Paradise lost: Florida resort files for bankruptcy
Like many other luxury resorts around the world, Amelia Island Plantation is feeling the effects of the recession. Last week, the 1,350-acre luxury enclave overlooking the Atlantic Ocean in northeast Florida filed a voluntary petition for Chapter 11 bankruptcy protection.
The resort is very dependent on its group business, which has dropped precipitously over the past year, according to Richard Goldman, its chief marketing officer. "More than half of our business is from corporate groups that hold conferences here," says Goldman. "The AIG effect has basically scared off folks -- even businesses that could afford to have meetings -- who are afraid to hold conferences at resorts." The "AIG effect" refers to businesses that have toned down lavish corporate events after the insurance giant was widely criticized for holding a conference at a luxury resort days after it received a cash infusion from Congress in 2008.
The bankruptcy was filed with the U.S. Bankruptcy Court, Middle District of Florida, Jacksonville Division. The company will restructure its debt and liabilities under the protection of the courts, while maintaining ongoing operations. Chapter 11 bankruptcies can last from a period of months to several years. "Our plans are to hold all the usual festivities and celebrations," says Goldman, who added that business will continue as before.
On a brighter note, the company has signed an agreement with a new investor group, Red Maple Investors, to help ensure the future of the renowned resort. The investor group, which consists of 22 well-heeled and concerned Amelia Island Plantation club members and property owners, organized after hearing of the financial condition of the club. Red Maple Investors have offered $5 million in "debtor in possession" interim financing and raised another $15 million with a plan to buy long-term equity in the company after it emerges from bankruptcy.
"We are pleased that Red Maple Investors truly believe in our vision for the future," says Jack Helan, president of Amelia Island Plantation.
The resort, which is 29 miles northeast from Jacksonville International Airport, dates back to 1971 when it was developed "in harmony with nature." The developers of the property included Charles Fraser and the Sea Pines Company of Hilton Head, South Carolina. The resort is located on a barrier island, and its original development included a master plan to protect tidal marshes, conserve oceanfront dunes, grassland and savannahs.
The Cooper Family Trust is now the owner of the resort. Family patriarch, Richard L. Cooper, bought Amelia Island Plantation in 1978 when its then-parent company, Sea Pines Co., was in the midst of a bankruptcy.
Amelia Island Plantation isn't the only hospitality company struggling during the recession. In Scottsdale, AZ, the W Hotel recently staved off foreclosure and the InterContinental Montelucia Resort, also in Scottsdale, faced possible foreclosure earlier in the year. The Tropicana casino in Las Vegas and the Ritz-Carlton Lake Las Vegas emerged from bankruptcy this year.