A year and a half after filing for Chapter 11 bankruptcy, the owners of the Sawgrass Marriott Golf Resort & Spa have given up their fight to keep control of the 26-acre resort in Ponte Vedra Beach, Fla., near Jacksonville.
The two Irish investment partnerships that own the Sawgrass Marriott, RQB Resort LP and RQB Development LP, filed a bankruptcy reorganization plan that calls for turning the property over to its major lender, Goldman Sachs Mortgage Co.
Goldman Sachs spokesman Michael DuVally said the firm would not comment on the Sawgrass Marriott case or its plans for the resort. But the reorganization plan does say that Goldman Sachs has agreed to continue the resort’s affiliation with Marriott.
“Retaining the Marriott flag with a financially strong and sophisticated new owner is a good result for the resort, its guests, its employees and the Jacksonville regional economy,” said Gardner Davis, an attorney with Foley & Lardner LLP in Jacksonville who represents Marriott International Inc. in the case.
According to the reorganization plan filed in U.S. Bankruptcy Court in Jacksonville, the Sawgrass Marriott is the largest convention and resort facility between Atlanta and Orlando. The resort includes a hotel with 348 guest rooms and three restaurants, golf villas with another 160 rooms and a beach club with three restaurants.
The resort also offers guests access to several neighboring golf courses, including exclusive access to The Players Stadium Course at TPC Sawgrass, which is famous for its island green on the 17th hole.
Sawgrass Marriott general manager Jeff Mayers said the bankruptcy filing has not affected the operations of the resort.
“We have never compromised the service we offer our guests,” he said.
RQB filed to reorganize its debts under Chapter 11 of the U.S. Bankruptcy Code in March 2010. The Irish group bought the Sawgrass Marriott for $220 million in 2006 and still owed $193 million on the mortgage from Goldman Sachs when it filed for bankruptcy.
RQB said in its reorganization plan that the recession caused the resort’s revenue to drop by more than 25 percent in 2009, and it tried to negotiate a restructuring of the loan with Goldman Sachs. But when they couldn’t agree, Goldman Sachs filed to foreclose on the property in early 2010 and RQB then filed for bankruptcy.
After filing for Chapter 11, RQB and Goldman Sachs haggled for months over the current value of the resort. Both parties agreed that the recession had lowered the value, but RQB’s appraisers assessed the value at $88.9 million and Goldman Sachs’ appraisers pegged it at $132 million.
U.S. Bankruptcy Judge Paul Glenn in January ruled in favor of Goldman Sachs, so RQB needed to come up with a plan to repay $132 million to Goldman Sachs in order to keep the resort.
RQB tried to find new investors to help it repay the loan but said in the reorganization plan that the $132 million price tag proved to be too much. So it resigned itself to turning over the property to Goldman Sachs.
A hearing to confirm the reorganization plan in bankruptcy court is scheduled for Oct. 18.