Pro Managers Will Run Yellowstone Club, and Finish Building It
The tony Yellowstone Club has a new professional management company, but will it be able to complete the private club's unfinished construction, improve the level of service and get the club onto firmer footing?By Robert Struckman, 9-03-08
Edra Blixseth (NewWest.Net file photo by Alexia Beckerling.)
Edra Blixseth and the other top owner of the Yellowstone Club near Big Sky have retained an Arizona-based company to manage the private club and complete its long-overdue construction projects, according to an item on PR-inside.com.
Over the past year and more, the Yellowstone Club, the world’s only private skiing and golf community, has been in and out of the news, thanks to the public divorce of owners Tim and Edra Blixseth as well as legal battles between owners and Tim Blixseth. Also, the club missed loan payments to creditor Credit Suisse and teetered on the brink of bankruptcy. Earlier this year, Edra won control of the club and vowed to get its overdue construction back on track and to keep its business out of the public eye.
Today it seems Edra and the club have taken a major step in that direction by entering a long-term contract with Discovery Land Co. of Scottsdale, Arizona. The company, which operates 15 other private communities around the world, will manage the club and expand the residential community, infrastructure and amenities.
“Today marks a historic milestone for Yellowstone Club as we embark on the next phase of Club enhancements and infrastructure development that will fulfill Yellowstone Club’s original vision and provide our members, their families and guest with and unmatched Montana outdoor lifestyle,” Edra reportedly said in the release. “I am delighted to be working with Michael Meldman and Discovery, which I know shares our vision and has the experience and creativity to enhance the mountain living and recreation lifestyle and amenities for our members and their families. This venture will help secure our position as the world’s most exclusive skiing, golf and outdoor recreation community.”
The release includes some interesting tidbits about the business at the club, namely about the number of club memberships sold and the number of residences planned. Blixseth said that Yellowstone Club and Discovery Land Company expect to begin land planning and development activities in the coming weeks and months. Development plans call for approximately 450 additional residential and multi-family residences to be built over the coming years to complement the existing 340 club member homes already on the property.
Projects at the club will include a Family Village around the Warren Miller Lodge, new ski facilities on Eglise Mountain, a golf clubhouse, a luxury spa, an ice rink, a baseball field and programs such as camping, fly fishing and wakeboarding.
According to the release, Sam Byrne, of CrossHarbor Capital Partners (the Yellowstone Club’s largest land owner), “We are extremely pleased to have a partner like Discovery Land Company bring its world-renown (sic) expertise in developing premier living and lifestyle communities. This is great news for current and future club members and their families and we look forward to a long and mutually beneficial partnership with Michael and his management team.”
It remains to be seen what the impact of this development will have on Montana and the amenity economy in the Rocky Mountain West.
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I am currious however about how they (Discovery) are going to sell lots in this kind of an environment. Rumor around town is that there will actually be a moratorium on sales at the club, in order to preserve the value of the current lots and homes. If this is the case, how then will the club make money and fund these planned projects, not to mention the ongoing opperations? I have seen first hand, that the resort is in need of repair, and employees have informed me that lift ops are in question this winter.
It's common knowledge that Mrs. Blixseth was forced to liquidate and leverage other assets in order to buy out her husband. One can only assume that this tight budget is the reason for a post-dated payment to Greg LeMond in November. I only bring this up because it points to a liquidity problem. If the club can not sell lots, then they can not pay Credit Suisse, Greg LeMond, run the daily ops, or expand the project. As these problems remain, my guess is that people will be apprehensive to invest in a project with so many "issues".
Unless there is a miraculous turn around in our domestic economy, which would create an onslaught of buyers, I am afraid that this particular ownership is destined to fail.
Discovery is the ultimate choice as they are the professionals and carry with them the cedibility which investors do not have in place.
Sam Byrne is a significant investor / developer in Sunrise ridge but the article is misleading. The company records still show Edra controls the shares of the company and there has been no sale of shares. Clearly the only shares owned by others are secondary shares of which Greg Lemond had and is being paid off.
Based on te court papers in Montana and reported many times in the press, Tim Blixseth borrowed money last year from Sam Byrne's group but are we to assume Sam Byrne was paid back or is there a special relationship? Can anyone address the issue of whether or not Sam Byrne is going to be a partner or is his plan still to keep a close eye on the matter to take the club when it can not make its payments? He is a very successful distressed asset buyer through his fund and prays on such opportunities of failure. What remains to be seen is how or if he plans to maintain his original position to force the club into some type of benefit to his group. Lets face it, Sam Byrne purchased land from the Blixseth and his fund has over 100m into Condo's which are not selling. Maybe having Discovery will help keep his investors calmed down and ride out the storm or maybe its what the press and Tim / Edra stated in their court papers that Sam Byrne is only hanging in there to Bankrupt the Club?
