WSJ: Sea Island Co. to likely sell for ‘stunningly cheap price’

• Sea Island Co.

After more than 80 years under the control of one family, Sea Island, the barrier-island resort that for decades has been Georgia’s playground for the rich, is expected to file for bankruptcy protection and be sold off to two funds.

The Wall Street Journalhas the details:

Under a pact expected Wednesday, funds managed by Oaktree Capital Management LP in Los Angeles and Avenue Capital Group in New York are paying $197 million for Sea Island, a stunningly cheap price for the 84-year old resort famed for its four golf courses, exclusive clubs and hosting such events as the 2004 Group of Eight summit. Despite its fame, it hit the wall financially when it couldn’t repay the debt taken on by fourth-generation chief Bill Jones III to finance a large renovation.

The deal is a sign of the changes taking place in the commercial real-estate landscape as banks begin to dispose of distressed assets and new land barons emerge. Until recently, banks have been reluctant to sell troubled loans and foreclosed property but the logjam is beginning to break.

If only you’d saved that $197 million you earned this summer maybe you could’ve become one of those “new land barons!” Way to slack off!

Some of the resort’s woes, the WSJ and Atlanta Business Chronicle say, can be traced to a recent $395 million renovation that spruced up the posh resort and a nearby residential development project undertaken just as the housing market began to crater. Some of the resort’s creditors will lose hundreds of millions in the deal.