Before the official arrival of spring, Cabot’s Greystone Country Club will have a new owner. The pending auction of Greystone’s two championship golf courses marks the second time in seven years that financial duress has forced an ownership change.
In December, Cabot developers Bill Minton and Jack King exited Greystone after selling more than 275 lots and houses since acquiring the property for $5.4 million in October 2004.
When residential property sales waned, they were unable to subsidize the golf club operations – a historic money loser by many people’s accounts. The same economic downturn that slowed housing and lot sales also cut into the club’s membership and the number of golfers playing Greystone courses.
Metropolitan National Bank of Little Rock took possession of the country club along with 21.3 acres of undeveloped land in lieu of foreclosure in December. The property, which secured Metropolitan mortgages that originally totaled almost $1.9 million, is scheduled for auction on March 1.
"We’ve had real good response," said Joe Wilson, president of Wilson Auctioneers Inc.
of Hot Springs. "We’ve had numerous calls from out-of-state investors as far away as California as well as Arkansas groups. There is interest in it. These are two beautiful courses with a lot of potential.
"We’ll find how much interest on March 1. We’re dealing with a very motivated seller. Somebody is going to make a very good investment. The property has everything it takes to maintain and operate two championship golf courses."
Despite their financial woes, Greystone’s two semi-private courses have remained popular since opening. As recently as a year ago, the Cypress Creek course ranked No. 4 and Mountain Springs No. 14 among Best Public-Access Courses in the state in a reader’s choice survey of Arkansas Business readers.
But building and maintaining those lush fairways and greens come at a steep price, and some believe the debt and added overhead associated with the second course has proven to be the financial undoing of two ownerships.
If there is one financial millstone that has burdened Greystone, many believe it’s the Cypress Creek course that opened less than three years after Mountain Springs began play in 1995.
"The data I have looked at from previous years showed that once upon a time before we opened the second course, we had enough golf play to support the first course," said Tom Everett, a Greystone resident since 2000. "I think it’s been operating at a loss ever since the second course opened."
Membership at Greystone had fallen to less than 250 when it closed last summer, down from around 400 before the economy slowed and households began cutting back on expenses.
Not So Green
Disease in 2008 cost Mountain Springs its bentgrass greens, which were replaced with more robust, less demanding bermuda grass. That was followed by disease also ruining the bentgrass greens on the Cypress Creek course in 2010, and an unsuccessful reseeding of bentgrass that left the greens unplayable in 2011.
The added cost of repairs and the reduced revenue from lost rounds of golf caused by the greens fiasco added to the financial strain. The greens problem also gave Greystone members another reason to cut $225 from their monthly expenses.
Despite the club’s outward signs of management and money troubles, Greystone residents were stunned when the country club actually closed on Aug. 21. Word of the email notification to its members spread quickly.
"A lot of people thought that would never happen, and they’re very alarmed," Everett said.
Members and non-members living in Greystone were concerned about how the closing would affect their property values. Word of appraisals that reflected a 20 to 25 percent decline in value began making the rounds.
However, a leading residential broker in Cabot said any changes in property values at Greystone aren’t linked to the country club’s fortunes.
"Values have not dropped," said Linda O’Brien, owner of Remax Real Estate Connections. "There was talk of a 30 percent drop because of the golf courses, but I haven’t seen that. There are a few foreclosures out there, but there are foreclosures everywhere."
O’Brien said there had been a slowdown in the appreciation rate of residential property in the Cabot area, and Greystone is no exception. The 7 to 8 percent annual gains that characterized the late 1990s slipped to 3 to 5 percent and finally to 1 to 3 percent more recently.
"We were Boomtown USA in Arkansas," O’Brien said of the Cabot market.
Everett is working to help form a group of Greystone property owners to buy the country club and bring stability.
"We’re hoping to put together enough funds to make a bid on the courses to where it would be owned by the property owners here," he said.
"We’re hoping we can purchase the property and control our own destiny."
The intent is to remodel the clubhouse, which is in need of updating, and reopen the Mountain Springs course after positioning it to operate in the black.
"We’re not going to open it up until we can cash flow it," Everett said. "We have to have the support of the community out here to do that."
