

John Divney

golfwallah wrote: »

That’s expecting a lot from “if, would, appear, might and probably” in 2 sentences before the work required to raise the cash from members and secure another bank loan.

And do you seriously expect other clubs in the area to stand about doing nothing, if Hollywood Lakes drastically reduces its subs?

Sure, it could be a turnip field by the new year

But they do have money in an account, and the price is 1.2m I'm no expert in banking but if it goes for lesss, which is an assumption in this market, they raise almost half, then is the debt manageable for a club like that, if they bring in more members due to lower subs?

golfwallah

John Divney wrote: »

Sure, it could be a turnip field by the new year

But they do have money in an account, and the price is 1.2m I'm no expert in banking but if it goes for lesss, which is an assumption in this market, they raise almost half, then is the debt manageable for a club like that, if they bring in more members due to lower subs?

The word "if" again, this time attached to the assumptions that (1) the land & buildings could go for less than the asking price of €1.2m and (2) they will be able to bring in more members with lower subs.

As regards (1) above, maybe ..... but this still leaves a lot of money to be raised from a shrinking existing membership and another loan to be raised. They also need a business plan for the next 20 years or so that is seen as viably credible to both members and their new lenders.

As regards (2) above, given that the bulk of potential new members are already in clubs, this is bound to prompt competing clubs to react to such lower subs to survive themselves.

Interesting times ahead!

Golfgraffix

IMO the underlying problem in attracting members willing to pay a fee that could sustain the club is its quality,

There are so many competing clubs in the area and Hollywood Lakes is bottom of the list when it comes to course quality (IMO)

If there are financial issues I don't think that lower members fees is the magic bullet.

As mentioned earlier if fees do drop if is only going to fuel this race to the bottom that is happening.

I do feel for the members but the simple fact is there are too many clubs and some need to go to the wall.

J

Derek Zoolander

golfwallah wrote: »

The word "if" again, this time attached to the assumptions that (1) the land & buildings could go for less than the asking price of €1.2m and (2) they will be able to bring in more members with lower subs.

As regards (1) above, maybe ..... but this still leaves a lot of money to be raised from a shrinking existing membership and another loan to be raised. They also need a business plan for the next 20 years or so that is seen as viably credible to both members and their new lenders.

As regards (2) above, given that the bulk of potential new members are already in clubs, this is bound to prompt competing clubs to react to such lower subs to survive themselves.

Interesting times ahead!

Its hard to see how an entity like this suddenly becomes viable - I doubt the club would be in receivership if it was just the capatial expentiture that was causing the issue.

They may be able to cover the initial capital spend but for a footprint that size it won't run itself for much less than a million a year - so assuming the capital is no issue - all that the new club would need is 1000 members @ 1000 per annum.... is that realistic in the current market?

Dealerz

Golfgraffix wrote: »

IMO the underlying problem in attracting members willing to pay a fee that could sustain the club is its quality,

There are so many competing clubs in the area and Hollywood Lakes is bottom of the list when it comes to course quality (IMO)

If there are financial issues I don't think that lower members fees is the magic bullet.

As mentioned earlier if fees do drop if is only going to fuel this race to the bottom that is happening.

I do feel for the members but the simple fact is there are too many clubs and some need to go to the wall.

J

Spot on there I think J

Dealerz

Derek Zoolander wrote: »

Its hard to see how an entity like this suddenly becomes viable - I doubt the club would be in receivership if it was just the capatial expentiture that was causing the issue.

They may be able to cover the initial capital spend but for a footprint that size it won't run itself for much less than a million a year - so assuming the capital is no issue - all that the new club would need is 1000 members @ 1000 per annum.... is that realistic in the current market?

Would you join a club when it's known what's happening in the background re financing?

I wonder what operational day to day changes would have to be made by the club to remain viable?

Derek Zoolander

Dealerz wrote: »

Would you join a club when it's known what's happening in the background re financing?

