Loan trouble closes Gloversville golf course
GLOVERSVILLE The nonprofit Pine Brook Golf Club faces an uncertain future after its board of directors, struggling with club finances, decided not to open the club’s nine-hole course this year.
The organization is behind on payments to NBT Bank on a $325,000 loan it took out in February 2010, and it also owes the Fulton County Economic Development Corp. approximately $50,000. Both mortgages are secured by the corporation’s primary assets — the golf course and on-site restaurant.
NBT, which is in first position on the mortgage, has not yet called in the loan, according to George Doherty, a bank spokesman.
“At this point, we have not taken any specific action. The decision to close [the golf course] was not our decision, it was their decision. These things do have a normal course. If they fall far behind, there is a normal action that is taken,” he said.
Doherty said Pine Brook’s board is taking steps to prevent foreclosure. Pine Brook President George Ringland was not available for comment for this story.
The nonprofit corporation’s 990 forms, which are filed with the federal Internal Revenue Service, show that Pine Brook had deficits of between $74,000 and $103,000 from 2008 to 2010. Its 990 form for 2011 was not available.
Michael Reese, president and chief executive officer of the Fulton County Center for Regional Growth, parent corporation of the Fulton County EDC, said the EDC’s collateral “is a mortgage on the property [that] sits behind a mortgage held by NBT Bank. They are the primary lender and they will drive this. We would try to work along with them, to try and protect the lien.”
Reese said his hope is Pine Brook can be kept in place as a golf course, operated either by the current nonprofit corporation or by a successor. But he said the current corporation may not be able to operate the golf course. “It is questionable they will run it as a golf course. They could transfer ownership,” he said. “If they are not going to run it, I hope we can find someone else to run it.”
Reese also hopes the board opens the on-site restaurant, to generate some revenue for the creditors. “It is one of these quality-of-life issues. These types of amenities are great in helping people enjoy living here and working here,” he said.
The property has some unusual deed restrictions, officials said. If the Pine Brook corporation ceases to operate the golf course, the course reverts to the city of Gloversville. The city must then operate and maintain it as a recreational facility. If the city declines, the property goes to Nathan Littauer Hospital. In both scenarios, the new operators assume the nonprofit’s debts and liabilities, Reese said.
He added that the value of the property exceeds that of the mortgages. The property has a value of more than $2 million, according to the corporation’s 990 form.
The NBT mortgage goes back to 1996 when Pine Brook borrowed $275,000. Pine Brook borrowed $70,000 in 2005 and $91,000 in 2010. The loans were consolidated Feb. 19, 2010, according to documents filed with the Fulton County Clerk’s Office.
Pine Brook borrowed $50,000 from the EDC on May 9, 2011, according to county records. Reese said Pine Brook made some payments on the loan but is not current on its payments.
Reese said EDC loaned money to Pine Brook as part of its mission, which is often to fill in gaps on conventional loans. He said some of its loans are to high-risk projects, but the EDC board fully expects to recover its loan to Pine Brook.
“We were working with the [Pine Brook] board of directors to generate additional revenues outside of golf revenues, such as increasing membership and selling tee-box markers. They made some good attempts to stay in business and keep the golf course running,” he said.
Pine Brook generated $218,000 in revenues in 2010, split between membership fees and program fees; it paid $93,000 in salaries and $140,000 in other expenses.