That means a membership drive for golfers as well as enticing more non-golfing residents to sign up for social memberships to help support the centerpiece of Greystone: its country club amenities.
Will the Cypress Creek golf course be redeveloped by new owners? It’s a fear among some Greystone property owners despite reassurances from Cabot city officials they will not support the rezoning necessary to convert the golf course to another use.
Although the Cypress Creek course is available for purchase in two pieces, Joe Wilson will be surprised if it doesn’t sell in a package deal.
"I think the back golf course will remain a golf course because all of the infrastructure is in place," the auctioneer said. "The courses just need to be managed and marketed properly. Frankly, the previous owners weren’t golf course people."
Minton and King, who inherited the golf courses when they entered the ownership picture, couldn’t be reached for comment. Mountain Springs and Cypress Creek are a legacy of an earlier owner, Dr. Glenn Dickson of Jonesboro.
Developing the golf courses was a dream project for him but one that ultimately drained even his considerable resources.
Early Days
Dickson, an orthopedic surgeon, recounted in a 1994 interview with Arkansas Business that the opportunity to build a golf course is what attracted him to Greystone.
"The developers were wanting to put in an upscale housing project, and they wanted to have a golf course, but they had no interest in putting in the golf course themselves," Dickson said.
"I had been down to Little Rock looking for a good site to build a course and really found nothing. I looked at a bunch of places. But this looked like the ideal spot. It had flat areas, hills, lakes, elevated areas for tees.
"Everything seemed to be perfect. I think it is going to be real nice. The property really lays well, and each hole will be distinctive."
North Star Ltd., the original Greystone development group, was in its first year of working the property and building infrastructure to support new homes when the investors met Dickson.
"None of us were in the golf course business," Bill Childress, a Cabot homebuilder and a member of the North Star investors, said in a recent interview. "We sought an individual who would be interested in building a golf course."
The idea of developing an upscale residential project around a golf course even predated the North Star group. Montine Farrar, who originally owned the Greystone acreage along Highway 5, had developed a few lots and a couple of houses with the idea of someday adding a golf course.
"Her husband had wanted a golf course out there," Bob Tasler, a Cabot homebuilder and North Star investor, said recently.
North Star bought the Farrar acreage for $675,000 and paid $2.1 million for an adjoining tract owned by Danco Construction Co. of North Little Rock to assemble 1,850 acres for Greystone.
"I grew up playing and hunting on that property," said
Preston Wright, Danco president. "It was called Omni Farms, and we raised Angus beef cattle and even had some buffalo. We built quite a few lakes that ended up becoming part of the golf courses."
Mountain Springs, a 7,000-yard, par-72 course designed by The Kevin Tucker Group of Nashville, Tenn., opened in 1995. Dickson told Arkansas Business it cost "in the neighborhood of $2.5 million."
Cypress Creek, a 7,300-yard par-72 course also designed by
Tucker, opened in 1998. It is named for a creek that flows through the property.
Early plans were drawn up for Greystone Country Club that included the development of a third golf course, a possibility that now sounds like crazy talk given the club’s track record of financial difficulties.
But back in 1995, the golf boom was in full swing, and the demand for more courses seemed insatiable, with some clubs reporting a waiting list for membership.
With this backdrop and Cabot’s status as a boomtown of growth, the timing appeared ripe for Greystone to be a sensation.
In 1996, golf-only memberships at Greystone were $750 annually plus a $2,000 initiation fee, and Dickson expected those fees eventually to go as high as $10,000.
But, the allure of $200,000-plus homes in a country club setting on the outskirts of Cabot didn’t prove overwhelming at first.
Home sales started off slowly despite droves of curiosity seekers attending the project’s early open houses. Activity in Greystone largely was driven by homebuilders buying lots and building spec homes.
"People were unsure of the development," said Linda O’Brien. "It was a hard sell. But once we started selling and getting some good comparables, it took off."
By 2005, Greystone’s eight subdivisions contained about 400 homes. And it was lot sales that helped service the debt and keep the country club and its two golf courses operationally solvent under Dickson and the succeeding ownership.
