Cliffs’ Anthony reaches out to shareholders

By Charles Sowell  

MARCH 5, 2010 9:07 a.m. (0)

Developer Jim Anthony opened the books on The Cliffs to stakeholders nearly two years ago to become more transparent and to ease fears about the financial stability of his multi-billion dollar empire.

“The real estate market was starting to go and we were forced into a series of dues increases for our club members,” Anthony said while driving through The Cliffs at Glassy, the first in his now international chain of luxury developments.

“Let me tell you we were getting some blowback from the members over the increases. We decided to open our books (the Cliffs is a closely held private firm) and set up a series of advisory committees so that the people who were being asked to come up with more money would have a better idea of why,” he said.

That decision by The Cliffs management resulted in the possibility that at least some of the 2,400 club members at the Cliffs will loan Anthony between $60 million and $100 million to complete amenities – golf courses, club houses, and wellness centers.

“When I loan you $10,000, I’m your banker,” said Don Tucker chair of the Cliffs at Glassy financial committee. “When I loan you $2 million, I’m your partner because I’ve bought into a philosophy and a way of doing business.”

The exact terms are subject to change but the offering would be restricted to club members to avoid Securities and Exchange Commission regulation, said Tucker, an attorney.

There are 3,000 property owners at the developments in North and South Carolina. Not all are members of the club system.

In the tightly knit world of communities like The Cliffs word travels fast about problems of developers, Tucker said.

“We know there are developments out there that are in real trouble,” he said. “We have friends who live there and we talk. The idea behind this loan is to head off problems before things get too serious.”

The lifestyle that property owners have come to love at all of The Cliffs developments is one reason behind the loan plan, Tucker said, but hard, cold fiscal reality plays a much bigger part.

“We know that if someone else comes in and takes control of the amenities, for instance, we will lose value in our property,” he said. Club membership enables residents to play at any Cliffs golf course.

The value of club membership at The Cliffs is a big part of the overall value of properties there, he said.

“There is going to only be one first Tiger Woods golf course (at High Carolina),” he said. “Despite the trouble Woods has undergone, that fact remains and it is a big point in favor of doing this loan.”

Anthony said his relationship with the golfing legend has developed over time.

“Sure, I’ve got a lot of money invested in Tiger,” Anthony said. “But he’s the kind of guy that always gives far more than is asked of him.”

For all the criticism over the harm Woods has done to his sponsors “there must have been some good, too,” Anthony said, “Or they would never have picked him.”

Anthony was in Florida for Woods’ recent news conference and believes the golfer is on the way back to prominence. He counts the golfing legend as a friend.

The golf course at High Carolina outside of Asheville is one of the courses that have been delayed by the recession.

“When the loan is approved by the members,” Anthony said, “and I believe it will be approved, that’s one of the amenities that we’ll finish.”

Clive and Carolyn Roberson, residents at The Cliffs at Mountain Park are suing Anthony and The Cliffs. Failure to finish that course is one of the causes for action cited in the suit.

Anthony could not comment on the suit, since it is still under litigation in the federal court system.

But he did say that, broadly speaking, it is sometimes cheaper to deal with one lawsuit than to cave in on a principal and bring on a lot more litigation.

“My wife (Leslie, a concert pianist) and I love living here,” said Tucker, looking out over the rolling Piedmont hills from his kitchen. “Years ago our first house burned down the night before we were to move in. She and I just looked at one another the next morning and decided to rebuild.”

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