Rancho Mirage Country Club Agrees to Settlement with Ronald Richards and Oasis Ranch LLC
Many of us have been following the situations in other communities who have been forced to deal with the purchases of their golf courses by Ronald Richards, Michael Schlesinger and their investment group. One of the properties is the Rancho Mirage Country Club (RMCC). Below is a summary of what has occurred at this course.
Rancho Mirage Country Club was purchased in June 2015 by Oasis Ranch LLC. The day after the sale the course closed and the employees were fired. A fence was erected around the property, the water was shut off and the course began deteriorating. Oasis Ranch began the process of proposing development of the golf course with high density housing. The proposed development, course deterioration and expected loss in property values led to the RMCC HOA filing a $39,000,000 suit against Oasis Ranch. One of our members, Pam Thurston, has a friend who lives in RMCC and has been able to obtain good information regarding their situation. Last week the RMCC HOA and Oasis Ranch reached a settlement agreement and I will highlight the key points to the settlement in this post.
At the end of this post there is a video of the RMCC HOA meeting where the settlement was presented to the residents. The video is lengthy (1:05) but I encourage you to view it when time permits. I spoke with the HOA President and he also provided me with information not clear in the video. Here are the key points to the settlement:
- Excluding the homes and streets the property is approximately 105 acres
The golf course itself is approximately 90 acres
- The current Clubhouse area (5 to 6 acres) will be replaced by a luxury hotel
- The current Maintenance Yard (4-5 acres)will be replaced with an assisted living facility
- The Driving Range (4- 5 acres) will be replaced with limited housing (up to 50 units)
- Following Oasis Ranch obtaining development entitlements for the hotel, care facility and housing, the HOA will have the option of either owning the golf course or selecting their designee to own the golf course. The course will be deeded to the HOA by Oasis Ranch
- The HOA will have the options to:
- Own and run the course themselves
- Sell the course to an outside party which more than likely would be the hotel
- Own the course and lease the course operations to an outside party
- Due to the cost involved in the filing of the suit all HOA members were assessed $98 dollars per month to cover the legal fees
- This assessment has brought in approximately $200,000
- In approximately one year the legal bill is already up to $400,000
- The HOA was fortunate in that they secured a law firm which took the case on a contingency and the HOA did not have to front a significant retainer
- Based on the settlement the law firm has agreed to settle the legal bill for the amount collected to date through the assessment
- The HOA President validated my opinion that
- The owners do not care about zoning
- Their tactic is to make the community look poorly and wait out the process as long as it takes to receive a return on their investment
- Given the situation the community was dealt the settlement is the best possible outcome for the RMCC residents
- The HOA President agreed with me that the best possible solution is to attempt to work with the ownership as early as possible to prevent the deterioration of the property
- Although the RMCC HOA does not have an exact figure as to the total cost to restore the property to golf course condition it is estimated to be a minimum of $1,000,000
- Oasis Ranch has agreed to pay for 50% of the cost to restore the property
What does this mean to our Community? Although none of like the hand we have been dealt we have to face the reality of where we are. We are fortunate the course did not close in December following the purchase. Once the course closes the deterioration will begin and as you can see above the cost to restore is outrageous.
In a previous post you saw the first rendition of a plan the ownership seeks for our community. I am convinced the only way we can maintain anything near what we have today is to attempt to reach some sort of settlement with Tree City LLC prior to their closing the course. In my dealings with Ronald Richards I only see the course closing sometime near December unless we can agree to some compromise. At our meeting on September 22 we can discuss our options and I encourage all to attend.
Stay the Course