The developer of Kiawah Island is cutting its ties with the Emerald Isle,
Kiawah Partners placed its high-end golf resort in Ireland into receivership this week to restructure the mounting debt on the property and line up a buyer.
The firm appointed officials from the accounting firm EY to run Doonbeg Golf Club and the 39-room Lodge at Doonbeg until the eventual sale.
“This is more of a restructuring than a bankruptcy,” Kiawah Partners spokesman Mike Touhill said Wednesday.
The inn and course remain open with no changes to the day-to-day operations, he said.
“We’ve fully committed the funding to operate the property until we can seek a buyer, which is what we’re going to do,” Touhill said.
The move comes about six months after South Street Partners bought Kiawah Partners for an estimated $360 million, including debt it assumed.
At the time of the purchase, the Charlotte-based investment firm said it was evaluating what to do with the overseas properties that were part of the deal.
Led by then-CEO Buddy Darby, a forerunner to Kiawah Partners looked across the Atlantic for its first big overseas real estate deal more than a decade ago.
The resort and its acclaimed Greg Norman-designed links-style course are in County Clare, on the rugged west coast of Ireland. When Doonbeg was ready for play in mid-2002, more than 170 members had paid a $50,000 initiation fee.
“Doonbeg’s natural setting is so spectacular that it will surely take its place as an Ireland ‘must-play’ soon, if it hasn’t already,” Golf Digest said in a review of the seaside layout that year.
The resort has never made money, and the total losses exceeded $70 million through 2011, according to public filings reported in the Irish press.
Ireland’s housing bust and other struggles since the 2008 global financial crisis haven’t helped, Touhill said.
“Quite frankly, the economy hasn’t recovered as soon as we had hoped for,” he said. “We need to take this measure. The goal is to get Doonbeg on its best long-term financial footing.”
He said most of the debt that needs to be restructured is tied to the real estate.
In a statement, EY said it expects a sale “within a short timeframe.”
“The Lodge and its facilities are recognised as one of the premier golf and leisure destinations in Ireland and Europe,” the firm said.
Touhill said Kiawah Partners already has heard from some prospective buyers.
“We’re confident we’ll have a sale in the short term,” he said.
South Street Partners is focusing on the residential home lots it owns on Kiawah.
Last year, it sold Darby a resort and marina he started on the West Indies island of St. Kitts.
In December, South Street sold Freshfields Village, an upscale shopping center and office property that Kiawah Partners built at the end of Betsy Kerrison Parkway.
Contact John McDermott at 937-5572.