The transfer of ownership of Somersett Golf and Country Club from Somersett Development Company to the golf course's equity members is part of a liquidation plan by Somersett Development Company, says Blake Smith, managing partner of the developer.
Somersett Development already has divested most of the real estate it once held in the upscale community in northwest Reno decreasing its holdings from 3,700 single-family residences on 3,000 acres to just two commercial pads and 30 custom lots. Divestiture of the golf course had always been part of the company's plans, Smith says.
"It has always been in the business plan to hand it to the members," he says. "We are a self-liquidating company, and it's always been our plan to sell our assets."
Equity members of Somersett Golf and Country Club plan to assume ownership of the course on Oct. 31. The golf course assets of more than $20 million include land, water rights, improvements and equipment, Smith adds. Equity members those who own a percentage of the course will receive ownership of the course free and clear of debt, plus $1.25 million cash to offset operating losses at the course, Smith says.
Somersett golf course opened in 2004, and though revenues from a growing membership had risen substantially to offset operating losses it costs more than $1 million annually just to mow the lawns, Smith says the course still was in the red.
"We have managed it down to a small negative, and that was part of the consideration in giving them cash to cover those losses going forward," Smith adds.
Smith says 80 percent of the golf course's membership there are about 230 total members voted to assume ownership, with a 95 percent positive response. Having the course owned by members, the majority of whom are Somersett homeowners, ensures the course will continue to look favorable and be well maintained, he adds.
"This downturn has been a terrible thing, but this is a positive thing," Smith says. "The golf course business is a tough business, and when you put in an economic downturn it really gets tough. For us to hand this over free and clear and have the members own it and control it is a very positive thing."
Dan Morgan, vice president of the Advisory Board of Governors for the Somersett Golf and Country Club and one of the first 10 members at the course, says the main concern of the equity members is keeping the course and facilities at their current levels.
"It is a very valuable asset to the whole community, and many people have made large investments," Morgan says. "The advisory board and board of directors think it is very important to maintain that investment to the standard it is today."
