Chesterton Tribune

LEL again owner of Sand Creek Country Club in deal with James Gierczyk

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By KEVIN NEVERS

Sand Creek Country Club (SCCC) is once again in the hands of the Lake Erie Land Company (LEL), after the embattled Illinois developer against whom LEL filed a mortgage foreclosure action last year transferred ownership back to the NiSource subsidiary.

NiSource spokesman Mike Banas told the Chesterton Tribune on Monday that LEL has received the deed to SCCC “in lieu of foreclosure,” as part of a “mutual agreement” which “resolves all claims” between LEL and James Gierczyk, the principal of Sand Creek CC LLC, which acquired the country club in 2006.

“This agreement preserves the club’s value for members and the community, under qualified management, with little or no impact to the operations of the country club,” LEL Vice-president Tom Godfrey said. “It’s good for the country club, its members, and the surrounding community.”

Michael Rippey of Kitson & Partners Club Services of Florida—who was appointed receiver by Porter Superior Court in September 2010 to oversee country-club operations—will remain as SCCC manager, Banas said. “The transition will be completely seamless.”

SCCC remains on the block, however. LEL “plans to continue to market the country club and its commercial properties to qualified buyers,” Banas added.

Monday’s agreement closes a chapter in the history of LEL which began in June 2006, when Gierczyk and his Chesterton Development Partners LLC inked a 10-year joint development partnership with LEL expected to jump-start Coffee Creek Center. As part of the partnership, Gierczyk’s Sand Creek CC Real Estate LLC delivered to LEL a promissory note in the amount of $11.5 million for the acquisition of SCCC. That note was secured by a mortgage on the country club: the 27-hole golf course, a tennis complex, three outdoor swimming pools, and the 50,000-square foot clubhouse with dining room, banquet facilities, and other amenities.

As originally executed, the note was scheduled to mature on June 13, 2009, at which time a lump sum payment for all outstanding principal and interest was due. But on June 12, 2009—the day before the note was set to mature—LEL and Sand Creek CC entered into the first of a series of six amendments to the note, each of them extending the maturity date by a month. The final amendment set a drop-dead date of Dec. 31, 2009, which came and went without Gierczyk’s Sand Creek CC’s making the payment, according to LEL’s foreclosure suit.

LEL took one last unsuccessful crack at getting its money in a letter to Sand Creek CC dated April 28, 2010, in which it demanded full payment. As of June 14, 2010, Sand Creek CC owed LEL the principal of $11.5 million and accrued interest of $632,500, the lawsuit stated.

LEL then filed its foreclosure action, which Monday’s agreement with Gierczyk’s Sand Creek CC resolves on all points.

Gierczyk, meanwhile, has been sued by numerous other creditors, including Old Second National Bank of Chicago Heights, Ill, which alleged in a suit filed in Porter Superior Court that Gierczyk’s Chesterton Development Partners—the entity with which LEL struck the joint development partnership—defaulted in January 2010 on an $11.9 million loan secured by 42 acres in Coffee Creek Center and 18 lots in the Estates of Sand Creek.

 

Posted 4/12/2011