By Mark Waite
It will be another five years before a deed restriction expires that mandates Willow Creek Golf Course be used only as a golf course, according to Doug Shaw, secretary of the valley’s Lake View Golf Association.
Jim Scott, owner of Willow Creek, filed Chapter 11 bankruptcy Nov. 6 in federal court for his company Caldera P & G. Another meeting of the creditors is scheduled for 3:30 p.m. Friday in the Foley Building in Las Vegas.
If a new owner emerges from the bankruptcy, they will have to abide by language in a deed restriction dated Dec. 29, 1983, Shaw said.
It states: “None of the land conveyed herein shall be used except for golf course purposes. No construction shall be permitted on said acreage except as pertains to and relates to the use of the land as golf course facilities and such use shall include the possible construction of hotel, motel, spas, villas or other compatible usage that does not substantially interfere with the golf facilities.
“Land which is the subject of this restrictive covenant is to remain as two, 18-hole golf courses together with such facilities as are customarily constructed.”
The agreement states the covenants are to run with the land and be binding on all parties for 35 years, including the heirs, executors, administrators, successors and assigns.
The agreement covers both Willow Creek and Lake View golf courses, both of which were formerly run by Preferred Equities Corporation until PEC declared bankruptcy in 2002. They were formerly known as the Calvada championship and Calvada executive golf courses at that time.
A group of 67 investors, of which about half live on Lake View Executive Golf Course, bought that course in 2004 for $600,000, Shaw said. But he said, “I think it’s too late for Willow Creek. I think they had an opportunity a couple years ago to form an association to take over the course but I think now it’s too late due to the economy and what it would take to put that into playable condition.”
Former golf pro Frank Cox told the Pahrump Valley Times the dilapidated course, an eyesore smack in the middle of the community, suffered from competition when Mountain Falls golf course opened.
Shaw said he doesn’t consider Lake View to be in competition with Mountain Falls, since the former is a shorter, mid-range course. But if Willow Creek golf course ever reopened, he said, it would bring more golfers to Pahrump, improving business at Lake View.
Shaw is skeptical Lake View Golf Association would collect their $20,400 judgment in the bankruptcy case. But he was confident the new owners will have to abide by the Tripartite Agreement, in which recycled effluent from the Utilities Inc. of Central Nevada sewer plant at Willow Creek golf course will be piped to Lake View.
“It’s still a concern until we know for sure that the issue has been resolved and what’s going to be the outcome of the bankruptcy. Everything we have, we’re participants in the Tri-Partite Agreement. Hopefully that assures us of having access to the effluent water. But this has been going on for five years,” Shaw said. “We have an agreement whoever takes over the golf course, or however that comes out, we’re supposed to get 425,000 gallons per day. It’s just all going to depend on what happens to the golf course.”
Jorei Enterprises holds a $500,000 secured claim for Willow Creek with a deed of trust. SCRS Investors LLC, which is one of Scott’s companies, has a $1.56 million promissory note for the property. They are followed by Utilities Inc. of Central Nevada which has five judgment liens totaling $1.98 million.
Joseph Atkins, trustee for the U.S. Bankruptcy Court in Las Vegas, said it’s still a possibility the Willow Creek bankruptcy could revert to Chapter 7, liquidation of assets, but he wouldn’t predict at this time what direction the case is headed. He referred to himself at this point as “a man in a deep fog.”
In the meantime, Atkins said he’s paying a maintenance worker at Willow Creek, which he hopes to recover as part of his fee.
“We’re trying to get together a game plan that will make everybody happy,” Atkins said.
What creditors will recover depends on what secures that property, or what property secures the debt, he said.
“In this case, we do have a secured creditor on the golf course in the amount of $500,000, but we’re looking at the other claims as well. Of course, we’re looking at the SCRS claim to determine who exactly is that and do they have a claim,” Atkins said.
Besides his bankruptcy in Las Vegas, Scott filed for Chapter 7 bankruptcy, liquidation of assets, in the Eastern District of California Jan. 30. A meeting of creditors in that case is scheduled for 2 p.m. March 6 in the U.S. Courthouse in Sacramento, Calif. See related story .