by Mike Sharkey
Staff Writer
Citing a long-running dispute with the financial institution that owns the mortgage on Mill Cove Golf Course, owner T.C. Newman has informed his employees and members he is removing himself as the day-to-day operator of the course.
In a two-page letter, Newman goes into detail describing how he purchased the lease on the Arlington course — technically owned by the Jacksonville Aviation Authority, which also owns and operates the adjacent Craig Airport — in February 2001. Within just a few years of purchasing the lease, the mortgage was sold by SouthTrust bank to Wachovia, which then sold it to Silver Point Capital, which Newman said never wanted anything more than the rights to the property.
“Within several months of assuming the mortgage, Silver Point Capital attempted to foreclose based on a technicality — our net worth had fallen below a certain guideline,” wrote Newman, adding he pointed out a clause in the contract that prevented the foreclosure. “Needless to say, our relationship was not very good with them from that point going forward.”
Monday, Silver Point Capital technically took over the operations of the course, but many of Newman’s staff were still working.
“The new people will be here tomorrow,” said Newman’s assistant, Linda Jowers. “I will do what I can to facilitate the ease for Mr. Newman. They (Silver Point Capital) wanted everyone to come in who’s scheduled (Tuesday). What they will say to us, if anything, I don’t know. My role is to help with the transition.”
Aviation Authority Director of External Affairs Michael Stewart said the golf course was an update item at Monday’s JAA board meeting. He said JAA CFO Richard Rossi informed the board that ownership of the lease is a tangled financial situation that involves bankruptcy court and debtors associated with the course.
“He filed bankruptcy,” said Stewart of Newman. “We are still getting our monthly lease payments. He was paying us.”
Stewart said the Aviation Authority won’t get involved until it doesn’t get its monthly lease payment. Stewart added that Newman does, however, owe the JAA about $70,000 for past missed or partial payments.
“It’s more of an issue for the courts and not us,” said Stewart. “We will get all or a portion of what’s owed to us and the courts will rule on who owns the lease. That lease will be assigned to someone who is owed money. We have no control over who gets the course. That is out of everybody’s hands except the courts.”
Stewart said he believes there are less than 12 years left on the 20-year lease and there two five-year options on the lease. The current lease requires the property to be operated as a golf course but Stewart said the new lease-owner could negotiate with the JAA provided they meet the stipulations of the bankruptcy court.
Bill Bishop, the City Council member who represents the Mill Cove area of Arlington, said he was not aware of Monday’s events but he did know Newman was struggling financially.
“I heard it had gone into bankruptcy,” said Bishop. “I knew he was having trouble. I knew he had filed for bankruptcy.”
Newman said at one point he had an investor willing to buy a significant portion of the course for $2 million, half of which would be given to Silver Point Capital if it “agreed to new mortgage terms on the remaining balance” which was in the form of a $3 million balloon payment. Newman said Silver Point Mortgage rejected the offer.
“We have done everything we could to provide the best possible service and to bring Mill Cove Golf Club to the highest standard,” wrote Newman. “This venture has turned out to be financially devastating to us as we have invested and lost our life savings of more than $2 million. Starting over at this point in our lives will be difficult, but with your prayers and by the grace of God, we will be all right.”
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