Fore! Or Foreclosure?

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Golf, that great game! Wine, that great lifestyle! Combine the two and what do you get? A pastime for the rich and famous, an activity for the young and restless, better fitness for the old and feckless. And the combination is (supposed to be) coming to the Yakima Valley.

Technically, there are already about 20 courses between Ellensburg and Kennewick, but nothing like The Vineyards Resort, a 500-acre luxury development 20 miles east of Yakima. An 18-hole, 7,500-yard championship course surrounded by nearly 600 homesites. Some reports call it a $70 million project (for now, seems likely), others say $500 million (could be, by the time all the housing is built). Some of the valley's biggest names are involved, among them paving contractor and charity underwriter Al DeAtley, who spearheads the non-profit Washington Wine Country. DeAtley and the other founding investors ($250,000 apiece) clearly see the development as a classy adjunct to the valley's wine industry, the sort of thing that would make Yakima an upscale vacation destination.

Trouble is, it takes time to build a golf course and sell 600 lots. Customarily, developers borrow the upfront money. In this case, SBC Development (with projects in Colorado, Idaho and Mexico under their belts) tapped a Wisconsin hedge fund, Stark Investments, for a short-term loan of $12.9 million. Earlier this month, a groundbreaking with great fanfare and a ceremonial tee-shot by one of the founders into the rabbit brush and sageland. (Great photo in the Yakima Herald, which, alas, won't grant repro rights to bloggers.) And here's where things go from fairway to rough. Less than a week later, Stark went to court, claiming the loan was in default, and got a court order foreclosing on the land. Auction on the courthouse steps, just like in the movies, on October 17th, unless help arrives.

Gulp! Are there any scarier words (this week, at least) than "hedge fund"?

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This page contains a single entry by Cornichon published on September 24, 2008 8:00 AM.

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