Ann Arbor Country Club’s ‘dire’ finances prompt board to propose ownership transfer to investor

Posted: Aug 27, 2010 at 2:00 PM [Aug 27, 2010]

Ann Arbor Country Club started the golfing season amid concerns over its lender selling its defaulted $1.7 million mortgage to an investor, followed by litigation involving control of the club.

Now it’s ending the summer in what a neighborhood note calls “dire financial straits” and its volunteer board is recommending that all club assets be transferred to that investor.

AnnArbor.com files show a March view of the clubhouse.

According to an email sent today by the Loch Alpine Board of Directors – a group that represents the 455-home neighborhood that borders the country club in Webster Township – the AACC membership met Wednesday and learned that the board “will decide by this weekend whether to accept this transfer of assets.”

The transfer to West Virginia investor A2C2 could take up to 6 months, and AACC would disband.

Other terms of the deal, according to the email, include A2C2:

• providing a cash infusion to continue club operations into 2011.• assuming management responsibility and some club liabilities that weren’t specified in the note.• retaining the name Ann Arbor Country Club.• operating the club as a semi-private operation and seeking to increase membership.

“The exact details of this potential transfer have not been finalized,” according to the email.

A2C2 is represented in Michigan by Mike Weikle, who also lives in Loch Alpine. he could not be reached for comment.

In addition, neither Karen Stevens, AACC board president, nor Loch Alpine Improvement Association president Peter Logan were available for comment.

One person close to the situation described the potential action as a “friendly foreclosure.”

The recommendation to turn over the assets follows the loan default; according to previous reports, the club struggled to make payments to Citizen’s Bank starting in late 2008. It went into default after club membership fell below the 120 total mandated in the mortgage.

The bank initiated a sale of the mortgage early this year.

A2C2 bought the note for $625,000 in March after an effort by neighbors and AACC board members to buy the property failed.

Weikle, on behalf of A2C2, then sued the club to remove the board members who had sought to buy the club. That lawsuit was dismissed in April.

Weikle said he’d been concerned that an early-season board vote to reduce rates – in an effort to boost membership – could jeopardize revenue, which needed to cover operating cost and the original $1.7 million mortgage payments.

Following dismissal of the suit, Weikle said, “I’m hopeful that we’ll all get together … and do what’s in the best interest of members and shareholders.”