Article Courtesy of The Palm
By Mike Diamond
Published July 18, 2020
Six golf country clubs in Palm Beach County - Hunters Run, Quail Ridge,
Wycliffe, Old Palm, Banyan Cay and the Loxahatchee Club - may have received as
much as $18 million in PPP loans through the Small Business Administration.
Six golf course communities are among the
more than 3,000 businesses in Palm Beach County that
received Payroll Protection Program (PPP) loans through the
Small Business Administration (SBA).
An analysis of the loans released this week by the SBA shows
that the six clubs may have received as much as $18 million.
The SBA had been sued by a number of newspaper organizations
over the identity of the loan recipients. When the
applicants applied, they were told the loans would be public
The program was designed to keep employees on the payroll.
If employers do that and comply with the loan conditions,
the loans become grants and do not have to be repaid.
The SBA agreed to identify all recipients of loans in excess
of $150,000 but only provided ranges of funds received,
refusing to reveal the exact amount.
The data released by the SBA do not
include the amount of the loan but rather the loan amount a
bank has approved. The actual amount of a loan could be
smaller than the approved amount. All amounts are in ranges.
Hunters Run in Boynton Beach received between $2
million to $2.5 million in Payroll Protection Program loans.
Some golf course communities that accepted PPP loans in Palm Beach County
have recently spent upward of $10 million on massive improvements to their
clubhouses and golf courses.
The clubs that took the money include:
– Hunters Run ($2 million to $5 million) in Boynton Beach.
– Quail Ridge ($1 million to $2 million) in Boynton Beach.
– Wycliffe ($2 million to $2.5 million) in Wellington.
– Old Palm ($1 million to $2 million) in Palm Beach Gardens.
– Banyan Cay Resort Club ($700,000 to $2 million) in West Palm Beach.
– The Loxahatchee Club Homeowners Association ($150,000 to $300,000) in
Scores of other Palm Beach country clubs had applied for the PPP loans. Many
were approved but decided to refuse to accept the money on both moral
grounds and legal grounds after reading the fine print. Government auditors
are expected to review how the money was spent and can ask for the money to
be returned and penalties to be imposed if they find misrepresentations.
Fifty-seven country clubs in Florida accepted the PPP funds. According to
CNBC, more than 400 country clubs and golf courses received loans throughout
the country. The issue of whether it is appropriate for golf course
communities to receive PPP loans has been debated.
“At the end of the day, we decided we just did not need it,” said Stephen
Wolk, president of the Gleneagles Country Club west of Delray Beach. “We
could see the government looking very closely at how well-to-do country
clubs were using these funds. How do you justify giving it to country
Assessment revenue a factor
Joshua Gerstin, a Boca Raton lawyer who specializes in homeowner and
condominium association law, said he expects one factor the SBA will
consider is how much revenue a country club gets from its assessments.
“If it is mostly assessment driven, the country club might have a problem,”
he said. “If members continued to pay their assessments, there was no real
loss of revenue. But if much of it comes from dining and other sources that
members pay outside of their assessments, they could be eligible.”
According to the SBA, businesses must certify that the loan is needed “to
support ongoing” operations and that they are unable to access “other
sources of liquidity” to support their ongoing operations.
Addison Reserve General Manager Michael McCarthy said once he and his board
saw those revised requirements, they decided that it would be wrong to
participate in the PPP program.
“There was no way I could certify that we needed it stay in business or that
we didn’t have other sources of liquidity,” he noted.
“Also, there is a real issue as to whether this money was designed for
country clubs when so many small businesses are struggling to stay afloat.
Some of our members asked us why we would return the loan. We then asked
them if they would sign the certifications. They all said no.”
Wycliffe, Quail Ridge: We preserved jobs
Hunters Run President Michael Soroka declined to comment on the issue.
According to the SBA, Hunters Run and Banyan failed to provide data to
indicate how many jobs were saved by the loans. Wycliffe was chastised on
CNBC early Tuesday morning for accepting its loan. The Post has learned that
the Wycliffe loan amount was $2 million. It was able to preserve 281 jobs.
Wycliffe’s general manager, Rob Martin, released a statement to The Post
“At Wycliffe, we are thankful to all of our employees for their hard work
and dedication through these challenging times. We took PPP money because we
care deeply about our team and wanted to make sure that we had the ability
to provide them a regular paycheck. Following the legal parameters, we only
requested and received enough to cover our payroll needs and did not use our
loan in any way to disadvantage other companies. We are thankful that we
qualified to receive money so that our employees and their families could
make ends meet during these challenging times.”
Quail Ridge GM William Langley said the PPP loan was used as intended. He
noted that Quail Ridge would have had to have laid off many of its 300
employees without the loan. “We are not a club with deep pockets,” he said.
The Club at Admiral’s Cove in Jupiter was one of those that returned the
funds - $3.1 million. “We saw too many issues, both moral and legal,” said
CEO Bret Morris. “We did not want to take the risks.” He said Admiral Cove
was able to keep its 500 employees working, noting: “We found other things
for them to do.”