March 5, 2003
Resort timeline
Read more:
MAIN STORY: GT Band, GT Resort deal looms
REACTION: News of deal spurs praise, some concern
TIMELINE: Gambling may not be near at GT Resort
CASINO: No casino for years
TAXES: Land won't come off local tax rolls
PLANS: New GM's focus will be dual marketing
Key events in history of
the GT Resort and Spa
Key events in the history of the Grand Traverse Resort and Spa in Acme:
1973 - Bloomfield Hills attorney Paul Nine and Livonia restaurant owner Arthur Kobierzynski form Grand Traverse Development Co. and buy 179 acres on M-72 near U.S. 31 North, including a small golf course and a restaurant. Others are recruited as investment partners.
1975 - The company gets a $500,000 Farmers Home Administration loan to expand the golf course, pro shop and kitchen.
1976 - The company asks to boost the FmHA loan to $8.5 million to build a Hilton Hotel, expand the nine-hole course to 18 holes and build a sports complex. Two years later the FmHA agrees to guarantee 90 percent of the loan, which will be made through National Bank and Trust of Traverse City. Nine and his partners are required to put $2 million into the project. A year later the guarantee is raised to $11.5 million.
1980 - Farmers Home Administration approves another increase in the loan guarantee to $13.9 million to cover cost overruns on the hotel and pay for other improvements. Partners are told to raise $1.5 million more in cash. The 250-room Hilton Hotel and sports complex is built and operating, but the development company seeks and receives a six-month moratorium on the principal and interest on the loans. The moratorium is granted starting January 1981, followed by a second moratorium, for 12 months, effective November 1981.
1982 - The Detroit General Employees Retirement System provides a $5 million loan. The Grand Traverse Development Co. is told to put another $2 million more into the project. Several original general partners resign, Nine as sole general partner.
1983 - Then-U.S. Rep. Robert Davis asks the Michigan head of FmHA to investigate the loan and moratorium and a deal to give the Detroit pension system first position as creditor for the resort's debt. Such a position means in the event of bankruptcy, the pension system's loans would be the first to be considered for payment. The FmHA officials says no investigation is necessary and that the resort is poised for success. The FmHA office in Washington grants an eight-month moratorium but requires the development company to raise $1.8 million more in cash.
1984 - National Bank and Trust of Traverse City fails and the resort's loans are assumed by the Federal Deposit Insurance Corp. The FDIC recommends a 20-month moratorium. The FmHA agrees but says it will be the last moratorium on principal and interest on the loans. By December the total debt to FmHA totals $19.5 million and interest is more than $4,500 a day. The resort reports it lost $19.85 million from its opening in 1980 to Sept. 30, 1984. The resort starts work on a 17-story hotel tower with 186 rooms.
1985 - The FmHA sells its $12.5-million delinquent loan to the Detroit pension system for $10.3 million, writing off $8 million in uncollected interest. The resort's signature golf course, The Bear, designed by Jack Nicklaus, opens.
1986 - The resort begins work on a 15,000-square-foot ballroom, a new outdoor pool, enclosure of an existing pool and other improvements with the aim of all being ready for the National Governors Association conference in the summer of 1987. The Detroit pension system buys the FDIC's loan, making it first-position creditor. Nine attempts to lure the state pension system in as a lender with the aim of paying off the Detroit pension system but the deal fails after state Treasurer Robert Bowman and Attorney General Frank Kelly say it's a bad deal for the state.
1992 - The Detroit pension system begins foreclosure proceedings in April. The resort files for bankruptcy 11 days later and claims $85.6 million in debt but only $49 million in assets. The pension system and Nine reach a tentative deal to withdraw the bankruptcy filing and go forward with foreclosure but that falls apart and Nine scrambles to find capital to keep control so he can win approval for reorganization. He fails to do that and files a second bankruptcy petition.
1993 - In February, a federal bankruptcy judge hands over control of the resort to the Detroit pension system effective May 4. Developers to date had racked up more than $90 million in debts, $83 million of that owned to the pension system. Resort investors, including Jack Nicklaus, Detroit auto dealer Marvin Tamaroff and more than a dozen Detroit-area doctors, dentists and lawyers lose the $13.1 million they had put into the project. The resort becomes a major tourism draw for the northwest region, employing up to 1,000 people in the peak summer season.
1996 - The Grand Traverse Band of Ottawa and Chippewa Indians fails to reach a deal with the pension system to buy the resort.
1997 - KSL Recreation Inc., a unit of New York investment house Kohlberg Kravis Roberts & Co., buys the resort from the Detroit pension system for $45 million. The company, which owns several other luxury resorts in California and Florida, adds several million dollars in new facilities including a spa, a third golf course and a clubhouse. It also sells some real estate, reducing the overall resort property from 1,100 acres to 950.
2002 - In August the Grand Traverse Band again takes a serious look at buying the resort after KSL puts out word that it was looking for investment partners to join it in developing a water park attraction at the resort. The band puts development plans for its Turtle Creek Casino just down the road on hold. In December the band announces it is no longer pursuing a deal to buy the resort. Resort official Paul McCormick says the company is no longer looking to sell.
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