With a mere $9.5MM, Lake Lawn Lodge has averted total, unmitigated catastrophe. When this massive resort was taken over by Anchor Bank last fall (Anchor was the primary lender, but other banks were involved), there was the very serious possibility that the golf course would return to nature, and the buildings be left to continue their nascent rot. There were immediate concerns for the local economy, as 100+ workers lost their jobs, and the city of Delavan faced crushing revenue drops due to lost room taxes. There were shouts and murmurs and lawsuits and name calling. There was blame being levied on both those who were to blame and the innocent. There was, in short, the very real possibility that Lake Lawn Lodge as we used to know it would cease to exist.
It was a long winter at Lake Lawn. The gate was chained shut. The buildings sat idle. There were rumored groups interested in buying the resort, but the savvy buyers knew that time was on their side. The trend with REO property, be it single family or resort, is that banks, in the absence of buyers, will carve their price to an extent that the REO property becomes liquid. In the case of Anchor and friends and the Lake Lawn property, they lasted less than six months. The new buyers, a group led by local developer and business man Jim Drescher, are scheduled to close on this property sometime in the next couple weeks. The golf course will immediately reopen, after some catch-up maintenance, and the marina will open on schedule as well. The price of $9.5MM being paid includes $8.6MM in cash and $900k in assumed debt, but it’s fair to say that this property- a property on shaky financial footing for the better part of a decade- is now in strong hands and the purchase price will allow the new group to make something that I’m guessing Lake Lawn hasn’t seen in years: a profit.
It’s important to stress just how important this upcoming sale is. Jobs will return, the city will get its revenue stream back, and a property that was within a whisper of turning into a blight of epic proportions will be maintained for the world to see. The downside possibilities of this resort having sat, unsold, for many more months or years was simply unimaginable. For all the consternation and misery caused by the foreclosure last fall, this entire event will prove to be a positive for Lake Lawn and the community as we move forward. By releasing the heavy burden of a debt load that made owning and operating the property a losing financial proposition, the resort can now move forward with a light debt load and the increased maneuverability that it provides. In short, Lake Lawn Lodge will live again because Anchor (and friends) took it on the chin.
While I applaud the ownership group who will be taking over Lake Lawn this month, there is plenty of trouble lurking for Walworth County when it comes to hotel/resort properties. Interlaken, now known as The Lodge At Geneva Ridge, was closed for much of the winter, and what this spring holds for that property I do not yet know. There is a significant foreclosure of vacant land West of the lake at the intersection of County O and North Walworth Road: a large piece of farm land that was scheduled to be developed into a multi-family residential housing project- a project that didn’t make an ounce of sense even at the height of our housing boom. With crop prices soaring, perhaps this failed development parcel will be best used for simply growing very valuable field corn. The Hillmoor Golf Course in Lake Geneva can only be called a golf course by those of us who prefer to remember it as such, as there is no way to restore golf to those grounds without a complete and exhaustive overhaul of that once fine property. Hillmoor is a problem.
Hillmoor does provide a cinematic style glimpse into the fate that Lake Lawn faced, as fairways have turned to fields, and greens are only recognizable by the increased density of weeds where daily cut grass once thrived. Hillmoor is a disgusting mess, a mess made worse by its prominent location in our marquee city. The biggest problem with Hillmoor is that I see no market for re-development of that property. The asking price was previously in the $10MM range as I recall (I don’t know what the asking price is now), which was ridiculous at best given the economic climate and a buyer pool that is just marginally large enough to soak up existing inventory. The thought of a new development on this ground makes my head hurt, but the thought of a continuance of the weed farm now squatting on this property might be even worse. There is no solution for Hillmoor. There is no market for a golf course here, with Hawk’s View and Grand Geneva and Geneva National all within 6 miles of Lake Geneva, and there is no market for a housing development on this property either (Walking distance to Walmart!). The only possible solution is for the city of Lake Geneva to make a paltry offer and somehow, some way, make something of the property. Stay tuned, as this will probably be a very long, drawn out conversation occurring not over weeks, but years.
A big congratulations to the future owners of Lake Lawn Lodge. A big congratulations to the city of Delavan, and those employees who will ultimately have many of their jobs back. And a big back slap to those condo-tel owners who will once again have access to their vacation properties. Lake Lawn Lodge, your table is ready.