Exclusive Golf Course for Sale After Default on $15-Million Loan : Simi Valley: Members are worry that a new owner will alter the challenging layout or open the greens to the public.

Earlier this month, the exclusive Wood Ranch Golf Club in Simi Valley was on the brink of being sold at public auction after its owner defaulted on a $15-million loan.

The news alarmed the club’s players. Would their costly memberships become worthless? Would a new owner open their private course to the public?

But on Dec. 2, a day before the sale was to take place, the lender, Wells Fargo Bank, approved a six-week reprieve.

Since then, the course’s financially ailing owner, Olympia/Roberts Co., has been negotiating to sell the Wood Ranch site to American Golf Corp., a Santa Monica firm that owns 150 courses nationwide. Its holdings include Sunset Hills Country Club in Thousand Oaks and Camarillo Springs Golf Course.

As the talks continued last week, the club’s members, some of whom paid up to $40,000 for memberships, grew more anxious, complaining that they have been left out of the negotiations.

Lacking hard facts about the sale, some trade ominous rumors and gloomy predictions about the future of the club, which has more than 400 golf members and about 100 social members.

“We’re in the dark, and we’re really concerned about the integrity of the golf course,” member Joe Beckerle of Thousand Oaks said. “Personally, I don’t think we’ve been treated fairly.”

Beckerle said the members learned about the loan default from newspaper reports and about the sale negotiations through a chance meeting with an American Golf employee at the clubhouse.

“I’m very disappointed in Olympia/Roberts in how they’ve handled the communications to members,” Beckerle said.

Olympia/Roberts is a Simi Valley-based partnership owned by the American subsidiary of Olympia & York, one of the world’s largest real estate businesses. Hurt by the worldwide real estate slump, the Canadian parent firm sought court protection from its creditors earlier this year.

Olympia & York’s American subsidiary has not begun bankruptcy proceedings but it is trying to restructure its debt, a company spokesman said.

Its holdings include Wood Ranch, the 3,000-acre planned community on scenic rolling terrain in southwest Simi Valley.

A development agreement, approved by the city in the 1980s, called for the construction of more than 4,000 residences, the golf course, a shopping center, an equestrian center and public amenities such as parks, a fire station and a school.

About 2,400 houses and condominiums have been built at Wood Ranch. But an Olympia & York spokesman said recently that the firm cannot afford to develop the rest of the planned community and has put its acreage up for sale.

Wells Fargo declared last month that Olympia/Roberts had defaulted on a $15-million Wood Ranch loan.

The bank scheduled a Dec. 3 auction to sell the tournament golf course and about a dozen undeveloped lots to satisfy the debt. But Wells Fargo later agreed to postpone the sale until Jan. 14 to give Olympia/Roberts more time to sell the course and its other land or to restructure its debt.

Because of its financial problems, Olympia/Roberts has let some golf course maintenance projects slide, club members said. They said they hope a new owner will replace the aging electric golf carts and repair a sprinkler system that leaves some grassy areas too soggy, others too dry.

But at the same time, club members said a new owner might seek to fund these improvement by imposing new fees, by opening the course to the public on slow weekday afternoons or by boosting the number of members by lowering the price to join.

A new owner could also alter the course’s design by eliminating hazards and shortening the holes, some members suggested. Such changes might make the course more appealing to less skilled golfers but it also could alienate those who joined Wood Ranch because they enjoy its challenging layout.

Attorney Alan Berg, who belongs to Wood Ranch, said he is upset that American Golf has been unwilling to talk to the members about whether it plans to pursue any of those strategies at the Simi Valley course.

“It concerns me,” Berg said. “It paints a picture of the type of people we may be dealing with.”

Beckerle, who serves with Berg on a committee of members monitoring the sale, said American Golf managed the Sunset Hills course in a professional manner when he was a member there.

But he asserted that because the company’s top priority was profit, it allowed too many new players to join for lower membership fees.

“The reason why I left (Sunset Hills) was that there were too many members playing that golf course,” said Beckerle, a title insurance company manager.

Clifford H. Pearson, an attorney who also serves on the members committee, said American Golf has declined to meet with him or answer most of his questions. “They have told me they intend to keep (the course) private,” Pearson said. “I don’t know what keeping it private means.”

Gail Goodrich, the former Lakers basketball star who is now a senior vice president for acquisitions at American Golf, said the members’ inquiries are premature.

“We don’t think it’s appropriate to comment or speculate until we have a signed (purchase) agreement,” he said. “Anything we would say to the members at this point is only speculative.”

Goodrich conceded, however, that American Golf would almost certainly continue to operate Wood Ranch as a private course if the purchase is made. “I think that’s a reasonable assumption at this point,” he said.

He said American Golf runs 22 private country clubs, each with different bylaws and regulations. American Golf is in the process of reviewing the membership rules for Wood Ranch, he said.

Goodrich said his company would provide astute management at Wood Ranch if a sale is completed. “We’ve got over 20 years of experience in the golf course business,” he said.

Wood Ranch members say that if a sale agreement is reached, their bylaws give them a right of first refusal, meaning they must be allowed to match any outside bid and buy the club themselves.

Some members have speculated that raising millions of dollars among themselves during tough economic times could be difficult. Others said they must find out how much American Golf is willing to pay for the course before the members can decide whether the sum in out of their reach.

Looming over the negotiations is the sale deadline imposed by Wells Fargo.

“I think we’ll be able to sign a contract before Jan. 14,” said Frank Rugani, the attorney representing Olympia/Roberts. He declined to say whether any other prospective buyers are talking to the company.

Wells Fargo attorney Tom Larmore said the bank must approve any sale because Wells Fargo would have to release the golf course from a mortgage that also covers a number of other properties.

Some club members are concerned that Wells Fargo will sell its Wood Ranch loan to another party before Jan. 14, creating another complication.

Larmore confirmed that “there has been some interest” in buying the loan, although he declined to elaborate.

He said the bank is interested in selling the loan because the loan buyer would then assume the risk of lost money should Olympia/Roberts declare bankruptcy.

A new lender could reject a sale to American Golf or another buyer, or it could foreclose and take possession of the course itself, Larmore said.

“We’re waiting for the next shoe to drop,” said club committee member Pearson. “We’re waiting to see what happens.”