"As long as they were building houses, they were doing fine," O’Brien said. "They were subsidizing the golf course. Greystone needed to stand on its own two feet, but it couldn’t.
"When you don’t have the membership and you can’t build up a cash reserve, you’re in trouble."
It will fall to the next ownership group to solve this math problem, Greystone’s financial legacy.
Greystone History
April 18, 1994: North Star Ltd. assembles about 1,880 acres in two buys totaling $2.8 million. The sellers are Danco Construction Co. of North Little Rock, $2.13 million, and Montine Farrar, $675,000.
The North Star investors are led by three Cabot homebuilders/developers, Bob Tasler, president of Sunland Enterprises Inc.; Jim Childress, president of Childress & Co.; and Mike Sentell, president of Dunn & Sentell Construction Co. Other North Star investors include Toby Troutman, president of Troutman Oil Co. in Austin; Dr. Richard Hayes of Jacksonville; and Steve Wilson, Tasler’s brother-in-law and an executive with Southwestern Bell Telephone Co.
Aug. 19, 1994: Ground is broken on the Greystone project.
April-May 1995: Greystone Development Ltd., led by Dr. Glenn Dickson of Jonesboro, buys out the North Star investors in two deals totaling $5.2 million. Dickson pays $337,000 for the Mountain Springs Golf Course land and $4.88 million for the rest of the property.
July 1, 1995: Capital Bancorporation Inc. of Cape Girardeau, Mo., buys Home Federal Savings & Loan Association of Jonesboro for about $6.8 million. Dickson and Tom Womack own about 84 percent of the $80 million-asset thrift. Dickson had been credited with bailing Home Federal out of financial trouble during the late 1980s.
October 1995: The 183-acre Mountain Springs Golf Course opens. Lots surrounding the course range from $22,900 to $55,000.
May 12, 1997: A third of the 180 lots at Greystone Country Club have sold, with 35 lots in its fifth phase coming on line in two months.
July 4, 1998: The 212-acre Cypress Creek Golf Course opens.
Jan. 12, 2004: The two Greystone golf courses, 875 undeveloped acres and 40 residential lots are reported for sale on eBay with an asking price of $9.75 million.
Jan. 13, 2004: Union Planters Bank of Memphis forecloses on a $3.4 million loan secured by the Mountain Springs Golf Course and Dickson later forfeits the property to the bank.
June 30, 2004: Dickson’s Greystone Development Ltd. relinquishes ownership of the Cypress Creek course and residential land to Regions Bank of Birmingham, Ala. The transfer extinguishes the remaining balance of a May 1995 loan that originally totaled $6 million. The loan was made by Jonesboro’s First Bank of Arkansas and inherited through acquisition by Regions. The bank also inherits the Mountain Springs Course through its purchase of Union Planters earlier in the year.
Oct. 13, 2004: Regions sells the golf courses and related land for $1.5 million to Greystone Entertainment LLC, led by William Minton, and residential lots and undeveloped residential land for $3.9 million to Minton Construction Inc.
Sept. 2, 2010: Greystone Land Co., led by Cabot homebuilders Minton and Jack King, sell 725 acres of undeveloped residential land in three transactions totaling $3.2 million. The buyers are K&K Maverick Properties LLC, led by Kent and Karen Knight, owners of Knight’s Super Foods of Beebe, 230 acres for $1.37 million; Mitch and Dennis Ward, owners of Red River Dodge Chrysler Jeep of Heber Springs and Overview Rentals of Cabot, 360 acres for $1.31 million; and Dow Investments LLC, led by Dow Worsham, president of Dow Enterprises Inc. of North Little Rock, $490,105 for 133 acres.
Aug. 26, 2011: The Greystone Country Club is closed despite prospective buyers touring the property during the previous months. The move precedes reports the club is losing $40,000 monthly.
Dec. 16, 2011: Minton and King transfer ownership of the golf courses and 21 undeveloped acres to REO Holdings III LLC, controlled by Metropolitan National Bank of Little Rock. The property secured Metropolitan loans that originally totaled almost $1.9 million.
March 1, 2012: An auction is scheduled to liquidate the golf club and associated property. A group of Greystone property owners hope to pool resources and put together a winning bid.
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