FEATURE STORY

Grand Strand Resorts
Going Deadbeat on
Payments to Local Golf Courses

MYRTLE BEACH, S.C. (April 11, 2002) – Grand Strand area resorts and golf package providers owe local golf courses over one million dollars, according to a report obtained by MyrtleBeachGolf.com, and the delinquent payments could be affecting spring season service levels according to some local golf course officials.

“If you divide it (the money owed) over all the courses, it doesn’t seem like that much,” said one course official, wishing to remain anonymous. “But it is not equally spread. Some courses may be owed between $50,000 and $100,000 and that can keep you from hiring an extra person in the proshop, or an extra guy to work the grounds.”

The report, distributed to member golf courses by the Myrtle Beach Area Golf Course Owner Association, cites nearly $1.3 million in delinquent payments owed to member golf courses by area resorts, hotels, condominium associations, and golf packaging companies.

George Hilliard, Executive Director of the MBAGCOA, believes that the delinquent payments will have little or no effect on service levels or conditions at Grand Strand golf courses.

“Golfers need not worry, their favorite courses aren’t going anywhere,” Hilliard told MyrtleBeachGolf.com. “This type of thing has been going on for years, and we’ve only had one golf course ever go out of business here, and that was Gator Hole and that was because the land was more valuable as another (land) use than it was as a golf course.”

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“This whole system is just like the family budget, in that you rob Peter to pay Paul sometimes,” said Hilliard. “For the amount of times that money changes hands here, the amount that is not repaid is extremely low. The spring season is when everyone makes their profits, and things begin to balance out again in terms of revenue after that. But the courses will not suffer.”

However, MyrtleBeachGolf.com has learned that at least two golf courses are owed close to $100,000, making it nearly impossible for them to maintain optimal service levels and conditioning. Both courses indicated that they expect a substantial payment following the peak spring season.

Sources close to MyrtleBeachGolf.com have indicated that the overall figure is closer to $3 million, but is listed at $1.3 million because only a sampling of courses reported numbers for the quarter.

Sands and Legends Top List of Deadbeat Packagers

The Sands Properties and the Legends, owners of six Myrtle Beach area courses and a number of Grand Strand resort properties top the MBAGCOA list with over $750,000 of delinquent payments, as of January 17, 2002.

Properties that are delinquent over 120 days are often “terminated” by the MBAGCOA, meaning member courses will not accept package play from them until the matter is settled, either by way of full payment or a payment plan agreed upon by both parties.

The Legends and the Sands Properties have worked out a payment plan with the MBAGCOA according to Hilliard, and he expects to have the matter settled following the peak spring season. Rumors have swirled throughout the Grand Strand over the past two months that the Legends was struggling financially from capital intensive improvements to the Sands Properties, and the drop off in golf packages during the fall of 2001.

Chip Smith of the Legends told MyrtleBeachGolf.com that rumors surrounding the Legends bankruptcy were unfounded, and that a significant portion of the money owed to area golf courses had not been paid because it remains in dispute.

“I can tell you that we are fine,” Smith said. “We are actually working on deals to acquire other courses.”

Smith did not reveal the courses his company is seeking to purchase, but sources close to MyrtleBeachGolf.com say that the Legends has targeted Barefoot Resorts’ three 18-hole daily fee courses in North Myrtle Beach. Smith did, however, admit that cash flow problems from the events of Sept. 11 were a major reason for the company’s delinquent payment status.

"Everyone in Myrtle Beach has struggled with cash flow after the fall, and if you look at how much we are delinquent, it is in proportion to the amount of business that we provide," he said.

The list published by the MBAGCOA lists 38 properties that are between 60 and 90 days past due on payments to local golf courses. Ironically, a number of the delinquent properties such as the Legends, Brunswick Resort, and Pawleys Plantation Villas, are also in the golf course business.

According to Hilliard, the list is made available to the MBAGCOA’s 115 member golf courses quarterly, and is intended to provide courses with guidance for handling future reservations and payments from delinquent properties.