By Daniel A. Espinosa, Esq
Built in 1962, the Doral Golf Resort & Spa sits on 650 acres with a pool complex, water slide, and five beautiful golf courses. Well known for hosting an annual PGA Tour event, the Marriott-managed hotel is also a popular destination for large groups, meetings, and local events. Despite all these amenities, things just haven’t been the same since early 2011.
Rather than focusing on showcasing its 50th anniversary in 2012, the iconic resort with nearly 700 rooms has been operating under a cloud of bankruptcy for almost a year. Doral received a jolt of energy when word got around that Donald Trump was interested in purchasing the property; and, now that it seems more than likely to occur, Doral may have an even better future.
Real-estate giant and reality TV personality, Donald Trump, maintains his focus on purchasing the Doral Golf Resort & Spa. The Trump Organization (“TTO”) is still the stalking-horse bidder. United States Bankruptcy Judge Sean Lane approved the sale, requiring bids to start at $150 million.
Doral’s bankruptcy is the result of a debt restructuring effort by the resort’s owner, a partnership that includes hedge fund Paulson & Company and Winthrop Realty Trust, which gained ownership of Doral in January 2011, and then filed for Chapter 11 bankruptcy protection to restructure the debt it inherited when taking over the properties.
Initially, Trump had planned to buy Doral for $170 million. When the investigation period lapsed, Trump negotiated a new contract, cutting the price to $150 million. With an army of lawyers working behind the scenes to secure the deal, it seems unlikely Trump is playing games: he’s serious.
Some critics suggest TTO may back away from the deal in light of the history surrounding the multi-million dollar transaction. Others argue that Doral’s current owner may figure out a way to restructure its debt and save the property. That’s highly unlikely, though, especially because Trump will earn a $4.5 million breakup fee if outbid. At this juncture it is unlikely anyone will make a better bid. What’s more, Trump will likely invest an additional $150 million improving the resort. So what does this mean for the City of Doral and its residents? You can’t even begin to imagine.
In buying Doral, TTO will take over Doral and four of its five professional golf courses—Greg Norman’s Great White Course will not be sold and is in the process of being rezoned for a mixed-use project. Doral is home to the prestigious WGC Championship—a PGA golf tournament played each spring on the TPC Blue Monster. The Blue Monster is considered one of the nation’s most recognizable golf courses. The course has held a PGA Tour event since 1962. Dick Wilson designed the Blue Monster in 1960, playing to 7,125 yards from the tips. For avid golfers, sometimes it seems as if all 7,125 yards were designed for the 18th hole. The ominous Par-4 18th is arguably the toughest finishing hole on the PGA Tour playing to an average of 449 yards, usually straight into the wind.
Having played four years of collegiate golf, I can tell you that the Blue Monster has one of the toughest finishing holes on tour: it requires two perfect shots. There have been some great shot making champions that include Jack Nicklaus, Phil Michelson, Craig Parry, Nick Price, Nick Faldo, and Greg Norman, to name a few. By contrast, there have been numerous fatal shots into the water off the tee or onto the green, yet ending up in the water due to the severity of the right-to-left slope and slick greens on the 18th. During a collegiate tournament, I recall being one under going into the 18th and spraying my shot way right in fear of the water. I then punched out into the fairway, and the ball rolled into the water greenside, resulting in a double bogey for a round of 73. I guess that’s one of the reasons the name Blue Monster is quite fitting for the course because the 18th, alone, is a monster. Be that as it may, TTO’s purchase of Doral will be huge for the City of Doral.
Trump’s interest in Doral comes at a time when Florida’s upcoming legislative session will focus on casino gambling for large resorts in South Florida. Trump, whose name decorates three Atlantic City casinos, told The Miami Herald last year that legalizing gambling at more South Florida locations is not part of his game plan. Is this a major coincidence or just good timing? You be the judge. TTO submitted its offer on October 13, 2011—two weeks later lawmakers introduced a bill to legalize destination casino resorts.
If the Florida Legislature approves large casinos, TTO will likely push for a casino. One problem, however, is that the City of Doral’s land-development code does not permit casino gambling. Under Doral’s land-use code, anything that is not expressly permitted is essentially prohibited. The City Council, however, could pass an ordinance to allow a casino.
Be that as it may, TTO’s potential purchase of Doral has great things in store for the City. TTO has been buying golf properties in the past few years. He owns nine golf properties. Those properties were revamped and are doing well. Make no mistake, if there’s anyone better equipped to take Doral to the next level, it’s Donald Trump.
Whether Doral remains under the Marriott flag is unknown. But what is known is that Trump’s been eyeing Doral for a while. When Trump sets his mind on something, he goes all in. He loves golf and would love to be a part of the PGA Tour. There is no question that TTO’s purchase and renovations of the Doral Golf Resort & Spa will not only be phenomenal for golf, but also for the City of Doral and its residents.
Daniel A. Espinosa, Esq., is the founding partner of ESPINOSA | JOMARRON, a full-service law firm in Miami’s Midtown area. For more information, feel free to e-mail him at firstname.lastname@example.org. Feedback, comments, and questions are welcomed.