Marshall Chesrown has surrendered ownership of his landmark Club at Black Rock luxury golf and housing development above Lake Coeur d’Alene amid the ongoing collapse of high-end real estate in North Idaho.
Washington Trust, a privately held Spokane bank, filed public records in Kootenai County this week taking the deeds from Chesrown in lieu of foreclosure.
The bank listed four loans totaling $12.5million in its filing. Bank President Jack Heath could not be reached for comment Thursday afternoon.
The action is the latest setback for Chesrown, who embarked on ambitious projects that catered to the wealthy.
The assets of Black Rock are worth considerably more than what the bank is owed, said attorney Barry Davidson, who Chesrown hired to restructure his holdings and shed his expensive projects.
“The original money came from Marshall, who has invested his own cash to develop the project,” said Davidson, noting that Washington Trust entered later to issue long- and short-term loans.
The Black Rock assets include the nationally acclaimed golf course, a spectacular clubhouse, guest facilities, maintenance equipment and other amenities.
Some of the club’s 300 members are hoping to engineer a deal to buy the club and establish an ownership model where dues-paying members own the assets, akin to many golfing country clubs, said Ford Elsaesser, who is representing some members leading the acquisition effort.
“The bank is now in charge and Marshall Chesrown is out of any control of club management,” Elsaesser said.
A deal has not yet been reached. But this much is certain: Members who have paid tens of thousands of dollars to join and use the private club will be asked for more money.
Founding members of the club paid about $40,000 to join and then each year paid dues in excess of $10,000. Members who joined later paid as much as $125,000 along with the annual dues.
Some with knowledge of the dealings say members may be asked to pay an extra $20,000 to $30,000 each as a deposit to begin buying the club.
There had been speculation that an outside buyer might scoop up the club. Some expected Fidelity National Timber Resources Inc. to make a bid.
Fidelity, owned by William Foley, purchased the controlling interest of a note from a Montana bank concerning a separate Chesrown project called Black Rock North. That project had fallen into foreclosure before the course was finished and before a single home was built.
Chesrown also had to give up Kendall Yards near downtown Spokane. He sold the project to Greenstone Corp., and surrendered his Legacy Ridge development in Liberty Lake to AmericanWest Bank of Spokane.
Chesrown made his fortune selling cars. He returned to his native Inland Northwest and launched Black Rock. He flew in prospective buyers on private aircraft and sold them on the idea of owning million-dollar homes on a gated golf course that collected accolades.
The project was successful and Chesrown used it as a springboard to capture the interest of banks, builders and community leaders who endorsed and financed his plans.
He has avoided bankruptcies. His Black Rock project operated as a limited liability company.
Chesrown intends to remain in the region, where he has other business interests, Davidson said.
“He has said all along that he wants to do what’s best for members and lenders,” Davidson said.