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November 5, 2002Boyne condo payments delayed- Money is share of income owners receive from letting resort rent out their condominiumsBy BILL ECHLINRecord-Eagle staff writer BOYNE FALLS - A cash flow crunch at Boyne USA Resorts delayed payments to the owners of about 500 condominiums who have rental management agreements with the resort. The payments typically are made shortly after the end of the quarter, around Oct. 15. This time around, however, Boyne USA chief financial officer Paul Jorgensen sent out letters saying that because of delays in closing on several major real estate deals, the payments would be pushed back to as late as Nov. 15. Owners would receive interest because of the delay, the letter said. The payments are the share of income owners receive from letting the resort rent out their condominiums at Boyne Mountain and Boyne Highlands. Stephen Kircher, general manager for Boyne's Michigan properties, said payments to owners of condos at the Inn at Boyne Mountain were sent out Monday and the rest will be made over the next week, ahead of the Nov. 15 date mentioned in the letter. Kircher said the short delay in payments was because of delays in closings on several real estate deals, including one of 11 acres at the base of the Boyne Mountain ski hill to Florida-based Bluegreen Corp., a developer and operator of timeshare units. He said payments to vendors also have been delayed, but added that is typical for this time of year, when the operations are between the summer golf season and the winter ski season. "At the time the letter went out, about $5.5 million of (land sale) transactions were pending," Kircher said. "A couple of million came through since and several more are due in the next week or so." The resorts are now heading into their best cash-flow season, he said. Because of the land sales and the pay-down of $40 million in debt over the past year, Kircher said, "We'll be in the best shape we've been in 15 years come Jan. 1, but it's not been without some pain. We've had to do a lot of cost cutting and paring down of debt." In recent weeks Boyne USA, the largest privately held golf and ski operation in the nation, announced several deals: - The sale of Boyne South Golf Club - 18 holes of golf and 330 home sites in Naples, Fla. - The deal with Bluegreen Corp. In addition to the land where Bluegreen will build 64 condominiums, the company also has options to buy more property and the right to buy land and build a similar timeshare project at Boyne Highlands in Harbor Springs. - A franchise deal with Marriott Corp. Marriott will put its brand on the main hotel at Boyne Mountain, the Inn at Bay Harbor and the company's Big Sky property in Montana. - A partnership with an investment group to build a water park at Boyne Mountain and to sell half of the unsold units at the incomplete $50-million, 222-room Mountain Grand Lodge and Spa. Because of that deal, Boyne USA will be able to pay off initial construction financing and get bank funding to complete the project, Kircher said. The lodge is expected to be partially opened by Christmas 2003 and completed some time in 2004. Bill Echlin is the reporter for business and tourism. He can be reached at (231) 933-1493, or at bechlin@record-eagle.com |
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