According to a memo sent out publicly last Monday, Heron Lakes Country Club General Manager Carlos Serrano has notified members the current board of investors is moving forward to complete a deal that will sell off two chunks of golf course property — totaling 15 acres — for over $2 million to develop an 80-unit, high-end condominium complex.
Serrano stated in a phone interview the decision was made in direct response to the ongoing economic downturns felt within their wedding event planning, banquet and golf membership businesses from COVID-19 since March of this year.
The pivot was presented this past July to the core board committee by Serrano and Russ Bloom of Bloom Golf Management, current majority owner and shareholder of Heron Lakes Country Club.
Bloom bought Heron Lakes in 2017, effectively doubling his portfolio size after assuming ownership of a site reportedly struggling to stay afloat. According to a news release at the time, Heron Lakes had been losing members for years and was on the verge of declaring for bankruptcy protection prior to the purchase by the Pass Christian, Mississippi-based property management company.
After a 30-plus member shareholder board vote was approved in late September, Tim Herrington with Herrington Realty Inc. was tapped as the local real estate agent to place the properties on the market for sale in early October.
The deal involves two separate sections of land.
One area covers a 7.3-acre rectangular footprint of land from the edge of the property east of the tennis courts, up to Government Boulevard, south to the edge of the golf course and west to 30 feet from the double doors that go from the entrance to the ballroom. It is listed on the market for $1.285 million.
The second plot encompasses some 8.37 acres located near businesses along Government Boulevard from the country club property’s maintenance building, all the way east behind the number 14 golf green, to the end of the property. It is listed for sale at $800,000.
“We will have new neighbors in the condo-style development,” Serrano said in the message pushed out this week. “During negotiations, we will set up a mandatory membership model for use of our amenities. For example, at 80 units, paying a social membership of $1,000 per year would lead to an increase in revenue of $80,000.
“This plan has one main goal: We must downsize our country club space footprint. It is way too big and we cannot keep trying to duct tape and superglue this place together. By downsizing, it allows a huge shift in our budget to invest more into the golf course and membership growth and less on keeping the building upright. The 40,000-square-foot, 70-year-old clubhouse property will be downsized to a freshly remodeled 10,000 square foot building.”
He went on to say the space is in dire need of upgrades and currently running up an estimated bill of $200,000 per year in payroll, utilities, insurance, repairs, maintenance and related expenditures. Some of the current spaces that will be sold off for repurposing or razing include the tennis courts, ballroom and office spaces.
“When the buildings are 60 to 70 years old and need substantial repair, they become a huge burden,” Serrano said. “No level of membership or banquet business would justify us repairing or renovating the current spaces to the level that we need. After careful consideration, we are planning to reduce the building to less than half of the current size. The demolition of the building will include removing the current pool. Like the building, the $450,000 pool is a money pit that doesn’t provide a return to our business.”
Upon completion of the new residential build-out, Heron Lakes will set up a mandatory membership model for use of amenities. Combined with a yearly savings of $200,000 from eliminated upkeep, a sizable net positive financial gain is anticipated from the deal when all work is done.
With the additional projected revenue coming in, Serrano outlined how the cost savings would transfer over to clubhouse upgrades. Key amenities targeted for a new streamlined country club space, condensed by 75 percent, will include a new clubhouse, new golf shop, an updated restaurant with a new bar, an upgraded and expanded outdoor area, a new pool, a new gym and updated locker rooms.
Renderings provided to members via email were not designed for size or scale, or the specifics of any area, but indicated the “big picture” vision of where everything will go and the flow of each space.
Serrano emphasized the fact funds from the sale of the land will sidestep incurring additional debt, allowing all needed renovations, reduction of existing debt and upgrades in the golf course to be sourced from the new capital infusion.
“In a very short and simple summary, we want to trade land for an updated clubhouse with amenities, generate new dues from paying neighbors and continue to operate with increased revenue and less expenses,” Serrano said. “Heron Lakes has been around for 70-plus years and just like 2020 has taught us, it is time for a change to lock in the next 70-plus years. When I took over this position while being a member, this was my vision for our future and now it is time to make this happen.”
Expectations for the sale of the acreage for residential development is anticipated to be within the next six to 12 months, with a handful of investors already inquiring on the properties, according to feedback from Herrington Realty Inc. Condominium build-out and completion timelines, after completing the land sale, were unknown as of press time.
Heron Lakes currently employs around 42 workers on-site and does not anticipate any layoffs of their current workforce to go along with the property downsizing. More information on Heron Lakes and/or Herrington Realty can be found at heronlakescountryclub.com and herringtonrealtyal.com.
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