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Almost KO'd, Champion comes back.

Members of NW Arkansas Country Club Tee Off on $18.5 Million Debt

THE PLAYGROUND OF the wealthy and famous.

That's how Champions Golf and Country Club in Rogers has been described in newspaper articles.

It opened auspiciously in July 1990 when golfing great Greg Norman took on basketball legend Larry Bird, hockey star Wayne Gretzky and tennis star Ivan Lendl in a made-for-television match.

Since then, however, Champions has not been fun and games for the club's rich and famous.

At one point, Champions was $18.5 million in debt.

Then last fall, the club, along with New Champions Land Development Limited Partnership, came under new ownership.

A group of 21 business people are operating under the name Sunrise Land Corp. to help rid the much-publicized northwest Arkansas club of its debt and increase its membership. Those involved with Sunrise Land Corp. are all club members.

If Champions is indeed headed toward prosperity under Sunrise, no one is certain whether to call this the fledging club's comeback or its initial takeoff.

"It's a little bit of both," says James T. "Red" Hudson, the chairman and chief executive officer of Hudson Foods Inc. who is the new chairman at Champions. "It went through a period there of a stalemate."

It showed. The club's swimming pool could have been a symbol of its grandeur. But, until recently, it sat empty with weeds growing in it.

"It wasn't dismal," Hudson says. "The club in general was running good."

Still, the club is undergoing many changes. It begins with the completion of unfinished projects, like the pool, and includes new construction, such as new roads through the club's adjoining residential area.

Of the 459 original lots, 135 remain to be sold by New Champions Realty.

Granville Harper, a Fort Smith native who was looking to invest in northwest Arkansas real estate, formed a partnership with Carol Green, a broker at Coldwell Banker Faucette Real Estate Inc. in Rogers for the past six years.

They formed Northwest Arkansas Capital and are doing business as New Champions Realty to sell lots and townhouses on behalf of Sunrise.

The $4 million Champions still owes creditors is secured by the remaining lots. The only debt associated with Champions is the $4 million debt pool.

The clubhouse and golf course are free of debt.

The new owners contributed about $7 million to cover the $18.5 million in debt owed to various financial backers.

"Presidential" members of the club included 40-50 Champions members who each contributed $150,000 or more to the club for a total of $6.5 million.

They were to have a return guarantee of $160,000. Instead, they had to settle for discounted paybacks of 25-30 percent with real estate options in lieu of the entire balance of the debt.

Others, such as Pauline Whitaker, who gave the club an original infusion of close to $4 million, will be paid when more lots are sold.

The time it will take for Champions to be completely debt free "just depends on how good a job we can do in selling off the real estate," Hudson says.

That also will determine how much money the investors can make.

"We didn't go into it with the idea that we're going to make a lot of money," Hudson says. "We hope and believe we can get our money back with a reasonable amount of interest, and that's all."

Financial Failure

A vacant, uncompleted, red-stone mansion sits on a hill overlooking the tennis courts and the unfinished swimming pool at Champions.

The $1 million house would have been one of 93 constructed at Champions ranging in size from 1,500 SF to 10,000 SF and in price from $130,000 to more than $4 million.

It would have been home to Fred Berckefeldt, the founder and developer of the country club and golf course.

Berckefeldt's financial problems at the club started almost immediately.

"It's water under the bridge now, and I just don't have any comment about it," Berckefeldt said in a telephone interview last week.

Berckefeldt, who now lives in Oklahoma, is taking his lawyer's advice and not speaking to the media.

However, he will allow that a book soon will be published about what happened at the club.

"I guess because of the high-profile people involved there, there has been interest," Berckefeldt says.

The list of the club's members, particularly the new owners, read like a Who's Who of big business in northwest Arkansas.

When asked what happened with the club, Berckefeldt says, "It will all be in this book."

He did not say who is writing it.

For now, Berckefeldt's side of the story remains untold.

But the new owners and remaining club members are talking.

They say with monthly deficits of $50,000-$100,000, Berckefeldt attempted to sell lots to cover the losses.

But sales did not come fast enough, so Berckefeldt began offering special deals to people based on non-dues paying memberships. That caused him to fall even further behind.

Instead of obtaining long-term financing, Berckefeldt looked for short-term solutions, they say.

The end came last April when Whitaker filed a foreclosure lawsuit on the club's second mortgage after late payments and bounced checks.

Then, a second foreclosure was filed on behalf of Whitaker's son, Larry.

More litigation followed.

Whitaker's financial clout is tied to Wal-Mart Stores Inc. through her late husband, Don, who was the first Wal-Mart store manager.

Pauline Whitaker had a well-publicized personal falling out with Berckefeldt. She started looking into his background.

She reportedly found he was convicted of stock fraud violation in another state 10 years earlier and was prohibited from selling stock.

Berckefeldt denies that.

"That's incorrect," he says.

He will not elaborate.

"All I'll say is that's incorrect," he reiterates.

Bargaining Power

When Whitaker's suit hit, some club members hired Siloam Springs lawyer John Elrod because they did not think anyone was representing their interests.

"Some of us decided we ought to try to take a look to see what needed to be done to salvage the club and not let it go through a bankruptcy," says George Westmoreland, a vice president with Merrill Lynch Pierce Fenner & Smith Inc. in Rogers.

"We jumped into the situation," Elrod says.

On July 9, Berckefeldt signed an option agreement to sell the club.

"He realized it was the end game," Elrod says.

Elrod alleges that Berckefeldt violated Arkansas securities laws when he used mortgages on Champions lots as security against loans. This and the pending litigation Berckefeldt faced "gave us a great deal of bargaining power," Elrod says.

He adds, "We knew shortly thereafter ... that he was at the end of his rope and probably would not even be able to make the next week's payroll."

Golf course membership -- an initial $20,000 and $350 monthly -- stands at 300.

Dining and social memberships number 250. They cost an initial $10,000, another $250 monthly with a minimum $50 food purchase.

For the club to be profitable, Hudson says, it will need an additional 50-100 golf members and another 50-75 dining and social members.

"There were a lot of loose ends that we had to bring together before we could go out and start operating and recruiting members," Hudson says.

It was just mid-March when Champions received approval to sell real estate.

But the members are confident.

"There's a substantially different feeling now," Westmoreland says. "The club's going to be there forever."
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No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Champions Golf and Country Club
Author:Rengers, Carrie
Publication:Arkansas Business
Date:Mar 29, 1993
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