Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, September 11, 1993 TAG: 9309110132
SECTION: BUSINESS PAGE: A-4 EDITION: METRO
SOURCE: SANDRA BROWN KELLY STAFF WRITER
DATELINE: LENGTH: Medium
Dan Ingalls Jr., president of Virginia Hot Springs Inc., which owns the mountain retreat, said he expects shareholders to approve the sale to Club Resorts Inc. at an Oct. 4 meeting.
The agreement proposes creating a joint venture, Management Company for Homestead Inc., which would become owner of the 600-room hotel, the nearby Cascades Inn, three golf courses, ski facilities, skeet-shooting range, skating rink, an equestrian center, the Warm Springs mineral pools and 1,000 acres now owned by Virginia Hot Springs.
In turn, Management Company will provide $12.5 million to meet debt payments on the resort and begin extensive renovations of the property.
Virginia Hot Springs will have an 80 percent share in the joint company initially, but will sell its holdings to Management Company in 1999.
Also as part of the agreement revealed Friday, Ingalls will be on the board of the new company but will not be involved in daily operation of The Homestead.
It would be the first time since the late 1800s that a member of the Ingalls family has not operated the famous resort. The family, which has a majority interest in Virginia Hot Springs, will retain ownership of 12,000 acres of unimproved real estate surrounding The Homestead.
Ingalls said there was no way to say if shareholders will lose money on the sale, because what they get will depend upon how well the resort is doing in 1999 when the deal closes.
Club Resorts several years ago bought the Pinehurst Golf Resort in Pinehurst, N.C., and is credited by the hospitality industry with the resort's financial turnaround. Ingalls said if similar results can be achieved at The Homestead, the current $35 to $40 per share value of Virginia Hot Springs stock should hold up.
"Compared to what we were facing, I think it's a really good outlook, but there is some uncertainty," he said.
Ingalls said he expects Club Resorts personnel to be in Hot Springs by Monday to get a head start on the takeover. But he said he couldn't speculate on any changes likely in the operation except that the golf facilities and spa will be given priority because they are viewed as the resort's main strengths.
Club Resorts is a subsidiary of Club Corporation International, an $884 million company that claims to be the world's largest privately held golf and conference resort owner-operator. Its affiliate, Club Corporation of America, is said to be the world's largest owner and operator of private city, country and athletic clubs.
Club Resorts announced its intention to buy the Bath County property in early July but said it was interested only if the resort's employees remained non-union. If the Club Resorts deal fell through, the resort owners said, The Homestead would go bankrupt.
When the union was defeated in a July 30 representation election, it filed an objection, saying employees had been threatened by the no-union requirement in the sale agreement.
Club Resorts initially said the objection blocked the sale according to terms of its intent-to-purchase agreement with Ingalls.
The National Labor Relations Board confirmed Friday it has mailed the union and The Homestead its decision on the objection. But Ingalls said he has not received the notice and the NLRB said it does not disclose its findings before the parties involved have been notified.
Ingalls also said his company would continue to fight the union's claim that employees had to vote in a threatening atmosphere. The union could not be reached for comment.
by CNB