May 25, 2010 in City
Buyer sees potential in troubled Black Rock North
Firm with Montana interests takes over North Idaho development
A Fortune 500 company is now calling the shots at Black Rock North after purchasing the promissory note on the private golf club overlooking Lake Coeur d’Alene.
The arrangement assures that big dollars continue to follow big development plans for the financially troubled project.
Fidelity National Timber Resources Inc., the real estate subsidiary of Fidelity National Financial Inc., purchased the note from bankers on the bet that better days in luxury real estate will return to North Idaho.
Executives of the company are familiar with owning and operating resorts and businesses in the Northwest.
William Foley II, who founded Fidelity and remains chairman of the board, owns a similar exclusive golf community, Rock Creek Cattle Co., near Deer Lodge, Mont., and owns a controlling interest in Whitefish Mountain Resort, the ski area formerly known as Big Mountain.
He also bought the popular Mackenzie River Pizza chain, based in Bozeman, and other restaurants.
And four years ago Fidelity bought a controlling interest in Cascade Timberlands LLC and its 293,000 acres of forest in Oregon and Washington.
“We have looked at dozens and dozens of similar projects across the country and this was the only one we became involved in,” said Greg Lane, Fidelity’s chief operating officer and a senior vice president overseeing the company’s stake in Black Rock North. “We see tremendous potential in that region.”
Crews had nearly finished building the 18-hole golf course when the economy crashed. As bills went unpaid and construction liens mounted, bankers filed a $14.6 million foreclosure suit last year against developer Marshall Chesrown and others.
The 1,100-acre project sits adjacent to Chesrown’s original gated golf enclave, Black Rock Club at Rockford Bay.
Lane declined to disclose how much Fidelity paid to acquire most of the $14.6 million note held by American Bank of Bozeman.
He said the note purchase is an investment designed to benefit the shareholders of Fidelity, which is traded on the New York Stock Exchange. It’s not a personal investment by Foley and others.
Lane said he continues to talk with Chesrown about how the unfinished Black Rock North project might align with the original Black Rock, which is legally separate and has been financially successful with its stunning clubhouse, polo grounds and acclaimed golf course dotted with million-dollar homes.
If the two projects can’t be aligned into some sort of “global solution” to resolve the debts, Lane said, the unfinished course and undeveloped land still have tremendous potential.
“Regardless of what happens in our discussions, it is our plan to move forward with a plan for the property,” he said. “We continue to keep an eye on market conditions.”
Following the success of his original Black Rock project, Chesrown’s ambitious plans for Black Rock North included 206 homes and 325 condominiums.
Chesrown’s lawyer didn’t return a call seeking comment. Representatives for Chesrown have said the developer wants to ensure his debts are paid and project promises kept.
The collapse of high-end real estate has taken a toll on Chesrown, who had launched multiple projects in North Idaho and his hometown of Spokane.
He surrendered his Legacy Ridge development in Liberty Lake to AmericanWest Bank of Spokane.
And he sold the Kendall Yards project along the north bank of the Spokane River in downtown Spokane to Greenstone Corp.
Now, as the foreclosure suit against Chesrown and Black Rock gets untangled, an Idaho judge has appointed a receiver to protect the unfinished course from neglect.
Maggie Lyons, the receiver, is overseeing a budget of about $500,000 paid by Fidelity to protect and maintain the course and oversee minor improvements this year. The course is not open for play.