Western Maryland ski and golf resort files for Chapter 11
Maryland’s only ski resort has fallen victim to the collapse of the real estate market, as its owners filed for bankruptcy on Saturday after defaulting on a $23.5 million loan.
D.C. Development of McHenry, owner of Wisp Resort in Garrett County, and related companies filed the Chapter 11 petition in U.S. Bankruptcy Court in Greenbelt, citing $50 million to $100 million in assets and $10 million to $50 million in debts.
“Wisp Resort continues to perform exceptionally well and will continue to be the region’s premiere skiing resort,” Karen F. Myers, an executive with Wisp Resort Development, wrote in an affidavit with the filing. “However, as a result of the [Branch Banking & Trust] confessed judgment, the companies must restructure their debt and their relationship with BB&T.”
Myers is a prominent businesswoman in the state; last year, the Maryland Chamber of Commerce inducted her into its Business Hall of Fame.
D.C. Development secured the $23.5 million loan from BB&T in Bethesda in 2006 to construct the Lodestone Golf Course at Wisp, according to court records. At the time, the company was pulling in more than $36 million in annual gross sales through its 93 resort properties. When the loan matured in 2010, the depressed real estate market had reduced that to $1.7 million and D.C. Development could not pay up.
“Like most in real estate development, [our companies] suffered losses as the decline in the market continued,” Myers said in the affidavit.
A Garrett County Circuit Court judge awarded a confessed judgment of $29.6 million to BB&T on Aug. 10.
The vacation home market in Garrett County has been off significantly for the past few years, said Patrick Kane, co-owner of Coldwell Banker Deep Creek Realty in McHenry. He said the middle-range market, with homes priced from $300,000 to $800,000, has taken a particular hit.
But with the market starting to ease up, especially for properties on popular Deep Creek Lake, he is “cautiously optimistic,” he said, adding off-lake properties still are moving slowly.
“It’s one of those things where you knock on wood and hope it keeps up,” he said.
Through her affidavit, Myers sought cash collateral from lender First United Bank & Trust in Oakland to support payroll and operating expenses. D.C. Development owes First United close to $3 million in secured claims, according to the filing.
“Without the relief requested, the companies will be forced to cease operations, and would be unable to manage and operate their collective businesses concerning the Wisp Resort,” Myers said.
Myers did not return a call seeking comment Monday. She said a sale of the resort would be a last option, according to an Associated Press report.
The Wisp Resort encompasses 2,200 acres, 32 ski trails, 12 lifts and two golf courses. Recreational Industries, its operating entity and part of D.C. Development, employs 550 people during the ski season and 218 during the rest of the year.