Grenelefe Buyer's Contract Falls Through

Princeton, NJ investor Peter A. Marks was the lead bidder. He initially offered $15.25 million for the three-golf course property in Haines City, FL, northeast Polk County, 30 minutes from Walt Disney World and 50 miles south of Downtown Orlando.

But Marks missed a May 17 deadline and another one May 20 to make a total $750,000 deposit on his bid. He deposited $250,000 May 8 and was scheduled to put down another $500,000 last Friday. Marks couldn't be reached at GlobeSt.com's publication deadline.

But real estate lawyers following the property's bankruptcy trail tell GlobeSt.com Marks' financial backers had second thoughts on their $15.25 million offer. They think the property will go for about $10 million or less than half of what owner Sports Shinko Florida Co. Ltd. paid for the asset ($27 million) in 1987 when it was purchased from New York-based Marine Midland Bank. The bank had earlier foreclosed on the property, then owned by a subsidiary of Minneapolis-based Radisson Corp.

Like Marks, Georgia investor Paul Harris ran into a similar scenario in mid-April when he twice couldn't come up with a $1 million deposit on his bid.

While Grenelefe has hosted legendary golf and tennis athletes over the last three decades, the property has never been able to pay for itself, court-filed financials show.

The last owner, Sports Shinko Group of Tokyo, through its American subsidiary, Sports Shinko Florida Co. Ltd., filed for Chapter 7 liquidation Feb. 18. The bankruptcy petition showed assets of $33.5 million, debt of $64.6 million and 2,000 creditors.

Shinko's largest creditor is Denver-based Columbine Life Insurance Co., owed $11.8 million. Atlanta-based Bank of America has a claim for $1.3 million.

When Shinko paid $27 million for Grenelefe, the group surpassed the $18 million offer that Orlando golfer Arnold Palmer and associates proposed at one time.

The last estimated value of the asset in 2001 from the Polk County Property Appraiser's office shows $70 million for the 419 single-family homes surrounding the main resort, 407 condominiums, 750 hotel rooms, three golf courses, 22 tennis courts, four swimming pools, a 30,000-sf convention center, three restaurants and a marina that make up the Grenelefe community.

The late George Phelps of Winter Haven, FL initially developed the resort in 1960 under the Arrowhead name. The property was named Grenelefe in 1974 when Phelps brought in associate investors.