I wonder what operational day to day changes would have to be made by the club to remain viable?

my point exactly, golden bullets are few and far between - but members sometimes keep flogging a dead donkey, rather than drawing a line under a bad investment and moving on

ssbob

Derek Zoolander wrote: »

They may be able to cover the initial capital spend but for a footprint that size it won't run itself for much less than a million a year - so assuming the capital is no issue - all that the new club would need is 1000 members @ 1000 per annum.... is that realistic in the current market?

1,000 members is unrealistic depending on location and course quality of course but you never mentioned green fee's, for every 5,000 green fee's thats an extra €100,000 into the coffers assuming €20 green fee and no spend in clubhouse at all........

Don't know the course, never played it, but with a business manager running the place rather than a committee I am sure a sustainable business model can be found if the members could get the place at the right price!

josie19

John Divney wrote: »

They said if they were succesful in the bid, that subs would come down drastically.. They appear to have a lot of cash in an account, so a loan and a bit of organisation , etc, they might be ok. Probably need a good winter.

The cash in the account is bonds from members with a dividend of 5% pa and repayment in full after 7 years. This is in effect a loan from the members and that account has in an around €200k in it at the moment. If it sells for €1.2m they still have to source another loan of €1m. Danske have called in the (circa) €3m debt and will probably get 1/3 of that back. I really can't see a bank lending €1m to a member club which has trouble attracting new members given it's location.

Shame really cos it's a nice course but these are hard times for golf clubs.

John Divney

Isn't the point it isn't viable at a 3m debt, like all clubs who got caught after the crash.

Which is why the land is in recievershiip, but viable at one third of that for a mortgage of around 800k to run a course with existing and expanded membership?

There must be some belief to it, as I was surprised that they did get so much money. people don't generally throw cash at lost causes.


As for the banks, what the hell were they thinking in the first place, crazy times, every GAA and golf club needed a state of the art clubhouse.

josie19

John Divney wrote: »

Isn't the point it isn't viable at a 3m debt, like all clubs who got caught after the crash.

Which is why the land is in recievershiip, but viable at one third of that for a mortgage of around 800k to run a course with existing and expanded membership?

There must be some belief to it, as I was surprised that they did get so much money. people don't generally throw cash at lost causes.


As for the banks, what the hell were they thinking in the first place, crazy times, every GAA and golf club needed a state of the art clubhouse.

More likely to be a contracting membership. Currently around 450 men and 50 women in a mixture of 7 day, 5 day and lifestyle memberships. The plan is to reduce the annual sub to €1,000 for 7 day membership (€1,350 currently) which on current numbers will bring in well short of €500k per year. Probably €130k - €140k per year to service the €1m debt alone.

They have a real difficulty in expanding membership out in the sticks.

Ollieboy

josie19 wrote: »

The cash in the account is bonds from members with a dividend of 5% pa and repayment in full after 7 years. This is in effect a loan from the members and that account has in an around €200k in it at the moment. If it sells for €1.2m they still have to source another loan of €1m. Danske have called in the (circa) €3m debt and will probably get 1/3 of that back. I really can't see a bank lending €1m to a member club which has trouble attracting new members given it's location.

Shame really cos it's a nice course but these are hard times for golf clubs.

This is what all golf courses should do to get a write down of debt. No different to how business are re-structuring debt.

The banks made a mistake and better to have a business servicing 1 million debt that will be paid then having 3 million with a question mark on it.

After there debt write down they'll need 1.2 million a year to run the place. Should be very possible with 600/700 members. Compared to currently needing about 1.5 million.

Makes total business sense to me.

josie19

Ollieboy wrote: »

This is what all golf courses should do to get a write down of debt. No different to how business are re-structuring debt.

The banks made a mistake and better to have a business servicing 1 million debt that will be paid then having 3 million with a question mark on it.

After there debt write down they'll need 1.2 million a year to run the place. Should be very possible with 600/700 members. Compared to currently needing about 1.5 million.

