Coral Beachs future hangs in the balance
Up to 60 jobs are on the line as Coral Beach Club faces an increasingly uncertain future after members turned down a plan by the operator to sell them the resorts facilities for $28 million.
There are concerns the exclusive beach and tennis club could close at the end of next month, be sold, or that it could even be handed back to the mortgagee, Swedbank.
New York-based Brickman Properties, which acquired a 200-year-lease on the club and operates it, had said it would collect membership dues only through November this year by which time it had hoped its equity conversion plan would have gone through. Brickman has said its no longer interested in redeveloping the property as a five-start resort.
A group of senior members of the club have banded together to try to keep it open and have presented an alternative ownership proposal to Brickman.
But a letter this week updating the members on their efforts said Brickman refused to discuss the new proposal with them, however, they were continuing to work towards ensuring that CBC will remain open beyond 30th November.
An official with Brickman told The Royal Gazette this week the company had no comment on whats happening with the club at this stage.
Club sources told us a large percentage of members rejected paying up to $35,000 each to Brickman as part of an equity conversion plan giving them ownership of just the facilities and not the 138 rooms/cottages, or much of prime oceanfront property, on which Brickman holds a lease. As part of the equity conversion, around 1,500 local and overseas members of the club were asked to also take on at least $5.5 million in debt owed by Brickman.
Coral Beach Club management told us yesterday they had no idea what would happen to the club after November and were carrying on business as usual, booking guests, events and parties beyond next month. The resort employs some 60 full and part-time staff.
A tourist, who works for a major US association, said he stayed at the resort last month with his wife as a non-member and got the sense staff were concerned when he brought up articles he had read about the clubs future.
I asked several non-senior staff members if they knew what was going to happen, but they said they didnt and it clearly made them uncomfortable, so I dropped it, he said. One waiter added that they were told they would get word at the end of the month (September). He added that when he was taking some pictures in the main building, a woman who worked there asked if I was taking some last pictures.
The steering committee of the Informal Group of CBC Members said this week in a letter to members, which we obtained: Since our last communication to CBC Members dated 5th July, we have been working hard to assess and develop plans for the survival and possible Members acquisition of CBC.
The committee said members had donated more than $75,000 towards legal and other professional costs being incurred as part of the effort, which includes: We have revised and correlated a master contact list for Members, analysed Members responses and considered Members ideas and suggestions for the future of CBC.
We have communicated and negotiated with BP3 (Brickman Properties 3 Ltd) on Members responses to the original equity offer and considered the terms of a potential revised offer from BP3.
We have analysed the current financial statements of CBC and formulated a budget for the period 2013 to 2015. We have targeted and valued renovations needing immediate attention and other renovations that will be required over the next three years as available funds dictate.
We have reviewed the current lease between BP3 and Horizons Ltd, the terms of the original mortgage secured over the property and Swedbanks role as current mortgagee.
We have agreed on an alternative proposal to BP3s revised terms. Our proposal provides for complete CBC ownership and control by Members. However, to finalise our proposal we need further information and access to other documents, including a Definitive Agreement, which is referred to in the Lease and which we expect contains obligations that would be critical to any purchaser of CBC, including potential protection for its continued operation.
We recently invited BP3 to meet with us to discuss revised terms, but our request for a meeting was turned down. We were simply invited to submit a counter offer in writing.
The letter to members also noted: We have been asked to confirm rumours relating to the handing over of CBC by BP3 to Swedbank. Whilst we do not have information to confirm or deny this, we would expect and trust that the interested parties would make any change in ownership known to the Members at an appropriate time.
Despite BP3s apparent lack of interest in discussing revised terms with us, we are continuing to work towards ensuring that CBC will remain open beyond 30th November. We intend to request an extension of Membership for a further period to allow negotiations to continue and to keep CBC an open and vibrant club with the help of the excellent and committed staff whom we all appreciate so much.
Finally, we continue to believe that the future success of CBC depends on the Members being in a position to act quickly in a coordinated and financially feasible manner and will be looking to the Members to support and achieve this.
The committee includes Francis Carter, Anthony Gorham, Elliott Rogers, Teresa Chatfield, Richard Keane, Steven Rees Davies, Jeff Conyers and Judith Howe Tucker.
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