An Idaho judge has appointed a receiver to take over management of the nearly completed Black Rock North golf course from developer Marshall Chesrown.
The receiver’s duties, outlined in a foreclosure action pending in Kootenai County First District Court, are narrow: oversee future borrowing and spending and protect the course overlooking Lake Coeur d’Alene from neglect.
American Bank, of Bozeman, filed a $14.6 million foreclosure suit last year against Chesrown, the project, investors and companies holding liens for unpaid work on the 18-hole course. Although crews had nearly finished the course, the collapse of the luxury real estate market stymied the effort.
No homes or lots have been sold at Black Rock North, an ambitious undertaking billed as a gated golf community with 206 homes and 325 condominiums overlooking the lake.
The 1,100-acre project sits adjacent to Chesrown’s original and legally separate Black Rock Club at Rockford Bay.
As receiver, Maggie Lyons will oversee an annual budget of about $500,000. That’s enough to fight weeds, irrigate the fairways and greens, pay for security and make incremental improvements to the course.
Bankers sought the appointment last year of Lyons, an accountant who worked as the Metropolitan Mortgage bankruptcy trustee. However, Chesrown argued he could handle the duties. After a year passed and the high-end real estate market didn’t rebound, Chesrown agreed to the bank’s renewed call for a receiver.
“Nobody can predict completion of the project,” said Barry Davidson, an attorney representing Chesrown.
He declined to say if the course could one day be finished and the business model changed to allow public play to generate cash flow.
“This is a project that was conceived as a very high-end, private development,” Davidson said. “Finishing it really depends upon the market for this type of project … returning.”
Davidson said that Chesrown hopes to do what’s best for those owed money, his investors and his lenders.
“He is mindful of the need to bring the project to the best use for all parties involved,” Davidson said.
As receiver, Lyons said she will be able to accept money from bankers, probably American Bank, to maintain the course and preserve its value.
“It’s a beautiful course and we’ll make sure it is kept that way,” she said.
As the receiver’s duties are well-defined, other aspects of the foreclosure litigation have evolved into a knot of counter-claims as lien holders seek judgment awards and line up for repayment.
Last year there were 11 construction and property development companies with liens totaling $3.57 million against Black Rock North.
Chesrown has been hard hit by the real estate collapse.
Last year he sold his ambitious Kendall Yards property near downtown Spokane to Greenstone Corp., surrendering his $1 billion vision of bringing urban luxury along the north bank of the Spokane River.
Chesrown also turned his Legacy Ridge development in Liberty Lake over to Spokane-based lender AmericanWest Bank.