Delinquent Debts Push Developer Phil Herrington Out at Oklahoma City Country Club

by George Waldon  on Monday, Feb. 3, 2014 12:00 am  

Eleventh-hour negotiations in January produced an agreement that derailed a court-ordered auction of Gaillardia Golf & Country Club in Oklahoma City.

The outcome formalized the exit of Little Rock developer Phil Herrington from the club’s ownership picture after 11 years and allowed him to shed more than $8.3 million of debt.

Along the way, Herrington was able to orchestrate the purchase of mortgages representing more than $5 million of debt on the Promenade, the last uncompleted neighborhood in the gated Gaillardia development.

Herrington transferred ownership of the 275-acre golfing spread, with its palatial 55,000-SF clubhouse and its 7,240-yard championship course, on Jan. 20 to GCC Lender LLC, an affiliate of Concert Golf Partners of Newport Beach, Calif.

The move followed Concert Golf consolidating its position by acquiring a $1.5 million second mortgage claim from First Liberty Bank of Oklahoma City.

Concert Golf entered Gaillardia in August by purchasing a $6.8 million first mortgage position from Little Rock’s Bank of the Ozarks. Herrington began talking with Concert Golf about facilitating a financial workout back in June.

“The frustrating thing for us is that this is essentially the same deal that we had been proposing for six months,” he said. “Why it wasn’t accepted until after six months, I honestly don’t know. We’re just thankful that it came together like it did.”

Officials at the banks and Concert Golf haven’t said how much of a discount, if any, Concert Golf paid for the two Gaillardia loans. Herrington defaulted on both loans, and foreclosure action was triggered by First Liberty in June.

What happened to cause the financial meltdown at Gaillardia? Herrington was short on details but conceded the obvious: that his management was accountable for unpaid lenders and vendors that included property taxes and water service.

“As I look back on it, we did not have the right kind of long-term capital structure for the last 18 months,” he said. “There were other things in play outside of our control, but at the end of the day, it is our responsibility.

“What we did was work really hard to get all of the issues with the club resolved regardless of how they came about.”

Gaillardia marks the sixth purchase of a financially distressed private golf club by Concert Golf. Earlier cash deals include Heathrow Country Club and Legacy Club at Alaqua Lakes, both in Orlando, Fla., Carrollwood Country Club in Tampa, Fla., Golf Club of Amelia Island (Fla.) and Country Club at Woodmore near Washington, D.C.



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