Investor buys Ann Arbor Country Club's mortgage after bank-ordered sale
Many members and neighbors of Ann Arbor Country Club spent recent weeks trying to raise money to buy the outstanding mortgage on the property.
However, they learned March 5 that the $1.7 million note had been sold by lender Citizens Bank for an undisclosed discount.
Now members of the club - situated on 200 acres between Ann Arbor and Dexter - and homeowners in both the adjacent 455-home Loch Alpine neighborhood and other nearby communities are sorting out what that means.
“The ownership of the property is not changing hands,” said Peter Logan, a club member and board member of the Loch Alpine Improvement Association.
“It will remain as a recreation facility,” Logan said. “Now there just will be the matter of how the club and membership negotiate a payment plan (with the buyer).”
The buyer of the mortgage is identified on the LAIA Web site as an entity called A2C2. Information on that entity was not yet available in the state’s data.
A representative of the mortgage buyer lives in nearby North Delhi Hills neighborhood, according to the Web site.
The bank-ordered sale started in late 2009 when Citizens Bank notified AACC that it was in default after membership totals fell below the required 120. The club had been making interest-only payments last year, and the board said they expected that arrangement to continue.
However, Citizens Bank had tried to find a buyer for the mortgage since January, and identified at least three prospective bidders willing to pay $500,000 to $600,000 to take over the outstanding debt. The leading contender as of early February, investor Anthony Barclae, withdrew from consideration.
The AACC Board of Directors sought proposals from other prospective buyers while neighborhood groups continued to seek funds to buy the mortgage.
However, late last week the board was notified that the note had been sold.
Citizens Bank spokesman Brian Smith said the bank would not comment on the transaction. He also would not provide information on the number or dollar value of loans that the bank has sold over the past year.
However, federal filings by the bank’s holding company, Citizens Republic Bancorp Inc., indicate that 6.74 percent of its loans were non-current as of year-end 2009, up from 4.15 percent in 2008.
During the same period, the bank’s net loans fell from $8.93 billion to $7.64 billion; and its loan loss allowance climbed from $255 million at year-end 2008 to $342 million at the end of 2009.
The change in mortgage holder for AACC - which will open March 17 - leaves many unanswered questions for the club.
“While this news provides AACC with some short-term breathing space, it does not solve our long-term issues,” board president Karen Stevens wrote in a letter circulated to the club and to neighbors.
She outlined several next steps for AACC board members:
â€¢ Meet with the new lender and negotiate the mortgage terms. â€¢ Review membership dues structure. â€¢ Revise the 2010 budget. â€¢ Put together an aggressive marketing strategy to grow the membership.
Stevens also used the letter to thank members and neighbors for participating in discussions to reach a solution.
“I believe we all agree it’s in everyone’s best interest that we overcome our current challenges and we won’t be able to do that without community support,” Stevens wrote.
Logan said the news about the mortgage purchase is still making its way around the neighborhood. People are hopeful that the mortgage buyer appreciates the club and its place in the community.
“We’re hopeful ... that it bodes well for our interests as a neighborhood,” Logan said.
He continued: “We’re simply waiting as a community to see how the club and the new mortgage holder negotiate a plan and . what business plans the club has that might engage more of the neighborhood in using more of the facilities.”