What happened to Tim Blixseth. Article says he kept a house at the club. That will make it very interesting considering at YC camp when he spoke the crowd was silent and when the real owner spoke it was loud and clear who they like.
How much did Tim receive? Where did the money come from? Who i paying off the Greg bill of 13m in November? Did Sam Byrne get his moneyback from Tim? Did Sam loan money to Edra to help dig the hole deeper and squeeze her out of ownership? Who is paying for all these investments? New club house? New Village? Come on people...speak up....who is going to be the winner? My bet is Sam is going to win this club the oly way he knows how.
Time is going to tell. It’s a great story SHARK BAIT but where are you on this matter. Last question, who is making the payments to the Employees, banks and suppliers. Seems to me loans pay off loans and one loan’s to BK the new owner.
It appears there is a Wolf in the Club, trying to act like a ‘Helping Hand’ but when the Wolf’s background is buying real estate companies on the verge of ‘BK’ who is to say kicking them over the edge is not correct. Its all about winning, its all about ego and its all about Greed.
Clearly this needs to be addresed. What about Discovery? Did the employees think of contacting the CEO of Discovery or writing him a letter to express your concerns as they are as the press has stated taking over the operations. Maybe by bringing in a professional management company things will be paid on time.
Another solution is to contact Sam Byrne. He appears to be the only one with money these days. The press stated he is the largest investor in the club, therefore it appears Sam Byrne has fronted this entire transaction and is being a 'Behind the Scene' Investor. Sam Byrne was quoted as saying he is pleased and thankful to have professionals like Discovery being appointed. Why not write a letter to Sam Byrne and his company asking if he will pay the payroll. Its amazing that they are reporting to be investing into a new golf club house, a new chairlift, new spa, and new village for the members kids but can not pay the employees.
One can not blame the members. They were sold on the fact that if they pay their $18,000 each year that everything is covered. I guess Tim Blixseth was more concerned about selling land and collecting big money and failed to tell people that $18,000 per year, per member only covers 1/4 of the running costs! All members want to see this club run and make sure people are paid but other members are trying to buy the club or 'Bankrupt the Club', thus there is a problem.
Is it not time for Sam Byrne as the largest single investor to step up and make sure this club has the necessary capital to back Discovery to insure operations are up to par and that employees are paid? The VP of Operations is not qualified if he sent this email, afterall was he not part of security before? Is Charles still collecting his salary? What about Dieter H.? Stand up if your claims are true. You have a voice but it appears the Blixseth's have sold out to Sam Byrne and he is in control now.
last question: when will this club admit its in a financial mess? someone above mentioned ENRON? Why?
While it is true that some of the employees have either contact with the members or have access to the phone numbers, that is a huge no no and you would probably lose your job right now. There are a couple employees who work in the PS&P;end of things who are in trouble allready for questioning the vp of operations on why they did not get paid on time. I could just imagine how the vp's would freak out if they found out a lowly caddie spoke of such things to a member. And in the end, it really isnt the members problem, they pay the club to have people around and should be able to assume the money they spend is being used right.
Most of the carpenters walked out as well as some of the chefs when they found out they were not being paid, and I am sure there were others as well who expressed dissatisfaction or left. I just hope the members all get together and tell Edra, Sam and discovery to get things shaped up.
is trying to plug the hole in the ship. Continued financial struggles in just paying regular people should assure everyone things are OK, right? I heard just today that Tim has been around a bunch. I still believe Tim and Sam may be secretly trying to finish off Edra. One of Discovery's money men is from an equity firm in Boston. Cross Harbor is also based in Boston, hmmm. Birds of a feather flock together. I wonder if CIP Sunrise Ridge Partners LLC is connected to Tim or the money man for Discovery Land? Was the Sunrise Ridge property deal on the up and up. I do not think so because Tim made a pile of money while screwing all the minority share holders, which at that point were 7 who held 8%. It is clear how 3 of the seven feel as seen in the number of documents in this case.
My understanding is the the club will be bankrupt by 12/08 unless sales and memberships are sold. The Yellowstone Club property management sure will not make up those numbers even with their outrageous fees and outright lies. The club is trying to cash in where ever it can. No one should or can be trusted regarding any matter. They are all lying, cheating, thieves who are to arrogant to care about the regular employees. The Blixseth's should be both punished without a second thought.
Whether or not we like it the YC is here to stay. The biggest thing is the members want to stay anonymous and unknown to the general public. With the exception of a few well knowns must of the member names would not mean a thing to anyone.
Sam Byrne and his fund investors are what is wrong in this country. Same as the failing mortgage industry. Monies get lent to over extended situations and they pray for failure so they can pick up the pieces at bargain prices. Can you imagine what kind of good
these millions could have done. How many Mexicans were hired to complete the Condos Sam? And at what cost savings to you and your company. The Blixseth's stole from banks and investors you are stealing or trying to profit by their failure. Stealing is stealing and it is unethical and it should not go unnoticed. Greed, Greed, Greed, is the route to all evil!
