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Game over for golf club?

National bankruptcy matters could hurt Tournament Players Club in Valencia

Posted: October 6, 2008 8:56 p.m.
Updated: December 8, 2008 5:00 a.m.

Mehran Abbassian, D.D.S., one of the founding members of the Tournament Players Club in Stevenson Ranch is curious to see what will happen to the course in the future.

 

Dr. Mehran Abbassian is a dentist when he's not golfing.

He bought a house in West Ridge, next to the Tournament Players Club at Valencia.

He also made sure it was near his work.

Dr. Mehran Abbassian is a golfer when he's not fixing people's teeth.

"The reason I moved there is because I love golf," he said.

If he walks to work, his five-minute morning commute takes him on foot across the golf course to his Tourney Road office.

The return trip takes even less time.

"All the big moves I've made in the last few years are because of the golf course," he said.

When U.S. Bankruptcy Court Judge Kevin J. Carey reviews a submission from golf course lawyers Friday, he won't know that a Santa Clarita Valley dentist sets his watch according to the golf course.

What he will see, however, are financial statements relating to the amount of money golfers like Abbassian invested in the TPC at Valencia.

TPC lawyers will produce figures that show the club's profits have steadily declined over the last 30 months.

Income reported from business operations at TPC at Valencia amounted to $4,781,222 in 2006, $4,459,512 in 2007 and $2,101,144 through May 2008, according to the court documents.

LandSource Communities Development LLC voluntarily filed for Chapter 11 bankruptcy protection June 8 in U.S. Bankruptcy Court in Delaware, listing TPC at Valencia and 20 other companies it owns as debtors.

TPC at Valencia's Membership Deposit Refund Program - the one in which Abbassian and more than 300 members invested - takes center stage as lawyers plead for permission to keep the program in place.

Members are essential
Since the club opened June 26, 2003, members invested between $8 million and $21.4 million in memberships purchased at the TPC at Valencia and pay between $125,400 and $160,000 every month in dues.

LandSource lawyers want the Membership Deposit Refund Program to remain in place to prevent an avalanche of members who want refunds.

It's a Catch-22: If members demand refunds, the club could fall short of funds to operate the golf course, which could cause more membership withdrawals, lawyers say.

"(A) lack of confidence in the Golf Club will likely result in the erosion of operating cash flow as members elect to resign their memberships and (ultimately) forego monthly membership dues that are essential to the golf club's operations," says the court motion filed Sept. 19.

"This, in turn, will diminish the value of TPC and is not in the best interests of TPC's estate.

"In addition, prospective members may be discouraged from joining the golf club if they perceive that TPC is unwilling to honor its obligations under the Gold Club membership agreement and plan."

Right now, said golf course spokeswoman Marlee Lauffer, a member can receive a full reimbursement when four new members join.

In for life
No one knows how likely members are to resign.

If you're a founding member like Abbassian, you're in for life.

"With over 300 members, there all different temperaments. Some people get nervous if the wind blows a particular way. Others can watch the world crumble and they maintain their cool," he said.

Even if rumors that the club is for sale prove to be true and suddenly courts, lawyers and owners hold a garage sale of sorts, Abbassian said he would try to buy it.

In fact, he's already moved on the possibility of a "fire sale" at the TPC at Valencia.

"I've been talking to some of the members about buying it," he said.

Others are not so sure.

Different temperaments
Some golfers, when they talk about the sport, talk about temperament - having the right temperament for golf, or the wrong one.

Members at the TPC at Valencia are, like Abbassian says, of various temperaments when it comes to staying on with a high-profile PGA Tour club membership.

One man familiar with the limelight, big money, big budgets, high-profile venues and professional sport is former Los Angeles Dodgers general manager Kevin Malone.

Malone, who owns the local Mercedes-Benz dealership, is a TPC member now weighing the pros and cons of keeping his membership.

"I'm still in the process of determining the value of this membership," Malone wrote in an e-mail. "I have not decided what is the best course of action. I certainly will make that decision in the near future."

Another golfer with less passion and commitment about TPC memberships is Morris Thomas.

The Signal's circulation director is on the fence about memberships.

The club's glossy presentation folder lauding the PGA Tour's long tradition and exalted reputation, sits on his desk. Thomas is deciding whether or not to become a member.

"I like the membership at TPC, its members," he said.

The fact that TPC is in bankruptcy court doesn't bother Thomas.

"If its not one owner, it's another owner," he said. "It doesn't matter to me."

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