Reynolds Plantation Seeks Asset Sales

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(OCONEE, GA) -- The developers of Reynolds Plantation, one of Georgia's most exclusive enclaves of vacation homes and golf courses, have floated a plan to sell off key assets like golf courses, clubhouses and swimming pools to pay off $45 million in debt to impatient lenders.

News of Reynolds Plantation's financial plight is another blow to luxury golf communities in Georgia, following the foreclosure of Country Club of the South's golf course and last year's bankruptcy and sale of renowned Sea Island Co.

The news about Reynolds Plantation surfaced after a letter was recently sent to homeowners detailing issues for the development that is about an hour and a half drive east of Atlanta on Lake Oconee.

According to the letter, signed by Reynolds Plantation Chairman Mercer Reynolds III, a group of banks is demanding a hasty payment of $45 million by April. The payment was requested while the development company was negotiating renewal of a line of credit.

In the letter, Reynolds says he and his cousin, Jamie Reynolds, had "pledged a number of additional assets (totaling approximately $60 million) to the banks," but the banks still want the large payment in two months. The cost of construction of the amenities being sold is about $136 million, the letter says.

The Reynolds empire at Lake Oconee spans more than 14,000 acres and 90 miles of shoreline, comprised of three gated communities--Reynolds Plantation, The Landing and Great Waters-- a golf academy, and six golf courses, with a seventh on the drawing board. There are around 2,000 residences between the three communities.

The letter says the line of credit was used by Reynolds Plantation, Linger Longer Development Co., and its affiliates to buy land for further development of the ritzy subdivisions and golf courses that are near the Ritz Carlton Lodge, a popular destination for Atlantans.

"Historically, acquiring land in the Lake Oconee area to ensure that Reynolds Plantation continued to grow has been a reliable business strategy," Mercer Reynolds wrote. "However, with this downturn, we found ourselves in the position of having acquired more real estate, and debt, for Reynolds Plantation than is supported by recent demand."

The letter says the company is pursuing three options for selling the assets: the property owners association, a smaller group of property owners, or an independent third party that has made an offer. The letter emphasizes that no decision has been made on which way to go.

Other assets being sold include marina facilities, a cottage rental operation, the Lake Club, the Nature & Heritage Center, historic Jackson House and several administration and service buildings.

The Reynolds family has owned land in the area, once known as Cracker's Neck, since the 1920s when the family patriarch owned a hunting retreat known as "Linger Longer." In the 1980s, the family started aggressively developing sites for retirement and vacation homes.

It started with Reynolds Plantation, and was followed by Great Waters, featuring an 18-hole Jack Nicklaus golf course in the 1990s. In the 2000s, Reynolds bought Port Armor, a competing development and renamed it The Landing at Reynolds Plantation. Later, a 251-room posh Ritz-Carlton hotel with a spa and golf course opened. The hotel is not part of the potential sale.

The Reynolds influence has stretched far beyond Lake Oconee. Mercer Reynolds served as national finance chairman for President George W. Bush's re-election bid in 2004, and served as U.S. ambassador to Switzerland and Liechtenstein.

 

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