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The Tampa Tribune
Published: March 05, 2013
Updated: March 05, 2013 - 5:08 PM
The Heritage Isles Community Development District has settled its debt with a majority of creditors with ties to its public golf course.
For the first time in 14 years, residents in Heritage Isles, an upscale golfing development on Plantation Bay Drive, north of Cross Creek Boulevard, don't have to be concerned the community's 18-hole golf course is operating in major debt.
The community's five-member taxing authority has reached agreements with about 82 percent of its outstanding creditors to accept a buy-back deal for the recreational revenue bonds issued to build the golf course.
It offered to pay a discounted rate of 25 cents on the dollar to settle with the bondholders, Heritage Isles Community Development District Chairman Dan Barravecchio said.
"The district successfully retired $3,115,000 of the golf course debt at a 75 percent discount," the community development district said in a news release.
Bondholders who choose not to take the deal must decide whether it is worthwhile to restructure the debt or seek other legal recourse. Bondholders typically include banks, brokerage firms and investment companies.
In 1999, the district issued $8.78 million in bonds to build the golf course and related facilities for public use.
The community development district stopped payments on the debt in October 2009.
The pan was to use revenue from the golf course and a restaurant at the Heritage Isles clubhouse to pay off the bond debt. But both operations performed below expectations for years.
When the community development district's debt service funds were depleted and it did not have money to keep making payments, the debt went into default.
To recoup their money, a majority of the bondholders urged the community development district to assess Heritage Isles residents, but the district supervisors disagreed. Instead, the board filed a lawsuit, asking the court to declare that the residents were not obligated to pay the bonds.
Homeowners in the subdivision are not affected by the defaulted bond payments, Tracy Robin, the community development district's attorney, has said.
Buying back the recreational revenue bonds at a discounted rate will save the district about $4 million.
The golf course now generates enough money to cover operation expenses and cannot be closed.
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