Justice at last: Broke Wintergreen finds deep-pocketed buyer
Wintergreen Resort– stung by a pair of weak snowsports seasons, challenged by state officials over tax credits, and losing its credit line– has found salvation in the arms of one of the region's richest people, James C. Justice II, the billionaire who yanked the venerable Greenbrier resort out of bankruptcy by building a glitzy casino.
The stunning turnaround comes months before a potential day of reckoning, as money was reportedly running out for the mountaintop playground in Nelson County. Three weeks ago, in response to inquiries from journalists, Wintergreen officials conceded that they'd hired a turnaround firm to assist with a transaction to rescue Wintergreen Partners Inc., the many-membered corporation that owns the the resort's facilities.
News of the deal came in a Friday-afternoon announcement. The May 25 release noted that while the corporate board had green-lighted the deal, Wintergreen's Class A equity members would need to approve the merger in advance of a planned pre-June 30 closing.
"We intend to take this property to the next level and see tremendous opportunities as we work with the Wintergreen management and staff in developing new membership programs and vacation packages," Justice said in a prepared statement.
The resort's financial problems, simmering for years, erupted in December when it defaulted on a multi-million-dollar line of credit from Bank of America. A potentially catastrophic factor was a challenge to the $4.6 million in tax credits Wintergreen tried to claim for putting its sprawling Crawford's Knob tract under conservation easement. Wintergreen claims it eventually won a "favorable" ruling without revealing how much of the credits it was allowed to keep.
The resort– which also includes an acclaimed tennis center and two golf courses– recently failed to pay the Wintergreen Property Owners Association the expected fees and dues the past two quarters, according to the May property owners newsletter. To raise cash, the resort began asking owners to pay their dues five to six months early.
The new owner doesn't appear to have such liquidity problems. Three years ago, after the storied but bankrupt Greenbrier resort seemed headed to the arms of the Marriott hotel company, Justice swooped in to buy the place for about $43 million and promptly began constructing a glitzy casino under the famed north lawn. In July 2010, the casino opened to star-studded fanfare, including a performance by Lionel Richie.
Justice made his fortune in coal, but he holds another golf mecca in the form of Charleston-area Resort at Glade Springs. Last year, he purchased a 4,500-acre tract southeast of Monticello in Albemarle County but reportedly declined to say why.
With his corporate office in Roanoke and his coal-mining operations headquartered in Wise, Justice himself lives just over the border in the West Virginia city of Lewisburg, where he coaches the high school girls basketball team. He's the "richest regular guy" according to a recent profile in the Washington Post Magazine.
Justice reportedly told the Charleston Gazette that his final cost will range between $12.5 million and $16.5 million and that pricing his latest purchase was "very complicated." Indeed, a realtor's web page indicates that Wintergreen Partners Inc., which operates as a club which some have paid as much as $21,000 to join, has allowed owners come and go.
"There's no question," says realtor Tom Kubiak, "this is a very positive development."
Taking a break from a Tuesday morning round of golf, Kubiak tells a reporter that he learned that five or six properties went under contract during the Memorial Day weekend, an indicator that Justice's involvement spurred some buyers into action.
"I've got a backlog of three or four buyers on the fence," says Kubiak. "Since the news, they've all made dates to come back."
If realtors aren't necessarily dancing in the streets, at least one of them is smiling while golfing.
"We'll all be much busier now," says Kubiak.
–story updated with paragraph about pricing on Monday, May 28 at 11:07am and paragraphs about Kubiak on Tuesday, May 29 at 11:31am.Attached Documents:Read more on: wintergreen resort