THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Friday, January 26, 1996 TAG: 9601260490
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: STAFF AND WIRE REPORTS
LENGTH: Medium: 75 lines
Brassie Golf Corp. said it pulled out of the championship golf course project planned in Virginia Beach because the city wants five golf courses built nearby.
Opening the additional courses could have cut profits on the championship links that the Tampa company intended to develop on West Neck Creek near Indian River Road in the city's southeastern reaches.
``The people in Virginia Beach failed to tell us they were going to build other golf courses within shouting distance of our own,'' Brassie vice president Terry Anton said.
However, officials in Virginia Beach said the golf company had been made aware of city efforts to become a popular vacation destination for golfers.
The financial threat posed by Virginia Beach's plans to become a Mid-Atlantic golf center represents Brassie's first public explanation for backing out of the project.
Reports that Brassie would pull out surfaced earlier this week when Virginia Beach City Manager James Spore told The Virginian-Pilot that Brassie faced problems financing the 185-acre project. Brassie officials did not return phone calls the newspaper placed in the several days before the article was published.
The article raised questions in South Carolina, where Timberland Properties Inc. is negotiating with Brassie to build a 27-hole championship golf course at the closed Myrtle Beach Air Force Base.
Anton told Timberland, which has planned a theme park resort at the former air base, that Brassie is in sound financial shape despite pulling out of the 2-year-old agreement with Virginia Beach.
Although Spore had said Brassie backed out because of problems financing the Beach project, Anton said that's only part of the story.
The Virginia Beach City Council this week reviewed a report recommending construction of five upscale public golf courses to boost tourism. No action has been taken on the report, but Anton said its contents spurred Brassie.
``When we learned that, we decided our golf course wasn't as good a deal as it would have been,'' Anton said.
Brassie would have received a 30-year lease on the Virginia Beach golf course and would have shared profits with the city, which had bought the 185 acres for $1.5 million.
Spore learned from city staff members involved in the golf course lease that Brassie was having difficulty financing the project, Spore said Thursday. City staff members realized that Brassie also was concerned about Virginia Beach's interest in developing other golf courses, Spore said.
``They were concerned about the concept of packaging Virginia Beach as a golf destination,'' Spore said Thursday. ``They didn't want the competition.''
Brassie officials should have been aware of plans for multicourse development, Spore said, because the city sent the company a preliminary copy of a report by PK Consulting of Alexandria recommending several golf courses. The final report was publicly released Tuesday.
``They were concerned about competition, and we were open and above board with them,'' Spore said.
Brassie chief financial officer Gary Nacht denied reports that his company is facing financial troubles. The Tampa Bay Business Journal reported last fall that Brassie, parent company of Hale Irwin Golf Services, has tried to shore up poor financial numbers since merging last year with golf course management group Summit Golf Corp.
``Our financials are not poor,'' Nacht said. Brassie restructured its debt last year, shedding three golf courses that weren't performing well, he said.
Brassie reported its first-ever profit during the second quarter of 1995, Nacht said, earning $6,876 on revenues of $2.22 million. MEMO: Staff writer Bill Reed and The Sun News of Myrtle Beach contributed to
this report. by CNB