LakePoint Sporting Community files for bankruptcy; recapitalizing plan to attract additional investm
LakePoint Sporting Community in Emerson and its affiliates have filed for bankruptcy in Northern District of Georgia court based in Rome.
Eight entities tied to LakePoint filed for Chapter 11 in federal court with documents listing assets of less than $500,000 but liabilities of more than $50 million.
The case, assigned to Judge Barbara Ellis-Monroe, lists 67 pages of creditors with founders and/or organizers listed among them including retiring state Representative Earl Ehrhart of Mableton and Judy Sparks of Smartegies public relations.
The filing comes after recent reports of management takeovers and an infusion of $10 million slotted for “go forward” efforts at the complex just off I-75.
The 13,000-acre property has become best known as the center for Perfect Game USA national baseball tournaments since opening in 2014.
Several restaurants and hotels have opened adjacent to the complex as well. There are also multipurpose fields for soccer, lacrosse, football, and other sports plus an indoor pavillion that has only generated a fraction of the revenue orginally projected.
Former Braves manager Bobby Cox and Kansas City manager Ned Yost helped get the project started just a few years ago. The organizers have had major deals fall through, however, including those with Bass Pro Shops and Greg Norman Golf.
The complex received $37 million in bonds in 2015 from the Bartow County Development Authority to build the new indoor sports complex, but Ehrhart said Monday that the complex is solely responsible for repaying the bonds, not Bartow County.
The new plan for LakePoint is designed to strengthen the organization’s financial position and improve its ability to attract millions of dollars in new investments.
MEDIA RELEASE by LakePoint Sporting Community — Monday, June 11; 6 p.m.
EMERSON, GA. (June 11, 2018) – LakePoint Sporting Community is recapitalizing in a move to achieve its vision for becoming the premier travel sports vacation destination.
The LakePoint Land entity is filing a pre-arranged Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Northern District of Georgia. The filing is expected to allow LakePoint to quickly emerge with a clean balance sheet and strong financial outlook.
“The recapitalization will strengthen the company’s financial picture so LakePoint can grow and flourish. It creates financial certainty and stability for the project and puts LakePoint on a clear growth trajectory,” said Dan Berman with GlassRatner, who is leading the restructuring on behalf of LP Investments I, an affiliate of Rimrock Capital, a fund with $4 billion of assets under management. Rimrock is the lender and main capital source for LakePoint and has been so for the past five years.
LakePoint is heralded as a premier family vacation sports destination with state-of-the-art indoor and outdoor facilities for athletic tournaments and scouting events. LakePoint hosts more than 40 sports, including baseball, softball, basketball, gymnastics and sand volleyball. LakePoint’s indoor complex, the Champions Center, was both the newest and busiest facility in the past year. The complex hosted 578 event days occurring from June 2016 to May 2017, making LakePoint a year-round destination.
During the brief bankruptcy process people should see few changes in the normal course operations, said Bob Zurcher, Manager and CFO. LakePoint will continue to operate as before, existing management will remain, employees and vendors will continue to get paid in full and on time, and tournaments, events and games will go on. LakePoint expects to grow 10 percent this year. “What we hope people do notice is LakePoint’s continued commitment to service and quality guest experiences along with Rimrock’s commitment to LakePoint’s continued success.” Zurcher added.
Certain facilities and venues, including the indoor sports pavilion, the entertainment venues, and the surrounding hotels and restaurants, are not included in the Chapter 11 filing as they are not owned by LakePoint. LakePoint Land has acted as a master developer and sold parcels to third parties for development.
Rimrock and LakePoint plan to continue the legacy of master developing the 1,300-acre project. Rimrock already has purchased additional acreage around campus and a new master plan is in the works. Rimrock has hired real estate firm Jones Lang LaSalle and other professionals to help with the planning and analysis.
“We’re extremely positive about LakePoint’s future,” he added. “LakePoint is an important asset to us at Rimrock. We’ve already invested millions of dollars in both LakePoint and surrounding land, and we plan to invest millions of dollars more. We believe in and support the original vision of LakePoint and we believe the project’s best years are yet to come.”
Why bankruptcy? In November 2016, LakePoint Land deeded land to Rimrock as part of a loan workout. In the prearranged filing, Rimrock will contribute the land it now owns back to LakePoint Land. Rimrock’s debt will be converted to equity, making Rimrock the largest shareholder in the project. This will allow LakePoint to emerge from bankruptcy debt free and with the certainty of being clear of any claims. As part of the plan, existing shareholders will share in LakePoint’s future success.
While LakePoint’s development of athletic facilities started fast, growth of supporting businesses – from hotels to restaurants to entertainment venues – didn’t go fast enough to create a thriving eco-system. “We hope to change that,” Berman said.
Progress on future projects already has started: Giant bulldozers, scrapers and trucks are working around the clock on a road-bridge expansion. This significant project will extend LakePoint Parkway from Allatoona Road to Red Top Mountain Road and will serve as a catalyst for more development. More than 1 million people visit LakePoint annually, which creates an economic impact of nearly $100 million from room nights at hotels, restaurant visits, shopping and other entertainment. “We’re only fifty minutes from the world’s busiest airport, and right off of I-75, so it’s easy to get here from just about anywhere,” Berman said. “And our attention to detail at the indoor and outdoor facilities can’t be matched. The reorganization will allow us to leverage these strengths to grow into the most sought-after sports venue of our kind.”