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NEWS & PRESS

05.21.2010
TELEGRAM & GAZETTE - Tee time in Sterling ~ Country club sold for $4M to RI firm

By Lisa Eckelbecker TELEGRAM & GAZETTE STAFF
leckelbecker@telegram.com

STERLING -  A Cranston, R.I., company that owns golf courses in Massachusetts, Connecticut and Rhode Island won the bidding yesterday at a foreclosure auction to acquire Sterling National Country Club, and a company official said the new owners plan to reopen the golf course, possibly in mid-June.

The Jan Companies, one of 10 registered bidders at the auction outside the country club, prevailed with a bid of $4.2 million for the 243-acre property, which includes an 18-hole golf course on the Sterling-Lancaster line, a clubhouse and a pool facility.

"We're in the country club and hospitality business," said William N. Janikies, chief operating officer of The Jan Companies, after the auction. "There's a great golf course here."

Jan Companies, founded in 1969, operates Norton Country Club in Norton, Quidnessett Country Club in North Kingstown, R.I., and Grassy Hill Country Club in Orange, Conn. The company also owns and operates more than 96 Burger Kings across eight states, primarily in Massachusetts, Connecticut, Rhode Island, New York and Vermont. In addition, it operates Krispy Kreme and Newport Creamery restaurants.

David Frem, general manager of Cyprian Keyes Golf Club in Boylston and vice president of the New England Golf Course Owners Association, said Jan Companies is known for running good golf courses.

"Norton is a great golf course," Mr. Frem said. "The courses they run are good quality courses. They have a reputation for knowing what they're doing in golf courses."

About 100 people gathered at the club yesterday morning for the auction, including local business people, competing golf course operators and town officials.

Sterling town officials had considered bidding for the property, but a recent town meeting vote narrowly failed to reach the majority needed to pursue a bid. At the auction, Sterling Town Administrator Terri Ackerman said town officials had considered regrouping and seeking another vote at a special town meeting to continue pursuing the club.

"We had some scenario we were working on if the numbers were lower," she said. "This is out of our range."

Sterling National shut its doors in February, dismissing workers and distressing couples who had deposited money for wedding events. Many members abandoned the club and pursued memberships at other clubs.

The club was owned and operated by entities linked to the real estate financing firm Potomac Realty Capital LLC of Needham. TD Bank, which held a mortgage on the property, foreclosed and claimed it was owed about $5.4 million.

Then in April, the club's owners filed for Chapter 7 protection in bankruptcy court in Boston, seeking to liquidate all assets. Earlier this week, a bankruptcy judge cleared the way for the foreclosure auction.

Mr. Janikies said the new owners intend to operate the property as a full-service facility with golf, banquet services and a pool. The country club will likely operate eventually as a private club, although probably not right away.

"There was a very strong membership here," he said. "It may take a few years to get full membership back here, but we do foresee that happening."

Meanwhile, the new owners will be contacting individuals and groups that had scheduled events at the club, and also talking to former employees about possibly returning to work at the club, Mr. Janikies said. A general manager has not yet been named.

"I think there will be a lot of the staff members that were here that will be rehired," he said.

The golf industry has been battered in recent years by overbuilding of courses, a decline in the number of golfers and a poor economy. Industry losses in the United States last year hit $635 million, and the market research firm IBISWorld forecasts an average profit margin of negative 3 percent this year.

The economy has challenged golf courses, Mr. Janikies said, but he expressed optimism about the competitive landscape in Sterling National's area.

"Long-term, the number of golf courses is probably appropriate for the number of people in the area," he said.