Makes total business sense to me.

Their restructuring business plan is setting the annual sub at €1,000 per year. The optimistic 600/700 membership will only generate €600/€700k. Green fees only generate around €60k per year.

A very big shortfall even on optimistic membership numbers (imo)

josie19

Ollieboy wrote: »

This is what all golf courses should do to get a write down of debt. No different to how business are re-structuring debt.

The banks made a mistake and better to have a business servicing 1 million debt that will be paid then having 3 million with a question mark on it.

After there debt write down they'll need 1.2 million a year to run the place. Should be very possible with 600/700 members. Compared to currently needing about 1.5 million.

Makes total business sense to me.

No write down of debt here. Danske have called in the loan as they are exiting the Irish market. The Golf Club is up for sale and the members are trying to buy it at what they perceive to be a knockdown price. At €1.2m it doesn't reprent value to me.

Ollieboy

josie19 wrote: »

No write down of debt here. Danske have called in the loan as they are exiting the Irish market. The Golf Club is up for sale and the members are trying to buy it at what they perceive to be a knockdown price. At €1.2m it doesn't reprent value to me.

Firstly I'm not a member of the club.

If the bank accept 1 million instead of 3 million, then that's a write off on debt in anyone's language.

Nobody else will bid for the site so I reckon the final figure will be around 750k. Not sure where you get the figure of 60k for green fees, but I would expect this to around 100k.

Finally, the sub will never be 1k, more likely 1200 plus.

So 1200 x 600 =720000
Green fees = 100000
Plus bar, opens, etc.

Main aim should be keeping cost down.

1200 is a fair membership fee for any club in co. Dublin.

Remember this club had no funding issue before the 3 million in debt ie pre 2007 this time next year they will have 3 million in improvements and a manageable debt.

josie19

The company that owns the land "Dahlen" is in receivership. The only way the bank gets any money is to sell. This is not a write down of debt. It is a limited company with limited assets which the receiver will sell on behalf of the bank. There's no guarantee that the members will get backing from any financial instituition. It could easily be sold as agricultural land.

As regards the annual sub: The cash being raised by the members is on the basis that the subs will be reduced to €1,000 for the next 3 years. This is in the business plan so the possibility of charging €1,200 does not exist if they use members money in their bid to buy the golf club.

Dealerz

Ollieboy wrote: »

Firstly I'm not a member of the club.

If the bank accept 1 million instead of 3 million, then that's a write off on debt in anyone's language.

Nobody else will bid for the site so I reckon the final figure will be around 750k. Not sure where you get the figure of 60k for green fees, but I would expect this to around 100k.

Finally, the sub will never be 1k, more likely 1200 plus.

So 1200 x 600 =720000
Green fees = 100000
Plus bar, opens, etc.

Main aim should be keeping cost down.

1200 is a fair membership fee for any club in co. Dublin.

Remember this club had no funding issue before the 3 million in debt ie pre 2007 this time next year they will have 3 million in improvements and a manageable debt.

100k in green fees is optimistic- it's not just private member clubs that are suffering but societies also- I would say €60/70k is good considering its location- and the 70k would include open comps plus bar income.

PARlance

Anyone know how long would a golf course have to be left fallow until it could be used for agricultural purposes?

Agri land is selling at about €14,000 per acre in Dublin at present(and on the rise). With 157 acres, that's a valuation of approx €2.2 million.

I assume the current asking of "€1.2 million and above" is based on the agri price and allowing a discount for a quick sale and that fact that the land may have to be left fallow for a few years to get rid of chemicals that have been used.

Talk of it going for under €1.2 million may be a bit hopeful.

Unfortunately, I'd say the members will be up against some strong competition. Not from lads with wedges, but wellies.

If the new club/newco managed to secure the land at €1.2 then I think they could make a go at it but its a big ask.

