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Hillmoor sold for $17 million

Photo

Photo by Kyle Bursaw

Since being foreclosed on in 2008, the links at Hillmoor Golf Course in Lake Geneva have become overrun with weeds and the greens have dried out.

ELKHORN — "Going once, going twice, sold…"

And that's how the story of the historic Hillmoor Golf Course in Lake Geneva ended.

Most of the golf course, which has held a prominent place in the community since the early 1920s, was sold at a sheriff's auction Tuesday morning for $17 million. The buyer of the 192 acres was the bank that had foreclosed on the property. The city of Lake Geneva owns the remaining 34 acres.

Kennedy Funding, the New Jersey lender through which Illinois developer George Wight had a $23.2 million loan, was the sole bidder.

Neither Wight nor a representative of his company, Wight Realty Group, was present at the auction.

Nancy Johnson, the attorney representing the bank, said a judge must confirm the sale before it becomes official. A confirmation hearing likely will be held in a couple weeks, she said.

Johnson said Kennedy Funding has created a limited liability company, Lake Geneva Properties, to hold the golf course property. The company likely will sell the property, she said.

Some residents have urged the city to consider operating a municipal golf course, and some aldermen have said the city should seriously consider the idea.

But Mayor Bill Chesen said the city is neither in the market for a golf course nor able to operate a golf course.

"We aren't looking to buy a golf course, and we don't have the money to buy a golf course," he said. "How likely is it that they'll turn around and sell it to us for a reasonable price? How likely is it that the citizens of this community will approve a referendum to spend millions of dollars to buy a golf course that we don't have the expertise or the equipment or the staff to run?

"It's not real likely," he continued. "The whole thing doesn't make a lot of sense."

A report prepared about two years ago by the Committee to Preserve Hillmoor showed a municipal course could break even if the city purchased the land for $4 million and the course saw an annual profit of $800,000.

Chesen said the property likely would go for a much higher price.

"The last thing I want to see is that green space eliminated," he said. "But I'm not willing to pay $500 or $1,000 a year in property taxes to preserve it.

"Why? I can go to Hawk's View. I can go to Grand Geneva. … There are 15 other courses within 20 miles of the city, where I could go to play golf."

Chesen said perhaps the only way the city could ensure the property remains a golf course would be to collect such a promise from a developer who buys the land. He said the city would consider leasing or selling the land it owns to make that happen.

"We would be getting everything we want out of it without the cost," he said.

The 18-hole golf course sits on 226 acres north of Highway 50 and west of Highway 12 in Lake Geneva.

The city owns about eight holes on the course. It long had leased the land to the owners of Hillmoor, but the city terminated its lease with the current and future owners of the course, possibly signaling the end of golf at the historic course.

"I hate to be so pessimistic as to say this is the end, but all the actions up to this point have made golf not that likely," Chesen said.

Lake Geneva committee would explore city's options

The New Jersey lender that now owns 192 acres of the historic Hillmoor Golf Course plans to sell the property, and two aldermen want the city to be ready.

Aldermen Mary Jo Fesenmaier and Tom Spellman have proposed the city create a Green Ribbon Committee to look at the city's options for the golf course, from operating it as a municipal course to turning it into a city park.

At the sheriff's sale Tuesday, Kennedy Funding bought 192 acres of the golf course for $17 million. The city owns the remaining 34 acres of the course and had leased it to the owners.

The city council July 6 discussed creating a special committee but decided it would be best to revisit the issue after Tuesday's sheriff's sale. The city council will take up the issue at its meeting Monday.

Fesenmaier said the committee would provide the city with information, not commit the city to purchasing the property.

"(The committee) would crunch the numbers and look at the viability of the city owning it or renting it out or whatever all the possibilities are," she said.

Spellman said a separate group is needed to research the options, especially because one of the options is to operate a municipal golf course.

"It's pretty clear the (city) council itself doesn't have the resources necessary to figure out what it all takes to make it work, and it's pretty clear the (city) staff doesn't have the ability either," he said.

A report prepared about two years ago by the Committee to Preserve Hillmoor showed a municipal course could break even if the city purchased the land for $4 million and the course saw an annual profit of $800,000.

Some city officials have been reluctant to seriously consider the idea, but since foreclosure put the golf course in the hands of a bank, other city officials have renewed the discussion about operating a municipal golf course.

TIMELINE

Hillmoor Golf Course was started in the early 1920s as a private-public partnership to create a public golf course in Lake Geneva. The city donated about 34 acres of land and issued a 99-year lease to ensure the golf course project succeeded.

May 2005: George Wight of Schaumburg, Ill., buys the property and proposes the Wight Canyon development of 275 multiple- and single-family homes on 226 acres, including the golf course. The plan includes redesigning the golf course from a 72-par professional course to a smaller 64-par course, a new clubhouse, a banquet hall and a 100-room hotel with a retail center.

February 2006: The city council approves the proposed development.

Spring 2006: Signs touting the proposed Wight Canyon development go up along Highway 50.

Wight announces Jim Gaugert, the longtime golf professional and general manager at Hillmoor, will play a lead role in plans to renovate the golf course.

The course is scheduled to be open for golf through the summer and close in the fall for renovations.

Spring 2007: Hillmoor opens for another season of golf.

August 2007: Alderman Mary Jo Fesenmaier proposes the city form a committee to explore whether the city should take ownership of the entire golf course after it becomes unclear if Wight will follow through with his plans to build a golf community.

The city council votes against forming such a committee, but that doesn't prevent a group of citizens from crunching the numbers. The Committee to Preserve Hillmoor, led by longtime golfer Hank Sibbing, presents a study that shows a municipal golf course could break even if the city purchases the 192 acres owned by Wight for $4 million and the course sees an annual profit of $800,000.

October 2007: Hillmoor Golf Course effectively closes.

June 2008: Wight tells the Gazette he plans to open the course in the summer.

"In effort to preserve the course for the long term, we've been overly cautious (in opening for the season)," he said. "I'd like to open the course sometime this summer."

Wight also tells the Gazette his company still plans to move ahead with the golf community.

"We fully intend to develop the property within the limitations of the current agreement (with the city)," he said.

August 2008: Kennedy Funding, the New Jersey lender through which Wight has a $23.2 million loan, files a foreclosure action against him in Walworth County Court. According to the lawsuit, Wight owes $19.4 million in principal and interest as of July 31, and interest is accruing at a rate of $12,000 per day.

The city notifies Wight that he is past due on his $15,000 annual payment to lease the city's 34 acres. The notice gives him 30 days to pay before the lease is terminated.

January 2009: Kennedy Funding pays the city the overdue lease payment. Nancy Johnson, the attorney representing the lender, tells the Gazette the bank plans to open the golf course in the spring.

The city council directs the city attorney to negotiate with the lender the terms of its lease.

March 2009: The driving range at Hillmoor opens and crews work to restore the golf course for an opening in the summer.

June 2009: The city terminates its lease with the current and future owners of the golf course.

Tuesday: Kennedy Funding buys the Hillmoor Golf Course property for $17 million. An attorney for the bank says it plans to sell the property.