Bob McNair, a big shot for years in the sport of kings, didn’t have a horse in the field at this weekend’s Kentucky Derby.
But the mint juleps likely tasted a tad sweeter for the billionaire NFL team owner. Just a few days earlier, the part-time Kiawah Island resident handily outpaced an also-ran in the pursuit of an alluring but ailing Johns Island golf course.
The venue was a packed U.S. Bankruptcy Court hearing in downtown Charleston. Rather than send a lawyer or some other representative, McNair, who owns the Houston Texans and chairs the NFL’s finance commission, took the time to show up in person Wednesday, with his eye firmly fixed on the prize: The Golf Club at Briar’s Creek.
“I’m not in this to make money,” he said.
Unusual words for a University of South Carolina graduate who made a fortune by building the nation’s largest privately held power company, Cogen Technologies Energy Group. He sold the business about 15 year ago for about $1.5 billion and then paid $700 million to bring professional football back to Houston, his longtime residence.
Around the same time, he became a founding member of Briar’s Creek.
The acclaimed and ultra-private course off River Road opened in late 2001, charging $100,000-plus initiation fees and steep monthly dues. Its membership roll includes the likes of General Electric CEO Jeff Immelt and retired Miami Dolphins quarterback and NFL Hall of Famer Dan Marino.
But despite its well-heeled clientele, the club stumbled badly during and after the last recession. Revenue plummeted as members resigned and real estate sales hit the skids, forcing Briar’s Creek to borrow money from within the club. It was forced to file for bankruptcy protection in February, thrusting the private enclave’s money problems into the public spotlight.
By then, McNair and two other insiders had put together a bailout plan — called, appropriately, a “stalking horse” bid — that included $11.3 million for the property and other assets and $2 million to capitalize the proposed successor club. They approached the reorganization like any other financial transaction, saying Briar’s Creek is, at its core, a business that needs to make money.
“And sometimes, in order to be successful, a business must reset,” McNair said in a statement immediately after the filing. “We hope our purchase proposal will ultimately be approved through the bankruptcy court process and allow us to chart a new path toward success.”
It didn’t go quite that smoothly. A rival offer emerged that added an element of drama and intrigue to last week’s court proceedings. In a last-minute move, a New York-based real estate company submitted a proposal to buy Briar’s Creek, including the course and surrounding property, topping McNair’s offer by $500,000.
The bid from R. Black Global LLC led a legal showdown last week. Lawyers for both the club and McNair blasted the proposal as invalid, saying the required $500,000 deposit was late by several days and that the rest of the money was not 100 percent committed to the deal.
Then there was the question of who was financing the bid.
It proved to be the turning point. Ryan Black of R. Black Global testified that he was willing to tell the judge who his backers were — in chambers only — but he was not at liberty to share that information with the members.
And he certainly wasn’t going to name these secretive high net-worth individuals in open court under oath, citing their strict demands for privacy.
“They don’t want to be on the front page of the Charleston paper,” Black said.
At that point, McNair was asked to state why his lower bid was superior.
In a word, cash.
“Capital is not an issue at all,” the 78-year-old billionaire told Judge John Waites. “If you said put up the money tomorrow, we’ll put it up tomorrow.”
He also said he had no motivation other than to right the club’s finances, maintain its quality, and, ultimately, attract more members to generate enough money to keep the operation out of debt.
“I don’t need any dividends from the club. ... We’re not in to build it up and sell it,” said McNair, who, according to reports, successfully battled leukemia and skin cancer last year.
He added that the new ownership group would start selling homesites only after other existing Briar’s Creek property owners decide either to sell or build on their lots.
“I’m not a real estate developer,” McNair said. “I’m golfer. I’m a sportsman.”
With that, the judge disqualified the other bid, citing a lack of transparency and other factors, to the delight of the dozens of club members sitting in the courtroom. It was probably one of the few times Waites received a round of applause — of the golf-gallery variety, of course — at a bankruptcy hearing.
Contact John McDermott at 937-5572.