Assuming the members raise 400k and get a loan for 800k.
I'm not sure what way a bank would set up the finance for a golf club... Repayment time frame, interest etc.
A guess would be 80k per annum to service it over 20 years.
I may be way off there, but I could see the club breaking even with that and income of €600-650k. Things would be tight though.

The big concern I'd have is the members getting their 400k repaid after 5 years.
Unless they do it by taking out another loan.
I can't see the club making 80k profit a year for 5 years to be able to make that commitment without going knocking on the banks door

Hope it works out, it's a shame to see this situation but unfortunately I wouldn't be hopefull.

John Divney

http://www.daft.ie/searchcommercial.daft?id=94941

Find out how much this land in Ballyboughal went for, and go from there. Same land size, but agri land in tillage.

PARlance

John Divney wrote: »

http://www.daft.ie/searchcommercial.daft?id=94941

Find out how much this land in Ballyboughal went for, and go from there. Same land size, but agri land in tillage.

I'd be happy enough with the assumption I've used, give or take.

From here
http://www.rte.ie/news/2013/0307/374540-farm-land/

"The price of agricultural land in Dublin was the highest at almost €14,000 an acre"

Key to the members securing it is the competition they face, €1.2mill would seem to be a very attractive price for someone to turn it into Agri.
Key to that would be the amount of time the land would have to be left fallow.
If its under 3 years, I'd guess there'd be strong competition from farmers.

josie19

ajcurry123 wrote: »

Anyone know how long would a golf course have to be left fallow until it could be used for agricultural purposes?

Agri land is selling at about €14,000 per acre in Dublin at present(and on the rise). With 157 acres, that's a valuation of approx €2.2 million.

I assume the current asking of "€1.2 million and above" is based on the agri price and allowing a discount for a quick sale and that fact that the land may have to be left fallow for a few years to get rid of chemicals that have been used.

Talk of it going for under €1.2 million may be a bit hopeful.

Unfortunately, I'd say the members will be up against some strong competition. Not from lads with wedges, but wellies.

If the new club/newco managed to secure the land at €1.2 then I think they could make a go at it but its a big ask.

Assuming the members raise 400k and get a loan for 800k.
I'm not sure what way a bank would set up the finance for a golf club... Repayment time frame, interest etc.
A guess would be 80k per annum to service it over 20 years.
I may be way off there, but I could see the club breaking even with that and income of €600-650k. Things would be tight though.

The big concern I'd have is the members getting their 400k repaid after 5 years.
Unless they do it by taking out another loan.
I can't see the club making 80k profit a year for 5 years to be able to make that commitment without going knocking on the banks door

Hope it works out, it's a shame to see this situation but unfortunately I wouldn't be hopefull.

I've heard it's 5 years for the chemicals to wash out so that's probably factored into the price. On the other hand some farmer could snap it up as a longer term investment with land prices now heading north.

The assumption that members raise €400k is too optimistic. It was just under €200k at the last count which was close to the deadline for their bid.

€80,000 per year over 20 years is probably a reasonable guess for €800k but if they have to borrow €1m then it's probably going to be closer to €100k per year to service the debt.

I'd share your concern with servicing the members debt. It's actually a 7 year bond but with 5% interest payable each year that will cost €10k per year plus around €27k per year to have that paid back in 7 years. Under this scenario it could cost €137k per year for the first 7 years before it would revert to €100k.

I'm not hopeful either but I hope I'm wrong.

Dealerz

josie19 wrote: »

I've heard it's 5 years for the chemicals to wash out so that's probably factored into the price. On the other hand some farmer could snap it up as a longer term investment with land prices now heading north.

The assumption that members raise €400k is too optimistic. It was just under €200k at the last count which was close to the deadline for their bid.

€80,000 per year over 20 years is probably a reasonable guess for €800k but if they have to borrow €1m then it's probably going to be closer to €100k per year to service the debt.

