Cordillera cash crunch sparks anger
August 16, 2010
EDWARDS, Colorado – All families fight about money, and the Cordillera community is no different.
Club at Cordillera owner David Wilhelm and attorney Dennis Hillier sat in front of a room of angry Club at Cordillera members last week, facing a firing squad of questions.
Wilhelm had told members that their club faces shortfalls of millions of dollars to pay its bills through the end of the year. His letter asked club members to help sell more memberships, and possibly come up with bridge loans.
It didn’t sit well with several members, and many unloaded on them during a series of town hall-style meetings.
“David is a blunt person and didn’t sugar coat it. We’ve got to generate enough revenue to cover ongoing operations,” Hillier said.
“We’re $3 million short this year,” Wilhelm said. “Next year we have to right-size the finances and we’ll make it work.”
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That may mean closing Cordillera’s short course and one other course, Wilhelm said.
“If we close one golf course next year, and go on a membership drive, we might generate enough cash flow,” Wilhelm said.
The Club at Cordillera has around 650 members who all pay dues of $11,000 annually, about $7.1 million every year. That’s not nearly enough to fund operations, Hillier said.
“We don’t have enough members, we don’t have enough dues payers,” Hillier said.
It could get worse before it gets better. More than 300 Cordillera members are on a list to walk away from their memberships, members said.
Because of the way the club is set up, members cannot be assessed to cover operating costs, Hillier said. The owner either has to absorb it, or cut costs.
Wilhelm has a $12.5 million loan with Alpine Bank. Hillier says he is not in default.
Wilhelm acquired the Club at Cordillera from Felix and Daniel Posen. Had he not acquired it, Cordillera would have ended up in bankruptcy, Wilhelm said.
The Posens were losing between $3.5 million and $4 million a year, Wilhelm said.
The members put up $12 million to buy the club from the Posens, but Wilhelm beat them to the closing table, inking the deal early in the summer of 2009. Wilhelm said he offered to sell it to the members for $24 million – $12 million up front and assuming Wilhelm’s $12 million debt.
The members refused, saying the price of real estate was still tumbling.
Felix Posen lives in London and Daniel Posen in Lucerne, Switzerland. Attempts to e-mail and phone them have, thus far, been unsuccessful.
It takes 390-400 golf memberships to cash-flow a golf course, Wilhelm said. Beyond 400, there’s not enough golf time for everyone, Wilhelm said.
Cordillera can accommodate 1,085 members.
Hillier says is working with Patrick Wilhelm to put together a five-year plan.
“I’m not interested in a one-year Band-Aid,” Hillier said.
In the meantime, the elected boards that deal with Cordillera are also meeting, trying to decide what course they’ll take.
Hillier has been with Cordillera since the beginning. He’s the attorney who put together the original membership documents.
Hillier says he’s spending much of his time these days helping clubs survive the recession.