As for the final payment I surely hope you guys get paid. Maybe
then more closure will arise. I wonder what the membership board is talking about. In a sinking ship one can not fix the leak. The ship
builder needs to build a new ship. Who might that be? Not Sam, he is just a profiteer. Not Edra or Tim, they have already showed what they are capable of. Time for all of them to go and my guess is the place will be public in a few years for everyone to enjoy.
Now, what about the Yellowstone Club World assets? The Credit Suisse Loan paid out 145,000,000. Tamarindo was 40,000,000 which Tim kept for himself and Edra assumes the repayment, Turks House was purchased for 30,000,000 and Tim gets to keep this asset as well but is now selling the house for 55,000,000 through ''In the Mint'' http://www.inthemint.com , Tim paid 15,000,000 for Tooth Fairy Yacht and it was sold 6 weeks ago for 10,000,000 and Tim kept the cash. Edra is keeping the French Castle which they bought for 28,000,000 but employees in Sales tell us she is in France selling this property for 40,000,000 Euros ($60,000,000) and Edra Blixseth also gets St Andrews where they bought it for 25,000,000. Why is Credit Suisse allowing them to keep the assets and or the cash from the sale of these assets when the club owes 300,000,000 back to the bank? If it can’t make payroll then how does it pay the bank? Credit Suisse where are you?
Now according to senior employees, Discovery is taking over and bringing in all new management which is what I believe employees are asking for. Discovery is not part of Sam Byrne as this makes no logic. Discovery, according to press articles from 2007 and early 2008 are linked to the former Citi bank member and Burt Sugarman who were apart of Edra's failed attempt to buy the club before Sam got the club. Read the old articles and you will see this t be true. Members are not going to put in money. Many were contacted and a few complained to Senior members as Sam was looking o help raise money from some of them but the members want nothing to do with the ownership.
So, Greg is owed 13,000,000 in less than 9 weeks, Credit Suisse is owed interest of 8% quarterly. That’s 24,000,000 a year so it’s safe to assume there is at least 8,000,000 coming due at year end. No cash for payroll? Member dues are 16,000 per year per member. So at 300 members we are only looking at 4,000,000 in change, therefore employees know it’s getting ugly. The club must spend at least 12,00,000 a year with all these big salaries, thus the club is out of cash unless its selling lots or memberships. Why don’t we call the sales department and ask what has sold in the last 6 months. I would imagine 4 properties and all to members or Tim.
In the end, the article says Sam Byrne is the largest investor and land owner, so it’s safe to say Edra is being pushed aside. Sam Byrne is playing this smart and let’s face it, he gave her ''Blood Money'' of 38,000,000 and she cannot repay this money nor the 300,000,000 to Credit Suisse. How is Edra able to fly her G4 back and forth from Yellowstone Club to Palm Springs? The Aviation Club told us her flight plan from Montana left for Paris France with 3 passengers and two pilots. This must be very expensive to fly over to Paris yet she is not paying payroll? Who covers the gas bill for the G4? It’s time for some answers and time for a good report on what’s going on. It will make a great story.
Every letter, correspondence, email, form, filing, is produced, vetted, examined, challenged, dissected by a lawyer. This is the Gallatin Shark Fest of All Time....
300 plus members owning homes all have a lawyer on this deal, you have to know. And home owner associations or groups, and employees, jobbers, contractors. All are lawyered up, and waiting to get paid...
And nothing will ever get done, accomplished, settled, because just when you think it will be, somebody will get a new lawyer, and a continuance, and the dance will go on and on and on and on...ad nauseum....
When this game is over, the lawyers will have a third of the whole deal. Everyone will pay lawyers to save a chunk of their butts. And we must never forget, Timmy is a litigant first and foremost. His suing his partners is legendary. You will see a Timmy lawsuit filed just about the time it appears someone will be getting something. Timmy will want his share, and there are lawyers galore who are more than willing to assist him.
The Blixeth track record is a trail of broken dreams for anyone involved but Tim. This deal is just more of the same, with more zeros after the numbers.
You seem to be a little over the top on your statements. Lets remember the members are not to blame and they provided countless jobs and businesses have opened up in the area, thus without their investment into large houses, Big Sky would not be where it is today. You can run and hide your whole life a preserve everything. The club is beautiful but has many problems with the biggest being financial. The club will always be private and only needs an owner with money and respect. Clearly it looks lke Sam Byrne has the lead but where is his money?
time is going to tell but the club is going to stay. Maybe they ca hire you to make some money and not fault the world for not being fair. Work hard and rewards follow, complain and moan and get no where. just a small piece of advise