I'd share your concern with servicing the members debt. It's actually a 7 year bond but with 5% interest payable each year that will cost €10k per year plus around €27k per year to have that paid back in 7 years. Under this scenario it could cost €137k per year for the first 7 years before it would revert to €100k.

I'm not hopeful either but I hope I'm wrong.

€200k for c.500 members- it's not great really is it- even with the condition that it's 100 % repayable if the bid is unsuccessful- and if successful you get a 5% roi- I'm sure it must be very difficult for members to commit money in these tough times with another budget around the corner.

PARlance

Dealerz wrote: »

€200k for c.500 members- it's not great really is it- even with the condition that it's 100 % repayable if the bid is unsuccessful- and if successful you get a 5% roi- I'm sure it must be very difficult for members to commit money in these tough times with another budget around the corner.

The only sure way the members will get their money back is if the bid is unsuccessful.

If successful, nothing is guaranteed afaik.
It's all dependant on making it a success after that. If the club was to lose money from the offset and was forced into a sale at a loss, then I can't see how they could protect that 200k

josie19

ajcurry123 wrote: »

The only sure way the members will get their money back is if the bid is unsuccessful.

If successful, nothing is guaranteed afaik.
It's all dependant on making it a success after that. If the club was to lose money from the offset and was forced into a sale at a loss, then I can't see how they could protect that 200k

Dead right. The money is only protected in the event of a failed bid. If the bid is successful the money becomes an investment with all the usual inherent risks.

Dealerz

Anyone know how the EGM went last night?

josie19

Dealerz wrote: »

Anyone know how the EGM went last night?

http://www.hollywoodlakesgolfclub.com/_news.php

Dealerz

Interesting to see what happens next post sale period. The 2014 subs will be set low by the looks of it to get new cash in.
Edit: just saw the notice re €999 for 2014

I'm sure that might get "floating" golfers out there.

Wonder how existing members are feeling re possible new owners?

billy3sheets

Any news on Hollywood Lakes? Was it bought?

golfwallah

Heard rumour today that highest bid in was around €900K.

According to "Captain's Blog" on their website, members are still trying to raise funds to buy it: http://www.hollywoodlakesgolfclub.com/_readmore.php?id=1580

Dealerz

Interesting that you can buy life membership for €10k

josie19

EGM this Thursday. Receiver in talks with as yet unknown bidder according to text from HL. The fact that the bidder is unknown to the committee does not augur well for the future of the Golf Club. If the bidder was interested in leasing it back to the members then I would imagine the bidder would be in negotiations with the committee. Only two possibilities IMO:

Bought as farmland
or
Bought as a Pay and Play

Dealerz

Any update?

josie19

EGM cancelled at short notice - all in the dark

The Bottler

Possible problems with boundary issues complicating sale.
The Members are the only group that can make H. Lakes into a going concern as a golf club, otherwise the property reverts to farmland.
Members should walk away if a Buyer/Investor wants to incorporate a deal involving a lease of the Club to the Members.

josie19

The Bottler wrote: »

Possible problems with boundary issues complicating sale.
The Members are the only group that can make H. Lakes into a going concern as a golf club, otherwise the property reverts to farmland.
Members should walk away if a Buyer/Investor wants to incorporate a deal involving a lease of the Club to the Members.

Why? I would have thought that this is the only way the club could survive. The members have failed in their bid to secure a loan and are now relying on some friendly bidder leasing it back to them. Are there other scenarios?

The Bottler

Doubt if such an entity as a "friendly bidder" exists. Bank badly messed up when it appointed a receiver. Bank should have negotiated a realistic debt write down with the membership. Then Bank should have followed by a moratorium on capital repayments for a number of years. This would have given H. Lakes Golf Club the breathing space to rebuild the membership and the Bank could have possibly eventually recovered 50% - 60% of its exposure. It now looks like the Bank will be lucky to retrieve 35%! Very few individuals left in Irish Banking with commercial cop on!